Do allegations of exclusivity in a Law 21 case over a single customer in the territory survive a motion to dismiss?

Update! No. 26-1077 argued on 11/5/2026 in the First Circuit. The panel was inquisitive and can be described as a hot panel. What makes this appeal interesting is the sufficiency of naked allegations of exclusivity in a second amended complaint and if those allegations survive a motion to dismiss. The allegations arose from a verbal agreement in which the representative allegedly performed as the de facto exclusive agent for commissions. The district court decided that this was legally insufficient. The questions are whether the Law 21 claim is implausible without also alleging that the supplier agreed with or corroborated that exclusivity, or should the case proceed to discovery to prove those facts. The central issue is the meaning of exclusivity in Law 21 and the sufficiency of allegations to survive a motion to dismiss. The appeal allows the court to interpret the norm that exclusivity can be inferred from the terms of the contract or the course of dealings, but in the context of a motion to dismiss not a fully developed factual record. Appellant conceded that the case is only about exclusivity from a course of dealings, not that there was a verbal exclusive agreement. Panel appeared to be confused with the allegations. Judges pressed hard about failing to plead facts of assurances of exclusivity and IOM CTA1 precedent. Did not plead that the verbal communications contained supplier's assurances of exclusivity. Appellant tried to distinguish IOM saying that discovery would uncover the assurances of exclusivity, but one panelist replied that those facts were already in plaintiff's control. Appellee countered that the scope of excluivity was not alleged for the Puerto Rico market, as required by Law 21, rather concerning a sole customer MMP Packaging, in a two-client market. In reply, appellant conceded that it was not exclusive for the entire market or new clients entering the market. This concession may prove fatal to the Law 21 claim. My guess is that the court will likely affirm on grounds not stated by district court, but case may still be remanded for a subsidiary tort claim. Court was curious if the Law 21 claim did not survive, why a good faith and fair dealing tort claim would not survive even if the contract is terminable at will. This depends on the court's reading of precedent cited by appellee.