Conformis, Inc. v. Aetna, Inc.

58 F.4th 517

• Court: Court of Appeals for the First Circuit
• Decided: January 23, 2023
• Docket: 21-1951P
• Status: Published

Opinion

United States Court of Appeals For the First Circuit

No. 21-1951

CONFORMIS, INC.,

Plaintiff, Appellant,

v.

AETNA, INC. and AETNA LIFE INSURANCE COMPANY,

Defendants, Appellees.

APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MASSACHUSETTS

[Hon. Indira Talwani, U.S. District Judge]

Before

Barron, Chief Judge, Selya and Lipez, Circuit Judges.

Anthony P. La Rocco, with whom Jeffrey S. King, Adam R.D. Paine, Robert F. Pawlowski, and K&L Gates LLP were on brief, for appellant. Sarah M. Harris, with whom Whitney D. Hermandorfer, Mihir Khetarpal, Williams & Connolly LLP, Stephen LaRose, Kierstan Schultz, and Nixon Peabody LLP were on brief, for appellees.

January 23, 2023 SELYA, Circuit Judge. An epigram, popular among

children in the last century, teaches that "[s]ticks and stones

will break my bones, but words will never harm me." G.F. Northall,

Folk-Phrases of Four Counties 23 (1894). That folk wisdom, though,

has scant purchase in the commercial world. This case, in which

the plaintiff advances claims for product disparagement and

related torts, illustrates the point.

The district court, ruling on a motion filed pursuant to

Federal Rule of Civil Procedure 12(b)(6), dismissed the

plaintiff's amended complaint for failure to state a claim upon

which relief could be granted. The plaintiff appeals. Concluding,

as we do, that some of the plaintiff's claims are sufficiently

plausible to warrant further proceedings, we affirm in part and

reverse in part.

I

We briefly rehearse the relevant facts and travel of the

case. As this appeal follows the allowance of a motion to dismiss

under Rule 12(b)(6), we draw the facts from the amended complaint

and its attachments. See Lanza v. Fin. Indus. Regul. Auth., 953

F.3d 159, 161 (1st Cir. 2020).

Plaintiff-appellant Conformis, Inc. (Conformis) is a

medical device company that designs and manufactures customized

hip and knee replacements, including the Conformis iTotal Knee

Replacement System (the Conformis system). The Conformis system

- 2 - is a customized total knee replacement (TKR) designed to improve

upon the limitations of uniform, off-the-shelf knee replacements.

The Conformis system received clearance from the federal

Food and Drug Administration (FDA) in February of 2011, through

the premarket notification process elaborated in 21 U.S.C.

§ 360(k). Over 100,000 patients have received the Conformis

system, and it is covered by over 90% of commercial payors as well

as the Centers for Medicare and Medicaid Services (CMS).

Various clinical studies have concluded that customized

TKRs in general, and the Conformis system in particular, exhibit

favorable patient outcomes when compared to off-the-shelf TKRs.

Studies also suggest that although customized TKRs may be more

expensive than off-the-shelf models on the front end, the total

cost may be lower due to fewer complications. The Conformis system

has been endorsed by the American Association of Hip and Knee

Surgeons (AAHKS). It also has a 5A rating from the Orthopaedic

Data Evaluation Panel in the United Kingdom — a rating that

indicates strong evidence of favorable outcomes assessed against

national clinical best practice guidelines.

Defendant-appellee Aetna, Inc., together with its wholly

owned subsidiary, Aetna Life Insurance Company (collectively,

Aetna), is one of the leading providers of health insurance and

third-party health plan administration in the United States.

Aetna's plans provided coverage (and, thus, reimbursement) for the

- 3 - Conformis system from 2011 until September of 2018, when Aetna

released a revised policy for "Unicompartmental, Bicompartmental,

and Bi-unicompartmental Knee Arthroplasties" (Policy 0660 or the

Policy). The Policy recharacterized Aetna's view of customized

TKRs, taking the position that "Aetna considers customized [TKRs]

experimental and investigational because [their] effectiveness has

not been established." The Policy did not explain the reason for

recharacterization, although the Policy's background section

included summaries of certain studies evaluating different types

of TKRs.

Separately, Aetna's website provides a glossary of

terms, which defines "experimental services or procedures" and

"investigational services" as "newer drugs, treatments or tests.

They are not yet accepted by doctors or by insurance plans as

standard treatment. They may not be proven as effective or safe

for most people."

Aetna's unexplained recharacterization of the Conformis

system had profound financial consequences. Aetna does not either

cover or reimburse for treatments that it characterizes as

"experimental and investigational" except in instances marked by

special circumstances.

Conformis has contracts with more than 2,100 healthcare

providers (including hospitals, group purchasing organizations,

and integrated delivery networks). It also maintains

- 4 - relationships with other healthcare providers who have, according

to the complaint, "routinely prescribed or otherwise provided the

Conformis System." After Aetna reversed course and changed its

position through the issuance of Policy 0660, Conformis saw a

significant reduction in the number of Aetna-covered patients

receiving the Conformis system. Some orthopedic surgeons have

stopped ordering the Conformis system for patients covered by

Aetna. And to avoid uncertainty about reimbursement, some

orthopedic surgeons have stopped ordering the Conformis system for

a wider universe of patients, including those covered under other

insurance plans.

The pleadings contain a vivid example of the Policy in

practice. The Conformis system was prescribed for one patient,

John Michael Schaub, but Aetna denied coverage only days before

Schaub's scheduled surgery. At the time, Schaub had health

insurance through an employer-sponsored plan administered by Aetna

(which contracts with eviCore Healthcare to handle patient

claims). Following the denial of coverage, an eviCore surgeon

explained to Schaub's surgeon that, while he considered the

Conformis system very effective, his "hands were tied by Aetna's

Policy." Various representatives of Aetna confirmed to Schaub in

subsequent telephone calls that it was Aetna's policy to no longer

- 5 - afford reimbursement for the Conformis system. Schaub went ahead

with the procedure despite Aetna's denial of coverage.1

Conformis sent Aetna a letter in April of 2019,

requesting that Aetna reconsider its policy revision. Conformis

provided additional studies in support of the Conformis system's

efficacy and widespread acceptance. In response, Aetna released

a policy supplement, which included summaries of some of the

additional studies, noting instances in which the authors had

recommended further research.

The president of AAHKS also wrote to Aetna after the

policy change to express his "concern . . . because the custom

implants in question are FDA approved, have been in use for many

years and have peer-reviewed published studies that should support

their continued use." That concern was heightened because some of

the scientific literature cited in the Policy's background section

as relating to customized TKRs did not involve the assessment of

customized TKRs at all. But Aetna dug in its heels.

Conformis sent a second letter in January of 2020,

demanding that Aetna, among other things, cease and desist from

treating the Conformis system as experimental and investigational.

1 Schaub was an additional plaintiff in this suit, pressing claims against Aetna under the Employee Retirement Income Security Act. See 29 U.S.C. §§ 1132(a)(1)(B), (a)(3), 1133. Schaub's claims were settled and the parties stipulated to their dismissal with prejudice. See Fed. R. Civ. P. 41(a)(1)(A)(ii).

- 6 - Conformis also demanded that Aetna re-authorize its approval of

the Conformis system. Aetna acknowledged receipt of the letter

but did not furnish any substantive response.

Conformis then repaired to the United States District

Court for the District of Massachusetts and sued Aetna, alleging

state common-law claims for product disparagement and tortious

interference with both contractual and advantageous relations, as

well as unfair trade practices in violation of Mass. Gen. Laws

chapter 93A. Conformis subsequently filed an amended complaint

containing similar allegations. See Fed. R. Civ. P. 15(a)(1)

(allowing amendment of complaint as of right within twenty-one

days after service of motion under Rule 12(b)). Aetna moved to

dismiss the amended complaint for failure to state a claim. See

id. 12(b)(6). Following a hearing, the district court granted the

motion to dismiss. See Conformis, Inc. v. Aetna, Inc., 2021 WL

1210293, at *10 (D. Mass. Mar. 31, 2021). This timely appeal

ensued.

II

We review de novo a district court's dismissal of a

complaint for failure to state a claim. See Alston v. Spiegel,

988 F.3d 564, 571 (1st Cir. 2021). In conducting that tamisage,

we accept as true all well-pleaded facts set forth in the complaint

and draw all reasonable inferences therefrom to the pleader's

- 7 - behoof. See SEC v. Tambone, 597 F.3d 436, 441 (1st Cir. 2010) (en

banc).

To ward off dismissal, "the plaintiff need not

demonstrate that [it] is likely to prevail, but [its] claim must

suggest 'more than a sheer possibility that a defendant has acted

unlawfully.'" García-Catalán v. United States, 734 F.3d 100, 102-

103 (1st Cir. 2013) (quoting Ashcroft v. Iqbal, 556 U.S. 662, 678

(2009)). In other words, the complaint must be "plausible on its

face." Iqbal, 556 U.S. at 678 (quoting Bell Atl. Corp. v. Twombly,

550 U.S. 544, 570 (2007)). The hunt for plausibility requires

that we separate factual allegations from conclusory ones and then

evaluate whether the factual allegations support a "reasonable

inference that the defendant is liable for the misconduct alleged."

Id. at 678-79.

This inquiry does not demand a plentitude of factual

content. See Grajales v. P.R. Ports Auth., 682 F.3d 40, 47 (1st

Cir. 2012). Even so, the pleader must put some meat on the bones.

Thus, the complaint "must contain more than a rote recital of the

elements of a cause of action." Rodríguez-Reyes v. Molina-

Rodríguez, 711 F.3d 49, 53 (1st Cir. 2013). It need not show,

however, "a one-to-one relationship between any single allegation

and a necessary element of the cause of action." Id. at 55. "For

pleading purposes, circumstantial evidence often suffices to

clarify 'a protean issue such as an actor's motive or intent.'"

- 8 - Id. at 56 (quoting Anthony v. Sundlun, 952 F.2d 603, 605 (1st Cir.

1991)).

Because this case is in a federal court by virtue of

diversity jurisdiction, see 28 U.S.C. § 1332(a), state law

supplies the substantive rules of decision, see Erie R.R. Co. v.

Tompkins, 304 U.S. 64, 78 (1938). Here, the parties agree that

Massachusetts law controls. That is a reasonable choice under the

circumstances, and we accept it. See Borden v. Paul Revere Life

Ins. Co., 935 F.2d 370, 375 (1st Cir. 1991) (holding that "a

federal court sitting in diversity is free, if it chooses, to forgo

independent analysis and accept the parties' agreement" as to what

law controls).

A

We begin with the claim for product disparagement. This

tort has many different guises: it is also variously known as,

among other cognomens, commercial disparagement, trade libel, or

injurious falsehood. See HipSaver, Inc. v. Kiel, 984 N.E.2d 755,

759 n.1 (Mass. 2013).

Conformis alleges that three particular statements are

actionably disparaging. The first, excerpted from the Policy,

declares that "Aetna considers customized [TKRs] experimental and

investigational because [their] effectiveness has not been

established." For ease in exposition, we refer to this statement

as "the Policy statement." The other two statements come from the

- 9 - definitions of "experimental services and procedures" and

"investigational services" contained in a glossary available on

Aetna's website. Such services and procedures, the glossary

definitions each explain, "are not yet accepted by doctors or by

insurance plans as standard treatment" and "may not be proven as

effective or safe for most people." We refer to these statements

as "the glossary statements."

To make out a claim for product disparagement, a

plaintiff must plausibly allege that the defendant "(1) published

a false statement to a person other than the plaintiff; (2) 'of

and concerning' the plaintiff's products or services; (3) with

knowledge of the statement's falsity or with reckless disregard of

its truth or falsity; (4) where pecuniary harm to the plaintiff's

interests was intended or foreseeable; and (5) such publication

resulted in special damages in the form of pecuniary loss."

HipSaver, 984 N.E.2d at 763; see Dulgarian v. Stone, 652 N.E.2d

603, 609 (Mass. 1995) (adopting Restatement (Second) of Torts

§ 623A (Am. L. Inst. 1977)). Product disparagement is similar to

defamation but lacks a reputational harm element and makes greater

demands as to the "falsity of the statement[s], fault of the

defendant and proof of damage." HipSaver, 984 N.E.2d at 762, 763

n.7 (quoting Restatement (Second) of Torts, supra at § 623A cmt.

g).

- 10 - 1

To narrow the scope of our inquiry, we leap-frog ahead

and start by analyzing the second element of a product

disparagement claim. That element requires that each of the

challenged statements be "of and concerning" the complaining

party's products or services. A plaintiff may show that a

statement is "of and concerning" it by proving either "(1) that

the defendant intended the words to refer to the plaintiff and

that they were so understood or (2) that persons could reasonably

interpret the defendant's words to refer to the plaintiff and that

the defendant was negligent in publishing them in such a way that

they could be so understood." HipSaver, 984 N.E.2d at 766 (quoting

ELM Med. Lab'y, Inc. v. RKO Gen., Inc., 532 N.E.2d 675, 679 (Mass.

1989), abrogated on other grounds by United Truck Leasing Corp. v.

Geltman, 551 N.E.2d 20, 23 (Mass. 1990)); see Eyal v. Helen Broad.

Corp., 583 N.E.2d 228, 231 (Mass. 1991) (emphasizing disjunctive

character of standard). Conformis relies mainly on the first

modality — a modality that has been described as "subjective."

Eyal, 583 N.E.2d at 231.

We first come to grips with the Policy statement.

Admittedly, that statement does not refer to Conformis by name.

Instead, it refers only to "customized [TKRs]." But a common-

sense reading of the Policy is required, and such a reading leaves

- 11 - little doubt that Aetna intended the words to refer to Conformis's

product. We explain briefly.

Conformis has been a leading producer of customized TKRs

for many years — and Aetna knew as much. In point of fact, Aetna

provided coverage for those implants for many years. But —

immediately upon the publication of the Policy — Aetna stopped

providing that coverage. What is more, representatives of Aetna

confirmed to Schaub that Aetna no longer covered the Conformis

system once the Policy was issued. And, finally, while the Policy

statement does not mention the Conformis system, the background

section of the Policy contains a subsection dedicated to the

"ConforMIS Knee Implant." These alleged facts suffice plausibly

to show that Aetna intended the statement to refer to the Conformis

system.

To satisfy the first modality of the "of and concerning"

test, Conformis also must allege facts demonstrating that the

Policy statement was understood by third parties to refer to the

Conformis system. See HipSaver, 984 N.E.2d at 766. Here,

Conformis alleges facts sufficient to satisfy that obligation.

For instance, Conformis alleges that the eviCore surgeon who

reviewed Schaub's claim understood the statement in the Policy to

refer to the Conformis system and to foreclose coverage for it.

So, too, Conformis alleges that numerous orthopedic surgeons have

told its sales team that they would no longer prescribe the

- 12 - Conformis system because of concerns that it would not be covered

under the Policy.

Still more is needed to demonstrate that the statement

is "of and concerning" the plaintiff when a statement is directed

at a group. Such is the case here: the Policy statement refers

to all customized TKRs generally, rather than to the Conformis

system specifically. A member of the group may recover for

defamation only if "the group or class is so small that the matter

can reasonably be understood to refer to the member, or . . . the

circumstances of publication reasonably give rise to the

conclusion that there is particular reference to the member."

Eyal, 583 N.E.2d at 230 n.6 (alteration in original) (quoting

Restatement (Second) of Torts, supra at § 564A); see Arcand v.

Evening Call Pub. Co., 567 F.2d 1163, 1164-65 (1st Cir. 1977).

Whether the circumstances of publication reasonably give rise to

the conclusion that there is particular reference to the plaintiff

is determined by what a reasonable reader would understand. See

Restatement (Second) of Torts, supra at § 564A cmt. D, illus. 5.

Although the Policy statement itself does not mention

Conformis, there is (as we previously have noted) a subsection

dedicated to the "ConforMIS Knee Implant" in the background section

of the Policy. The Conformis system is the only customized TKR

singled out with its own subsection. A reasonable reader could

- 13 - conclude, based on those circumstances, that the Policy statement

made particular reference to Conformis.

That ends this phase of our inquiry. We hold that

Conformis has plausibly alleged facts sufficient to show that the

Policy statement is a statement "of and concerning" Conformis.

The glossary statements are a different matter.

Conformis has not provided any convincing explanation as to how

those statements, standing alone, can be regarded as "of and

concerning" the Conformis system. There is no indication that

Aetna intended the glossary statements to refer to the Conformis

system, nor that they were so understood by third parties. See

HipSaver, 984 N.E.2d at 766. And we do not believe that anyone

reading the glossary statements would reasonably interpret them,

standing alone, as referring to the Conformis system. See id.

The bottom line is that the Policy statement is

potentially actionable under the product disparagement rubric but

the glossary statements are not. The relevance of the latter

statements, if any, is merely as an aid in understanding the Policy

statement. See infra Part II(A)(2)(a).

Having established which statement is at issue, we turn

to the first element of product disparagement: the requirement

that a plaintiff show that the challenged statement is false. See

HipSaver, 984 N.E.2d at 763. For a statement to be false, though,

- 14 - it would need first to be factual. In the context of claims for

defamation, for example, non-factual statements — commonly called

"opinions" — are not actionable because they cannot be proven

false. See Lyons v. Globe Newspaper Co., 612 N.E.2d 1158, 1161

(Mass. 1993); King v. Globe Newspaper Co., 512 N.E.2d 241, 243

(Mass. 1987).

The Massachusetts Supreme Judicial Court (the SJC) has

yet to address whether the same analysis extends to a claim for

product disparagement. See HipSaver, 984 N.E.2d at 765 n.11

(declining to resolve whether "mere opinions that imply no

misstatement of objectively verifiable fact" can qualify as

product disparagement (quoting W.L. Prosser & W.P. Keeton, Torts

§ 128, at 967 (5th ed. 1984))). We must, therefore, "endeavor to

predict how [the SJC] would likely decide the question." In re

PHC, Inc. S'holder Litig., 894 F.3d 419, 428 (1st Cir. 2018)

(quoting Butler v. Balolia, 736 F.3d 609, 613 (1st Cir. 2013)).

We draw on the permissible sources that customarily

inform such a prediction. See id.; Blinzler v. Marriott Int'l,

Inc., 81 F.3d 1148, 1151 (1st Cir. 1996). We are persuaded that

the striking similarity between product disparagement and

defamation, see HipSaver, 984 N.E.2d at 762, and the First

Amendment considerations that circumscribe both torts, see

Restatement (Second) of Torts, supra at § 623A cmts. c-e, would

cause the SJC to apply, in product disparagement cases, the same

- 15 - analytic modality that it has used in defamation cases. Other

courts that have considered the question have reached the same

conclusion. See, e.g., Advanced Tech. Corp. v. Instron, Inc., 66

F. Supp. 3d 263, 269 (D. Mass. 2014); Dulgarian v. Stone, 1994 WL

879631, at *4 (Mass. Super. Ct. Feb. 3, 1994).

This means, of course, that a statement of fact can be

actionable as product disparagement, but a statement of opinion

cannot. Accordingly, we must address the threshold question of

whether the Policy statement is fact or opinion before determining

whether it is false. The determination of whether a statement is

fact or opinion is a question of law "if the statement

unambiguously constitutes either fact or opinion," but a question

of fact "if the statement reasonably can be understood both ways."

Scholz v. Delp, 41 N.E.3d 38, 45 (Mass. 2015) (quoting King, 512

N.E.2d at 244). At the pleading stage, then, a statement that can

reasonably be understood as either fact or opinion is sufficient

to survive a motion to dismiss.

Whether a statement is fact or opinion is determined by

whether the statement would be understood by a reasonable reader

as containing "objectively verifiable facts." Id. at 45 (quoting

Levinsky's, Inc. v. Wal-Mart Stores, Inc., 127 F.3d 122, 131 (1st

Cir. 1997)); see Lyons, 612 N.E.2d at 1162. That approach requires

us to "examine the statement in its totality in the context in

- 16 - which it was uttered or published." Scholz, 41 N.E.3d at 45-46

(quoting Cole v. Westinghouse Broad. Co., 435 N.E.2d 1021, 1025

(Mass. 1982)). The factors to be considered comprise "all of the

circumstances surrounding the statement, including the medium by

which the statement is disseminated and the audience to which it

is published"; "all the words used, not merely a particular phrase

or sentence"; and any "cautionary terms" employed. Lyons, 612

N.E.2d at 1162 (quoting Fleming v. Benzaquin, 454 N.E.2d 95, 100

(Mass. 1983)).

The district court concluded that a reasonable reader

could interpret the Policy statement as either fact or opinion.

See Conformis, 2021 WL 1210293, at *8. We agree that the statement

could plausibly be read as either an expression of fact or as an

opinion. A reasonable reader could interpret this statement as a

statement of fact because such a reader could interpret it as a

verifiable assertion that the Conformis system is "not clinically

effective and not accepted by doctors and insurance providers as

a standard treatment." Our reasoning follows.

Whether a statement is fact or opinion depends on whether

"in a given context it reasonably can be understood as having an

easily ascertainable and objectively verifiable meaning."

Levinsky's, 127 F.3d at 129. Put another way, the inquiry turns

on whether the statement has a meaning capable of being proven or

- 17 - rebutted by objective evidence. See id. at 131; Scholz, 41 N.E.3d

at 45.

With respect to verifiability, Conformis and Aetna

advance different approaches for deducing the meaning of the Policy

statement. Conformis asserts that the glossary definitions can

shed light on the meaning of "experimental and investigational."

Aetna takes a different view: it asserts that there is no reason

to incorporate the definitions of "experimental" and

"investigational" found in the glossary because the Policy itself

defines those terms (stating that a customized TKR system is

"experimental and investigational because its effectiveness has

not been established").

When a text contains a specific definition for a term,

courts normally eschew reliance on an external definition. See In

re Blinds to Go Share Purchase Litig., 443 F.3d 1, 6 (1st Cir.

2006) (explaining that when contract provides specific definition

for term, courts should not rely on general usage). Here, however,

the Policy — fairly read — does not contain a specific definition

for either "experimental" or "investigational." We do not think

it clear, as Aetna maintains, that the word "because" that connects

the two clauses in the Policy statement transmogrifies the second

clause into a definition of the first. And in the absence of a

specific definition within the text, it is appropriate to consult

outside sources to understand how a reasonable reader would define

- 18 - the disputed terms. See Piccone v. Bartels, 785 F.3d 766, 772

(1st Cir. 2015) (considering dictionary definitions to define

allegedly defamatory term); Levinsky's, 127 F.3d at 129 (reviewing

various literary and legal uses to define allegedly defamatory

term).

In this instance, it seems logical that a reasonable

reader would likely consult the definitions found in Aetna's own

glossary to define the allegedly disparaging terms. We hold,

therefore, that the glossary definitions are relevant to our

inquiry.

With this understanding in place, we return to the

question of whether the Policy statement could reasonably be

understood as having a verifiable meaning. In that statement,

Aetna characterizes customized TKRs as "experimental" and

"investigational." And, as described, the glossary defines

"experimental" and "investigational" services as treatments that

"are not yet accepted by doctors or by insurance plans as standard

treatment" and which "may not be proven as effective or safe for

most people." A reasonable reader plausibly could understand those

statements, taken together, as conveying verifiable facts:

whether a treatment has been accepted by insurers and medical

professionals as "standard treatment" and whether it is safe or

medically effective are questions that suggest an appraisal of

- 19 - that treatment against objective professional or scientific

standards.

To be sure, statements to the effect that a procedure is

"experimental" or "investigational" may not, under all

circumstances, convey verifiable facts. In cases where an

objective standard is lacking or cannot be ascertained, the

disputed statements may not be actionable. See Piccone, 785 F.3d

at 772 (explaining that disputed term conveyed opinion in context

even though same term could refer to sufficiently objective

standard in another context). But given the context supplied by

the glossary statements, a reasonable reader could interpret the

assertion that the Conformis system is "experimental and

investigational" as a verifiable statement that could be proved or

disproved by objective criteria agreed upon by the insurance

industry and medical professionals. This proof could be measured

(as the glossary statements suggest) by whether the treatment was

widely prescribed by doctors and covered by insurers as standard

practice.

The second half of the Policy statement ("its

effectiveness has not been established") mirrors the second

glossary statement. With respect to that portion of the Policy

statement, standard dictionaries generally define "effective" as

producing an intended effect. See, e.g., Merriam-Webster's

Collegiate Dictionary 367 (10th ed. 2001) (defining "effective" as

- 20 - "producing a decided, decisive, or desired effect"); The American

Heritage Dictionary of the English Language 587 (3d ed. 1992)

(defining "effective" as "[h]aving an intended or expected

effect"). Conformis asserts that the Conformis system's intended

effect logically refers to its clinical effect. We agree with

this assertion and, thus, the question reduces to the extent to

which the system's clinical effect could reasonably be understood

as verifiable.2

Aetna posits that effectiveness in this context is not

verifiable because there is no single, recognized threshold at

which there is sufficient scientific evidence to permit the

conclusion that the Conformis system is clinically effective. In

support, Aetna relies primarily on the decision in TMJ Implants,

Inc. v. Aetna, Inc., 498 F.3d 1175 (10th Cir. 2007), in which the

Tenth Circuit concluded that an assertion that one medical product

"has not been shown to be as effective as" another was non-

actionable opinion under Colorado defamation law because it was

"not provably false," id. at 1195. The court reasoned that

"[d]ifferent people will make different judgments on whether a

product 'has been shown to be as effective as' another." Id. It

2 We reject the district court's suggestion that "effectiveness" refers to "cost effective[ness]." Conformis, 2021 WL 1210293, at *8. Nothing in the policy, the glossary definitions, or Aetna's submissions supports this imaginative reading.

- 21 - explained that, "[s]ome may require only one study; others may

require the gold standard of a double-blind study, or even multiple

such studies." Id. The threshold at which scientific evidence

was sufficient to render a product "effective" was therefore found

to be "a matter of individual taste," leading to the conclusion

that the clinical effectiveness of a given medical product was not

susceptible to objective verification. Id.

In our view, TMJ Implants overlooked a significant and

plausible alternative: that in some circumstances, there may

already be a consensus within relevant scientific and medical

circles that a product or procedure produces or fails to produce

its intended clinical effect. When that is the case, the

effectiveness of such a product or procedure would be objectively

verifiable. And here, Conformis has plausibly alleged that a

consensus exists in the relevant scientific and medical

communities — a consensus holding that the Conformis system is

clinically effective. At the motion-to-dismiss stage, this

plausible assertion suffices to show verifiability.

In a further effort to blunt the force of this reasoning,

Aetna seizes upon two of our prior decisions. First, it brandishes

our decision in Piccone, 785 F.3d 766. There, the plaintiffs sued

for defamation when the defendant called them "unprofessional."

Id. at 772. We upheld the district court's rejection of their

suit, noting that even though the definition of "unprofessional"

- 22 - might include reference to a particular "standard," the

"[p]laintiffs [had] not allege[d] that [the] [d]efendant accused

them of violating any technical, ethical, or commonly-understood

standard." Id. But we also explained that the same statement, in

a different context, might refer to a "sufficiently objective

standard of conduct" as to make the statement verifiable. Id.

Seen in this light, Piccone is of no help to Aetna. The

case at hand is far different: the statement as set forth in the

complaint could be susceptible to an objective scientific standard

— which Conformis alleges the Conformis system meets.

Aetna also flaunts our decision in Cheng v. Neumann, 51

F.4th 438 (1st Cir. 2022). There, we concluded that the terms

"right-wing," "far-right," and "conspiracy theorist" in an online

article were "unprovable as false" and, thus, were not actionable.

Id. at 446. In the context of political discourse, we determined

that those statements would be read as "rhetorical hyperbole" and

expressions of the author's opinion. Id. (quoting Pan Am Sys.,

Inc. v. Atl. Ne. Rails & Ports, Inc., 804 F.3d 59, 65 (1st Cir.

2015)).

Cheng is at a considerable distance from the case at

hand. Here — in the context of an insurer's policy and its intended

audience — we think that the statement "Aetna considers [the

Conformis system] experimental and investigational because its

effectiveness has not been established" could reasonably be read

- 23 - as a statement of verifiable fact. That is all that is required

at this early stage of the proceedings.

Aetna has yet another rejoinder: it suggests that the

Policy statement should be protected as opinion because it forms

part of a scientific debate. For support, Aetna turns to ONY,

Inc. v. Cornerstone Therapeutics, Inc., 720 F.3d 490 (2d Cir.

2013), in which the Second Circuit rejected a defamation claim

based on conclusions presented in a scientific article. There,

the court held that a statement "made as part of an ongoing

scientific discourse about which there is considerable

disagreement" and presented in a journal intended for experts

"alongside an accurate description of the data taken into account"

should be treated as a non-actionable opinion. Id. at 497-98.

Although this suggestion has some force, it does not

take Aetna where it wants to go. After all, we must take into

account the statement's context, including the medium in which the

statement was published and the audience to which it was presented.

See Lyons, 612 N.E.2d at 1162.

The medium in this case is an explanatory document issued

by Aetna in aid of its insurance plans and policies. That medium

is designed to help communicate Aetna's coverage determinations.

Unlike a medical journal, it is not a medium meant to communicate

insights into matters of scientific debate. See HipSaver, 984

N.E.2d at 769; ONY, 720 F.3d at 497.

- 24 - The audience consists primarily of prospective patients

and healthcare providers. That audience, of course, includes

laypeople seeking to determine whether a certain procedure is

covered by their medical insurance. It also includes physicians

and other healthcare professionals seeking to determine whether

reimbursement will be forthcoming for a given procedure. The

purpose of the statement is to inform that audience as to what

financial support may be expected — not to "mark the path toward

superior understanding of the world around us." HipSaver, 984

N.E.2d at 769 (quoting Underwager v. Salter, 22 F.3d 730, 736 (7th

Cir. 1994)). The upshot, then, is that Aetna cannot take refuge

in the hallowed halls of scientific debate for purposes of this

case.

Aetna has one more shot in its sling. A statement of

opinion may be actionable if it implies the existence of

undisclosed defamatory facts. See Lyons, 612 N.E.2d at 1161. But

the converse is equally true: an opinion is not actionable if it

merely draws a conclusion from disclosed non-defamatory facts.

See id.; see also Restatement (Second) of Torts, supra at § 566.

Such a rule creates a safe harbor for an opinion that reveals its

basis even if the same statement — standing alone — would be

actionable because it implies knowledge of a defamatory fact. See

Nat'l Ass'n of Gov't Emps. v. Cent. Broad. Corp., 396 N.E.2d 996,

1000-01 (Mass. 1979). Aetna claims that the Policy statement is

- 25 - not actionable because it is an opinion that discloses the non-

defamatory facts on which it is based: scientific studies cited

in the Policy.

In order to reach this safe harbor, though, "a challenged

statement first must qualify as an expression of opinion." Lyons,

612 N.E.2d at 1162. And as we have just explained, the statement

challenged here — taken in the light most favorable to the

plaintiff, as required by the motion-to-dismiss standard — does

not so qualify.

No more need be said at this stage. We recognize that

Conformis's allegations are far from conclusive. But in this early

chapter of the litigation, we must construe ambiguities in the

record in favor of the non-moving party (here, Conformis). See

Vázquez-Ramos v. Triple-S Salud, Inc., 55 F.4th 286, 299 (1st Cir.

2022); see also Lyons v. New Mass Media, Inc., 453 N.E.2d 451, 457

(Mass. 1983) (explaining that when "allegedly libelous remarks

could have been understood by the average reader [as either fact

or opinion], the issue must be left to the jury's determination").

Consistent with this obligation, we conclude that because the

Policy statement reasonably could be understood as either fact or

opinion, Aetna's contention that the claim should be dismissed as

one based on a non-actionable opinion cannot prevail.

- 26 - b

This conclusion brings us back to the claimed falsity of

the challenged statement. Conformis alleges that over 90% of

commercial payors, as well as CMS, cover the Conformis system —

and in the insurance context, coverage is powerful evidence that

the payors view the system as accepted as standard treatment.

Conformis also alleges that the system is approved by the AAHKS

and has a 5A rating from the Orthopaedic Data Evaluation Panel in

the United Kingdom (which assesses the performance of a procedure

against national clinical best practice guidelines). Those facts

justify a plausible inference that Aetna's recharacterization of

the Conformis system as experimental and investigational, defined

as "not yet accepted by doctors or by insurance plans as standard

treatment," is false.

As for the remainder of the statement — declaring that

the Conformis system's "effectiveness has not been established" —

one plausible interpretation is that its truth can be verified by

showing that a consensus of scientific journals and experts agree

that the system produces its intended effect. See supra Part

II(A)(2)(a). Conformis plausibly alleges that such a consensus

exists here, pointing to the array of studies that it submitted to

Aetna. To buttress that plausible allegation, it notes that AAHKS

and the Orthopaedic Data Evaluation Panel have endorsed the system.

- 27 - Those averments are sufficient to make out a showing of falsity

for pleading purposes.3

The next element of product disparagement is that the

defendant "knows that the statement is false or acts in reckless

disregard of its truth or falsity." HipSaver, 984 N.E.2d at 768

(quoting Restatement (Second) of Torts, supra at § 623A). This

element "mirrors what has been termed 'actual malice' in the

defamation context," without regard to whether the plaintiff is a

public figure. Id. at 767, 768 n.14. A defendant acts in reckless

disregard if it "entertained serious doubts as to the truth of

[its] publication." Id. at 767-68 (quoting St. Amant v. Thompson,

390 U.S. 727, 731 (1968)).

Because "direct evidence of actual malice is rare," it

may be shown through inference and circumstantial evidence. Sindi

v. El-Moslimany, 896 F.3d 1, 16 (1st Cir. 2018) (quoting Levesque

v. Doocy, 560 F.3d 82, 90 (1st Cir. 2009)). By way of example,

actual malice "may be found where a publisher fabricates an

account, makes inherently improbable allegations, relies on a

3 It is less clear that the Conformis system's FDA clearance demonstrates that its effectiveness has been established. The FDA clearance process evaluates the similarity of a new device to a relevant existing device, and the resulting assessment is, therefore, "focused on equivalence, not safety" or, presumably, effectiveness. Riegel v. Medtronic, Inc., 552 U.S. 312, 323 (2008) (emphasis in original) (quoting Medtronic, Inc. v. Lohr, 518 U.S. 470, 493 (1996)).

- 28 - source where there is an obvious reason to doubt its veracity, or

deliberately ignores evidence that calls into question his

published statements." Id. (quoting Levesque, 560 F.3d at 90).

Essentially the same standard applies in product disparagement

cases. See HipSaver, 984 N.E.2d at 767-68.

Conformis alleges that Aetna did not consider the

Conformis system experimental and investigational for many years

before recharacterizing it in Policy 0660, and then provided no

explanation for its sudden about-face. Aetna's support for the

recharacterization consists generally of the listed studies and

their language suggesting areas ripe for further inquiry — language

that Conformis plausibly claims is boilerplate. Conformis also

plausibly alleges that Aetna deliberately ignored the compelling

evidence of established effectiveness and widespread use of

customized TKRs provided by the AAHKS president in his February

2019 letter, explaining that the studies Aetna cited to support

the recharacterization did not warrant that conclusion and that

relevant medical literature "[did] not appear to have been

considered."

Separating wheat from chaff, we conclude that Conformis

plausibly alleges that Aetna ignored credible evidence presented

to it that called its statement into serious question. See Sindi,

896 F.3d at 16. And Aetna's abrupt change in policy, without any

explanation at all as to why a previously covered device had

- 29 - suddenly become "experimental and investigational," forms the

basis for a plausible inference that Aetna must have known that

assertion was false.

Aetna responds that the product disparagement claim

nonetheless must fail because Conformis does not allege that Aetna

"specifically intended [the defamatory] meaning," as required by

Howard v. Antilla, 294 F.3d 244, 252 (1st Cir. 2002). But Howard

is factually distinct. There, we concluded that an article that

presented evidence for and against a rumor that the plaintiff was

not who he said he was — but which ultimately disclaimed

"evaluating the truth or falsity of any party's account" — could

not be read to express a "harmful implication." Id. The defendant

could not be said to have serious doubts about the veracity of an

implication that she had expressly disavowed. See id. at 253-54.

Unlike in Howard, this is not a case in which Conformis

seeks to ascribe an allegedly disparaging meaning that Aetna's

statement expressly disavows. Nor is this a case that depends on

a negative implication derived from the disputed statement;

rather, Conformis alleges that the statement itself is injurious.

At this nascent stage, it is enough that Conformis has

plausibly alleged facts from which a jury reasonably could infer

that Aetna "entertained serious doubts as to the truth of [its]

publication." HipSaver, 984 N.E.2d at 768 (quoting St. Amant, 390

U.S. at 731). Conformis has carried this burden: it has plausibly

- 30 - alleged that Aetna acted with reckless disregard for both the truth

of whether the Conformis system was experimental and

investigational and the truth of whether its effectiveness had

been established.

The remaining elements of a product disparagement claim

are inextricably intertwined. In combination, they require a

showing that "pecuniary harm to the plaintiff's interests was

intended or foreseeable" and that the disparagement "resulted in

special damages in the form of pecuniary loss." HipSaver, 984

N.E.2d at 763. The special damages requirement limits a

plaintiff's recovery to the "'pecuniary loss that results directly

and immediately from the effect of the conduct of third persons'

acting in response to the alleged disparagement." Id. at 772

(quoting Restatement (Second) of Torts, supra at § 633(1)(a)). In

the product disparagement context, a plaintiff typically

establishes those damages by identifying "a specific loss of sales

to identifiable customers." Id. But where, as here, the

disparaging statement has been "widely disseminated," the

plaintiff may show by circumstantial evidence "that the loss [of

the market] has in fact occurred" and that no other factor caused

that loss. Id. at 772-73 (alteration in original) (quoting

Restatement (Second) of Torts, supra at § 633 cmt. h).

- 31 - The district court determined that the plaintiff had

adequately alleged these intertwined elements. Conformis, 2021 WL

1210293, at *8. We agree with that determination. To this end,

Conformis alleges that orthopedic surgeons told its sales team

that they would no longer prescribe the Conformis system due to

Aetna's shift in policy. For pleading purposes, those reports

indicate lost sales to identifiable customers. So, too, Conformis

plausibly alleges that the "widespread dissemination" of the

Policy caused its sales to suffer a "significant dropoff." Given

Aetna's prominent position within the health insurance market, it

was foreseeable that Aetna's recharacterization of the Conformis

system as "experimental and investigational" and, thus, ineligible

for coverage, would result in a plummeting sales curve. In light

of these averments, Conformis has plausibly alleged the pecuniary

harm and special damages elements.

That ends this aspect of the matter. We hold that

Conformis has plausibly alleged a claim for product disparagement

as to the Policy statement. For pleading purposes, Conformis's

allegations suffice to "remove the possibility of relief from the

realm of mere conjecture." Hamann v. Carpenter, 937 F.3d 86, 92

(1st Cir. 2019) (quoting Tambone, 597 F.3d at 442). It follows

that the district court erred in granting Aetna's motion to dismiss

the product disparagement claim.

- 32 - B

We turn next to the claims of tortious interference with

contractual and advantageous relations. We treat these claims

separately.

To defeat a motion to dismiss a claim for tortious

interference with contractual relations, a plaintiff must

plausibly allege that "(1) [it] had a contract with a third party;

(2) the defendant knowingly induced the third party to break that

contract; (3) the defendant's interference, in addition to being

intentional, was improper in motive or means; and (4) the plaintiff

was harmed by the defendant's actions." Psy-Ed Corp. v. Klein,

947 N.E.2d 520, 536 (Mass. 2011) (quoting G.S. Enters., Inc. v.

Falmouth Marine, Inc., 571 N.E.2d 1363, 1369 (Mass. 1991)).

In an effort to satisfy the first element, Conformis

alleges that it "has contracts with more than 2,100 healthcare

providers (e.g., hospitals, group purchasing organizations, and

integrated delivery networks) under which Conformis supplies the

Conformis System." It is not necessary at the pleading stage to

furnish "a high degree of factual specificity," Grajales, 682 F.3d

at 47, so Conformis's allegations may be sufficient to satisfy the

first element of tortious interference with contractual relations

— that the plaintiff had a contract with a third party.

- 33 - But Conformis stumbles at the next step: it fails to

provide any further details about those contracts. Even under the

lenient plausibility standard, a plaintiff must furnish enough

detail about the obligations of the alleged contracts to allow a

reasoned determination as to whether the second element — breach

of contract — is alleged. Cf. Tel. Answering Serv. of Bos., Inc.

v. New Eng. Tel. & Tel. Co., 267 N.E.2d 918, 918-19 (Mass. 1971)

("Where the gist of the action, whatever its form and however

stated, is failure to perform a duty arising out of a

contract, . . . it is essential to state with substantial

certainty the facts showing the existence of the contract and the

legal effect thereof" (internal alteration and quotation marks

omitted) (quoting Pollock v. New Eng. Tel. & Tel. Co., 194 N.E.

133, 136 (Mass. 1935))). Conformis's claim for tortious

interference with contractual relations, as pleaded, does not

satisfy this requirement. Thus, we uphold the district court's

dismissal of that claim.

Conformis's parallel claim for tortious interference

with advantageous relations (sometimes described as business

relations) stands on a different footing. To defeat a motion to

dismiss such a claim, a plaintiff must plausibly allege that "(1)

[it] had an advantageous relationship with a third party (e.g., a

present or prospective contract or [business] relationship); (2)

- 34 - the defendant knowingly induced a breaking of the relationship;

(3) the defendant's interference with the relationship, in

addition to being intentional, was improper in motive or means;

and (4) the plaintiff was harmed by the defendant's actions."

Hamann, 937 F.3d at 93 (second alteration in original) (quoting

Blackstone v. Cashman, 860 N.E.2d 7, 12-13 (Mass. 2007)). In

connection with such a claim, plausible allegations of a "probable

future business relationship anticipating a reasonable expectancy

of financial benefit will suffice" to satisfy the first element.

Am. Priv. Line Servs., Inc. v. E. Microwave, Inc., 980 F.2d 33, 36

(1st Cir. 1992).

With respect to this claim — as with respect to its claim

for tortious interference with contractual relations — Conformis

alleges the existence of "contracts with more than 2,100 healthcare

providers," as well as relationships with "non-contracted

healthcare providers [who] have routinely prescribed or otherwise

provided the Conformis System since it received FDA clearance in

2011." The question, then, is whether these allegations suffice,

for pleading purposes, to satisfy the first element of the

advantageous relations tort.

Aetna says that we should answer this question in the

negative. It labors to draw comparisons between this case and the

decisions in Singh v. Blue Cross/Blue Shield of Massachusetts and

- 35 - Laser Labs, Inc. v. ETL Testing Laboratories, Inc. We think that

these comparisons are strained and, ultimately, unhelpful.

In Singh, we held that the allegation that unspecified

patients either left or failed to sign up for the plaintiff's

medical practice was too "speculat[ive]" and non-specific to

withstand a motion for summary judgment. 308 F.3d 25, 48 (1st

Cir. 2002). In Laser Labs, the district court held that merely

alleging business relationships with "several" unspecified

customers was insufficient to withstand summary judgment. 29 F.

Supp. 2d 21, 23 (D. Mass. 1998). The case at hand, though, differs

both in its procedural posture and in substance.

In Singh and Laser Labs, bare allegations of

advantageous relations were deemed insufficient to withstand

summary judgment. See Singh, 308 F.3d at 48; Laser Labs, 29 F.

Supp. 2d at 23. A plaintiff is held to a less demanding standard

at the motion to dismiss stage, "with a record yet to be fleshed

out with evidence." Vázquez-Ramos, 55 F.4th at 297. It need not

establish the existence of a genuine issue of material fact but,

rather, may rest on allegations as long as those allegations

"create a reasonable expectation that discovery may yield evidence

of [the defendant's] allegedly tortious [interference]." Hamann,

937 F.3d at 92 (second alteration in original) (quoting García-

Catalán, 734 F.3d at 103).

- 36 - Conformis has made this modest showing. It alleges the

existence of sustained relationships, contractual and non-

contractual, with a constituency of healthcare providers during

the extended period of time that the Conformis system has been on

the market. Such allegations are plausible, and we deem them

sufficient to show the existence of business relationships

"anticipating a reasonable expectancy of financial benefit." Am.

Priv. Line Servs., Inc., 980 F.2d at 36.

Of course, the plaintiff also must plausibly allege that

the defendant knew of the advantageous relations and intentionally

interfered with them, causing economic harm. See Hamann, 937 F.3d

at 93; see also Sindi, 896 F.3d at 26; Ayash v. Dana-Farber Cancer

Inst., 822 N.E.2d 667, 690 (Mass. 2005). In this context,

intentionality requires that the defendant "either desired to

bring about the harm to the plaintiff or [] kn[ew] that this result

was substantially certain to be produced by his conduct."

Restatement (Second) of Torts ch. 37, intro. note (Am. L. Inst.

1979). Here, Conformis plausibly alleges that its leading position

in the market for customized knee replacements, its letters to

Aetna urging reconsideration of the Policy, the articles Aetna

reviewed, and the claims submitted on behalf of Aetna's subscribers

combine to ground a reasonable inference that Aetna not only knew

of the existence of Conformis's advantageous relations but also

must have known that its interference — the recharacterization of

- 37 - the Conformis system as experimental and investigational and

therefore ineligible for coverage — was virtually certain to result

in economic harm.

We think these allegations are sufficient to lift this

claim above the realm of mere speculation. Giving due weight to

the "cumulative effect" of Conformis's factual averments, Ocasio-

Hernández v. Fortuño-Burset, 640 F.3d 1, 14 (1st Cir. 2011), it is

nose-on-the-face plain that Aetna must have been aware that

Conformis had advantageous relations that were almost certain to

be disrupted by Aetna's recharacterization of the Conformis

system. It would be too much to demand — at the pleading stage —

that Conformis allege more specific facts about Aetna's knowledge

and intent. See Rodríguez-Reyes, 711 F.3d at 56 ("For pleading

purposes, circumstantial evidence often suffices to clarify 'a

protean issue such as an actor's motive or intent.'" (quoting

Anthony, 952 F.2d at 605)). We hold, therefore, that Conformis's

allegations with respect to this element of its advantageous

relations claim are plausible.

Last — but far from least — Conformis must plausibly

allege that Aetna's interference with its advantageous relations

"was improper in motive or means." Hamann, 937 F.3d at 93 (quoting

Blackstone, 860 N.E.2d at 13). We agree with Aetna that no

improper motive has been proffered. After all, it is settled that

purely financial motives will not normally sink to the necessary

- 38 - level of impropriety. See id. at 90; King v. Driscoll, 638 N.E.2d

488, 495 (Mass. 1994). And here, Conformis's complaint explicitly

states that "Aetna's motive for excluding coverage for the

Conformis System . . . was purely financial."

But the failure plausibly to show an improper motive

does not sound the death knell for Conformis's claim of tortious

interference with advantageous relations. Conformis may still

carry its pleading burden on this element of the tort by plausibly

alleging improper means. See Geltman, 551 N.E.2d at 23-24. In

this context, improper means refers to whether the defendant

"violated a statute or a rule of common law[,] . . . used threats,

misrepresented any facts, defamed anyone, or used any other

improper means" in interfering with the business relationship.

Id. at 24.

The allegations of the complaint plausibly allege

improper means. In considering whether Conformis has plausibly

alleged improper means, the decisive data point is that Conformis

— as we have explained, see supra Part II(A) — has pleaded a

plausible claim for product disparagement. This same showing does

double duty, serving to satisfy the "improper means" element. See

Geltman, 551 N.E.2d at 24.

We summarize succinctly. Although we uphold the

district court's dismissal of Conformis's claim for tortious

- 39 - interference with contractual relations, we reverse its dismissal

of Conformis's claim for tortious interference with advantageous

relations. Conformis has plausibly alleged the necessary elements

of the latter claim.

C

This brings us to Conformis's challenge to the dismissal

of its claim for unfair or deceptive trade practices. See Mass.

Gen. Laws ch. 93A. To state a claim for unfair or deceptive trade

practices under chapter 93A, a commercial plaintiff must plausibly

allege "1) that the defendant engaged in an unfair method of

competition or committed an unfair or deceptive act or practice,

as defined by [Mass. Gen. Laws ch.] 93A, § 2, or the regulations

promulgated thereunder; 2) a loss of money or property suffered as

a result; and 3) a causal connection between the loss suffered and

the defendant's unfair or deceptive method, act, or practice."

Auto Flat Car Crushers, Inc. v. Hanover Ins. Co., 17 N.E.3d 1066,

1074-75 (Mass. 2014). The plaintiff's allegations must plausibly

show that the defendant's actions fell "within at least the

penumbra of some common-law, statutory, or other established

concept of unfairness" or were "immoral, unethical, oppressive, or

unscrupulous." Ruiz v. Bally Total Fitness Holding Corp., 496

F.3d 1, 11 (1st Cir. 2007) (quoting PMP Assocs., Inc. v. Globe

Newspaper Co., 321 N.E.2d 915, 917 (Mass. 1975)).

- 40 - The parties agree that the viability of this claim at

the motion-to-dismiss stage depends on the viability of the claims

for product disparagement and tortious interference. Because we

have determined that some of those claims survive Aetna's motion

to dismiss, see supra Parts II(A), (B)(2), we reverse the district

court's dismissal of Conformis's chapter 93A claim.

III

We need go no further. For the reasons elucidated above,

the judgment of the district court is

Affirmed in part and reversed in part. No costs.

- 41 -