Inge et al v. McClelland
MEMORANDUM OPINION AND ORDER granting 26 MOTION to Dismiss Plaintiffs' Complaint by Senior District Judge James A. Parker. (bap)
UNITED STATES DISTRICT COURT
DISTRICT OF NEW MEXICO
ELIZABETH INGE, individually, and
JOHNNY INGE, individually,
No. 16 CV 1232 JAP/LAM
ROBERT (BOB) McCLELLAND, III,
individually, and doing business as,
BOB’S BUDGET PHARMACY,
MEMORANDUM OPINION AND ORDER
GRANTING MOTION TO DISMISS
In DEFENDANT’S MOTION TO DISMISS PLAINTIFFS’ COMPLAINT (Doc.
No. 26) (Motion), Defendant Robert McClelland (Defendant) asks the Court to dismiss
all claims asserted in the FIRST AMENDED CIVIL COMPLAINT FOR VIOLATION
OF THE RACKETEER INFLUENCED AND CORRUPT ORGANIZATIONS (RICO)
ACT; NEGLIGENCE; BREACH OF FIDUCIARY DUTIES, UNFAIR PRACTICES;
AND PUNITIVE DAMAGES (Doc. No. 2) (Amended Complaint). Plaintiffs oppose the
Motion. See PLAINTIFFS’ RESPONSE TO “DEFENDANT’S MOTION TO DISMISS
PLAINTIFFS’ COMPLAINT” [DOC. 26] (Doc. No. 30) (Response). Defendant
submitted a reply brief. See DEFENDANT’S REPLY IN SUPPORT OF HIS MOTION
TO DISMISS PLAINTIFF’S COMPLAINT (Doc. No. 33) (Reply). Because Plaintiffs’
claims are barred under the wrongful conduct rule and its corollary, the in pari delicto
doctrine, the Court will grant the Motion and will dismiss with prejudice all claims in the
STANDARD OF REVIEW
Normally a motion to dismiss for failure to state a claim should be made prior to
filing the answer or in the answer itself. Fed. R. Civ. P. 12(b)(6). If the defendant moves
to dismiss after filing the answer, the motion should generally be treated as a motion for
judgment on the pleadings. Fed. R. Civ. P. 12(c), (h)(2); Lowe v. Town of Fairland,
Okla., 143 F.3d 1378, 1381 n. 5 (10th Cir. 1998); Republic Steel Corp. v. Pennsylvania
Eng’g Corp., 785 F.2d 174, 182 (7th Cir. 1986). In evaluating a Rule 12(c) motion,
however, the court applies the same standard used in deciding Rule 12(b)(6) motions to
dismiss. See Atlantic Richfield Co. v. Farm Credit Bank of Wichita, 226 F.3d 1138, 1160
(10th Cir. 2000) (“A motion for judgment on the pleadings under Rule 12(c) is treated as
a motion to dismiss under Rule 12(b)(6).”).
Under Rule 12(b)(6), the court may dismiss a complaint for “failure to state a
claim upon which relief can be granted.” Fed. R. Civ. P. 12(b)(6). A Rule 12(b)(6)
motion “tests the sufficiency of the allegations within the four corners of the complaint.”
Romero v. United States, 159 F. Supp. 3d 1275, 1279 (D.N.M. 2015) (citation omitted).
When considering a Rule 12(b)(6) motion, the court must accept as true all well-pleaded
factual allegations in the complaint, view those allegations in the light most favorable to
the non-moving party, and draw all reasonable inferences in the plaintiff’s favor. Smith v.
United States, 561 F.3d 1090, 1097 (10th Cir.2009). “To survive a motion to dismiss, a
complaint must contain sufficient factual matter, accepted as true, to state a claim to relief
that is plausible on its face.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citations
omitted). “A claim has facial plausibility when the plaintiff pleads factual content that
allows the court to draw the reasonable inference that the defendant is liable for the
misconduct alleged.” Id.
In ruling on a motion to dismiss, the court typically considers only the facts
alleged in the complaint. Martin v. Central States Emblems, Inc., 150 F. App’x 852, 857
(10th Cir. Oct. 11, 2005) (unpublished) (citing County of Santa Fe v. Pub. Serv. Co. of
N.M., 311 F.3d 1031, 1035 (10th Cir. 2002)). However, the court may review documents
referred to in a complaint, without converting a motion to dismiss into a motion for
summary judgment, if the documents are central to the plaintiff’s claim and the parties do
not dispute their authenticity. Martin, 311 F.3d at 1035 (citing County of Santa Fe). The
court may also consider documents of which the court may take judicial notice. S.E.C. v.
Goldstone, 952 F. Supp. 2d 1060, 1190 (D.N.M. 2013).
Plaintiffs allege that between approximately July 26, 2013 and January 29, 2015,
Defendant, a licensed pharmacist,1 filled prescriptions for Plaintiff Johnny Inge for
improper and dangerous amounts of opioids and other controlled substances “knowing
that there was absolutely no medical necessity or benefit to prescribing these
medications[.]” (Am. Compl. ¶ 9 v-vi.) For example, during that time period Defendant
dispensed to Mr. Inge 5,160 oxycodone pills, a Schedule II narcotic, in dosage amounts
intended for end-stage cancer patients. (Id. ¶ 9 vi.) Defendant also dispensed to Mr. Inge
1,560 tramadol pills, a Schedule IV narcotic. Between November 25, 2013 and January
29, 2015, Defendant filled numerous prescriptions for Plaintiff Elizabeth Inge. For
Defendant’s pharmacist license is in probationary status under a “Settlement Agreement” with the New
Mexico Board of Pharmacy. (Am. Compl. ¶ 9 v.) Defendant was also criminally charged and agreed to a
pre-prosecution diversion program to avoid incarceration. State v. McClelland, Case No. D-1010-CR201600036.
example, Defendant dispensed to Mrs. Inge 1,650 tramadol pills and 6,540 oxycodone
pills at potency levels given to end-stage cancer patients. (Id. ¶ 9 vii.) (See also Am.
Compl. Exs. 1–2 (printout of prescriptions filled for Plaintiffs at Bob’s Budget
Pharmacy)). Defendant also allowed Plaintiffs to pay cash for some prescriptions in
violation of Medicaid rules and regulations. (Id. ¶ 9 viii.)2
In PLAINTIFFS’ SUPPLEMENTAL JOINT STATUS REPORT AND
PROVISIONAL DISCOVERY PLAN CONTENTIONS (Doc. No. 18) (Plaintiffs’
Supplemental Joint Status Report), Plaintiffs explain that in June 2013, Mr. Inge received
a telephone call from David Jones, a Nurse Practioner. (Id. at 1.) Although Mr. Inge had
not heard from Mr. Jones the previous two years, Mr. Jones knew that Mr. Inge was
“recovering from prescription pill use and approached him because of his known
vulnerability.” (Id. at 1–2.) Mr. Jones proposed to write prescriptions for powerful
narcotic pain pills for Mr. Inge; and after Mr. Inge filled those prescriptions, Mr. Inge
would share half of the pills with Mr. Jones. (Id. at 2.) Mr. Inge agreed and picked up the
written prescriptions from various drop locations. (Id.) Mr. Inge attempted to fill the
initial prescription at Wellburn Pharmacy in Tucumcari, New Mexico; however, the
pharmacist refused to fill “such a large prescription for Mr. Jones.” (Id.) Mr. Inge then
took the prescription to Defendant, who filled the prescription “knowing that the
prescription was bogus; that it was improper and illegal for [Jones] to be prescribing such
strong narcotics for a healthy individual[.]” (Id.) Over the ensuing months, Defendant
In the Amended Complaint, Plaintiffs also allege that Defendant filled prescriptions for other dangerous
drugs including, Gabapentin, Alprazolam, and Carisoprodol. Gabapentin is used to prevent and control
seizures and to relieve nerve pain. Alprazolam is used to treat anxiety and panic disorders. It belongs to a
class of medications known as benzodiazepines. It is a Schedule IV controlled substance also known as
Xanax. Carisoprodol is used to treat muscle pain and is a muscle relaxant. It is a Schedule IV controlled
substance also known as Soma.
filled numerous fraudulent prescriptions for both Mr. and Mrs. Inge. (Am. Compl. Exs.
As a result of obtaining and using these powerful drugs, Plaintiffs became
addicted to the drugs, lost custody of their child, and lost employment. Mr. Inge was
arrested for driving while intoxicated, and Mrs. Inge suffered an overdose. Plaintiffs also
experienced painful withdrawal symptoms after losing access to the drugs. (Id. ¶ 11 i-iii.)
In Count I, Plaintiffs assert a claim for civil damages under the Racketeering Influenced
and Corrupt Organizations Act, 18 U.S.C. §§ 1962, 1964 (RICO). In Count II, Plaintiffs
allege that Defendant was negligent in the provision of pharmacy services and acted in
“wanton disregard of the rights of Plaintiffs,” entitling Plaintiffs to actual and punitive
damages. (Id. ¶¶ 15–17.) In Count III, Plaintiffs assert a claim against Defendant for
“unfair, deceptive and unconscionable trade practices in the conduct of his business
during the times Plaintiffs were patients.” (Id. ¶ 19.) In Count IV, Plaintiffs aver that
Defendant “entered into a fiduciary relation of trust and was bound to act in good faith
with due regard for the interest of the Plaintiffs as an agent and health care provider” and
that Defendant breached the fiduciary duty by filling prescriptions for dangerous drugs in
excessive numbers and dosage amounts. (Id. ¶¶ 27–30.)
Defendant argues that Plaintiffs are barred from any recovery under the New
Mexico “wrongful conduct rule.” Defendant asks the Court to dismiss the Amended
Complaint in its entirety. As explained below, Plaintiffs are barred from asserting their
claims because they are based on Plaintiffs’ own illegal conduct, acquiring narcotics
through fraudulent prescriptions. Accordingly, the Court will grant the Motion.
AFFIRMATIVE DEFENSE NOT WAIVED
As a preliminary matter, Plaintiffs argue that since Defendant failed to
specifically plead the wrongful conduct rule as an affirmative defense in his Answer,
Defendant has waived the defense and may not assert it in the Motion. Rule 8(c) states,
“[i]n responding to a pleading, a party must affirmatively state any avoidance or
affirmative defense[.]” Fed. R. Civ. P. 8(c). The wrongful conduct rule is an affirmative
defense to Plaintiffs’ claims. See Stringfellow v. Oakwood Hosp. and Med. Center, 409
F.Supp.2d 866, 872 (E.D. Mich. 2005) (acknowledging that wrongful conduct rule is an
affirmative defense). However, Rule 8(c)’s core purpose is to “act as a safeguard against
surprise and unfair prejudice, and strict adherence to the pleading requirement is
inappropriate when the purpose of the requirement has otherwise been fulfilled.” Sanchez
v. BNSF Railway Co., 976 F.Supp.2d 1265, 1267 (D.N.M. 2013) (Hansen, J.). Hence, in
ruling on the Motion, the Court will decide whether the wrongful conduct rule bars
Plaintiffs’ claims despite Defendant’s failure to specifically plead it as an affirmative
defense in his Answer. See Ahmad v. Furlong, 435 F.3d 1196, 1201 (10th Cir. 2006)
(ruling that failure to plead qualified immunity in answer was not fatal to party who
raised the defense in a motion for summary judgment).
WRONGFUL CONDUCT RULE
Plaintiffs maintain that they were not violating the law when they presented
prescriptions to be filled; however, Plaintiffs admitted their scheme to fill fraudulent
prescriptions for narcotics in Plaintiffs’ Supplemental Joint Status Report, a document
that this Court may consider in ruling on the Motion. Plaintiffs’ acquisition of narcotics
through fraudulent prescriptions is a violation of federal and state law. See 21 U.S.C. §
843(a)(3) (providing, “[i]t shall be unlawful for any person knowingly or intentionally— .
. . (3) to acquire or obtain possession of a controlled substance by misrepresentation,
fraud, forgery, deception, or subterfuge[.]”); NMSA 1978 § 30-31-23 (“It is unlawful for
a person intentionally to possess a controlled substance unless the substance was obtained
pursuant to a valid prescription or order of a practitioner while acting in the course of
professional practice.”); NMSA 1978 § 30-31-25 (“It is unlawful for any person: . . . (3)
to intentionally acquire or obtain, or attempt to acquire or obtain possession of a
controlled substance by misrepresentation, fraud, forgery, deception or subterfuge.”).
Because Plaintiffs admit they agreed to share the narcotics with Jones, Plaintiffs also
violated state and federal drug trafficking statutes. See NMSA 1978 § 30-31-20
(prohibiting possession of narcotic with intent to distribute) and 21 U.S.C. § 841(a)(1)
Recently, the United States District Court for the District of New Mexico
described the wrongful conduct rule and outlined its parameters:
It is a well settled rule of law that a person cannot maintain
an action if, in order to establish his cause of action, he
must rely, in whole or in part, on an illegal or immoral act
or transaction to which he is a party, or where he must base
his cause of action, in whole or in part, on a violation by
himself of the criminal or penal laws.
Desmet v. Sublett, 54 N.M. 355, 225 P.2d 141, 142 (1950). “The principle
of this public policy is this: No court will lend its aid to a man who founds
his cause of action upon an immoral or illegal act.” Id. Notably, the
wrongful conduct rule forecloses recovery by the plaintiff even where “the
defendant has participated equally in the illegal activity.” Orzel v. Scott
Drug Co., 449 Mich. 550, 537 N.W.2d 208, 212–13 (1995). The contours
of the wrongful conduct rule require that “the plaintiff’s conduct must be
prohibited or almost entirely prohibited under a penal or criminal statute,”
and that “a sufficient causal nexus must exist between the plaintiff’s
illegal conduct and the plaintiff’s asserted damage.” Id. at 214–17.
Further, “the defendant’s culpability [must not be] greater than the
plaintiff’s culpability for the injuries[.]” ... Id. at 217 (citation omitted).
Romero v. United States, 159 F. Supp. 3d 1275, 1280–81 (D.N.M. 2015) aff’d 658 Fed.
App’x 376 (10th Cir. 2016). In Orzel, a case on which the Romero court heavily relied,
the Michigan Supreme Court held the plaintiff’s negligence claim against a
pharmaceutical company for honoring her husband’s fraudulent prescriptions, which led
to his death, was barred by the wrongful conduct rule because his injuries resulted from
his wrongful conduct. Id. at 558–59. The Michigan Supreme Court equated the wrongful
conduct rule with the common law maxim, known as the “doctrine of in pari delicto.” Id.
[A]s between parties in pari delicto, that is equally in the wrong, the law
will not lend itself to afford relief to one as against the other, but will leave
them as it finds them.
Id. (citations omitted, alterations in original). Finding no practical difference in their
application, the court in Orzel referred to both of these doctrines as the wrongful conduct
COUNT I RICO CLAIMS ARE BARRED
Even after Plaintiffs stopped presenting fraudulent prescriptions on January 29,
2015, Defendant allegedly continued to violate drug laws. (Id.¶ 9 vi.). On or about
February 24, 2015 in Quay County, New Mexico, Defendant obtained or attempted to
obtain a Schedule IV controlled substance, lorazepam, in violation of NMSA 1978 § 261-22(B).3 (Id. ¶ 9 i-v.) On or about March 19, 2015, Defendant obtained or attempted to
obtain a Schedule IV controlled substance, clonazepam, in violation of § 26-1-22(B). On
the same date, Defendant unlawfully distributed a controlled substance in violation of
NMSA 1978 § 30-31-25(A) (1)–(5).4 On April 8, 2016, Defendant was criminally
charged. On May 25, 2016, Defendant entered into a Settlement Agreement with the
Board of Pharmacy admitting to several violations of New Mexico law. (Id.) Defendant’s
It shall be unlawful for any person to obtain or attempt to obtain any dangerous drug or to procure or
attempt to procure the administration of any dangerous drugs other than a controlled substance:
A. by fraud, deceit, misrepresentation or subterfuge; or
B. by forgery or alteration of a prescription or of any written order; or
C. by the concealment of a material fact; or
D. by the use of a false name or the giving of a false name or the giving of a false address.
NMSA 1978 § 26-1-22.
A. It is unlawful for any person:
(1) who is a registrant to distribute a controlled substance classified in Schedule I or II,
except pursuant to an order form as required by Section 30-31-17 NMSA 1978;
(2) to intentionally use in the course of the manufacture or distribution of a controlled
substance a registration number which is fictitious, revoked, suspended or issued to
(3) to intentionally acquire or obtain, or attempt to acquire or obtain possession of a
controlled substance by misrepresentation, fraud, forgery, deception or subterfuge;
(4) to intentionally furnish false or fraudulent material information in, or omit any
material information from, any application, report or other document required to be kept
or filed under the Controlled Substances Act, or any record required to be kept by that
(5) to intentionally make, distribute or possess any punch, die, plate, stone or other thing
designed to print, imprint or reproduce the trademark, trade name or other identifying
mark, imprint or device of another or any likeness of any of the foregoing, upon any drug
or container or labeling thereof so as to render the drug a counterfeit substance.
NMSA 1978 § 30-31-25
pharmacist license was suspended for five years, with all but thirty consecutive days of
the suspension held in abeyance. (Id.) Defendant was diverted into a pre-prosecution
diversion program on August 15, 2016. (Id.)
Plaintiffs allege that Defendant’s actions display a pattern of racketeering activity
within the meaning of 18 U.S.C. § 1961(5).5 (Id. ¶ 10.) Plaintiffs further allege that they
were injured “as a direct and proximate result of Defendant’s complained of acts,
Plaintiffs suffered damages, including, pain and suffering, loss of enjoyment of life, loss
of income, and earnings [sic] capacity[.]” (Id. ¶ 11.) Plaintiffs maintain that they are
entitled to treble damages under 18 U.S.C. § 1964(c).6 (Id. ¶ 12.)
Defendant argues that since Plaintiffs’ injuries were a result of their willing
participation in criminal conduct, Plaintiffs should not be allowed to recover damages
under any theory, including treble damages under RICO. The Court agrees. Under the
wrongful conduct rule, also known as the in pari delicto doctrine,7 Plaintiffs’ Count I
RICO claim must be dismissed. See Rogers v. McDorman, 521 F.3d 381, 389 (5th Cir.
2008) (“We . . . hold that in pari delicto is a cognizable defense to a civil RICO claim.”).
“Racketeering activity” means (A) any act or threat involving murder, kidnapping, gambling, arson,
robbery, bribery, extortion, dealing in obscene matter, or dealing in a controlled substance or listed
chemical (as defined in section 102 of the Controlled Substances Act), which is chargeable under State law
and punishable by imprisonment for more than one year[.] 18 U.S.C. § 1961(1).
A “’pattern of racketeering activity’ requires at least two acts of racketeering activity, one of which
occurred after the effective date of this chapter and the last of which occurred within ten years (excluding
any period of imprisonment) after the commission of a prior act of racketeering activity[.]” 18 U.S.C. §
18 U.S.C.A. § 1961(5).
“Any person injured in his business or property by reason of a violation of section 1962 of this chapter
may sue therefor in any appropriate United States district court and shall recover threefold the damages he
sustains and the cost of the suit, including a reasonable attorney’s fee[.]”
18 U.S.C.A. § 1964(c).
Black’s Law Dictionary defines the in pari delicto doctrine as “The principle that a plaintiff who has
participated in wrongdoing may not recover damages resulting from the wrongdoing.” Black's Law
Dictionary 806 (8th ed. 2004).
In Rogers, the Fifth Circuit explained that to dismiss a RICO civil claim under the
doctrine of in pari delicto, a defendant must show two elements: (1) the plaintiff actively
participated in the RICO violation; and (2) the defense will not interfere with the policy
goals of RICO. Id. The court found that both of the elements were met and upheld the
dismissal of a civil RICO claim brought by directors of a bank who participated in an
illegal check kiting scheme perpetrated by the bank’s customer. Id. at 383–84. The court
reasoned, “it would be anomalous, to say the least, for the RICO statute to make
racketeering unlawful in one provision, yet award the violator with treble damages in
another provision of the same statute.” Id. In other words, “[t]o allow co-conspirators to
recover from each other would not . . . deprive violators of their ill-gotten gains, but
would transfer the ill-gotten gains between them.” Id.
In this case the same reasoning applies. Based on the allegations in the Amended
Complaint and in Plaintiffs’ Supplemental Joint Status Report, Plaintiffs instigated and
actively participated in a scheme to acquire opioids through fraudulent prescriptions, they
shared the fruits of their acquisition with Mr. Jones, and they abused and trafficked those
prescription drugs. As a result of their illegal behavior, Plaintiffs suffered injuries to their
health, their family, and their employment. Significantly, Plaintiffs were not “passive
participant[s]” and thus, the first element is met.
As for the second element, the application of the in pari delicto defense in this
case will not interfere with the policy goals of civil RICO. As the Eleventh Circuit stated,
“Congress intended RICO’s civil remedies to help eradicate ‘organized crime from the
social fabric’ by divesting ‘the association of the fruits of ill-gotten gains.’ . . .” Official
Committee of Unsecured Creditors of PSA, Inc. v. Edwards, 437 F.3d 1145, 1155 (11th
Cir. 2006) (citations omitted). In that case, the court upheld the dismissal of claims
brought on behalf of an organization at the center of a Ponzi scheme. Id. The court
recognized that “recovery under RICO would not divest RICO violators of their ill-gotten
gains; it would result in a wealth transfer among similarly situated conspirators.” Id.
Similarly, if this Court allowed Plaintiffs to recover for their injuries, Plaintiffs would in
essence be rewarded for their illegal behavior in a way never intended by Congress in
RICO. Id. at 1155 (“recovery under RICO would not divest RICO violators of their illgotten gains.”). The allegations of the Amended Complaint and in the Plaintiffs’
Supplemental Joint Status Report compel the conclusion that Plaintiffs had “substantially
equal responsibility for their injuries” and barring their claims advances the policy of the
RICO statute. Id. Thus, the doctrine of in pari delicto prevents Plaintiffs from bringing
the Count I civil RICO claim for treble damages.
COUNTS II, III, AND IV TORT CLAIMS ARE BARRED
In similar fashion, New Mexico state law tort claims may be dismissed under the
wrongful conduct rule if: (1) the plaintiff’s conduct is prohibited under a criminal statute;
(2) there is a sufficient causal nexus between the plaintiff’s illegal conduct and plaintiff’s
damages; and (3) the defendant’s culpability is not greater than the plaintiff’s. Romero,
159 F. Supp. 3d at 1281. In Romero, the plaintiff, a recovering drug addict, brought
claims for negligence and for intentional infliction of emotional distress against agents of
the federal government alleging that the government rekindled his drug addiction when it
targeted him in a drug trafficking investigation. Id. at 1279. The defendants directed a
confidential informant to approach the plaintiff and propose that the plaintiff act as a
broker to obtain crack cocaine; and in return, the plaintiff would keep some of the crack
for his personal use. Id. at 1281. Over a period of six months, the plaintiff purchased
crack several times for the confidential informant in exchange for a portion of the drugs.
Id. The plaintiff, who had been off of crack for several months prior to being approached
by the confidential informant, alleged that the defendants’ use of the confidential
informant to target him reignited his crack cocaine addiction and caused him to become
“pennilessness,” to lose his familial relationships, and to become unemployable. Id.
The district court dismissed both of the plaintiff’s tort claims under the wrongful
conduct rule: “Plaintiff’s own allegations demonstrate that his conduct was prohibited by
federal criminal statute and was causally related to his alleged injuries, and that his
conduct contributed to his injuries in a least the same degree as did the government’s
conduct.” Id. The court rejected the plaintiff’s argument that the wrongful conduct rule
did not apply because the government’s conduct, “created, funded, controlled, and
furthered the ‘illegal acts’” and caused the plaintiff’s injuries. Id. at 1283. The court
noted that under New Mexico law, “there may be more than one proximate cause of an
injury.” Id. (citing Andrews v. Saylor, 134 N.M. 545, 80 P.3d 482, 489 (N.M. Ct. App.
2003)). Thus, even though the government “created, funded, and controlled” the illegal
acts, the plaintiff’s role as a broker in those transactions “contributed to bringing about
his injuries, his injuries would not have occurred without his participation, and his
participation was reasonably connected as a significant link to his injuries.” Id.
The Tenth Circuit affirmed the district court’s application of the wrongful conduct
rule. Romero v. United States, 658 Fed. App’x 376 (10th Cir. Aug. 10, 2016)
(unpublished). The plaintiff argued on appeal that the wrongful conduct rule should not
be applied in light of New Mexico’s comparative fault scheme in tort cases. Id. at 380.
The Tenth Circuit found the argument unpersuasive and distinguished a New Mexico
Court of Appeals ruling in Rodriguez v. Williams, --- N.M. ---, 355 P.3d 25, 29 (N.M. Ct.
App. 2015). In Rodriguez, the New Mexico Court of Appeals declined to apply the
wrongful conduct rule as a bar to an intoxicated driver’s claims against another driver
who ran a red light causing a collision. Id. The Tenth Circuit in Romero explained that in
Rodriguez, application of the wrongful conduct rule was inappropriate because the
intoxicated driver was not seeking to “profit from any impairment to his driving” and his
damages were limited solely to the other driver’s negligence under the comparative fault
scheme. Id. (citing, Rodriguez, 355 P.3d at 28–29. In contrast to Rodriguez, the Tenth
Circuit found in Romero that the plaintiff’s damages “undoubtedly arose when [the
plaintiff] engaged in illegal conduct.” Id. The Tenth Circuit concluded that application of
the wrongful conduct rule in Romero was therefore, “not inherently incompatible with a
comparative fault framework” adopted in New Mexico. Id.
Plaintiffs argue that their case is distinguishable from Romero because, unlike
brokering crack cocaine sales, their presentation of prescriptions to a pharmacist was not
illegal. However, Plaintiffs cannot ignore their own admission that they worked in
concert with Mr. Jones to present fraudulent prescriptions to a pharmacy and to share
those drugs with Mr. Jones. As mentioned, this conduct is illegal under both federal and
Plaintiffs’ admission also leads to the inference that their conduct, presenting false
prescriptions, caused their alleged injuries or at least contributed to their injuries in at
least the same degree as Defendant’s illegal conduct in filling those prescriptions.
Mr. Inge disclosed the arrangement with Mr. Jones to the Drug Enforcement Agency (DEA); and after an
investigation, Mr. Jones was arrested and charged with violation of 21 U.S.C. §§ 841(a)(1). (Plfs’ Supp. Jt.
Status Rpt. And Prov. Discov. Plan at 4.) See United States v. Jones, Case No. 15 MJ 670 (D.N.M.).
However, Plaintiffs contend that their conduct was either less culpable than Defendant’s
conduct or alternatively, that their illegal conduct could not have come to fruition without
Defendant’s illegal conduct.9 According to Plaintiffs, they could not obtain the drugs
until Defendant filled the prescriptions; thus, their illegal conduct “was a result of
Defendant’s conduct.” (Resp. at 7.) Just as the court in Romero rejected a similar
argument, the Court will not accept this argument. See Romero, 159 F. Supp. 3d at 1282
(concluding that plaintiff and defendants were equally at fault). Plaintiffs, as part of a
scheme to traffic in controlled substances, initiated contact with Defendant to fill
prescriptions that they knew were not valid. Even though Defendant’s conduct in
dispensing unreasonably large quantities of narcotics to Plaintiffs violated state and
federal law, and even though Defendant’s conduct partially enabled Plaintiffs to abuse
and traffic the drugs, Defendant’s unlawful actions cannot be said to have been a greater
cause of Plaintiffs’ injuries than Plaintiffs’ own unlawful behavior. Moreover, there are
no allegations in the Amended Complaint suggesting that Defendant unduly influenced
Plaintiffs or coerced Plaintiffs’ illegal behavior. Thus, Plaintiffs were at least equally at
fault in this case. See id. (“While Plaintiff characterizes the informant’s offer as
‘seductive and alluring,’ he provides no basis to conclude that the choice to accept or
reject the offer was not ultimately his.”).
Plaintiffs cite Tug Valley Pharmacy, LLC v. All Plaintiffs Below in Mingo County,
773 S.E.2d 627 (W.Va. 2015) and argue that the Court should not bar their claims
For example, Defendant may have violated 21 U.S.C. § 829, which prohibits dispensing a Schedule II
controlled substance except by a valid prescription. Defendant may have also violated 21 C.F.R.
§1306.04(a), which states, “An order purporting to be a prescription issued not in the usual course of
professional treatment or in legitimate and authorized research is not a prescription within the meaning and
intent of section 309 of the Act (21 U.S.C. 829) and the person knowingly filling such a purported
prescription, as well as the person issuing it, shall be subject to the penalties provided for violations of the
provisions of law relating to controlled substances.”
because comparative fault principles will account for their unlawful conduct. In Tug
Valley Pharmacy, the plaintiffs sued various pharmacies and physicians alleging that the
defendants improperly prescribed controlled substances for pain, which caused the
plaintiffs to “become addicted to and abuse the controlled substances.” Id. at 628. The
defendants’ medical practice had been under an FBI investigation, which revealed
violations of federal and state law, and some of the physicians and pharmacists involved
lost their licenses. Id. at 629. On a certified question from the trial court, the West
Virginia Supreme Court declined to adopt the wrongful conduct rule and its companion
doctrine of “in pari delicto.” Id. at 631. Instead, the court ruled that the plaintiffs’ claims
could proceed and that liability for damages could be adjusted under the comparative
fault doctrine. Id. In other words, the plaintiffs’ percentage of fault was considered a fact
issue for a jury rather than a complete bar to a claim. Id. at 633.
Unlike West Virginia, New Mexico has adopted the wrongful conduct rule, and
application of the rule is appropriate in this case. The facts alleged here differ greatly
from the allegations in the Rodriguez case in which the New Mexico Court of Appeals
declined to apply the rule because a drunk driver injured by a driver who ran a red light
was not trying to benefit from his own illegal behavior. Since Plaintiffs, in presenting
false prescriptions, were at least equally responsible for causing their injuries, the
wrongful conduct rule as applied in New Mexico bars their claims.
OAKEY DECISION ON DUTY OF PHARMACISTS DOES NOT
REPUDIATE WRONGFUL CONDUCT RULE.
Plaintiffs contend that the wrongful conduct rule does not bar their claims
because, under a recent New Mexico Court of Appeals ruling, Defendant was “much
more culpable as a licensed pharmacist preying on the vulnerabilities of the Plaintiffs in
filling prescriptions[.]” (Resp. at 15.) Plaintiffs cite Oakey v. May Maple Pharmacy, Inc.,
No. 34,914, 2017 WL 1382220, * 6 (N.M. Ct. App. Ap. 13, 2017) (slip op.). In Oakey,
claims of negligence and negligence per se were brought by the representative of the
estate of a nineteen year old patient who died from an overdose of physician-prescribed
opioids and benzodiazepines (Oxycodone, Oxymorphone, and Alprazolam). The
pharmacy that dispensed the prescription drugs argued on summary judgment that “it was
entitled to judgment as a matter of law because ‘a pharmacist’s standard of care is to
dispense appropriately prescribed medications to a patient in accordance with a proper
medical doctor’s prescription[,]’ and the Pharmacy met that standard in filling the
prescriptions at issue.” Id. at *1. The court characterized the Pharmacy’s proposed
standard of care as the “clerical-accuracy standard.” Id. at *10. The Pharmacy did not
dispute there was evidence that the decedent was abusing drugs. The decedent presented
and the pharmacy filled Oxycontin prescriptions between two and twenty-three days
“early” on at least seven occasions between May 28, 2009 and September 21, 2009. Id. at
*2. On at least one occasion, the decedent paid $ 1,107 in cash for 90 Oxycontin 80 mg
pills in September 2009. The pharmacy argued, however, that the standard of care was
met because its pharmacists accurately filled the facially valid prescriptions most of
which were authorized for early filling. Id.
In Oakey, the wrongful conduct rule was not raised as a bar to the claims. The
court framed the issue, which was one of first impression in New Mexico, as what
standard of conduct was required of retail pharmacists “in filling prescriptions for
controlled substances with a significant potential for abuse and addiction, such as
Oxycodone and Oxycontin.” Id. at *5. The court then refined its inquiry to involve “the
specific conduct required of pharmacists in these circumstances, which we view as
questions of fact informed by relevant requirements prescribed by statutes and
regulations governing the practice of pharmacy and dispensing physician-prescribed
controlled substances.” Id. The court rejected the clerical-accuracy standard because that
standard did not take into account the federal and New Mexico statutory framework
applicable to pharmacists. The court emphasized that “New Mexico regulations require
pharmacists “to review the patient’s profile and, ‘[p]rior to dispensing any prescription,’
to identify issues including ‘clinical abuse/misuse’ and ‘incorrect drug dosage.’” Id. at *9
(citing NMAC 18.104.22.168(D)(1)(a), (e)). The court continued, “[u]pon recognizing any of
the above, a pharmacist, using professional judgment, shall take appropriate steps to
avoid or resolve the potential problem[.]” Id. at 10 (citing NMAC 22.214.171.124(D)(2)). The
court concluded that on remand, the pharmacy must present evidence that it “conformed
its conduct to the standard of care required in the circumstances presented here, . . . that
accounts for statutes and regulations relevant to the professional responsibilities of
pharmacists filling prescriptions for controlled substances at issue here.” Id. at *11.
Plaintiffs assert that the Oakey decision, imposing on pharmacists a higher duty of
care when dispensing controlled substances, shows that Plaintiffs’ behavior in presenting
false prescriptions was less culpable than Defendant’s conduct in filling obviously
excessive prescriptions for controlled substances. Plaintiffs ask the Court to conclude, as
a matter of law, that under Oakey they are less culpable than Defendant; and therefore,
the wrongful conduct rule does not bar their claims. Plaintiffs’ argument, however, relies
on their assertion that their conduct was not illegal, which flies in the face of the facts
alleged in their Amended Complaint and in their admissions in Plaintiffs’ Supplemental
Joint Status Report. Neither Oakey, nor the other cases cited by Plaintiffs, convinces this
Court that a New Mexico court would abandon the wrongful conduct rule under the facts
alleged here. Thus, the Court holds that, as a matter of law, Plaintiffs claims are barred by
the wrongful conduct rule.
COUNT III UNFAIR PRACTICES ACT CLAIM IS BARRED
Under New Mexico law, an “unfair or deceptive trade practice” means an “a false
or misleading oral or written statement, visual description or other representation of any
kind knowingly made in connection with the sale . . . of goods or services[.]” NMSA
1978 § 57-12-2. To state a claim under the New Mexico Unfair Practices Act (NMUPA),
a claimant must allege facts supporting four elements. First, the complaining party must
show that the defendant made an oral or written statement, visual description, or other
representation that was either false or misleading. Second, the false or misleading
representation must have been knowingly made in connection with the sale, lease, rental
or loan of goods or services. Third, the conduct complained of must have occurred in the
regular course of the defendant’s trade or commerce. And fourth, the representation must
have been of the type that may, tends to, or does deceive or mislead any person. See
generally, Guidance Endodontics, LLC v. Dentsply Intern., Inc., 749 F.Supp.2d 1235,
1259 (D.N.M. 2010) (outlining elements of NMUPA claim). New Mexico courts have
emphasized that “[t]he gravamen of an unfair trade practice is a misleading, false, or
deceptive statement made knowingly in connection with the sale of goods or services.”
Id. at 1275 (quoting Diversey Corp. v. Chem–Source Corp., 125 N.M. 748, 754, 965 P.2d
332, 338 (N.M. Ct. App. 1998)).
In light of these standards, Plaintiffs’ Count III NMUPA claim fails not only
under the wrongful conduct rule, but also due to the absence of facts stating a plausible
claim that Defendant engaged in an unfair or deceptive trade practice. Plaintiffs allege
that they presented false prescriptions for narcotics to Defendant, who filled the
prescriptions and sold the narcotics to Plaintiffs. Plaintiffs wholly fail to allege Defendant
made a misrepresentation in connection with the filling of the prescriptions or in the sale
of those drugs. Therefore, in addition to barring the claim under the wrongful conduct
rule, the Court will dismiss Plaintiffs Count IV NMUPA claim because they failed to
allege that Defendant knowingly made a misleading, false, or deceptive statement in
connection with the sale of drugs.
IT IS ORDERED that DEFENDANT’S MOTION TO DISMISS PLAINTIFFS’
COMPLAINT (Doc. No. 26) is granted; and a separate order of dismissal will be entered.
SENIOR UNITED STATES DISTRICT JUDGE
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