43 F.4th 150
1st Cir.2022Background
- Dr. Juan M. Rodríguez (Puerto Rico rheumatologist) used Allscripts' MyWay EHR via reseller Novatek beginning in 2009; EHRs were hosted on Allscripts' servers.
- In 2017 Allscripts informed customers it was discontinuing MyWay; shortly thereafter Allscripts told Rodríguez his patient data had been destroyed because the Novatek account had been sent to collections and maintenance terminated.
- Rodríguez sued Allscripts Healthcare, LLC (Allscripts), its parent/holding company Allscripts Healthcare Solutions, Inc. (AHS), and others in Puerto Rico federal court alleging contract, tort, fraud, RICO-style mail/wire fraud, unjust enrichment, and related claims.
- Defendants moved to dismiss for lack of personal jurisdiction, to compel arbitration based on an EULA allegedly governing MyWay, and for failure to state a claim; the district court dismissed with prejudice and compelled arbitration.
- The First Circuit affirmed dismissal as to AHS for lack of PJ (but modified to dismissal without prejudice), reversed the dismissal as to Allscripts (finding specific PJ), vacated the district court’s compelled-arbitration and merits rulings, and remanded for further proceedings.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Personal jurisdiction over AHS | AHS controls Allscripts and thus is amenable to PJ in PR | AHS is a holding company with no PR contacts or control over Allscripts | No PJ over AHS; dismissal affirmed but changed to without prejudice |
| Personal jurisdiction over Allscripts | Allscripts targeted PR via Novatek reseller, had PR customers, revenue, direct support and communications with PR users | Any contacts were Novatek's unilateral acts; Allscripts' PR contacts minimal | Specific PJ exists over Allscripts; dismissal reversed |
| Existence/enforceability of arbitration agreement | Rodríguez never agreed to or signed any EULA and never consented to arbitration | Allscripts produced an EULA (signed by Novatek’s president) containing an arbitration clause and says use/signing bound Rodríguez | District court erred: factual dispute exists; arbitration issue must be resolved under the FAA with summary-judgment-type factfinding (remand) |
| Dismissal for failure to state a claim | Complaints state viable claims and facts; merits should be adjudicated if arbitration not found | Complaint fails on multiple legal grounds | Court should not have addressed merits after (erroneous) arbitration ruling; merits dismissal vacated and left for further proceedings if arbitration is rejected |
Key Cases Cited
- Int'l Shoe Co. v. Washington Office of Unemployment Compensation & Placement, 326 U.S. 310 (minimum contacts due process standard)
- Ford Motor Co. v. Montana Eighth Judicial District Court, 141 S. Ct. 1017 (claims must arise out of or relate to defendant's forum contacts)
- Daimler AG v. Bauman, 571 U.S. 117 (limits on general jurisdiction)
- Asahi Metal Indus. Co. v. Superior Court, 480 U.S. 102 (stream-of-commerce and purposeful-availment guidance)
- Burger King Corp. v. Rudzewicz, 471 U.S. 462 (purposeful availment and voluntary contacts)
- Air-Con, Inc. v. Daikin Applied Latin Am., LLC, 21 F.4th 168 (motions to compel arbitration ordinarily evaluated using a summary-judgment standard)
- Henry Schein, Inc. v. Archer & White Sales, Inc., 139 S. Ct. 524 (courts must enforce arbitration agreements according to their terms)
- Plixer Int'l, Inc. v. Scrutinizer GmbH, 905 F.3d 1 (forum-originated revenue and purposeful availment)
- United States v. Swiss Am. Bank, Ltd., 274 F.3d 610 (nexus/relatedness discussion)
- Knox v. MetalForming, Inc., 914 F.3d 685 (relatedness/purposeful-availment in distributor relationships)