mcs rico

IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF PUERTO RICO

HOME ORTHOPEDICS CORP., PLAINTIFF, V. RAÚL RODRÍGUEZ; JOSÉ A. LINARES; PAUL PINO; JULIO F. JULIÁ; JAVIER MAGRIÑÁ MELÉNDEZ; LUIS GORIS GARCÍA; ARLENE MARRERO; DIRECTORS AB, BC, CD, DE, EF, FG, GH, HI, IJ, JK, KL, OF HUMANA HEALTH PLANS OF PUERTO RICO (D/B/A HUMANA); DIRECTORS LM, MN, NO, PQ, QR, RS, ST, TU, UV, VW, WX, OF MEDICAL CARD SYSTEM, INC. (MCS); A, B, C, D, E, F, G, H, I INSURANCE COMPANIES, DEFENDANTS.

CIVIL NO.: 11-01591 (DRD) RE: R.I.C.O. ACT; TORTIOUS INTERFERENCE WITH CONTRACTS; TORT PLAINTIFF DEMANDS TRIAL BY JURY

JULIO JULIÁ AND JAVIER MAGRIÑÁ’S MOTION TO DISMISS

TO THE HONORABLE COURT:

COME NOW Defendants Julio F. Juliá and Javier Magriñá Meléndez, through the

undersigned attorneys, and respectfully state and request as follows:

I. INTRODUCTION.

Plaintiff HOME ORTHOPEDICS CORP. (hereinafter “HOC”) has filed a complaint [Dkt. No.

1] seeking indemnification for violation of the Racketeer Influenced and Corrupt Organizations

Act (hereinafter “RICO”) and for tortious interference with contractual relations.

While the complaint was filed on June 21, 2011, and still at this time no summons have

been issued or served1, painfully for Julio Juliá and Javier Magriñá, the Complaint was highly

publicized on July 1, 2011, when the Puerto Rico Daily Sun, on its front page headline, informed

1 Nor were they even requested for more than a week after the filing of the complaint.

Case 3:11-cv-01591-DRD Document 5 Filed 07/05/11 Page 1 of 25

Home Orthopedics Corp. v. Raúl Rodríguez, et al. Civil No. 11-01591 (DRD) Page 2

of its filing. Although it is the appearing co-defendants’ right to await formal service of process

before responding to the libelous and offensive allegations contained therein, they voluntarily

waive such service of process in an effort to advance a just and speedy resolution and

adjudication of the purported causes of action before this Court.

Having analyzed the allegations made by HOC,2 Julio Juliá and Javier Magriñá hereby

move to dismiss all possible claims brought against them. As will be shown, the larger part of

Plaintiff’s Complaint consists of conclusory and bald assertions lacking supporting facts. HOC

frames its allegations against these defendants in a generalized and conclusory manner

neglecting to identify who did what to whom, when, where, how, and why or to show any

conduct that is a violation of law. Furthermore, and most importantly, Plaintiff has framed a case

where fraud lies at the core of the action. Consequently, the allegations against Julio Juliá and

Javier Magriñá, as individual personal defendants, are insufficiently pled pursuant to the

corresponding heightened pleading standard of Fed. R. Civ. P. 9(b). They are vague and

ambiguous and cannot reasonably require them to answer or to frame a responsive pleading.

Moreover, the factual narrative contained in the Complaint is not sufficient to show that Plaintiff

has a plausible claim against neither Julio Juliá nor Javier Magriñá, thus submitting them to

attack and the burdens of defense on the basis of a nonspecific complaint. There is no showing

that Plaintiff is entitled to relief under RICO or the Puerto Rico Civil Code for alleged tortious

interference with contractual obligations. Thus, Plaintiff does not give “fair notice” to Julio Juliá

2 Pursuant to the allegations of the Complaint ([Cplt. ¶72 Dkt. 1] and [Exh. 13 Dkt 1]) its filing appears to be an attempt to extend to Federal Court an acrimonious litigation between two business parties before the Court of First Instance, San Juan, Superior Part which commenced in 2009. All of the claims now brought before this Honorable Court either are actually pending in said litigation or could have been made a part of said litigation, including the federal RICO claim. Thus, at the outset, it points to be a mechanism being utilized by HOC to exert pressure against Clinical Medical Services, Inc. (hereinafter “CMSI”) to settle or otherwise stop prosecuting said litigation.


Home Orthopedics Corp. v. Raúl Rodríguez, et al. Civil No. 11-01591 (DRD) Page 3 or Javier Magriñá regarding the grounds upon which the claims against them are based and they

cannot responsibly answer HOC’s Complaint without engaging in guesswork and conjecture.

II. LEGAL ANALYSIS

In order to analyze a motion to dismiss a claim under the RICO statute and under article

1802 of the Puerto Rico Civil Code for alleged tortious interference with contractual relations,

the Court is called to examine the allegations pursuant to (A) Fed. R. Civ. P. 12(b), (B) the

heightened pleading standard under Fed. R. Civ. P. 9(b), and (C) the most recent United States

Supreme Court interpretations of Fed. R. Civ. P. 8(a) and its corresponding plausibility standard

as set by Bell Atlantic v. Twombly, 550 U.S. 544, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007) and

interpreted in Ashcroft v. Iqbal, __ U.S. __, 129 S.Ct. 1937, 173 L.Ed. 2d 868 (2009).

A. RULE 12 (B)(6)- MOTION TO DISMISS STANDARD OF REVIEW

When evaluating motions under Fed. R. Civ. P. 12(b)(6) – requesting the dismissal of a

claim for failure to state a claim upon which relief can be granted – the Court must accept as true

“all well-pleaded factual averments and indulg[e] all reasonable inferences in the plaintiff’s

favor.” Aulson v. Blanchard, 83 F.3d 1, 3 (1st Cir. 1996). See also Parker v. Hurley, 514 F. 3d

87, 90 (1st Cir. 2008). Moreover, a complaint must set forth “factual allegations, either direct or

inferential, regarding each material element necessary to sustain recovery under some actionable

theory.” Gooley v. Mobil Oil Corp., 851 F.2d 513, 514 (1st Cir. 1988). The analysis of a 12(b)(6)

motion is closely linked to the sufficiency of the pleadings under the Federal Rules of Civil

Procedure. Consequently, the courts’ analysis under Fed. R. Civ. P. 8(a) and Fed. R. Civ. P. 9. is

extremely pertinent.

The Supreme Court in recent years has clarified the requirements of an adequately pled

federal complaint in Iqbal, supra; Erickson v. Pardus, 551 U.S. 89, 127 S.Ct. 2197 (2007);


Home Orthopedics Corp. v. Raúl Rodríguez, et al. Civil No. 11-01591 (DRD) Page 4 Twombly, supra; Swierkiewicz v. Soreman N.A., 534 U.S. 506, 122 S.Ct. 992 (2002) and

Crawford-EL v. Britton, 523 U.S. 574, 118 S.Ct. 1584 (1998).

B. RULE 9(B)- HEIGHTENED PLEADINGS STANDARD OF REVIEW

Foremost, allegations of fraud and related causes of action, such as RICO where the

element of fraud is closely tied to the predicate acts, are subject to a heightened pleading

standard.3 In that regard, Plaintiff has failed to meet this standard as to Julio Juliá and Javier

Magriñá in its general allegations.

This heightened pleading standard also governs cases where a conspiracy is tied to the

fraud. Even where allegations of fraud are based on information and belief, supporting facts on

which the belief is founded must also be set forth in the Complaint.4

The reasons as to why a Plaintiff must plead its RICO case in compliance with Fed. R.

Civ. P. 9(b) is clear.

Federal Rule of Civil Procedure 9(b) requires that fraud be pled with particularity. This requirement is designed to accomplish three purposes: (i) to provide a defendant with adequate notice of the charges levelled [sic] against him so that the defendant will be able to prepare an adequate answer and defense; (ii) to eliminate complaints that seek to obtain discovery of

3 Fed. R. Civ. P. 9(b) states: Fraud, Mistake; Conditions of Mind. In alleging fraud or mistake, a party must state with particularity the circumstances constituting fraud or mistake. Malice, intent, knowledge, and other conditions of a person’s mind may be alleged generally. 4 Hayduk v. Lanna, 775 F.2d 441, 443, 444 (1st Cir. 1985) (dismissing causes of action for insufficiency of pleading of fraud, conspiracy to commit the fraud and allegations of fraud based on information and belief.); cases cited therein; and U.S. ex rel. Jarvelas v. Melrose-Wakefield Hosp., 360 F.3d 220, 226 (1st Cir. 2004) revk’d on other grounds. In other words, a plaintiff must “specify the statements contended to be fraudulent, identify the speaker, state when and where the statements were made, and explain why the statements were fraudulent…. the complaint [is required] to set forth the who, what, where, and how of the events at issue…. The plaintiffs must allege specific facts supporting an inference of fraud.” Murungi v. Texas Guaranteed, 646 F.Supp.2d 804, 810 (E.D. La. 2009) citing Dorsey v. Portfolio Equities, Inc., 540 F.3d 333 (5th Cir. 2008) (addressing the who, what, when, where and how requirement.) “Besides the burden of proof, the party who alleges fraud must produce evidence which is strong, clear, unchallengeable, convincing and conclusive, since a mere preponderance of the evidence is not sufficient to establish the existence of fraud in our jurisdiction.” Id. See also Puerto Rico Power Authority, 472 F. Supp. 2d at 139. “Mere conclusions, conjectures, and suppositions or suspicions are not of themselves sufficient to substantiate an allegation of fraud.” Id. See also Puerto Rico Power Authority, 472 F. Supp. 2d at 139. “If the facts are susceptible of a natural and probable explanation which is compatible with the good faith and honesty of the parties, fraud is not established.” Id.



unknown fraud; and, (iii) to protect a defendant from injury to his reputation from frivolous or unfounded charges of wrongdoing. Since the label ‘racketeer’ attaches to a RICO defendant from the moment the action is filed, the third criterion is particularly important in the RICO context. Many plaintiffs rely on the stigma associated with RICO to orchestrate early settlements of claims that are meritless. For the defendant, the motion to dismiss is the only way to oppose such efforts at their inception.

(Emphasis supplied and footnotes within citation omitted.) Davis J. Howard, Moving to Dismiss

a Civil RICO Action, 35 Clev. St. L. Rev. 423, 444-445 (1986/1987).

Moreover, the “legal presumption [is] that everybody acts in good faith and that private

transactions are conducted in good faith and according to law,” In re Las Colinas, Inc., 294 F.

Supp. 582, 598 (D. P.R. 1968), rev'd. on other grounds, 426 F.2d 1005 (1st Cir. 1970).5

Finally, the new “plausibility” standard under Rule 8 also applies to Rule 9(b)'s

requirement for pleading fraud. As this Honorable Court has recently explained:

[There] is no excuse for the failure to make comprehensible the specific claims and facts supporting those claims that would comprise a plausible claim for relief. This is especially true in light of Federal Rule of Civil Procedure 9(b)'s command to state the circumstances constituting fraud with particularity, as well as of the recent Supreme Court decisions in Twombly and Iqbal requiring Plaintiffs to plead their claims with greater factual specificity.

Cintrón-Luna v. Román-Bultrón, 668 F.Supp.2d 315,318 (D. P.R. 2009, Pérez-Giménez, J.).6

C. RULE 8(A)- CONTEXT-BASED PLAUSIBILITY STANDARD OF REVIEW UNDER IQBAL

Fed. R. Civ. P. 8(a) states that “[a] pleading that states a claim for relief must contain… a

short and plain statement of the claim showing that the pleader is entitled to relief.”

5 There is a “legal presumption that everybody acts in good faith and that private transactions are conducted in good faith and according to law. Whoever alleges fraud has to destroy these presumptions.” In re Las Colinas, 294 F. Supp. at 598. See also Puerto Rico Power Authority v. Action Refund, 472 F. Supp. 2d 133, 138 (D. P.R. 2006). Furthermore, “[s]ince the presumption is in favor of the good faith and honesty and against fraud, the party who alleges fraud must prove its existence with uncontroverted and unchallengeable facts.” Id. at 599 (citing Bamberger v. Schoolfield, 160 U.S. 149 (1895). See also Puerto Rico Power Authority, 472 F. Supp. 2d at 138. 6 This same analysis has been reached in other districts. See, S.E.C. v. Mozilo, 2009 WL 3807124 at *14 (CD. Cal. 2009) (when applying the Rule 9(b) standard, in order 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.’” (citing Iqbal and mentioning Wright & Miller).



Furthermore, Plaintiff must also sufficiently plead its cause of action so as to show that it

is entitled to relief and not simply allege through well pleaded facts the existence of just a “mere

possibility of misconduct”. Iqbal, 129 S.Ct. at 1950.7

Moreover, even those properly pled factual allegations “must be enough to raise a right to

relief above the speculative level on the assumption that all the allegations in the complaint are

true.” Twombly, 127 S.Ct. at 1959.8 “If the factual allegations in the complaint are too meager,

vague, or conclusory to remove the possibility of relief from the realm of mere conjecture, the

complaint is open to dismissal.” Artuso v. Vertex Pharms., Inc., 637 F.3d 1. 5 (1st Cir. 2011)

Iqbal, provided a two-step process by which courts may analyze motions to dismiss under

the “context” based “plausibility standard.” In order to follow the suggested analysis, the court

must first “accept as true all the allegations contained in the complaint.” However, to do so, the

7 Iqbal and Twombly interpret the duties of all plaintiffs when drafting their pleadings under Fed. R. Civ. P. 8(a)(2). This is the same standard applicable to the instant motion to dismiss for failure to state a claim. Pursuant to the standard set forth in Twombly, a plaintiff cannot depend on “a pleading that offers ‘labels and conclusions’ or ‘a formulaic recitation of the elements of a cause of action . . . . ’” Iqbal, 129 S.Ct. at 1949 quoting Twombly, 550 U.S. at 555. Instead, Plaintiff must tender statements with enough detail to provide defendant with “fair notice of what the claim is and the grounds upon which it rests.” Twombly, 550 U.S. at 555. Bare recitals of a cause of action supported by conclusory allegations will not suffice to give proper notice to a defendant. Moreover, conclusory statements will not be entitled to the benefit of assuming their truth when challenged by a request for dismissal. Iqbal, 129 S.Ct. at 1949-1950, 1951. 8 After the United States Supreme Court’s ruling in Iqbal, even in non heightened pleading standard cases, one must test the allegations of the complaint pursuant to a “flexible ‘plausibility standard,’” and subject to the basic tenants of pleadings. The pleader must amplify a claim with some factual allegations, “where such amplification is needed to render the claim plausible. A complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’… 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. The plausibility standard is not akin to a ‘probability requirement,’ but it asks for more than a sheer possibility that a defendant has acted unlawfully. Where a complaint pleads facts that are ‘merely consistent with’ a defendant's liability, it ‘stops short of the line between possibility and plausibility of ‘entitlement to relief.’” (Citations to Twombly omitted.) Iqbal, 129 S.Ct. at 1949. Even though Rule 8 does not require “detailed factual allegations” it still “demands more than an unadorned, the-defendant-unlawfully-harmed-me accusation.” Ibid. “The tenet that a court must accept as true all of the allegations contained in a complaint is inapplicable to legal conclusions. Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice.” Ibid. “[W]here the well-pleaded facts do not permit the court to infer more than the mere possibility of misconduct, the complaint has alleged-but it has not ‘show[n]’-‘that the pleader is entitled to relief.’” Id. at 1950 citations to Rule 8. Thus, even in cases where there is no heightened pleading standard, Plaintiff cannot rely on conclusory statements, legal conclusions, or on facts that are merely consistent with a defendant’s liability.



court is obligated to prune the complaint by identifying and eliminating all conclusory

allegations, bald assertions, legal conclusions and formulaic recitations of the elements of a

cause of action. 9

III. ANALYSIS OF HOC’S COMPLAINT UNDER THE IQBAL TWO-PRONG TEST

The Complaint lists seven specifically identified individuals, among them Julio Juliá and

Javier Magriñá, and expounds on two causes of action. The pre-pruned Complaint speculates

that Raúl Rodríguez, the principal of CMSI, a current service provider of durable medical

equipment to Medical Card System, Inc. (hereinafter “MCS”), two of HOC’s employees, co-

defendants Juliá and Magriñá, and two Humana Health Plans of Puerto Rico (hereinafter

“Humana”) employees, Arlene Marrero and Luis Goris García, supposedly extorted HOC and its

principal, Jesús Rodríguez. A second cause of action is for alleged interference with HOC’s

contractual relations with MCS, several medical companies, physicians, and Humana.

The supposed extortion allegedly initiates in 2004 and centers at that time on HOC’s then

ongoing business relationship with MMM Healthcare, Inc. (hereinafter “MMM). As a result of

HOC not complying with a supposedly fraudulently induced agreement entered into between

HOC and CMSI to maintain HOC supplying MMM, co-defendant Raúl Rodríguez allegedly

extorted HOC by threatening HOC with losing its business with MMM if he did not comply with

the terms of the contract and then trying to judicially collect on the alleged debt arising under

their contractual agreement.

Plaintiff also speculates that HOC’s contract with MCS, which first terminated in 2006;

the subsequent HOC proposal that was not adopted by MCS; and its not being chosen among

9 The plausibility standard of Iqbal has been applied by the First Circuit, most notably in the recent cases of Ocasio-Hernández v. Fortuño-Burset, ___ F.3d ___, 2011 WL 1228768 (1st Cir. April 1, 2011); Ríos-Colón v. Toledo-Dávila, ___ F. 3d ___, 2011 WL 1138847 (1st Cir. March 30, 2011); Sepulveda-Villarini v. Department of Educ. of Puerto Rico, 628 F.3d 25 (1st Cir. 2010).



MCS’s service providers for prosthetics and orthotics, was a result of Raúl Rodríguez living up

to his threats that if HOC did not comply with the allegedly fraudulently induced agreement

between HOC and CMSI, its business would suffer the consequences. In 2009, CMSI sued HOC

in the Puerto Rico Court of First Instance, San Juan Superior Part for breach of the allegedly

fraudulently induced contract. Supposedly, during settlement conversations, Raúl Rodríguez

threatened Jesús Rodríguez with losing MCS’s and Humana’s business. Plaintiff further

speculates that since in 2010, HOC in fact permanently lost its MCS contract, allegedly without

any explanation10, it must have been as a result of CMSI’s and Raúl Rodríguez’s active

interference. HOC further speculates in a conclusory manner that the named MCS officers, Juliá

and Magriñá, allegedly conspired for the benefit of HOC’s competitors Diabetic Solutions,

Nazareno Services, Inc., and RPS Medical Equipment. It concludes, without any factual

allegation, that one of the MCS officers, Julio Juliá, used his position to unduly influence MCS

providers. HOC also states, without a basis on a factual allegation, that Julio Juliá and Javier

Magriñá induced Humana and MCS to breach or terminate their contracts and business

relationships with HOC. Additionally, without any reference to any facts, HOC charges that Raul

Rodríguez, Julio Juliá and Javier Magriñá interfered with “the medical companies” and

convinced “them” to “breach HOC’s contract or business relationships with physicians.”

The allegations against the two Humana employees, Luis Goris García and Arlene

Marrero, follow a similar blueprint. It is alleged that HOC had a direct relationship with Humana

since 2004 and that without explanation it was terminated or partially terminated in 2009. No

specific facts tying CMSI, Raúl Rodríguez and Humana are alleged, but as part of the RICO

10 However, as will be discussed, a reading of the exhibits included with the Complaint show that HOC was among the prosthetics and orthotics service providers that were not chosen by MCS after MCS conducted an evaluation of its prosthetics and orthotics net of providers and made changes.


Home Orthopedics Corp. v. Raúl Rodríguez, et al. Civil No. 11-01591 (DRD) Page 9 charge thrusted at Humana’s officers, it is stated that the termination of the relationship between

Humana and HOC was the culmination of Raúl Rodríguez’s threats “as prognosticated” and as

the result of the alleged extortion scheme. Furthermore, there are allegations regarding

communications from Humana regarding HOC’s status as provider and its alleged continuing

intervention with HOC’s business relations with doctors and hospitals around the island.

While Plaintiff has elaborated an interesting though outlandish theory, it has not provided

factual allegations to allow Julio Juliá and Javier Magriñá to respond to the conclusory

allegations directed at unspecified defendants and/or unnamed persons, to the allegations related

to fraud, or to the allegations regarding supposedly predicate or illegal conduct, thus preventing

them from adequately defending themselves. The most conspicuous omission of detail is the

inability to ascertain their participation in the fraudulent actions and/or the behavior directed

towards the related conspiracy or illegal acts. The facts stated by HOC which refer to Julio Juliá

are circumscribed to an alleged statement that HOC’s status as an exclusive provider of MMM

was a reason for HOC not being chosen to be a part of MCS’s network of service providers and

his alleged participation in two meetings, one in which he supposedly stated that MCS could not

contract directly with HOC because of a preexisting contract between HOC and CMSI, and

another in which supposedly Raul Rodriguez interrupted to state the same. [Cplt. ¶¶65-68, 80

Dkt. 1]. The allegations stated by HOC which refer to Javier Magriñá are circumscribed to his

allegedly having participated in a meeting where he indicated that the decision as to the

remaining service providers was not his and to his having subscribed two letters included as

exhibits to the Complaint. One letter referred to a stay of the termination of the contract between

HOC and MCS and the other, addressed to the Health Care Organizations, Hospitals and

Participating Doctors, among others, announcing the names of the companies that had been


Home Orthopedics Corp. v. Raúl Rodríguez, et al. Civil No. 11-01591 (DRD) Page 10 selected to be a part of MCS’s Prosthetics and Orthotics network of providers after performing

an evaluation of the applicants. [Cplt. ¶¶79-80 Dkt. 1] and [Exh. 15 & 18 Dkt. 1].

As analyzed below, the allegations presented by Plaintiff do not offer fair notice of what

the claims are and the grounds upon which they rest, nor do they cross “the line between

possibility and plausibility of ‘entitlement to relief.” Iqbal, 129 S.Ct. at 1949. Those specific

factual allegations against Julio Juliá and Javier Magriñá are insufficient to show that Plaintiff is

entitled to relief and do not comply with the plausibility standard of the two-prong test..

A. FIRST PRONG: PRUNING THE COMPLAINT In order to survive a motion to dismiss, one must sift through the allegations and accept

as true only the well-pleaded factual allegations. These remaining factual allegations must then

be sufficient to state a plausible claim for relief. We will address each category separately.11

1. GENERAL ALLEGATIONS AGAINST UNDISCLOSED AND OTHERWISE UNNAMED DEFENDANTS

General allegations against undisclosed and otherwise unnamed defendants are evidently

not directed against Julio Juliá or Javier Magriñá and additionally are insufficient under the

heightened pleadings standard of Rule 9(b). Thus they should be eliminated.

2. FORMULAIC RECITATION OF THE ELEMENTS OF A CAUSE OF ACTION

Plaintiff speculates that Mr. Julio F. Juliá, by allegedly stating to HOC’s representative

that MCS could not negotiate directly with HOC because CMSI had a prior agreement with HOC

for these negotiations, was party to an effort to extort HOC and Jesús Rodriguez by means of

misrepresentation and fraud, in order to benefit CMSI. [Cplt. ¶¶65-66 Dkt. 1] This is a

11 Upon a study of the allegations of the Complaint, once the conclusory allegations, bald assertions and formulaic recitals are eliminated and the well-pleaded factual allegations are accepted as true (for purposes of this motion only), HOC fails to state a plausible claim for relief. The facts alleged on the face of the complaint do not nudge the claims from the conceivable to the plausible.


Home Orthopedics Corp. v. Raúl Rodríguez, et al. Civil No. 11-01591 (DRD) Page 11 conclusory allegation; but even if true, it could not be deemed to be an extortion,

misrepresentation, or fraud.

The Complaint charges that “Juliá told, convinced and affirmed, to HOC and Jesus

Rodriguez the [sic] MCS could not legally sign directly with them, while being fully aware that

this was a falsity. Similarly he told MCS that they could not contract with HOC. Thus he

effectively controlled the relationship for profit.” [Cplt. ¶68 Dkt. 1]. This statement is truly a

conclusory allegation and a bald assertion of an element of a possible cause of action. Moreover,

this matter is closely related to the alleged fraud and misrepresentation. The statement is not

sufficient under the heightened pleading standard of when, where and how this alleged fraud and

control of the relationship for profit occurred and should be eliminated.

The un-pruned Complaint also states that “They are also actors having taken actions in

concert or as part of an association in fact which were designed to damage or diminish the

market of HOC.” [Cplt. ¶81 Dkt. 1]. This statement is a bald assertion and a formulaic allegation

of elements of a cause of action. It fails to provide a factual narrative upon which to support the

speculative accusation or provide the necessary details of who did what to whom, when, where

and how and should therefore also be eliminated.

The unstrained Complaint claims that Julio Juliá and Javier Magriñá used their positions

at MCS to allegedly extort HOC and other providers like HOC and also, cooperate to forward

CMSI’s economic interests. [Cplt. ¶83 Dkt. 1]. This statement is also a bald assertion and a

conclusory allegation. Furthermore, it does not comply with the heightened pleading standard

because it fails to state the when, where, how, who, or what of the alleged extortion to HOC and

others or how CMSI’s economic interest was forwarded by any action whatsoever. There is no



factual narrative as to Julio Juliá or Javier Magriñá in any manner, form or way extorting Jesús

Rodriguez or HOC. Plaintiff has failed to properly dress his accusations.

Furthermore, HOC, out of the blue, states that Julio F. Juliá and Javier Magriñá allegedly

acted in benefit of Diabetic Solutions, Nazareno Services, Inc., and RPS Medical Equipment,

HOC’s competitors. [Cplt. ¶84 Dkt. 1]. Even though this is indeed a conclusory allegation and

bald assertion, even if taken as true, the same does not give notice as to the improper conduct

that would create a possible cause of action in a manner that would allow the defendants to

defend themselves. It fails to state a cause of action upon which relief can be granted in favor of

HOC.

Additionally and incomprehensibly as to why it would be so, the un-sifted allegations of

the Complaint state that co-defendants Luis Goris García and Arlene Marrero, employees at

Humana during the alleged misconduct, cooperated to forward Julio F. Juliá’s economic

interests. [Cplt. ¶103 Dkt. 1]. This libelous, inexplicable, and unfounded statement is purely

conclusory and does not allow Mr. Juliá to adequately respond or to defend himself.

Paragraphs 104, 106, 107, 108, 109, 11012, 111, 112, 113, 121, 122, and 123 generally

refer to defendants, without specifying which defendants. Furthermore, the allegations in these

paragraphs are purely conclusory.13 Plaintiff fails to dress its accusations and does not describe

how Julio Juliá and Javier Magriñá participated in said actions, or the conduct that should be

deemed to be illegal, or even how they profited or caused damage and loss in a legally precluded

12 It is important to note that paragraph 110 of the complaint does have subparagraphs (i) through (xxvii). However, Javier Magriñá is not mentioned in these subparagraphs in any manner or form and Julio Juliá is only mentioned to the extent that Luis Goris García and Arlene Marrero, of Humana, forwarded his economic interests. This conclusory allegation discussed above and identified as an inadequate allegation. 13 They allege that defendants “violated the law”, “extorted HOC”, “defrauded merchandisers”, “conspired to defraud”, “made threats of business violence” or “violence to business”, “racketeered”, “used the mail and wires”, “fraudulently obtained money”, “knew of each other’s actions”, “interfered with HOC’s property interest or with the execution of HOC’s business”, “aided and abetted” and “rendered substantial assistance to each other”, “threatened harm”, “profited from their action”, “obtained money and services from HOC”, “coerced HOC” and “acted so as to HOC not obtain contracts.”


Home Orthopedics Corp. v. Raúl Rodríguez, et al. Civil No. 11-01591 (DRD) Page 13 manner. Plaintiff relies on just stating that every fact describing Defendant’s actions constitutes a

predicate act under RICO. These allegations do not comply with the heightened pleading

standard of Fed. R. Civ. P. 9(b) or Fed. R. Civ. P. 8(a) as defined in Iqbal and Twombly. [Cplt.

¶¶ 104-113, 121-123 Dkt. 1] since they are formulaic recitals of the elements of a cause of

action. Furthermore, the factual narrative as to Julio Juliá and Javier Magriñá does not support

such conclusions.

Paragraph 114 of the Complaint is just a list of the elements of Section 1962 of the RICO

statute, in a conclusory matter identifying Mr. Juliá and Mr. Magriñá as persons, and persons

employed or associated with CMSI. Clearly this does not comply with a sufficiently pled factual

allegation that would impede the dismissal. [Cplt. ¶114 Dkt. 1]

Likewise, paragraphs 115, 117, and 118 contain a series of conclusory statements and

bald assertions that merely recite different elements of a RICO violation without providing any

factual narrative to sustain them. [Cplt. ¶¶115, 117-118 Dkt. 1]

Additionally, Plaintiff libelously states that Julio F. Juliá allegedly uses his position as

President of MCS to “unduly influence providers” yet fails to state a single fact to support its

baseless accusation. [Cplt. ¶120 Dkt. 1].

Similarly, paragraphs 125-130 of the un-pruned Complaint are recitals of the elements of

a tortious interference with contractual obligations cause of action where HOC makes naked

conclusory allegations, by which Julio Juliá and Javier Magriñá are unjustifiably accused of

tortiously interfering with HOC’s relationship with the medical companies, physicians, MCS and



Humana14. [Cplt. ¶¶125-130 Dkt. 1]. Consequently, these co-defendants do not have proper

notice of the claims against them in a manner that they can reasonably defend themselves.

3. REMAINING TRIMMED ALLEGATIONS AGAINST JULIO JULIÁ

1. Juliá, Magriñá and Raúl Rodriguez are allegedly close friends.15 [Cplt. ¶81 Dkt. 1].

2. Mary Davis, MD, MCS representative, and Michael Soler, on HOC’s behalf, met in order

to discuss HOC’s proposal. Julio Juliá allegedly participated in the referred meeting.

[Cplt. ¶64 Dkt. 1]

3. In that meeting, Julio Juliá allegedly indicated MCS could not negotiate directly with

HOC because CMSI had an exclusivity-percentage agreement with HOC for those

negotiations, and they could only be made through CMSI. [Cplt. ¶65 Dkt. 1].

4. Subsequently, Julio Juliá allegedly coordinated a meeting with Michael Soler regarding

HOC, and supposedly Raúl Rodríguez appeared at the meeting and told Soler that HOC

could not negotiate directly with MCS because CMSI had an exclusivity-percentage

agreement with HOC for those negotiations, and they could only be made through CMSI

[Cplt. ¶68 Dkt. 1]

5. Juliá then “told, convinced and affirmed, to HOC and Jesus Rodriguez the [sic] MCS

could not legally sign directly with them.” He also allegedly told MCS that they could not

contract with HOC. [Cplt. ¶68 Dkt. 1]

6. However, MCS did not negotiate through CMSI. HOC in fact did negotiate and met

directly with MCS to discuss the matters related to orthotics, prosthetics and implants.

[Cplt. ¶¶67 & 70 Dkt. 1].

14 In addition that the allegations are not sustained with any factual context, one cannot even fathom or understand how Julio Juliá and Javier Magriñá could interfere with HOC’s relationship with Humana. 15 This conclusory statement, even if taken as true cannot lead to a plausible conclusion or inference of misconduct.



7. Subsequently, Javier Magriñá in a meeting held in April of 2010, allegedly told Jesús

Rodríguez that the decision to end the contract between MCS and HOC in 2010 was Julio

Juliá’s and that the purported reason given was that HOC was an exclusive provider of

MMM [Cplt. ¶80 Dkt. 1], while CMSI allegedly is a provider of MCS and also of

American Health, also under “exclusive” terms. [Cplt. ¶80 Dkt. 1]

8. Hector L. Pastor, supposedly told Jesús Rodriguez that he would schedule a meeting

between Julio Juliá and HOC. However, days later, Pastor told Rodríguez that “Julio Juliá

[had] nothing to talk with him.” [Cplt. ¶82 Dkt. 1]

4. REMAINING TRIMMED ALLEGATIONS AGAINST JAVIER MAGRIÑÁ

9. Juliá, Magriñá and Raul Rodriguez allegedly are close friends.16 [Cplt. ¶81 Dkt. 1]

10. During the April 19, 2010 meeting in which Pastor participated, Magriñá allegedly told

Jesús Rodríguez that the decision to end the contract was not his. [Cplt. ¶¶79-80 Dkt. 1]

11. Magriñá signed a letter dated June 23, 2010, informing of a stay of the termination of the

Prosthetics and Orthotics Suppliers Agreements. [Exh. 15 Dkt. 1].

12. Javier Magriñá signed a subsequent letter dated August 31, 2010, informing that MCS,

after re-evaluating their network of providers and deciding to make changes to the same,

had chosen three providers effective October 1, 2010. HOC was among the suppliers that

had not been selected. [Exh. 18 Dkt. 1].

5. OTHER TRIMMED FACTUAL ALLEGATIONS

13. As early as November 16 of 2006, MCS terminated HOC’s contract because it was

reevaluating its policies. [Cplt. ¶59 Dkt. 1] and [Exh. 8 Dkt 1].

16 See footnote 15.


Home Orthopedics Corp. v. Raúl Rodríguez, et al. Civil No. 11-01591 (DRD) Page 16 14. As a result, all contracts with prosthesis companies were terminated and new policies

were put in place. [Exh. 9 Dkt 1].

15. Said re-evaluation process began in 2006-2007. [Exh. 8-10 Dkt 1].

16. On February 22, 2007, the Credentials Committee met to discuss HOC’s request to be

chosen as a provider. [Exh. 9 Dkt 1].

17. The Credential Committee found that HOC did not comply with the requirements since

its prosthetists did not have the requested certifications. One of the prosthetists was

working for another entity and a credentials check showed that he had allegedly been

suspended for ethical reasons. [Exh. 9 Dkt 1].

18. On March 12, 2007, HOC was given, in reconsideration, the opportunity to complete the

procedures necessary to have its prosthetists certified and placed certain prohibitions

regarding the handling of patients by certain prosthetists. [Exh. 11 Dkt 1].

19. This termination and the change in MCS’s policies occurred prior to Julio Juliá working

for MCS. [Cplt. ¶62 Dkt. 1]

20. In 2008, HOC voluntarily made a proposal to provide services under a capitation or

capitated agreement. [Cplt. ¶61 Dkt. 1].

21. In spite of the allegations that MCS was supposedly informed that it could not negotiate

with HOC, MCS allegedly informed HOC that it would not negotiate through co-

defendant CMSI [Cplt. ¶67 Dkt. 1] and thus HOC met directly and negotiated matters

with MCS. [Cplt. ¶70 Dkt. 1].


Home Orthopedics Corp. v. Raúl Rodríguez, et al. Civil No. 11-01591 (DRD) Page 17 22. On March 31, 2010, MCA and its Subsidiaries notified all its providers in written form

the decision to terminate all of the Prosthetics and Orthotics Supplier Agreements

effective May 31, 2010. [Cplt. ¶77 Dkt. 1] and [Exh. 15 Dkt 1].17

23. The reasons for the termination of all the providers were that MCS had decided to re-

evaluate its net of providers and then selected only three after engaging in said

reevaluation process. HOC was among the many providers not chosen. [Exh. 18 Dkt 1].

24. The Prosthetics and Orthotics Supplier Agreement was an agreement terminable at will.

[Exh. 8 Dkt. 1].

25. HOC filed before the Administración de Seguros de Salud de Puerto Rico (ASES) a

complaint related to its termination by MCS [Exh. 21 Dkt 1].

26. CMSI filed a complaint against HOC in the Court of First Instance, San Juan Superior

Part, to enforce the allegedly fraudulently induced agreement. [Cplt. ¶72 Dkt. 1] and

[Exh. 13 Dkt 1]

B. SECOND PRONG: STATING A PLAUSIBLE CLAIM WITH REMAINING ALLEGATIONS

1. ELEMENTS OF THE CAUSES OF ACTION UNDER RICO

Plaintiff claims causes of action under RICO 18 U.S.C. § 1962 (c) and (d), in its civil

context and Article 1802 of the Puerto Rico Civil Code.

The 18 U.S.C. § 1962 (d) Claim

The RICO statute states that “[i]t shall be unlawful for any person to conspire to violate

any of the provisions of subsections (a), (b) or (c) of this section.” 18 U.S.C. § 1962(d). “In order

to state a cause of action under 18 U.S.C. § 1962 (d), plaintiff must state a viable conspiracy

17 Plaintiff fails to include the actual termination letter and in an opportunistic fashion only attaches as an Exhibit a follow-up letter postponing the termination until later dates [Exh. 15 Dkt 1] and omits to state in the body of the complaint that all the providers had been terminated [Exh 18 Dkt 1].



charge. To state a claim for conspiracy a plaintiff must allege “the existence of at least one overt

act by a defendant in furtherance of the conspiracy and the assent of each defendant to the

conspiracy.”18 “To succeed under § 1962(d) a plaintiff must show that the defendants were

parties to an unlawful agreement or that defendants knowingly agreed to further its affairs

through the commission of various offenses. 19As will be stated below, Plaintiff does not provide

any facts that would show a conspiracy, unlawful agreement, predicate act, or commission of

offenses by Julio Juliá and Javier Magriñá.

Plaintiff fails to provide any factual narrative that would lead a reasonable person to

conclude that the elements, necessary to constitute a conspiracy, have been properly alleged.

Plaintiff cannot survive a motion to dismiss on veiled speculation.

The 18 U.S.C. § 1962 (c) Claim

Plaintiff also claims violations of 18 U.S.C. § 1962(c), which states the following.

It shall be unlawful for any person employed by or associated with any enterprise engaged in, or the activities of which affect, interstate or foreign commerce, to conduct or participate, directly or indirectly, in the conduct of such enterprise’s affairs through a pattern of racketeering activity or collection of unlawful debt. A cause of action under 18 U.S.C. § 1962 (c) requires a finding that the defendant be

employed or associated with the enterprise. Plaintiff identifies CMSI as the enterprise. However,

there is no factual narrative as to how Julio Juliá and Javier Magriñá, are employed, associated or

in any way have an interest in CMSI and its endeavors or directly or indirectly, conduct or

participate in CMSI’s affairs. The only allegation is that some of co-defendants are allegedly

close friends.

18 Salinas v. United States, 522 U.S. 52, 65 (1997). “An actionable claim under section 1962(d) ... requires that the complainant's injury stem from a predicate act within the purview of 18 U.S.C. § 1961(1). Miranda, 948 F.2d at 48.” JJ Alvarez v. Westernbank, 2009 WL 4730776 *5 (D.P.R., Dec 4, 2009). 19 See Miranda, 948 F.2d at 47-48; see also First City National Bank & Trust v. Federal Deposit Insurance Co., 730 F.Supp. 501 (E.D.N.Y.Jan.16, 1990) (dismissing claim under 1962(d) because no agreement shown between named defendants).”” JJ Alvarez, supra.



The United States Supreme Court has adopted an “operation or management” test by

which the courts are to analyze the alleged relationship.

Once we understand the word “conduct” to require some degree of direction and the word “participate” to require some part in that direction, the meaning of § 1962(c) comes into focus. In order to “participate, directly or indirectly, in the conduct of such enterprise's affairs,” one must have some part in directing those affairs. Of course, the word “participate” makes clear that RICO liability is not limited to those with primary responsibility for the enterprise's affairs, just as the phrase “directly or indirectly” makes clear that RICO liability is not limited to those with a formal position in the enterprise, but some part in directing the enterprise's affairs is required. The “operation or management” test expresses this requirement in a formulation that is easy to apply.

Reves v. Ernst & Young, 507 U.S. 170, 179, 113 S.Ct. 1163, 1170 (1993).

Under the “operation or management” test under 18 U.S.C. § 1962(c), Plaintiff has failed

to state that Julio Juliá and Javier Magriñá conducted or participated, directly or indirectly, in the

activity of CMSI or the alleged enterprise, much less as to when and how. Plaintiff is unable to

show that Juliá or Magriñá in any way, shape or form directed the alleged enterprise and formed

part of its operation or management.

“To state a claim under section 1962(c) [or (a)], a plaintiff must allege each of the four

elements required by the statute: (1) conduct (2) of an enterprise, (3) through a pattern (4) of

racketeering activity.” 20 “The predicate acts of which the RICO statute speaks are, basically,

acts indictable under any one or more of certain specified criminal laws.”21

No Illegal Conduct

The Complaint fails to allege sufficient facts from which one could plausibly infer that

Juliá and Magriñá participated in “racketeering activity”. Plaintiff fails to provide any factual

narrative by which a conduct punishable under Puerto Rico Criminal Statutes or an act

20 North Bridge Ass., Inc. v. Boldt, 274 F .3d 38, 42 (1st Cir.2001) as cited in JJ Alvarez v. Westernbank, 2009 WL 4730776 *4. Giuliano v. Fulton, 399 F. 3d 381, 386 (1st Cir. 2005) as cited in La Carpa Corp. v. Baer, 2010 WL 3955813 *4 (D. P.R. Sept. 30, 2010). 21 Feinstein v. Resolution Trust Corp., 942 F.2d 34, 42 (1st Cir.1991) (citing 18 U.S.C. § 1961(1)(B)). as cited in JJ Alvarez v. Westernbank, 2009 WL 4730776 *7.


Home Orthopedics Corp. v. Raúl Rodríguez, et al. Civil No. 11-01591 (DRD) Page 20 constituting an unlawful activity described in 18 U.S.C. § 1961 (1) could be alleged as to Juliá

and Magriñá. Plaintiff’s allegations of extortion or any other illegal conduct by Juliá and

Magriñá are conclusory allegations naked of any factual support.

Even though Plaintiff does allege wire fraud22, the acts described in the complaint do not

refer to any such conduct by Julio Juliá or Javier Magriñá. “Mail or wire fraud requires proof of

(1) a scheme to defraud based on false pretenses; (2) the defendant's knowing and willing

participation in the scheme with the specific intent to defraud; and (3) the use of interstate mail

or wire communications in furtherance of the scheme.” Sánchez v. Triple-S Mgmnt. Corp., 492

F.3d 1, 9-10 (1st Cir. 2007). But even if the allegation would be deemed to include the letters

sent by Magriñá, a study of the same would show that their content cannot be considered to be

part of a scheme to defraud based on false pretenses. The facts responding to the particular

elements necessary to constitute mail or wire fraud are not stated.23

No Pattern

“A RICO claim requires the showing of at least two predicate acts of racketeering

activity. [Citing Efron v. Embassy Suites (P.R.), Inc., 223 F.3d 12, 15 (lst Cir.2000)] The mere

occurrence of two or more predicate acts, however, does not constitute a pattern. Id. A plaintiff

must also demonstrate (1) that the predicate acts are related, and (2) that they pose a threat of

continued criminal activity. [Referring to Feinstein v. Resolution Trust Corp., 942 F.2d 34, 44

(1st Cir.1991)” JJ Alvarez v. Westernbank, 2009 WL 4730776 *8.

22 The Complaint states that on January 9, 2006, in an effort to continue the alleged “extortion” of HOC, CMSI sent an e-mail (wire fraud) to Jesús Rodríguez. [Cplt. ¶44 Dkt. 1] 23 In addition, in order for a plaintiff to bring a valid RICO claim, he or she needs to show that there is a causal nexus between the racketeering activity and the plaintiff's injury. Holmes v. Securities Investor Protection Corp., 503 U.S. 258, 266-68 (1992). In the present case, however, HOC has failed to allege sufficient facts from which one could plausibly infer a causal relationship between any acts of Juliá and Magriñá and any injuries allegedly suffered.



HOC has failed to allege sufficient facts from which one could plausibly infer that there

was a pattern of predicate acts. Plaintiff fails to allege the sufficient quantity of predicate acts to

meet the statutory minimum, and even if it did, fails to establish that they are a pattern because

they are too circumscribed to demonstrate the requisite “continuity”. Even conceding, for

argument's sake only, that the alleged actions by Juliá and Magriñá are indeed predicate acts and

that such acts are related to one another, the Complaint still fails to state a claim under RICO

because the allegations are insufficient to establish the pattern element of the claim, given that

one cannot infer either close-ended or open-ended continuity.

No Open-Ended Pattern

Viewing plaintiff’s allegations under the closed-ended approach, the alleged predicate

acts of Javier Magriñá of a meeting in 2010, and possibly two letters in June and August of 2010,

does not satisfy the minimum requirement for a closed-ended continuity. Similarly, the alleged

factual narrative regarding Julio Juliá is undertaken in a short time frame in the year 2008. Even

if extending the term to the year 2010, it is alleged throughout a less than 24-month period.

Although this time frame exceeds the minimum requirement for closed-ended continuity of more

than “a few weeks or months,” H.J. Inc. v. Northwestern Bell Telephone Co., 492 U.S. 229, 242

(1989), “it is not so long a period, nor are there so many predicate acts that other indicators of

continuity-or lack of them-are without significance.” Efron, 223 F.3d at 17. Where, as here, the

alleged racketeering is “neither so extensive in reach nor so far beyond the minimum time period

that common sense compels a conclusion of continuity, the fact that a defendant has been

involved in only one scheme with a singular objective and a closed group of targeted victims [is

also] highly relevant.” Id. at 18. Plaintiff wants the court to infer and speculate that Julio Juliá

and Javier Magriñá participated in a single narrow scheme to defraud a single victim, HOC, by


Home Orthopedics Corp. v. Raúl Rodríguez, et al. Civil No. 11-01591 (DRD) Page 22 allegedly misrepresenting its relationship with CMSI. These allegations do not state a RICO

claim based on a closed-ended series of predicate acts.24

No Open-Ended Pattern

Under the open-ended approach, Plaintiff has not alleged any specific threat of repetition

extending indefinitely into the future. Moreover, although the Complaint’s allegations, if proven

to be true, they do not plausibly demonstrate that Julio Juliá or Javier Magriñá would seek to

repeat the alleged fraud or schemes in this or other business settings, such that racketeering

activity is their regular way of conducting business. See Efron, 223 F.3d at 19 (citing H.J. Inc.,

492 U.S. at 243; Roeder v. Alpha Indus., Inc., 814 F.2d 22, 31 (1st Cir.1987) (“no suggestion

that defendants used similar means to obtain other subcontracts, or that they bribed anyone

else”)). It is not reasonable to infer from the allegations that there is a risk of a broader scheme,

or that the allegedly fraudulent acts directed at HOC would continue indefinitely into the future.

HOC does not allege any other behavior that would prove that the alleged predicate acts were

part of an ongoing scheme or that they were Juliá’s or Magriñá’s regular way of doing business.

For that reason, there is no open-ended continuity in this case.

Because there is neither close-ended nor open-ended continuity, the pattern element of

the RICO Act claim is not met. Since that element is a necessary condition for a RICO Act

claim, the Court should dismiss that claim against Julio Juliá and Javier Magriñá.

24 See Efron, 223 F.3d 12 (dismissing RICO claim where alleged acts comprised “a single effort over [21-month period] to wrest control of a particular partnership from a limited number of its partners”) (citing Apparel Art Int’l., Inc. v. Jacobson, 967 F.2d 720, 723 (1st Cir.1992) (“[A] single criminal episode, or event, is not a ‘pattern’ ... [because] its parts, taken together, do not amount to or pose a threat of continued criminal activity.”); Edmondson & Gallagher v. Alban Towers Tenants Ass’n, 48 F.3d 1260, 1265 (D.C.Cir.1995) (combination of “single scheme, single injury, and few victims ... makes it virtually impossible for plaintiffs to state a RICO claim”); Resolution Trust Corp. v. Stone, 998 F.2d 1534, 1545 (10th Cir.1993) (“Where the scheme has a limited purpose, most courts have found no continuity.”); Sil-Flo, Inc. v. SFHC, Inc., 917 F.2d 1507, 1516 (10th Cir.1990) (affirming dismissal of RICO claim where a “closed-ended series of predicate acts ... constituted a single scheme to accomplish one discrete goal, directed at one individual with no potential to extend to other persons or entities”); Menasco, Inc. v. Wasserman, 886 F.2d 681, 684 (4th Cir.1989) ( “Defendants’ actions were narrowly directed towards a single fraudulent goal.”)).



2. ELEMENTS OF CAUSES OF ACTION UNDER ARTICLE 1802 FOR TORTIOUS INTERFERENCE WITH CONTRACTUAL OBLIGATIONS

The Puerto Rico Supreme Court has recognized a cause of action for tortious interference

with contractual obligations under Article 1802 of the Puerto Rico Civil Code. Gen. Off. Prod.

Corp. v. A.M. Capen’s Sons, Inc., 15 P.R. Offic. Trans. 727 at *3-4, 115 D.P.R. 553 (1984);

Dolphin Int. of P.R., Inc .v. Ryder Truck Lines, Inc., 1991 WL 735928 P.R. Offic. Trans. *4, 127

D.P.R. 869 (1991).

The elements of a cause of action for tortious interference with contractual obligations

requires that 1) there must be a contract with which a third person interferes (if an expectancy or

a profitable financial relationship for which there is no contract is interfered with the action does

not lie); 2) fault must be present, so the Plaintiff must show that the third party has acted

tortiously with the knowledge of the contract’s existence; 3) plaintiff must suffer a damage; and

4) the damage must be a consequence of the tortious acts of the third person. Gen. Off. Prod.

Corp. 15 P.R. Offic Trans. 727 at *4; Dolphin, 1991 WL 735928 P.R. Offic. Trans. At *4; Jusino

v. Walgreens, 155 D.P.R. 560, 575-576 (2001).

The doctrine of tortious interference with contractual obligations requires that there be a

contract. An interference with expectancy is not deemed a conduct actionable as a tortious

interference with contractual obligations. Gen. Off. Prod. Corp. 15 P.R. Offic Trans. 727 at *4;

Dolphin, 1991 WL 735928 P.R. Offic. Trans. at *6. The termination of a contract at will is not

subject to liability for tortious interference with contractual obligations and is subject to the

defense based on the theory of privilege of competition. Dolphin, 1991 WL 735928 P.R. Offic.

Trans. at *6-7.

Plaintiff mentions that MCS originally terminated its contract in 2006. The Complaint

specifically states that Julio Juliá was not employed by MCS at that time, nor is there any factual


Home Orthopedics Corp. v. Raúl Rodríguez, et al. Civil No. 11-01591 (DRD) Page 24 narrative regarding Julio Juliá and Javier Magriñá as to said termination. Furthermore, the

Exhibits included in the complaint state ample reasons for the termination of the relationship and

identify that the type of agreement was terminable at will. Consequently, there is no cause of

action for tortious interference with a contractual obligation for said events.. HOC then

complains that it presented a proposal to MCS to change the relationship to capitated services.

Consequently, from the actual allegations of the Complaint one must conclude that said proposal

is not a contract between MCS and HOC for which there could have been an actionable tortious

interference. Lastly, Plaintiff complains that its business relationship with MCS was terminated.

However, given by its own admissions and attached Exhibits, the relationship could be

terminated at will and MCS gave its reasons for termination. Consequently, said termination is

not actionable and would be subject to the privilege of competition defense.

Moreover, the cause of action needs to be against a third party. The Puerto Rico Supreme

Court has recognized that there is no cause of action against employees of a corporation for

alleged tortious interference with contractual obligations between Plaintiffs and the corporation

for which defendants work. Jusino, 155 D.P.R at 586-587. Consequently, to the extent that

Plaintiff is claiming that MCS employees/officers tortiously interfered with its business

relationship with HOC, it fails to state a claim upon which relief can be granted. Also see La

Carpa, 2010 WL 3955813 at *3-4 (D. P.R. Sept. 30, 2010) and cases cited therein.

Therefore, for the same reasons stated herein, there is no possible cause of action as

stated in Paragraph 130 of the complaint for alleged interference with prospective business

relations, expectations, or advantages.25

25 Plaintiff also in a conclusory manner accuses Mr. Juliá and Mr. Magriñá of interfering with HOC’s relationships with medical companies, Humana and physicians. However, the allegations lack any factual narrative. On the contrary, the factual narrative regarding HOC’s relationship with Humana, the medical companies and the physicians identify other alleged actors. Consequently, Plaintiff fails to state a plausible cause of action against Juliá


Home Orthopedics Corp. v. Raúl Rodríguez, et al. Civil No. 11-01591 (DRD) Page 25 IV. CONCLUSION

Plaintiff has not stated its claim adequately. The causes of action cannot be supported by

showing any set of facts consistent with its allegations. Even taking the well-pled facts as true,

these do not show a plausible cause of action as Plaintiff has not nudged its claims “across the

line from conceivable to plausible.” Iqbal, 129 S.Ct. at 1951.

WHEREFORE, for the reasons stated above, Julio Juliá and Javier Magriñá move that the

Court pursuant to Fed. R. Civ. P. 12(b)(6) dismisses all causes of action presented against them

by Plaintiff HOME ORTHOPEDICS CORP.

RESPECTFULLY SUBMITTED.

WE HEREBY CERTIFY that on this same date the foregoing was electronically filed with

the Clerk of the Court using the CM/ECF System which will send notification of such filing to

all attorneys of record registered in the use of the CM/ECF system.

In San Juan, Puerto Rico, this 5th day of July, 2011.

DEL TORO & SANTANA Attorneys for Julio Juliá and Javier Magriñá Plaza Scotiabank, Suite 610 273 Ponce de León Avenue San Juan, Puerto Rico 00917 Tel. (787) 754-8700 Fax (787) 756-6677 S/ ROBERTO SANTANA APARICIO USDC-PR 122811 E-mail: [email protected]

s/ BERENICE B. BELLOTTI USDC-PR 214802 E-mail: [email protected]

and Magriñá as to any interference with HOC’s relationships with Humana, the medical companies and the physicians.


mailto:[email protected]

mailto:[email protected]

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