United States District Court, D. New Mexico
ELIZABETH INGE, individually, and JOHNNY INGE, individually, Plaintiffs,
ROBERT BOB McCLELLAND, III, individually, and doing business as, BOB'S BUDGET PHARMACY, Defendant.
MEMORANDUM OPINION AND ORDER GRANTING MOTION TO
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 Amended Complaint.
STANDARD OF REVIEW
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).”).
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.
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).
allege that between approximately July 26, 2013 and January
29, 2015, Defendant, a licensed pharmacist,  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 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
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 filled numerous fraudulent prescriptions
for both Mr. and Mrs. Inge. (Am. Compl. Exs. 1-2.)
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.
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
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
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) (same).
the United States District Court for the District of New
Mexico described the wrongful conduct rule and outlined its
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
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
[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, ...