Federal court in Riverside blocks bankruptcy escape for drug dealer

A Central District of California bankruptcy court has ruled that a convicted drug dealer cannot discharge a $5.8 million civil judgment through bankruptcy.

This judgment stems from the death of 20-year-old Alexandra Capelouto, who died after taking fentanyl-laced pills sold by Brandon Michael McDowell.

Los Angeles attorney Baruch C. Cohen, representing Alexandra's parents, Matt and Christine Capelouto, called the case "a first impression of a drug dealer being held personally liable in a civil court." Capelouto v. McDowell, 6:23-ap-01041-MH, (C.D. Cal. filed May 11, 2023)

The case began in Riverside County Superior Court, where the Capeloutos initially won their judgment. McDowell then filed for bankruptcy protection to escape financial liability.

"Had he been successful in discharging this debt, it would have been a huge victory for McDowell," Cohen stated. Capelouto v. McDowell, CVSW2109985, (River. Super. Ct., filed Nov. 30, 2021); In re: Brandon Michael McDowell, 6:22-bk-14752-MH, (Bankr. C.D. Cal., 2022)

McDowell was self-represented.

In a federal court plea agreement signed July 11, 2022, McDowell admitted to knowingly and intentionally distributing fentanyl to Alexandra Capelouto on Dec. 22, 2019, which resulted in her death the next day. He filed for bankruptcy protection on Dec. 21, 2022. On July 1, 2023, McDowell was sentenced to nine years in federal prison for possession with intent to distribute fentanyl.

In the bankruptcy proceedings, U.S. Bankruptcy Judge Mark D. Houle initially denied a motion for summary judgment, requiring more specificity in the pleadings. Cohen pivoted to pursuing a default judgment. "Paragraph 25 of my complaint specifically said that McDowell's actions were willful and malicious," Cohen explained. Under federal rules, when a defendant defaults, all allegations in the complaint are deemed admitted and true.

Houle's decision drew praise from Cohen.

"He exhibited compassion to the Capeloutos, so much so that even when I was making my appearances through Zoom, he allowed them to ask him questions," Cohen said. "He showed a tremendous balance of judicial temperament. I wouldn't hesitate to litigate another case in front of him. His command of the code was extraordinary, and his direction was precise and very professional."

The case has broader implications beyond the courtroom. Matt Capelouto is advocating for "Alexandra's Law," which would make drug dealers who sell fentanyl civilly liable.