United States Court of Appeals For the First Circuit

No. 21-1571

AMERICAN BOARD OF INTERNAL MEDICINE,

Plaintiff, Appellee,

v.

JAIME A. SALAS RUSHFORD, MD,

Defendant/Third Party Plaintiff, Appellant,

CHRISTINE K. CASSEL; NAOMI P. O'GRADY; PEARSON EDUCATION, INC.; JOAN M. VON FELDT; LYNN LANGDON; RICHARD DOE; DAVID L. COLEMAN; RICHARD BARON; ERIC S. HOLMBOE; COMPANIES A,B,C; DOCTORS 1-2800; JOHN DOE; RICHARD DOE,

Third Party Defendants, Appellees.

APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF PUERTO RICO

[Hon. Silvia Carreño-Coll, U.S. District Judge]

Before

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

Andrew L. Schlafly for appellant.

Paul Lantieri, III, with whom Carlos A. Rodriguez-Vidal, Goldman Antonetti & Cordova LLC, Hara K. Jacobs, and Ballard Spahr LLP were on brief, for appellees. August 29, 2024 LIPEZ, Circuit Judge. The American Board of Internal

Medicine ("ABIM") suspended the certification of appellant Dr.

Jaime Salas Rushford, a Puerto Rico physician, after concluding

that he improperly gave board exam questions to his test prep

instructor. ABIM then sued Salas Rushford for copyright

infringement in federal court in New Jersey. This appeal addresses

only Salas Rushford's counterclaims against ABIM and

ABIM-affiliated individuals (the "ABIM Individuals") alleging a

"sham" process leading to his suspension. The counterclaims were

transferred to Puerto Rico, where the district court granted

appellees' motion for judgment on the pleadings. The court also

denied Salas Rushford leave to amend his pleading. We affirm.

I.

We review an entry of judgment on the pleadings de novo,

"view[ing] the facts contained in the pleadings in the light most

favorable to the nonmovant and draw[ing] all reasonable inferences

in his favor." Zipperer v. Raytheon Co.,

(1st

Cir. 2007). We may, however, "augment these facts and inferences

with data points gleaned from documents incorporated by reference

into the complaint." Haley v. City of Bos.,

(1st

Cir. 2011). Here, accordingly, we recite the facts as alleged by

Salas Rushford and assume their veracity, gleaning factual content

- 3 - from documents Salas Rushford referenced in his complaint that

ABIM subsequently provided in its motion.1

A. Factual Background

1. Salas Rushford's Board Certification

Salas Rushford is a physician specializing in internal

medicine who is licensed to practice in Puerto Rico as well as

several states. After completing his residency, Salas Rushford

sought certification in internal medicine from ABIM. ABIM is a

private nonprofit offering certification in internal medicine and

numerous subspecialties. While board certification is not legally

required to practice medicine, it is a highly valuable credential,

as it is necessary to obtain admission privileges at most hospitals

and is a requirement for employment in many medical practices.

According to ABIM, it grants board certification in internal

medicine to physicians who meet certain requirements, including

completion of an accredited three-year residency and passing the

board exam, which is a ten-hour computer-based exam administered

at testing centers around the United States.2

Salas Rushford was scheduled to take the board exam on

August 20, 2009, at a testing center in Puerto Rico. According to

1 When helpful to provide context, we also refer to ABIM's original complaint, though we do not assume the truth of its allegations. 2 ABIM refers to the physicians it has certified as "diplomates."

- 4 - ABIM, August 20 was the sixth day of its ten-day "examination

window" in August 2009. ABIM asserts that its exams are secure

and its exam questions confidential and copyrighted, as advance

access to this material would compromise the exam's integrity.

To prepare for the board exam, Salas Rushford enrolled

in a six-day review course offered by Arora Board Review ("ABR").

Salas Rushford's colleagues and professors highly recommended ABR

to him. The course was presented by a well-regarded physician,

Dr. Rajender K. Arora, had existed for two decades, was accredited

by a body with ties to ABIM, and was hosted by the City University

of New York. Salas Rushford attended the course in May 2009, along

with 350 other participants. Salas Rushford also participated in

several study groups, some of which included former ABR course

participants, and members of these groups exchanged study

material, including simulated exam questions, obtained from

multiple sources. Salas Rushford also remained in contact with

Arora, who welcomed students to discuss issues with him at any

time ahead of the exam.

According to ABIM, and unbeknownst to Salas Rushford,

ABIM had begun to investigate ABR after developing suspicions that

ABR was illicitly collecting and disseminating confidential,

copyrighted board exam questions after ABIM discovered actual exam

content on ABR's website. Salas Rushford alleges that ABIM sent

a "spy" to attend the ABR course he attended but never warned him

- 5 - or other attendees about its suspicions or took action to remove

potentially compromised questions from the exam. Ultimately, ABIM

sued ABR for copyright infringement, and the parties eventually

settled that lawsuit. ABIM claims that, during the process of

discovery in that litigation, it obtained several emails in which

Salas Rushford allegedly sent numerous exam questions to Arora

prior to sitting for the exam, thereby prompting the copyright

infringement claim against Salas Rushford.3

Salas Rushford took the board exam on August 20, 2009,

and passed. He practiced as a board-certified physician for

several years and was well-regarded among colleagues, patients,

and his community.

2. Suspension of Salas Rushford's Certification

On May 8, 2012, almost three years after taking the board

exam, Salas Rushford received a letter from Lynn Langdon, ABIM's

chief operating officer.4 The letter informed Salas Rushford that

3 ABIM alleges that Salas Rushford obtained some of these questions from a colleague who had taken the exam earlier in the examination window and that Salas Rushford also forwarded a collection of several years' worth of material from past exams to Arora. It also alleges that, in return, Arora sent Salas Rushford questions obtained from other ABR students. 4 Salas Rushford incorporated this letter into his complaint by reference, and ABIM attached the letter to its motion for judgment on the pleadings. Thus, we recount the letter's content to provide context for the dispute and "augment" the facts as appropriate. Haley,

. We do not, however, assume the truth of factual allegations made in the letter. See

- 6 - during an investigation of ABR and its students, ABIM uncovered

evidence that Salas Rushford had "collected and compiled hundreds

of ABIM examination questions from multiple sources" and sent them

to ABR using multiple email addresses, including a "disguised email

address" under a "pseudonym," "Jimmy R."

The letter stated that ABIM intended to revoke Salas

Rushford's board certification. It cited as authority to do so

provisions within ABIM's "Policies and Procedures for

Certification" (the "Policies & Procedures"), which candidates

agree to follow when registering for the exam.5 The letter advised

Salas Rushford that he could contest his revocation through a

three-stage appeals process, during which the revocation would not

be considered final. Neither the existence nor the details of

this appeals process are specified in the Policies & Procedures.

Along with its notification to Salas Rushford, ABIM

updated its website to reflect Salas Rushford's certification

status as "Revocation Recommended." The website did not provide

Cebollero-Bertran v. P.R. Aqueduct & Sewer Auth.,

(1st Cir. 2021). 5 According to Salas Rushford, the letter's reference to the Policies & Procedures is spurious because the letter attached the August 2009 Policies & Procedures, whereas Salas Rushford's contract was governed by the October 2008 version of the document in effect when he registered for the exam (the "October 2008 Policies & Procedures"). As we discuss, our resolution of this dispute turns on a particular provision of ABIM's Policies & Procedures that Salas Rushford does not dispute is contained within the October 2008 document.

- 7 - the context for this recommendation, and ABIM refused to alter the

representation of Salas Rushford's certification status after he

denied wrongdoing.

Salas Rushford sought an appeal through ABIM's internal

process. He describes the process as a more than two-year-long

"tour de force in bad faith dealing and reputational damages,"

perpetrated by ABIM and the ABIM Individuals. During this

"improvised" process, ABIM refused to provide a copy of the October

2008 Policies & Procedures. Moreover, at his final appeals

hearing, ABIM "failed to cite a specific Rule, Policy or

Resolution" that he had violated. Nor did ABIM or the appeals

panel respond to his "request to specifically address the charges"

or "provide the applicable Policies and Procedures." ABIM also

failed "to provide the evidence to substantiate the allegations"

against him, which the panel instead simply "deemed credible and

proven." Lastly, ABIM and the panel refused to make available to

Salas Rushford the actual examination questions ABIM believed he

illicitly disseminated, thereby denying him an opportunity to

mount the defense that the questions he shared were not actually

confidential exam content.

According to a letter sent on behalf of ABIM, Salas

Rushford presented several defenses through counsel before and

- 8 - during his final appeals hearing.6 First, he made a contract-based

argument that the October 2008 Policies & Procedures did not

prohibit the conduct of which he was accused. Second, he argued

that he did not try to conceal his identity, as he regularly used

the email through which he sent the exam questions and uses "Jimmy

R." as a nickname.7 He also criticized the appeals process and

presented evidence of his good character and community standing.

However, he chose not to testify.

Finding his arguments "unpersuasive," the panel

concluded that "[t]he evidence of record -- which Dr. Salas

Rushford refused to address with the Panel -- demonstrates that

Dr. Salas Rushford failed to maintain satisfactory ethical and

professional behavior, acted in a manner that adversely affected

his professional integrity, and subverted the certification

process." The panel also "express[ed] its disappointment that Dr.

Salas Rushford chose not to answer its questions about his conduct

and the evidence, and refused to confront the core issues presented

by the evidence." The panel modified ABIM's recommended discipline

6Salas Rushford incorporated by reference in his pleading a letter from the appeals panel describing this hearing, which the appellees attached to their motion. Once again, we draw upon this letter for context but do not assume the truth of factual allegations contained within the letter. 7ABIM also accused Salas Rushford of violating a pledge of honesty during the exam, which Salas Rushford denied signing. The appeals panel, however, did not rely on the purported violation of the pledge in resolving his case.

- 9 - to a seven-year suspension, retroactively beginning on December 7,

2012.

Following the panel's determination, ABIM updated its

website to display Salas Rushford's certification status as "Not

Certified." Immediately below, the website displayed the words

"INITIAL CERTIFICATION Internal Medicine: 2009."

Salas Rushford alleges that appellees' actions caused

him "professional and emotional harm," as well as loss of income.

B. Procedural Background

ABIM filed its original complaint against Salas Rushford

in October 2014 in the United States District Court for the

District of New Jersey.8 The complaint asserts violations of the

federal Copyright Act stemming from Salas Rushford's alleged

efforts to disseminate copyrighted exam questions.9

Salas Rushford filed a counterclaim and third-party

complaint (the "CTPC") against ABIM and the seven ABIM Individuals

who are officers of ABIM and members of the appeals panel that

finalized his suspension. The CTPC asserts three counts relevant

8 ABIM initially filed in federal court in New Jersey because ABR and Arora are located in New Jersey, and thus Salas Rushford allegedly transmitted copyrighted material into that state. 9The district court dismissed ABIM's complaint, but the Third Circuit reversed that determination. See Am. Bd. of Internal Med. v. Rushford, No. 14-cv-06428,

(D.N.J. Mar. 16, 2017) rev'd,

(3d Cir. 2020). The matter remains pending. See Am. Bd. of Internal Med. v. Rushford, No. 14-cv- 06428 (D.N.J).

- 10 - to this appeal: a breach of contract claim against ABIM, a "general

torts" claim against the ABIM Individuals, and a claim of

"commercial disparagement" under the Lanham Act,

et seq., against six of the individuals.10

After the District of New Jersey transferred the CTPC to

the District of Puerto Rico, appellees moved for judgment on the

pleadings under Fed. R. Civ. P. 12(c). In his opposition, Salas

Rushford attached and made extensive reference to several

documents that were the fruits of discovery between the parties,

including depositions and expert reports. Salas Rushford's

approach prompted the district court, at the hearing on the motion,

to ask appellees if they wished to convert their motion to one for

summary judgment. Because appellees replied that they wished to

proceed under the judgment-on-the-pleadings standard, the court

did not consider the discovery-related documents Salas Rushford

had referenced. Therefore, they are not part of the record before

us on appeal.

10The CTPC included three other counts: (1) a claim under the Copyright Act against numerous doctors who authored ABIM's exam questions and the testing center that proctored the exam, which was dismissed without prejudice and is not at issue in this appeal; (2) a contract claim against the testing center, which Salas Rushford has abandoned; and (3) a second general torts claim concerning the publication of statements about his certification status on ABIM's website, which the district court construed as a defamation claim. Salas Rushford's only argument related to this defamation claim appears in a two-sentence footnote in his reply brief, and, accordingly, we deem the claim waived. See Hamdallah v. CPC Carolina PR, LLC,

, 21 n.25 (1st Cir. 2024).

- 11 - The district court resolved appellees' Rule 12(c) motion

in two phases. In its first opinion and order, the court dismissed

Salas Rushford's Lanham Act claim and the now-waived defamation

claim. See Am. Bd. of Internal Med. v. Salas Rushford ("Salas

Rushford I"), No. 19-1943,

(D.P.R. Jan. 20, 2021).

The court held in abeyance the breach of contract claim and

remaining tort claim because the contract governing the parties'

relationship was not contained in either party's pleadings.

Appellees subsequently produced five documents, including the

October 2008 Policies & Procedures. After a dispute over that

document's authenticity,11 the district court accepted it as the

true document governing the parties' relationship.

The district court dismissed Salas Rushford's remaining

claims in a second opinion and order. See Am. Bd. of Internal

Med. v. Salas Rushford ("Salas Rushford II"), No. 19-1943,

(D.P.R. July 9, 2021). The court concluded that Salas

Rushford did not adequately allege breach of an express contractual

obligation by ABIM. The court further held that Salas Rushford

failed to state a claim for breach of the implied covenant of good

faith and fair dealing, reasoning that his allegation that ABIM's

11 Salas Rushford disputed the authenticity of the October 2008 Policies & Procedures because it made two references to "July 2008." Appellees authenticated the document, explaining via affidavit that these stray references had not been updated from the document's previous version.

- 12 - appeals process was a sham was belied by the record. The court

emphasized, in particular, that Salas Rushford had "refused to

address the allegations against him head-on." Id. at *7. Finally,

the court dismissed Salas Rushford's tort claim against the ABIM

Individuals, finding that Salas Rushford had identified no duty

that they breached.

The court dismissed all of Salas Rushford's claims with

prejudice, denying his request for leave to amend the CTPC.

II.

On appeal, Salas Rushford argues that the district court

erred in dismissing his contract claim against ABIM, his tort claim

against the ABIM Individuals, and the Lanham Act claim against six

of the ABIM Individuals. He also challenges the district court's

denial of his request for leave to amend.

A. Contract Claim

Under New Jersey law, the "essential elements for [a]

breach of contract claim [are] 'a valid contract, defective

performance by the defendant, and resulting damages.'" Globe Motor

Co. v. Igdalev,

(N.J. 2016) (quoting Coyle v.

Englander's,

(N.J. Super. Ct. App. Div.

1985)).12 The only element in dispute is ABIM's allegedly deficient

12 The district court determined that the law of New Jersey, rather than Puerto Rico, governs Salas Rushford's breach of contract claim. On appeal, the parties do not meaningfully dispute the applicability of New Jersey law. Indeed, in his opening brief,

- 13 - performance of a contractual duty. Though Salas Rushford's precise

theory is not entirely clear, the CTPC alleges two discernable

contractual duties that ABIM may have breached.13 First, ABIM had

an ongoing contractual duty to maintain Salas Rushford's

board-certified status according to the terms of the Policies &

Procedures. Second, ABIM had an implied duty of good faith and

fair dealing. We address these theories in turn.

1. ABIM's Duty to Maintain Salas Rushford's Certification

We limit our assessment of Salas Rushford's contract

claim to the section of the October 2008 Policies & Procedures

Salas Rushford does not cite any cases applying Puerto Rico contract law at all (nor does he assert that Puerto Rico law applies). To the contrary, both parties appear to agree that the outcome would be the same under either New Jersey or Puerto Rico law. While Salas Rushford does cite one case applying Puerto Rico contract law in his reply brief and half-heartedly suggests, for the first time, that Puerto Rico law should apply, we have been clear that "[s]uch an untimely and incomplete presentation of" choice of law issues constitutes waiver. Butler v. Deutsche Bank Tr. Co. Ams.,

(1st Cir. 2014). We will therefore follow the lead of the district court and the parties, in their initial briefing, in applying New Jersey law. See, e.g., Lluberes v. Uncommon Prods., LLC,

(1st Cir. 2011) ("When the parties agree on the substantive law that should govern, 'we may hold the parties to their plausible choice of law, whether or not that choice is correct.'" (quoting Perry v. Blum,

(1st Cir. 2010))); New Ponce Shopping Ctr., S.E. v. Integrand Assurance Co.,

(1st Cir. 1996) ("Generally, where the parties ignore choice of law issues on appeal, we indulge their assumption that a particular jurisdiction's law applies."). 13 In the district court, ABIM disputed that it had any contractual obligation to Salas Rushford at all. The district court disagreed, and ABIM has not renewed that argument on appeal.

- 14 - that formed the primary basis of the district court's decision.14

This provision states:

ABIM may, at its discretion, revoke or rescind certification if the diplomate was not qualified to receive the certificate at the time it was issued, even if the certificate was issued as a result of a mistake on the part of ABIM. It may also revoke the certificate if the diplomate fails to maintain moral, ethical, or professional behavior satisfactory to ABIM, or engages in misconduct that adversely affects professional competence or integrity.

The district court concluded that, even under "the most

benevolent reading possible of [the] CTPC," Salas Rushford's

contract claim failed because the Policies & Procedures "vested

ABIM with the ability to suspend or revoke his board certification

if he did not comply with certain standards and requirements as

14 As noted, though Salas Rushford disputed the authenticity of the October 2008 Policies & Procedures document supplied by ABIM, the district court accepted the document as authentic based on an affidavit supplied by ABIM. It is not clear that a district court may resolve a dispute over a contract's authenticity in this fashion, without converting the motion into one for summary judgment, as we have said that a court may consider "documents -- the authenticity of which is not challenged -- that are central to the plaintiff's claim or sufficiently referred to in the complaint." Carrero-Ojeda v. Autoridad de Energía Eléctrica,

(1st Cir. 2014) (emphasis added). Salas Rushford, however, has not developed any argument on appeal disputing that the revocation provision is included within the October 2008 Policies & Procedures, and, indeed, his arguments assume that it is. We thus deem any challenge to the district court's reliance on this provision to resolve the contract dispute waived. See United States v. Zannino,

(1st Cir. 1990) ("[I]ssues adverted to in a perfunctory manner, unaccompanied by some effort at developed argumentation, are deemed waived.").

- 15 - set forth therein," including that he "maintain moral, ethical,

[and] professional" conduct. Salas Rushford II,

,

at *5. Then, observing that ABIM had determined that "Salas

Rushford failed to maintain satisfactory ethical and professional

behavior," the court reasoned that "in order for a breach of

contract to materialize, Dr. Salas-Rushford was tasked with

pleading that he in fact did not contravene [these] postulates,

but that, even then, ABIM move[d] forward with the suspension of

his board certification."

Finding Salas Rushford to have

made no such allegation, the court dismissed his contract claim.

Salas Rushford argues on appeal that the CTPC does

contain such allegations. We agree. It would seem reasonable to

infer from the CTPC's strenuous disagreement with ABIM's

revocation decision that he has alleged that he did nothing wrong.

Indeed, the CTPC expressly alleges at paragraph 49, in response to

the allegations in ABIM's first disciplinary letter accusing him

of improper conduct, that those allegations were false.

ABIM does not pursue affirmance solely by defending the

district court's rationale, however. See United States v. George,

(1st Cir. 2018) ("We are at liberty to affirm a

district court's judgment on any ground made manifest by the

record, whether or not that particular ground was raised below.").

In its appellate brief, ABIM advances an interpretation of the

contract that reserved to ABIM broad discretion to revoke a

- 16 - diplomate's certification according to its subjective judgment of

a diplomate's conduct. Indeed, as ABIM puts it, "[r]egardless of

whether [Salas Rushford] agrees that he violated ABIM's policies,

the pleadings and other documents appropriately considered at this

stage would render implausible any allegation that ABIM breached

an obligation to him when it exercised the discretion afforded it

by the parties' contract to suspend his certification when it

concluded, after a robust process, that he had violated its

policies."

Despite ABIM's argument for affirming on an alternative

ground, Salas Rushford develops no argument in his reply brief

that the contract does not afford ABIM this level of discretion,

as a matter of plain text or New Jersey law. Salas Rushford simply

shrugs off ABIM's "one-sided interpretation of a document that it

alone drafted," without developing a contrary interpretation. We

have recognized that such a failure to address an appellee's

argument for an alternative ground of affirmance constitutes

waiver. See Furtado v. Oberg,

(1st Cir. 2020).

After all, as we have very often repeated, "[i]t is not enough

merely to mention a possible argument in the most skeletal way,

leaving the court to do counsel's work, create the ossature for

- 17 - the argument, and put flesh on its bones." United States v.

Zannino,

(1st Cir. 1990).15

Nonetheless, we choose not to rely on Salas Rushford's

potential waiver, as we find his breach of contract claim to

clearly fail on the merits of the alternative ground ABIM proposes.

First, as a matter of plain text, the provision states that ABIM

is entitled to revoke a diplomate's certification when it finds

that "the diplomate fails to maintain moral, ethical, or

professional behavior satisfactory to ABIM." (Emphasis added).

As we read that language, the revocation provision clearly vests

ABIM with the discretion to judge whether a diplomate has conducted

himself morally, ethically, and professionally, according to

ABIM's own standards. And the revocation provision contains no

Salas Rushford does make one specific argument that does 15

not directly address ABIM's broad discretion argument regarding the revocation provision. He asserts -- again, without any citation or further development -- that the requirement that he "maintain" satisfactory behavior did not apply until after his certification. For one thing, this argument would have applied with equal force to the district court's reliance on the revocation provision, and thus his failure to raise it until his reply brief constitutes waiver for this reason as well. See Hamdallah,

n.25. In any event, Salas Rushford alleges that the Policies & Procedures took effect once he registered for the board exam (and thus before his alleged misappropriation of exam material). There is no indication in the revocation provision that ABIM must overlook immoral, unethical, or unprofessional conduct committed by a candidate during their candidacy for board certification but discovered by ABIM after certification, and Salas Rushford supplies no basis for thinking so.

- 18 - language defining those standards of behavior or otherwise

constraining ABIM's exercise of its revocation authority.

Our review of New Jersey law further assures us that

ABIM's interpretation is correct. The revocation provision

expressly conditions ABIM's revocation authority on ABIM's

"satisfact[ion]." Under New Jersey law, such "satisfaction

clauses" are interpreted subjectively whenever "the extent and

quality of performance can[not] be measured by objective tests" or

the language of the contract otherwise compels a subjective

assessment. See Silvestri v. Optus Software, Inc.,

(N.J. 2003) (holding that satisfaction clauses in employment

contracts are judged under a subjective standard absent language

to the contrary). Under such a subjective standard, "satisfaction

[is] dependent on the personal, honest evaluation of the party to

be satisfied." Id.; see also

("The party to be satisfied is

the sole judge of his or her satisfaction. . . . If the party to

be satisfied asserts in good faith that he or she is not satisfied,

there can be no inquiry into the reasonableness of his or her

attitude." (Quoting 13 Williston on Contracts § 38.23 (Lord ed.

2000))).

Here, the provision reserves to ABIM's judgment whether

"the diplomate [has] fail[ed] to maintain moral, ethical, or

professional behavior," criteria the provision does not define and

- 19 - that would seem to defy objective measurement.16 Indeed, the

provision expressly states that the diplomate's behavior must be

"satisfactory to ABIM." (Emphasis added). In fact, New Jersey's

highest court has applied a subjective standard to a contract

including somewhat similar criteria and using nearly identical

language. See Corn Prod. Ref. Co. v. Fasola,

(N.J. 1920) ("If at any time before shipment the financial

responsibility of the buyer becomes impaired, or unsatisfactory to

the seller, cash payment or satisfactory security may be required

by the seller before shipment." (Emphasis added)).

In short, ABIM's alternative ground for affirmance finds

ample support as a matter of the revocation provision's plain text,

as well as New Jersey law. We see no need to remand to the district

court a claim that, in our de novo review, is clearly meritless,

and we thus affirm the dismissal of the breach of contract claim

on the alternative basis advanced by ABIM.

2. The Implied Covenant of Good Faith and Fair Dealing

In support of his theory that ABIM breached the implied

covenant of good faith and fair dealing, Salas Rushford points to

16By way of comparison, Silvestri specifies that an objective standard applies when the contract pertains to "operative fitness," "mechanical utility," or "marketability."

. Plainly enough, a contract pertaining to good morals, sound ethics, and professionalism is of an entirely different sort.

- 20 - his allegations that describe ABIM's investigation and

disciplinary process as unfair.

(a) Background Law

New Jersey law recognizes an "implied covenant of good

faith and fair dealing" in "every contract." Sons of Thunder,

Inc. v. Borden, Inc.,

(N.J. 1997). Though the

implied covenant "cannot override an express term in a contract,

a party's performance under a contract may breach that implied

covenant even though that performance does not violate a pertinent

express term." Wilson v. Amerada Hess Corp.,

(N.J. 2001). Indeed, a party "may breach the implied covenant of

good faith and fair dealing in performing its obligations even

when it exercises an express and unconditional right." Sons of

Thunder,

(holding that defendant breached the

implied covenant when exercising unilateral right to terminate

contract); see also Bak-A-Lum Corp. of Am. v. Alcoa Bldg. Prods.,

Inc.,

(N.J. 1976) (similar).

Accordingly, even a party with unilateral discretion

under a contract does not possess "unbridled discretion." Wilson,

. Such a party "breaches the duty of good faith

and fair dealing if that party exercises its discretionary

authority arbitrarily, unreasonably, or capriciously, with the

objective of preventing the other party from receiving its

reasonably expected fruits under the contract."

In light of

- 21 - these principles, though we have concluded that ABIM had

considerable discretion in the exercise of its revocation

authority, it was nonetheless obligated to exercise that

discretion in good faith, meaning in a reasonable manner, without

"bad motive or [ill] intention." Id.; see also Silvestri,

(explaining that even when a satisfaction clause

relates to a party's subjective satisfaction, the party is

"oblige[d] . . . to act 'honestly in accordance with his duty of

good faith and fair dealing'" (quoting Beasley v. St. Mary's Hosp.

of Centralia,

(Ill. App. Ct. 1990))). Salas

Rushford asserts that ABIM breached its duty of good faith by

running a sham disciplinary process that did not give him a fair

opportunity to prove his innocence.

(b) Improper Factfinding

Salas Rushford argues that the district court

erroneously dismissed his good faith and fair dealing claim

because, contrary to the pleading standard, the district court

improperly resolved the central disputed fact of whether ABIM's

disciplinary process was an unfair sham by considering material

outside the pleadings. Specifically, the district court held that

Salas Rushford had not stated a claim for breach of the implied

covenant based, in large part, on its finding that the record

failed to show that ABIM conducted its disciplinary review in an

unfair and unreasonable manner. In so concluding, the court relied

- 22 - heavily on the ABIM appeals panel's assertion, in its letter to

Salas Rushford, that he had "refused to address the allegations

against him head-on." Salas Rushford II,

, at *7

& *7 n.17.

As we have explained, Salas Rushford incorporated that

letter into the CTPC by reference, and the district court was thus

entitled to consider its contents and even to "augment" the facts

as appropriate. Haley,

. But even when a document,

such as a letter from the defendant, is properly before a district

court at the pleadings stage, the court may not "assume the truth

of . . . factual claims in that letter," particularly when doing

so would require it to abandon its obligation to "assume[] the

truth of [the plaintiff's] factual claims." Cebollero-Bertran v.

P.R. Aqueduct & Sewer Auth.,

(1st Cir. 2021). Such

"weighing [of] competing claims [by] both parties" to support a

conclusion that the plaintiff's allegations stand on insufficient

evidence is incompatible with the pleading standard.

.

The district court erroneously engaged in such weighing

here, testing the sufficiency of Salas Rushford's allegations

about a sham process not against the applicable legal standard but

against the competing allegation contained in the appeals panel's

letter that he failed to avail himself of ABIM's fundamentally

fair process. We thus agree with Salas Rushford that the court

strayed from the judgment-on-the-pleadings standard.

- 23 - The district court's error notwithstanding, we are

entitled to affirm the district court's judgment on any ground

available in the record. See, e.g., Miles v. Great N. Ins. Co.,

, 64-65 & n.5 (1st Cir. 2011); see also Lefkowitz v.

Smith Barney, Harris Upham & Co.,

, 156–57 (1st Cir.

1986) (per curiam) ("Even if we assume that the district court

erred by considering factual matters outside the pleading in

reaching its decision, such error would be harmless because the

dismissal can be justified without reference to the extrinsic

material."); Cebollero-Bertran,

("Despite the

district court's legal error" of improperly assuming the truth of

factual claims in a letter attached to the complaint, "we could

affirm the decision on any basis available in the record.").

Salas Rushford's allegation that ABIM's appeals process

was a sham must plausibly state a claim under New Jersey law.

Here, that means he must have plausibly alleged that ABIM possessed

a bad motive and behaved unreasonably, rather than in a justifiable

exercise of its discretion. See Wilson,

. Our

analysis starts, and ends, with the bad motive requirement.

(c) Bad Motive Requirement

The bad motive requirement is a separate and no less

"vital" element of "an action for breach of the covenant" under

New Jersey law than an allegation that the defendant has acted

unreasonably. Brunswick Hills Racquet Club, Inc. v. Route 18

- 24 - Shopping Ctr. Assocs.,

(N.J. 2005); see also

Buck Consultants, Inc. v. Glenpointe Assocs.,

(3d Cir. 2007), as amended (Mar. 16, 2007) (explaining that

even a finding of unreasonableness under New Jersey contract law

does not establish a breach of the implied covenant absent a

further finding of "subjective, wrongful intent" (applying Wilson,

)).

"[B]ad motive may be established through circumstantial

evidence," including the defendant's statements, actions, and "the

surrounding circumstances." Wilson,

. For

instance, a plaintiff can show the defendant's bad motive by

pointing to "'[s]ubterfuges and evasions' in the performance of a

contract." Brunswick Hills Racquet Club,

(alteration in original) (quoting Restatement (Second) of

Contracts § 205 cmt. d (Am. L. Inst. 1981)). We have similarly

observed that "allegations of self-dealing" may support a showing

of bad motive in the exercise of contractual duties. Lass v. Bank

of Am., N.A.,

(1st Cir. 2012) (holding that

allegation that bank purchased excess flood insurance at the

homeowner's expense to generate commissions stated a breach of

good faith claim under Massachusetts law); accord Brunswick Hills

Racquet Club,

(holding that landlord who engaged

in "a series of evasions and delays" to "unjustly enrich[] itself

with a windfall increase in rent at plaintiff's expense" breached

- 25 - the implied covenant under New Jersey law); Wilson,

(holding that evidence that the defendant "set prices

intending to destroy plaintiffs economically," in furtherance of

a change in business strategy, would establish a breach of the

duty of good faith).

The CTPC contains many conclusory assertions that ABIM

possessed a bad motive. It states that ABIM had set a "course to

destroy Dr. Salas Rushford's reputation and livelihood," put on a

"tour de force in bad faith dealing and reputational damages," and

"engaged in an ongoing campaign of appalling conduct intended to

destroy the personal and professional life of Dr. Salas Rushford."

Such "free-wheeling invective," of course, is not entitled to any

presumption of validity. Cordi-Allen v. Conlon,

(1st Cir. 2007). While these accusations imply that ABIM harbored

personal animus against Salas Rushford, he has not supported that

claim with any factual allegations plausibly demonstrating that

any such animus existed beyond the empty rhetoric quoted above.17

See Elliott & Frantz, Inc. v. Ingersoll-Rand Co.,

(3d Cir. 2006) (rejecting claim under New Jersey law where

17In addition to the lack of any plausible support for Salas Rushford's assertion that ABIM harbored personal animus towards him, we note that the CTPC does not support an inference of any self-serving motive on ABIM's part, as is frequently present in New Jersey cases sustaining claims for breach of the implied covenant. See, e.g., Wilson,

; Brunswick Hills Racquet Club,

.

- 26 - "there are no facts to demonstrate, or from which to infer, bad

motive or intention," but "only conclusory allegations that [the

defendant] had such motives"); see also, e.g., Havlik v. Johnson

& Wales Univ.,

(1st Cir. 2007) (stating that where

a claim involves a state of mind element like malice, "the

plaintiff cannot rest on naked assertions or bare conclusions but,

rather, must proffer facts sufficient to support a finding of" the

requisite state of mind).

Stripping away these bald assertions, the CTPC contains

no other allegations from which we can plausibly infer ABIM's bad

motive. At most, there are the allegations describing what Salas

Rushford characterizes as an unfair process: ABIM did not warn him

of its investigation into ABR or remove any compromised questions

from the exam; it oversaw an "improvised" appeals process in which

it refused to cite the rules or policies that he had violated; it

relied on the incorrect Policies & Procedures document; and it

refused to share its evidence, including the actual exam questions

he supposedly misappropriated.18 However, these allegations about

ABIM's disciplinary process, taken as true, do not plausibly

establish ABIM's bad motive. Indeed, each allegation gives rise

18The district court briefly addressed an additional argument -- that ABIM had not interviewed Salas Rushford during its investigation -- finding that there is no such allegation in the CTPC. Though Salas Rushford repeats the same argument on appeal, we decline to analyze it further for the same reason.

- 27 - to an "obvious alternative explanation," Ashcroft v. Iqbal,

(2009) (quoting Bell Atl. Corp. v. Twombly,

(2007)), about ABIM's motivations or is contradicted by

Salas Rushford's own pleadings.

Chiefly, Salas Rushford complains that in the course of

carrying out its "improvised process," ABIM would not divulge its

evidence against him, and, in particular, that it would not share

the actual test questions that he supposedly stole. While access

to that information might have been helpful to Salas Rushford in

his appeal, ABIM's alleged refusal to divulge those questions does

not demonstrate animus towards Salas Rushford, nor any other

improper motive. Rather, its refusal is "not only compatible with,

but indeed [is] more likely explained by" an anodyne motivation:

ABIM was unwilling to share that confidential, proprietary

material, particularly with a person it suspected of previously

misappropriating that material. Iqbal,

. As the

CTPC states -- and as the materials it incorporates by reference

confirm -- ABIM informed Salas Rushford of what its evidence

showed: numerous emails in which Salas Rushford disseminated

hundreds of exam questions.19 It then provided him with layers of

19 ABIM's initial letter to Salas Rushford stated: Evidence seized from Arora Board Review demonstrates that between May 2009 and August 2009 you collected and compiled hundreds of ABIM examination questions from multiple sources in preparation for your ABIM

- 28 - appellate review, even though -- as Salas Rushford points

out -- the Policies & Procedures did not require any appellate

review at all. ABIM did not have to prosecute its case against

Salas Rushford in his preferred manner and provide him with all

the process he wanted to exercise in good faith its authority to

revoke his certification.

Likewise, Salas Rushford's allegation that ABIM did not

warn him of its investigation into ABR does not plausibly establish

ABIM's bad motive. ABIM's decision not to tip off course

participants of its suspicions of ABR's wrongdoing is readily

explained by the fact that such an act would risk exposing its

investigative efforts, and thus this allegation also succumbs to

an "obvious alternative explanation" that we think more likely

examination and that you sent hundreds of ABIM examinations questions to Arora Board Review from your e-mail address "[email protected]" and from a disguised e-mail address "[email protected]" under the pseudonym, "Jimmy R." to conceal your identity.

Of course, we do not accept the truth of these charges. Nonetheless, this text shows that ABIM provided enough information to Salas Rushford to put him on notice of the allegations against him and its source of proof. Indeed, the CTPC acknowledges Salas Rushford's receipt of this letter and that the letter informed him of his accused wrongdoing. Moreover, Salas Rushford does not allege that he did not send the emails referenced in this letter or that he was unable to access or locate these emails, which were presumably in his possession. The CTPC only alleges that Salas Rushford was unable to cross-reference these questions with ABIM's question bank to independently verify ABIM's contention that the questions he allegedly emailed were in fact actual exam content.

- 29 - captures ABIM's motives than Salas Rushford's unsupported

assertions of bad intent. Twombly,

.

Salas Rushford also argues that ABIM's disciplinary

process was unfair because ABIM did not cite the specific policy

he violated. This allegation, however, is flatly contradicted by

the material in his pleading and incorporated by reference. In

addition to detailing the charges against him, ABIM cited several

provisions of its Policies & Procedures that it said justified

revoking his certification. Namely, it invoked the requirements

that he "maintain moral, ethical [and] professional behavior

satisfactory to the Board" and refrain from "misconduct adversely

affecting the Diplomate's integrity."

Our review of other cases assessing claims under New

Jersey law that disciplinary proceedings violated the implied

covenant of good faith and fair dealing further assures us that

Salas Rushford's pleading is inadequate to state such a claim.20

In Donohue v. Capella University, LLC, No. 22-5634,

, at *6 (D.N.J. Aug. 22, 2023), for instance, the district

court dismissed a doctoral student's complaint alleging that the

university breached the duty of good faith and fair dealing despite

20These cases involve the disciplinary proceedings of educational institutions. We do not presume that this context is perfectly analogous. Nonetheless, we find these cases informative in our assessment of Salas Rushford's allegations regarding ABIM's disciplinary procedures.

- 30 - allegations of an unfair disciplinary process similar to those

alleged by Salas Rushford. The student, accused of plagiarism,

alleged that the school wrongfully relied on a plagiarism detection

software that it knew to be unreliable and that, after the school

assigned the student a remediation assignment, he was set up for

failure because he was locked out of the program needed to complete

the assignment, the school provided inadequate instructions for

the assignment, and the school did not provide feedback when he

failed the remedial assignment on his first attempt (after failing

a second attempt, he was academically dismissed). Id. at *1-2.

Notwithstanding these allegations, the district court observed

that the student's own allegations showed that he had received a

multi-layered disciplinary process and that the complaint

"fail[ed] to identify an ill motive or intention," and thus the

court could not conclude that the student had plausibly alleged

any breach of the implied covenant. Id. at *6; see also Donohue

v. Capella Univ., LLC, No. 22-5634,

, at *4 (D.N.J.

June 25, 2024) (dismissing the student's subsequent amended

complaint because "Plaintiff's allegations are devoid of an ill

motive and Capella's conduct cannot be said to have no legitimate

purpose").

By contrast, cases that have sustained breach of good

faith claims against disciplinary proceedings have involved

specific allegations of a bad motive, backed up by allegations of

- 31 - clearly unfair and unjustifiable conduct. See, e.g., Doe v.

Princeton Univ.,

(3d Cir. 2022) (sustaining

breach of good faith claim where student's allegation of

discriminatory animus was supported by allegations that the

university systematically "disregarded exculpatory evidence [in

his favor] and incriminating evidence against [his accuser],

construed all discrepancies and inconsistencies in [his accuser's]

favor, and ignored evidence corroborative of [his] counter claims"

(internal quotation marks and brackets omitted)); Doe v. Rider

Univ., No. 16-cv-4882,

, at *14 (D.N.J. Jan. 17,

2018) (sustaining breach of good faith claim where student alleged

that the university official overseeing his disciplinary

proceeding had told him he was "going against" him).

We also find informative the court's analysis in

Napolitano v. Trustees of Princeton University,

(N.J. Super. Ct. Ch. Div. 1982). In that case, a New Jersey

trial court granted summary judgment against a student claiming

that her university's discipline of her violated the implied duty

of good faith and fair dealing. Though sympathetic to the

student's arguments that the school's discipline for suspected

plagiarism was harsh -- she had an unblemished academic record

before the incident at issue, her alleged plagiarism was

unintentional, and other similarly-situated students had received

less severe punishments -- the court reasoned that "the proper

- 32 - role of a court is to permit private organizations to govern their

own affairs, unless the court's intrusion is warranted by conduct

so egregious as to constitute a breach of the parties' agreement."

. Because it could not "find that Princeton could not

in good faith have assessed the penalties it did," the court

exercised "[j]udicial restraint" and declined to disturb the

sanction.

The reviewing court affirmed, invoking New Jersey

Supreme Court precedent "afford[ing] [deference] to the internal

decision-making process[es]" of private institutions as "the

members of an association are generally bound by its private law."

Napolitano v. Trustees of Princeton Univ.,

(N.J.

Super. Ct. App. Div. 1982) (citing Higgins v. Am. Soc. of Clinical

Pathologists,

(N.J. 1968)). We take a similar

view of Salas Rushford's effort to obtain federal judicial

intervention into ABIM's disciplinary proceedings -- absent any

allegations from which we can plausibly conclude that ABIM had a

bad motive in its dealing with Salas Rushford, and therefore

shirked its implicit duty to afford him a fair disciplinary

process, we decline to second-guess ABIM's approach to its internal

disciplinary matters.

In sum, Salas Rushford has not plausibly alleged that

ABIM possessed a bad motive, nor can we reasonably infer as much

from the facts he does allege. This glaring fault alone is a

sufficient basis to affirm the district court's dismissal of Salas

- 33 - Rushford's good faith claim. See, e.g., Kolbe v. BAC Home Loans

Servicing, LP,

(1st Cir. 2013) (en banc) (lead

opinion of equally divided court) (rejecting claim of breach of

the implied covenant under New Jersey law where allegations of

"self-dealing . . . fail[ed] the standard of plausibility

necessary to survive a motion to dismiss"); Hassler v. Sovereign

Bank,

(3d Cir. 2010) (dismissing claim under

New Jersey law where the plaintiff "does not allege any bad motive

on the part of [the defendant]"). Mindful that under New Jersey

law "an allegation of bad faith or unfair dealing should not be

permitted to be advanced in the abstract and absent improper

motive," Wilson,

, we cannot conclude that Salas

Rushford has stated a successful claim for breach of the implied

covenant.

B. Tort Claim

Salas Rushford asserts that the ABIM Individuals21 are

liable in tort for the way they carried out their investigation of

ABR and for the suspension of his certification.22

21In his briefing, Salas Rushford directs these arguments at ABIM rather than the ABIM Individuals, whom the CTPC names in this count. We construe his arguments to run against the ABIM Individuals rather than ABIM. 22 ABIM argues that Salas Rushford's tort claim amounts to nothing more than a disguised procedural due process claim challenging ABIM's disciplinary process. This is an unduly narrow view of his claim, as we explain below. Of course, to the extent Salas Rushford makes any such due process claim, that theory would fail because, as the CTPC makes clear, neither ABIM nor the ABIM

- 34 - Under Puerto Rico law, a plaintiff like Salas Rushford,

seeking to establish liability under Article 1802 of the Puerto

Rico Civil Code, must establish "a duty requiring the defendant to

conform to a certain standard of care, a breach of that duty, proof

of damage, and a causal connection between the negligence and the

damage." Nieves-Romero v. United States,

, 378–79

(1st Cir. 2013) (citing Sociedad de Gananciales v. González Padín

Co.,

, 125 (1986)).23 Like the district

court, we focus our analysis on whether Salas Rushford has

established a duty of care owed by the ABIM Individuals. Under

Puerto Rico law, a duty of care "refers to an 'obligation to

anticipate and take measures against a danger that is reasonably

foreseeable.'" Baum-Holland v. Hilton El Con Mgmt., LLC,

(1st Cir. 2020) (quoting Woods-Leber v. Hyatt Hotels of

P.R., Inc.,

(D.P.R. 1996), aff'd,

(1st Cir. 1997)). Such a duty "may arise (1) by statute or

regulation; (2) 'as the result of a special relationship between

the parties that has arisen through custom; or (3) as the result

Individuals are state actors, and the CTPC does not allege that their actions could, nonetheless, be construed as state action. See Jarvis v. Vill. Gun Shop, Inc.,

(1st Cir. 2015). 23 Once again, we adopt the district court's conclusion that Puerto Rico law applies to Salas Rushford's tort claim because the parties do not dispute the applicability of that body of law on appeal. See, e.g., Lluberes,

; Perry,

; New Ponce Shopping Ctr.,

.

- 35 - of a traditionally recognized duty of care particular to the

situation.'"

(quoting De Jesús-Adorno v. Browning Ferris

Indus. of P.R., Inc.,

(1st Cir. 1998)). The

"essential elements" of the duty are "foreseeability . . . and the

risk involved in each specific case." Montalbán v. Centro Com.

Plaza Carolina,

(P.R. 1993) (official

translation).

Tellingly, rather than identify a duty that has been

breached, Salas Rushford argues, incorrectly, that "it is not

necessary to allege the existence of a duty in order to assert a

cause of action in tort." Despite this disclaimer, in identifying

two courses of conduct that form the basis of his tort claim -- the

defendants' failure to warn him about its investigation of ABR and

the unfair manner in which they conducted the appeals process -- he

essentially articulates the purported duties that the ABIM

Individuals have allegedly breached.

Salas Rushford first argues that the individual

defendants had a duty to warn him about their suspicions regarding

the ABR course, rather than allow him to participate in the course

and thereby expose himself to the risk of his certification being

later suspended.24 Salas Rushford fails to explain, however, how

24 It is not clear from the CTPC that the ABIM Individuals participated in this stage of the investigation. Since Salas Rushford's theory fails regardless, we need not also consider this potential causation issue.

- 36 - such a duty is compelled by any of the considerations described

above, such as legal authority, a special relationship, or a

situation-specific duty traditionally recognized. See

Baum-Holland,

. For that reason, this tort theory

fails.

Salas Rushford next suggests that the ABIM Individuals

owed a duty of care in how they conducted his disciplinary review.

Specifically, echoing the central theory underpinning his breach

of the contractual duty of good faith claim, he asserts that the

ABIM Individuals acted negligently by refusing to share with him

the Policies & Procedures document guiding their decision-making,

as well as the evidence against him. Indeed, he claims that they

had a duty to refrain from participating in his hearing at all,

given their affiliation with ABIM.

Salas Rushford points us to no legal authority, special

relationship, or traditionally recognized duty in this situation

that would establish any such duty of care governing the ABIM

Individuals' conduct during the disciplinary proceedings, nor have

we discovered any. And, in our survey of Puerto Rico law, we have

not found any authority supporting the existence of such a duty.

Accord Doe v. Trs. of Bos. Coll.,

(1st Cir. 2018)

(similarly holding, under Massachusetts law, that individual

defendants conducting "disciplinary proceedings ar[ising] from [a]

contractual relationship[,]" had no tort duty of care because

- 37 - "[w]hen an 'alleged obligation to do or not to do something that

was breached could not have existed but for a manifested intent,

then contract law should be the only theory upon which liability

would be imposed'" (quoting Treadwell v. John Hancock Mut. Life

Ins. Co.,

(D. Mass. 1987))). We thus reject

Salas Rushford's second theory of liability and affirm the

dismissal of his tort claims.

C. Lanham Act Claim

Salas Rushford asserts a claim of "commercial

disparagement" against most of the ABIM Individuals, invoking

(a). The Lanham Act makes liable:

(1) Any person who, on or in connection with any goods or services, or any container for goods, uses in commerce any word, term, name, symbol, or device, or any combination thereof, or any false designation of origin, false or misleading description of fact, or false or misleading representation of fact, which--

(A) is likely to cause confusion, or to cause mistake, or to deceive as to the affiliation, connection, or association of such person with another person, or as to the origin, sponsorship, or approval of his or her goods, services, or commercial activities by another person, or

(B) in commercial advertising or promotion, misrepresents the nature, characteristics, qualities, or geographic origin of his or her or another person's goods, services, or commercial activities.

- 38 - Salas Rushford's Lanham Act claim appears to target two

statements about his certification status published on ABIM's

website: (1) the label of "Revocation Recommended" after ABIM

initiated disciplinary action and (2) the labels of "Not

Certified" and "INITIAL CERTIFICATION Internal Medicine: 2009"

once ABIM suspended his certification. He argues that these

statements make the ABIM Individuals liable under both subsection

(A), for false association, and under subsection (B), for false

advertising. We address each theory of liability in turn.

1. False Association

To state a claim under section 1125(a)(1)(A), the

plaintiff must plausibly allege facts showing a likelihood of

consumer confusion "as to the affiliation, connection, or

association of such person with another person, or as to the

origin, sponsorship, or approval of his or her goods, services, or

commercial activities by another person." Claims under this

subsection typically involve "attempts to appropriate the goodwill

associated with a competitor[,]" for example, by misappropriating

a trademark or falsely implying an endorsement. Flynn v. AK

Peters, Ltd.,

(1st Cir. 2004) (quoting Purolator,

Inc. v. EFRA Distribs., Inc.,

(1st Cir. 1982));

see also, e.g., Int'l Ass'n of Machinists & Aerospace Workers,

AFL-CIO v. Winship Green Nursing Ctr.,

(1st Cir.

1996) (Saris, J., concurring) ("Typical claims under prong (A)

- 39 - would involve a new trademark that was confusingly similar to an

already established one, or an attempt by a defendant to 'palm-off'

its goods as those of a competitor by use of the competitor's

mark."). In evaluating such claims, the factors we usually

consider to gauge the likelihood of consumer confusion under this

subsection mostly relate to the possibility of consumers mistaking

one party's good, service, or trademark with that of another.25

Salas Rushford's theory, however, does not remotely

relate to any risk of consumers of his medical services being

misled into misunderstanding the origin of those services, or those

of any competitors, or misapprehending his affiliation with the

ABIM Individuals. Rather, Salas Rushford's theory is, as he puts

it, one of "commercial disparagement," that is, that consumers

will be misled into believing that his medical services are

substandard because of statements about him on ABIM's website.

The district court noted this deficiency, remarking that

"the CTPC . . . is barren of any mention [or] factual allegation

of a plausible likelihood of confusion in connection with the

25See I.P. Lund Trading ApS v. Kohler Co.,

(1st Cir. 1998) ("This court has identified eight factors to be weighed in determining likelihood of confusion: '(1) the similarity of the marks; (2) the similarity of the goods; (3) the relationship between the parties' channels of trade; (4) the relationship between the parties' advertising; (5) the classes of prospective purchasers; (6) evidence of actual confusion; (7) the defendant's intent in adopting its mark; and (8) the strength of the plaintiff's mark.'" (quoting Bos. Athletic Ass'n v. Sullivan,

(1st Cir. 1989))).

- 40 - reporting of his certification status on ABIM's website." Salas

Rushford I,

, at *5. On appeal, Salas Rushford once

again argues only that "patients were likely to believe that the

quality of Dr. Salas Rushford's services was in question," without

any effort to connect that concern to the type of consumer

confusion contemplated in subsection (A).26 We thus agree with the

district court that Salas Rushford has failed to state a claim

under this theory of liability.

2. False Advertising

Salas Rushford next invokes

(a)(1)(B),

which prohibits "commercial advertising or promotion" that

"misrepresents the nature, characteristics, qualities, or

geographic origin of his or her or another person's goods,

services, or commercial activities." As relevant to Salas

Rushford's challenge to statements appearing on ABIM's website,

"[t]he Lanham Act prohibits only 'false or misleading

description[s] [or representations] of fact,'" and thus the

"plaintiff bears the burden of proving that the statement at issue

Salas Rushford does cite Doe v. Friendfinder Network, Inc., 26

for the proposition that the Act prohibits "a defendant from using the plaintiff's name in commerce in connection with services in a way likely to cause confusion as to 'the affiliation, connection, or association' of the parties."

(D.N.H. 2008) (quoting

(a)(1)(A)). That case concerned the "defendants' unauthorized use of a plaintiff's identity for marketing purposes,"

and thus lends Salas Rushford no support for his invocation of subsection (A) in the very different circumstance of this case.

- 41 - is false and/or misleading." Azurity Pharms., Inc. v. Edge Pharma,

LLC,

(1st Cir. 2022) (second alteration in

original) (quoting

(a)(1)). While "[t]hat

question is typically for the factfinder to determine," id. at

487, the plaintiff must still, of course, plausibly allege such a

statement, see id. at 495, 499 (dismissing Lanham Act claims for

failure to allege misleading representations of fact).

The CTPC makes clear that the challenged statements on

ABIM's website are literally true. Salas Rushford must therefore

shoulder the "additional burden" of showing that the statements,

"though 'literally true or ambiguous,' nonetheless [are] 'likely

to mislead and confuse consumers' into believing a 'false

representation of fact.'" Id. at 487 (omission removed) (first

quoting Cashmere & Camel Hair Mfrs. Inst. v. Saks Fifth Ave.,

(1st Cir. 2002), and then quoting Clorox Co. P.R. v.

Proctor & Gamble Com. Co.,

, 33 & 33 n.6 (1st Cir.

2000)).27 Moreover, with respect to liability under subsection

(B), Salas Rushford "must show how consumers have actually reacted

to the challenged advertisement rather than merely demonstrating

27We have recognized that a plaintiff alleging that a statement is misleading is nonetheless "relieved of the burden of demonstrating consumer deception when there is evidence that defendants intentionally deceived the consuming public." Cashmere & Camel Hair Mfrs. Inst.,

n.8. Salas Rushford, however, has made no appellate argument about intentional deception, nor does the CTPC contain any such allegations.

- 42 - how they could have reacted." Clorox,

(emphasis

added).28

The district court found Salas Rushford's claim of

liability under subsection (B) lacking in several respects.29 We

find it sufficient to focus on the CTPC's most glaring deficiency:

it contains no allegations whatsoever indicating that any

consumers have actually been misled by the challenged statements.

We have repeatedly emphasized that plaintiffs seeking damages must

make this additional showing when they premise a false advertising

28 In Cashmere & Camel Hair Manufacturers Institute, we clarified that this requirement is incurred in cases, like this one, seeking monetary damages rather than injunctive relief.

n.9. 29 Because subsection (B) applies only to "commercial advertising or promotion,"

(a)(1)(B), the district court found Salas Rushford's claim insufficient on the ground that the statements on ABIM's website about Salas Rushford's certification status are not "commercial speech." See also Podiatrist Ass'n, Inc. v. La Cruz Azul de P.R., Inc.,

(1st Cir. 2003) (explaining that to constitute "commercial advertising or promotion" a statement "must (a) constitute commercial speech (b) made with the intent of influencing potential customers to purchase the speaker's goods or services (c) by a speaker who is a competitor of the plaintiff in some line of trade or commerce and (d) disseminated to the consuming public in such a way as to constitute 'advertising' or 'promotion'"); but see

(noting that "the Lanham Act's commercial disparagement provision covers more than classic advertising campaigns" and "to pass the pleading threshold in a Lanham Act § 43(a)(1)(B) case, a plaintiff at the very least must identify some medium or means through which the defendant disseminated information to a particular class of consumers"). We need not reach the question of whether ABIM's website simply reporting the certification status of doctors falls within the "commercial advertising or promotion" contemplated by the act.

- 43 - claim upon the purported misleading nature of a statement, rather

than the statement's literal falsity, unless they allege that the

defendant acted with an intention to deceive. See Azurity Pharms.,

& n.3; Cashmere & Camel Hair Mfrs. Inst.

n.9; Clorox,

.30

Most often, a plaintiff in a Lanham Act case makes such

a showing through consumer survey data indicating "that a

substantial portion of the audience . . . was actually misled,"

Clorox,

, though surveys are not the only permissible

form of evidence to make this showing, see, e.g., Herman Miller,

Inc. v. Palazzetti Imps. & Exps., Inc.,

(6th

Cir. 2001). While we clarified in Clorox that a plaintiff need

not "identify the particular consumer survey that will be used to

support its allegations to survive a motion to dismiss,"

n.11, we have nonetheless made clear that plaintiffs must

make some allegations of actual consumer deception or intentional

deception to state a legally sufficient claim for relief, see

; Azurity Pharms.,

n.3. Accordingly, the

30 As the Third Circuit has explained, see Fisons Horticulture, Inc. v. Vigoro Indus., Inc.,

, 472 n.8 (3d Cir. 1994), this requirement of demonstrating actual falsity applies to misleading statements underpinning false advertising claims under

(a)(1)(B), but not false association claims under

(a)(1)(A), which, by the plain text of the act, may be proven simply by showing that the challenged expression is "likely to cause confusion, or to cause mistake, or to deceive,"

(emphasis added).

- 44 - absence of any such allegations alone compels the dismissal of

Salas Rushford's false advertising claim.

D. Leave to Amend

Salas Rushford also challenges the district court's

denial of leave to amend the CTPC. We review the denial of leave

to amend for abuse of discretion, and, as such, "we will affirm

'so long as the record evinces an arguably adequate basis for the

court's decision.'" U.S. ex rel. D'Agostino v. EV3, Inc.,

(1st Cir. 2015) (quoting Hatch v. Dep't for Child.,

Youth & Their Fams.,

(1st Cir. 2001)). Leave to

amend should be "freely give[n] . . . when justice so requires."

Fed. R. Civ. P. 15(a)(2). That rule notwithstanding, "[a] court

may deny leave to amend for a variety of reasons, including

'futility, bad faith, undue delay, or a dilatory motive on the

movant's part.'" Privitera v. Curran (In re Curran),

(1st Cir. 2017) (quoting Hatch,

).

In denying leave to amend the CTPC, the district court

focused largely on the timing of Salas Rushford's request. See

Salas Rushford II,

, at *10-11. It noted that he

requested leave to amend more than five years after filing the

CTPC. Moreover, it observed that, previously, Salas Rushford had

"vehemently" disavowed any need to amend the CTPC in a bid to

expedite the proceedings. Id. at *11. Further, Salas Rushford

had made no concrete arguments explaining why justice required

- 45 - leave to amend, simply asserting that he should have the chance to

"address any defect" in the CTPC. Id. at *10.

On appeal, Salas Rushford argues only that an amendment

would not be futile. As our description of the district court's

ruling reveals, however, Salas Rushford fails to address the

district court's primary rationale -- that his request was unduly

delayed -- and he therefore offers no basis for finding that the

court abused its discretion. See Winslow v. Aroostook Cnty.,

, 31 n.7 (1st Cir. 2013) ("We will not disturb the district

court's determination" where the appellant "merely disagrees with

the district court's holding at length and presents no reasoned

argument that the district court abused its discretion in this

instance.").

Moreover, insofar as the district court's reasoning

could be construed as a comment on the futility of Salas Rushford's

requested leave to amend,31 Salas Rushford's rebuttal to that

finding lacks substance. Neither in his request to the district

court nor on appeal has he explained why his proposed amended CTPC

would survive dismissal beyond the vague assertion that

"perceive[d] deficiencies in the pleading would be easily

31In denying leave to amend, the district court remarked that "[o]ther than including a generic assertion that leave to amend is requested in order to 'address any defect,' Dr. Salas Rushford does not articulate why a request to amend the CTPC is being advanced at this juncture." Salas Rushford II,

, at *10 (citation to record and alteration omitted).

- 46 - remedied." That unsupported contention is inadequate to

demonstrate an abuse of discretion in the district court's

judgment. Accordingly, we affirm the district court's denial of

leave to amend.

III.

In light of the foregoing analysis, we affirm the

district court's grant of judgment on the pleadings to appellees.

So ordered.

- Concurring and Dissenting Opinion Follows -

- 47 - BARRON, Chief Judge, concurring in part and dissenting

in part. I agree with the majority's well-reasoned resolution of

this appeal, save for the way that the majority resolves Jaime A.

Salas Rushford's challenge to the dismissal of his counterclaim

for breach of contract. I write separately to explain why I would

vacate rather than affirm the judgment as to the dismissal of that

claim.

The District Court rested the contract claim's dismissal

solely on Salas Rushford's failure to have alleged facts that

contested the basis for the decision by the American Board of

Internal Medicine ("ABIM") to suspend his certification. ABIM had

relied for the suspension on Salas Rushford's asserted misconduct

and a provision in the operative contract (the "Revocation

Provision") that states, in relevant part, that ABIM could "revoke

the certificate if the diplomate fails to maintain moral, ethical,

or professional behavior satisfactory to ABIM . . . ."

As the majority notes, however, Salas Rushford expressly

alleges in paragraph 49 of his counterclaim and third-party

complaint (the "CTPC") that he did not engage in the claimed

misconduct. Moreover, Salas Rushford refers expressly to that

portion of the complaint in his briefing on appeal to us. Thus,

in my view, this ground for the contract claim's dismissal does

not hold up.

- 48 - The majority does not suggest otherwise. The majority

nonetheless affirms the District Court's dismissal of the claim on

the ground that the Revocation Provision gives ABIM unilateral

discretion to determine for itself whether Salas Rushford failed

to "maintain moral, ethical, or professional behavior." This

ground for affirmance was first surfaced on appeal, however, and

then only based on a contention by ABIM that rests entirely on a

text-based assertion about the Revocation Provision's meaning that

Salas Rushford characterizes, not implausibly, as "one-sided."

In such a circumstance, it strikes me as problematic to

affirm the contract claim's dismissal based on our own unaided

attempt to parse New Jersey's law of satisfaction contracts. Salas

Rushford would first have had reason to address this issue only in

his reply brief, and even then, he had no developed argument from

the appellees to address. And while the majority offers its own

view about how the law of a state outside our Circuit would be

best construed by the highest court of a state outside our Circuit,

it does so without identifying any case that addresses a

satisfaction contract between an accreditation organization and a

professional seeking accreditation. Whether that context is more

like the employment context -- in which "highly personal and

idiosyncratic" judgment is to be anticipated -- or a standard

consumer context -- in which subjective standards of satisfaction

are disfavored -- is not evident to me. See Silvestri v. Optus

- 49 - Software, Inc.,

(N.J. 2003); see also Restatement

(Second) of Contracts § 228 cmt. b (1981) ("[I]t will not usually

be supposed that the obligee has assumed the risk of the obligor's

unreasonable, even if honest, dissatisfaction."); 13 Williston on

Contracts § 38:22 (4th ed.) ("[A]s is true generally, the law here

prefers the more objective reasonable person standard to that of

the more subjective good faith standard, and the former standard

will apply absent a specific expression in the instrument or a

clear indication from the nature of the subject matter that the

good faith standard was intended.").

I thus see no reason to venture on our own -- without

the benefit of a single citation to any New Jersey precedent by

either party to this litigation -- to predict how the highest court

of a state outside our Circuit would resolve that question.

Rather, it seems to me more appropriate to follow the procedure

that we often use when confronted with an alternative ground for

affirmance that the appellee advances but that was neither asserted

below nor addressed by the district court: vacate and remand for

further proceedings. See, e.g., Lachance v. Town of Charlton,

(1st Cir. 2021) (vacating grant of judgment as a matter

of law, "declin[ing] to exercise our discretion to affirm on any

of th[e alternative] bases [for affirmance proffered by the

appellees, and] finding it 'appropriate to leave such a matter for

the district court to address in the first instance on remand,

- 50 - especially when the grounds are not fully developed or fairly

contested on appeal,' as is the case here." (quoting Yan v. ReWalk

Robotics Ltd.,

(1st Cir. 2020))). That way, the

newly raised issue may be given the full consideration that our

multi-tiered adjudicative system contemplates.

I therefore respectfully dissent from the decision to

affirm the dismissal of the contract claim but otherwise join the

decision in full.32

32Even though I do not construe the Revocation Provision to give ABIM the discretion that the majority opinion does, I agree that, for the reasons well stated in the majority's "good faith and fair dealing" analysis, ABIM did not breach the implied covenant of good faith and fair dealing.

- 51 -