United States District Court, N.D. Indiana, South Bend Division
OPINION AND ORDER
Michael G. Gotsch, Sr. United States Magistrate Judge
November 7, 2016, Defendants, Zimmer Biomet Holdings, Inc.
(“Zimmer Biomet”), filed its Motion to Dismiss
Pursuant to Fed.R.Civ.P. 12(b)(6). [DE 4]. On
November 25, 2016, Plaintiff, Alejandro Yeatts
(“Yeatts”), filed his response in opposition to
Zimmer Biomet's motion. [DE 12]. Zimmer
Biomet's motion became ripe on December 4, 2016, when it
filed a reply brief. [DE 13]. The undersigned may
enter a ruling on this motion based on the parties'
consent and 28 U.S.C. § 636(c).
October 13, 2016, Yeatts filed his complaint raising three
claims - defamation (Count I), intentional infliction of
emotional distress (Count II), and negligent infliction of
emotional distress (Count III). Yeatts's claims are based
on allegations that he was injured as a result of a
defamatory email sent by Zimmer Biomet. Yeatts alleges that
Zimmer Biomet's email caused him to suffer emotional
to his complaint, Alejandro Yeatts is a resident of
Argentina, who from 2005 to September 4, 2015 was employed by
Biomet Argentina, SA, a subsidiary of the Defendant, Zimmer
Biomet. In July 2007, Yeatts attended a presentation by
Biomet's Compliance Officer regarding the Foreign Corrupt
Practices Act (“FCPA”). Yeatts alleges that after
witnessing this presentation, he reported to the Compliance
Officer that Biomet Argentina employees had paid commissions
to induce government-employed doctors to use Biomet products.
After hearing nothing further from the Compliance Officer,
Yeatts approached an in-house attorney for Biomet
International at a meeting of the American Academy of
Orthopedic surgeons and reported the alleged payments to her.
2008, Zimmer Biomet was a party to a distribution agreement
between Biomet International and Prosintese, a Brazilian
company owned by Sergio Galindo. Prosintese made payments to
doctors employed by the government who used Biomet products.
In May 2008, Zimmer Biomet General Counsel Bradley Tandy
wrote Galindo a termination letter, which stated that Biomet
has learned of Prosintese's business practices and that
Zimmer Biomet was terminating its relationship to Prosintese.
[DE 1 at 3, ¶ 11].
March 26, 2012, Zimmer Biomet and the United States
Department of Justice (“DOJ”) entered into a
deferred prosecution agreement (“DPA”), pursuant
to which the DOJ agreed to defer prosecution of a criminal
information charging the company with five felonies, which
include violations of the FCPA based on payments made by the
company to government doctors. Zimmer Biomet agreed to pay a
penalty of $17, 280, 000. In the DPA, Zimmer Biomet admitted
to having knowledge of Prosintese's payments to doctors
in Brazil since at least 2001.
complaint, Yeatts alleges that Zimmer Biomet breached the
2012 DPA by continuing to maintain a relationship with
Galindo and Prosintese. [Id. at 7, ¶ 22].
Yeatts further alleges that when Zimmer Biomet became aware
that he knew about the breach of the DPA, a company attorney
met with him and accused him of continuing to deal with
Galindo and Prosintese and concealing this to his superiors.
In April 2014, Biomet Argentina suspended Yeatts's
employment and ultimately terminated him on September 4,
Biomet asserts in its memorandum in support of its instant
motion to dismiss that on the same day Yeatts was terminated,
he entered a settlement agreement with Zimmer Biomet. [DE
5 at 6]. Zimmer Biomet states that both parties were
represented by counsel during negotiations, which concluded
with Zimmer Biomet paying Yeatts approximately $350, 000 in
exchange for his release of “'any and all
claims' against Biomet Argentina, SA, and any
‘associated or continuing companies'-without
limitation.” [Id.] Zimmer Biomet attached a
copy of the settlement agreement to its memorandum filed on
November 7, 2016. [DE 5-2; see also id.
at 23-24, ¶ THIRD].
complaint also alleges that on October 24, 2014, while he was
suspended but before he was terminated, Antje
Petersen-Schmalnauer, Chief Compliance Officer, Vice
President and General Counsel of Zimmer Biomet, sent an
email, addressed to “CPWAR DueDiligence
(Mailbox)” that informed its readers that Yeatts
engaged in criminal activity. [DE 1 at 7, ¶ 24]. Yeatts
quoted the email as follows:
Biomet Inc. and its worldwide subsidiaries
(“Biomet” or the “Company”) are
committed to complying with the anti-corruption and
anti-bribery laws in all countries in which Biomet operates.
In furtherance of that commitment, Biomet has identified
several entities that pose significant and unacceptable
compliance risks. The Company has placed these entities on a
Restricted Parties List. All Biomet employees, agents, third
parties, and any individual or entity performing services for
or on behalf of Biomet, anywhere in the world may not do
business with any entity on the Restricted Parties List.
[Id.]. Yeatts further alleges in his complaint that
the “Restricted Parties List” that was attached
to the email included Yeatts's name and stated that he
had been suspended in connection with a corruption-related
investigation involving Brazil. [Id.].
defamation claim (Count I) alleges that the message in the
October 24, 2014, email-that Yeats had engaged in this
criminal activity-was false and constituted defamation per
se. Further, Yeatts alleges that Zimmer Biomet published the
email with malice, knowing that the statements regarding
Yeatts were false, or with reckless disregard of their
falsity. Also, Yeatts alleges that the publication of the
defamatory material damaged his reputation for honesty,
integrity, morality and law-abidingness; exposed him to
harassment, public contempt and ridicule; caused him to lose
professional stature; impaired his employment and earnings
opportunities for the rest of his life; and caused him to
suffer great pain and mental anguish. [Id. at 8,
intentional infliction of emotional distress claim (Count
II), Yeatts alleges that Zimmer Biomet engaged in extreme and
outrageous conduct by knowingly publishing false information
in the October 24, 2014, email. Furthermore, Yeatts alleges
that he suffered severe emotional distress as a result of
Zimmer Biomet's extreme and outrageous conduct. Lastly,
Yeatts's negligent infliction of emotional distress claim
(Count III) alleges that he suffered severe emotional
distress as result of Zimmer Biomet's negligence in
publishing the email containing false information.
instant motion to dismiss, Zimmer Biomet argues that Yeatts
has failed to state any claim for which relief can be
granted. Specifically, Zimmer Biomet contends that (1) on
September 4, 2015, Yeatts entered into a binding settlement
and release agreement (“settlement agreement”
pursuant to which he released “any and all
claims” he had against Zimmer Biomet [DE 4 at 1,
¶¶ 1-2]; (2) Count I is inadequately pleaded
because Yeatts did not sufficiently plead either a false
statement or actual malice [Id., ¶ 4]; (3)
Count II fails to state a claim because Yeatts did not allege
either outrageous conduct or that Zimmer ...