Intermediaries in the distribution chain are not principals or grantors and Law 75 liability cannot attach to them

In Meta Med, LLC v. Insulet Corporation, 2024 WL 1763610 (D.P.R. Apr. 23, 2024) (Vélez-Rivë,J.), following a termination and the appointment of another distributor, a Puerto Rico reseller Meta Med and an individual sued a medical device company and two stateside wholesalers asserting claims under Laws 75 and 21. Plaintiffs alleged to have signed separate written agreements with defendants to provide training and resell diabetes products and services. Plaintiffs’ flawed theory of the case was that there were multiple principals and defendants were jointly liable. In short order, the court granted the defendants-wholesalers’ motion to dismiss. Citing Romero v. ITE, 332 F. Supp. 523 (D.P.R. 1971), the court held that Law 75 limits liability to the principal and grantor and not third parties. Based on the allegations, the court found that the wholesalers stopped selling products to plaintiffs at the principal Insulet’s request and control. As intermediaries and not principals, the wholesalers were not liable under Law 75. Because plaintiffs had no actionable Law 75 claim against these defendants, the claim for breach of a duty of good faith and fair dealing failed as well. As to Insulet, the court enforced a mandatory forum selection clause of Massachusetts in the agreement with plaintiff Mercado and dismissed certain claims. Notably, the court held that Law 75’s public policy considerations cannot override the benefit of the bargain in the valid choice of forum provision. The Law 21 claim did not survive as the statute requires exclusivity and Plaintiffs conceded the relationship was nonexclusive.The only claim that survived, and remained pending for a preliminary injunction hearing, was plaintiff Meta Med’s termination claim against Insulet, whose agreement apparently did not have a choice of forum provision.