Schiff v. Internal Revenue Services et al

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF PUERTO RICO
PETER DAVID SCHIFF,
Plaintiff,
v.
INTERNAL REVENUE SERVICE, et al.,
Defendants.
CIVIL NO.: 24-1511 (CVR)
REPORT AND RECOMMENDATION
I. 	PROCEDURAL B ACKGROUND
On June 5, 2025, plaintiff Peter David Schiff (“Plaintiff”) filed a Second Amended Complaint
(the “complaint”), alleging various claims against The New York Times, Inc. (“NYT”), The Age, a
newspaper in Melbourne, Australia, Matthew Goldstein (“Mr. Goldstein”), a NYT reporter, Charlotte
Grieve (“Ms. Grieve”), a journalist at The Age, and Nick McKenzie (“Mr. McKenzie”), a journalist
at The Age (collectively, the “Media Defendants”), among others. ECF No. 121. Specifically,
Plaintiff brings a claim against the Media Defendants under 42 U.S.C. § 1985(3) (“Section 1985(3)”),
and claims for tortious interference with business relations, and defamation under Article 1536 of the
Puerto Rico Civil Code of 2020, 31 L.P.R.A. § 10801.1 Id. at 4-6.
On July 30, 2025, Mr. Goldstein and NYT (“NYT Defendants”) filed a motion to dismiss all
of Plaintiff’s claims against them pursuant to Federal Rule of Civil Procedure 12(b)(6). ECF No. 165.
1 Plaintiff also brings a claim alleging violation of his due process rights under 42 U.S.C. § 1983 (“Section 1983”), an
independent claim under Bivens v. Six Unknown Named Agents of the Federal Bureau of Narcotics, 403 U.S. 388 (1971)
(“Bivens”), and in the alternative of the Bivens claim, Plaintiff brings a claim for violation of his due process rights and
unlawful seizure of property under the Fifth Amendment. ECF No. 121 at 4-6. The Section 1983 and Bivens claims are
not brought against the Media Defendants; therefore, the Fifth Amendment claim cannot be properly alleged against the
Media Defendants despite Plaintiff’s assertion because it was brought in the alternative of the Bivens claim, which was
not alleged against the Media Defendants. Id.
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On August 6, 2025, Plaintiff filed a response in opposition. ECF No. 177. The NYT Defendants
replied. ECF No. 225. On July 30, 2025, The Age, Ms. Grieve, and Mr. McKenzie (“The Age
Defendants”) also filed a motion to dismiss Plaintiff’s claims against them pursuant to Federal Rule
of Civil Procedure 12(b)(2) for lack of personal jurisdiction, Federal Rule of Civil Procedure 12(b)(5)
for improper service, and Federal Rule of Civil Procedure 12(b)(6) for failure to state a claim upon
which relief can be granted. ECF No. 167. Plaintiff responded. ECF No. 186. The Age Defendants
replied. ECF No. 223. For the reasons that follow, it is recommended that the Media Defendants’
motions to dismiss (ECF Nos. 165, 167) be GRANTED.
II. 	S UMMARY OF ALLEGATIONS2
Plaintiff owned a financial institution called Euro Pacific International Bank ("the Bank").
ECF No. 121 at 3, ¶ 1. The Bank was subject to scrutiny by the Internal Revenue Service (“IRS”) and
Commissioner of Financial Institutions of the Commonwealth of Puerto Rico (“OCIF” per its
Spanish-language acronym) as part of a joint tax enforcement investigation called "Operation
Atlantis" conducted by the Joint Chiefs of Global Tax Enforcement (known as “J5”). Id. J5 combats
transnational tax crime through gathering information, sharing intelligence, conducting operations,
and building the capacity of tax crime enforcement. ECF No. 10 at ¶ 2(b)(viii). J5 consists of five
individual members, all named defendants in this case: the IRS, Mr. Will Day, Mr. Eric Ferron, Mr.
Niels Obbink, and Mr. Simon York (the “J5 Defendants”). Id. at 3.3
“Operation Atlantis” was initiated when Plaintiff arranged for the sale of the Bank's stock to
a company called Qenta for $17.5 million. ECF 121 at 3, ¶ 3. OCIF blocked the sale on May 16, 2022,
2 This summary is based on Plaintiff’s allegations in the complaint.
3 This allegation and that of the previous sentence do not appear in the Second Amended Complaint but rather appear in
the First Amended Complaint. ECF No. 10. They are provided as context for the reader and are not essential to the
conclusion of this Report and Recommendation. However, nothing in the motions to dismiss or related filings suggest
that the role and membership of the J5 is contested.
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at the request of the J5 Defendants. Id. Instead, OCIF approved an asset sale to Qenta for $1.25 million
after the Bank entered receivership, resulting in a considerable loss to Plaintiff. Id. Plaintiff’s offer to
inject $7 million in capital was rejected by the OCIF Commissioner, who assured Plaintiff that the
Bank’s capital level, though below the statutory required minimum, was sufficient for the bank to
operate prior to the completion of the sale to Qenta. Id. As of June 5, 2025, OCIF’s appointed Trustee
had not completed the Bank’s liquidation. Id. at 5.
On June 30, 2022, Mr. Jim Lee, at the time the IRS Chief of Criminal Investigations, made
statements during a press conference in Puerto Rico to announce the investigation into the Bank. Id.
¶ 2; Id. at 5. In this press conference, the reasons given for the investigation implied that Plaintiff was
involved in illegal tax evasion and money laundering. Id. at 4. Plaintiff found out in April of 2024,
after receiving information from the IRS, that the J5 Defendants agreed to leak confidential
investigation information to the media, specifically to defendants Mr. Goldstein, Ms. Grieve, and Mr.
McKenzie, who then disseminated the allegations of tax evasion and money laundering regarding
Plaintiff and the Bank, despite knowing these claims were unsubstantiated. Id. As result of these
statements and as result of the delay in completing the Bank’s liquidation, Plaintiff claims that his
reputation was damaged and that he suffered significant financial harm. Id. at 5-6.
III. 	MOTION TO DISMISS FOR L ACK OF PERSONAL J URISDICTION
A. Applicable Legal Standard
Federal Rule of Civil Procedure (12)(b)(2) (“Rule 12(b)(2)”) allows a defendant to request
dismissal of a complaint due to lack of personal jurisdiction. Fed. R. Civ. P. 12(b)(2). Since federal
courts are courts of limited jurisdiction, the party asserting jurisdiction has the burden of
demonstrating that jurisdiction exists. See United States v. Swiss Am. Bank, Ltd., 274 F.3d 610, 618
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(1st Cir. 2001); Ealing Corp. v. Harrods Ltd., 790 F.2d 978, 979 (1st Cir. 1986); Dalmau Rodríguez
v. Hughes Aircraft Co., 781 F.2d 9, 10 (1st Cir. 1986).
The prima facie standard requires the district court to determine “whether the plaintiff has
proffered evidence that, if credited, is enough to support findings of all facts essential to personal
jurisdiction.” Boit v. Gar-Tec Products, Inc., 967 F.2d 671, 675 (1st Cir. 1992). This determination
must be based on affirmative evidence of specific facts set forth in the record. Steen Seijo v. Miller,
425 F.Supp.2d 194, 198 (D.P.R. 2006) (citing Kowalski v. Doherty, Wallace, Pillsbury & Murphy,
787 F.2d 7, 9 (1st Cir. 1986); see also Swiss Am. Bank, Ltd., 274 F.3d at 619; Gar-Tec Prods., Inc.,
967 F.2d at 675 (stating that mere references to unsupported allegations in the complaint are
insufficient to establish personal jurisdiction). Therefore, the court accepts plaintiff’s asserted facts
as true so long as they are properly supported by the evidence in the record. Swiss Am. Bank, Ltd.,
274 F.3d at 619; see also Steen Seijo, 425 F.Supp.2d at 198. “Unsupported allegations in the pleadings
do not contribute to the prima facie showing of personal jurisdiction”; said showing “must be based
on evidence that goes beyond the pleadings.” Steen Seijo, 425 F.Supp.2d at 198 (citing Chlebda v.
H.E. Fortna & Bro. Inc., 609 F.2d 1022, 1024 (1st Cir. 1979); Foster-Miller, Inc. v. Babcock &
Wilcox Canada, 46 F.3d 138, 145 (1st Cir. 1995) (“The plaintiff ordinarily cannot rest upon the
pleadings but is obliged to adduce evidence of specific facts.”)).
In order to show that the forum state has personal jurisdiction over a defendant, the plaintiff
must make a prima facie showing “as to every fact required to satisfy both the forum's long-arm
statute and the Due Process Clause of the Constitution.” Harlow v. Children's Hosp., 432 F.3d 50, 57
n. 3 (1st Cir. 2005); see also Boit v. Gar-Tec Products, Inc., 967 F.2d 671 (1st Cir. 1992). “As Puerto
Rico's long-arm statute is coextensive with the reach of the Due Process Clause, the Court therefore
proceeds to the constitutional analysis.” Vargas-Santos v. Sam’s West Inc., 2021 WL 4768387, at *3
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(D.P.R. Oct. 12, 2021) (citing Portugues v. Venable LLP, 497 F. Supp. 2d 295, 298 (D.P.R.
2007); Carreras v. PMG Collins, LLC, 660 F.3d 549, 552 (1st Cir. 2011)) (internal citations and
quotations omitted).
B. Analysis
The Age Defendants argue that Plaintiff’s all of claims against them should be dismissed for
lack of personal jurisdiction. ECF No. 167 at 14-19. In deciding The Age Defendants’ 12(b)(2) motion
to dismiss, the plaintiff bears the burden on elements of relatedness and minimum contacts. Foster–
Miller, Inc. v. Babcock & Wilcox Can., 46 F.3d 138, 145 (1st Cir.1995).
In order to satisfy the Due Process Clause and for the Court to exercise personal jurisdiction,
a defendant must “have certain minimum contacts with [the forum state] such that the maintenance
of the suit does not offend ‘traditional notions of fair play and substantial justice.’” Int’l Shoe Co. v.
Washington, 326 U.S. 310, 316 (1945) (citation omitted). Personal jurisdiction over a defendant can
be general or specific. Lang v. Corporación de Hoteles, S.A., 522 F.Supp.2d 349, 359 (D.P.R. 2007)
(citing Mass. Sch. of Law at Andover, Inc. v. Am. Bar Ass’n, 142 F.3d 26, 34 (1st Cir. 1998)); Steen
Seijo, 425 F.Supp.2d at 198 (citing Pritzker v. Yari, 42 F.3d 53, 60 (1st Cir. 1994)). “General
jurisdiction exists when the litigation is not directly founded on the defendant’s forum-based contacts,
but the defendant has nevertheless engaged in continuous and systematic activity, unrelated to the
suit, in the forum state.” United Elec. Workers v. 163 Pleasant St. Corp., 960 F.2d 1080, 1088 (1st
Cir. 1992). Specific jurisdiction, on the other hand, exists “where the cause of action arises directly
out of, or relates to, the defendant’s forum-based contacts.” Id. at 1088–89. Courts assess whether a
plaintiff has pled sufficient facts in their complaint to establish specific personal jurisdiction
according to a three-part test:
First, an inquiring court must ask whether the claim that undergirds the litigation
directly relates to or arises out of the defendant's contacts with the forum. Second, the
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court must ask whether those contacts constitute purposeful availment of the benefits
and protections afforded by the forum's laws. Third, if the proponent's case clears the
first two hurdles, the court then must analyze the overall reasonableness in light of a
variety of pertinent factors that touch upon the fundamental fairness of an exercise of
jurisdiction.
Portugues, 497 F.Supp.2d at 298 (citing Phillips Exeter Acad. v. Howard Phillips Fund, 196 F.3d
284, 288 (1st Cir. 1999)).
Plaintiff states that his allegations assert only specific personal jurisdiction as to the Age
Defendants. ECF No. 186 at 3-4. Therefore, the discussion is limited to that type of personal
jurisdiction.4 See Steen Seijo, 425 F.Supp.2d at 198 (“In the instant case, the plaintiffs only attempt
to establish the existence of specific in personam jurisdiction ..., so the Court will circumscribe to
discussing that type of personal jurisdiction.”). However, there are not enough facts to apply the prima
facie approach to determine whether the Court has personal jurisdiction over the Media Defendants.
Plaintiff states, in opposition, that The Age Defendants’ contacts with Puerto Rico represent
purposeful availment. However, the complaint does not state as much because Plaintiff’s complaint
contains no specific factual allegations naming The Age Defendants or any contact with the United
States. The only assertion as to The Age Defendants’ conduct is the vague and conclusory assertion
that the “Media Defendants intentionally directed their actions at Puerto Rico by participating in
planning, execution, and media promotion of the closure, establishing minimum contacts sufficient
for jurisdiction.” ECF No. 121 at 4. Plaintiff’s complaint does not provide any additional information
regarding how the Media Defendants participated in such a conspiracy or what specific contacts they
4 Regardless, general jurisdiction is not applicable in this case because no allegation has been made that the Age
Defendants have engaged in continuous and systematic activity in Puerto Rico unrelated to this suit. Defendant asserts
that The Age and its parent company are headquartered and conduct all their operations exclusively in Australia, where
the newspaper is “written, edited, and published.” ECF No. 167 at 14. Ms. Grieve and Mr. McKenzie are likewise
Australian citizens and residents with no domicile, presence, or business operations in the United States. Id. Plaintiff’s
complaint contains no factual allegations to the contrary, or any factual allegations at all regarding The Age or its reporters.
Therefore, Plaintiff’s complaint does not sufficiently allege general jurisdiction.
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had with Puerto Rico in carrying out such plan. Accordingly, the Court cannot properly assess the
three elements of specific jurisdiction test, as Plaintiff fails to allege any facts allowing the Court to
determine whether the claims made directly related to The Age Defendant’s contacts with Puerto
Rico, much less whether the Age Defendants purposefully availed themselves of Puerto Rico’s laws.
Having failed to carry his burden, Plaintiff’s claim against The Age Defendants should be dismissed
for lack of personal jurisdiction. Moreover, an evidentiary hearing on the issue is not necessary, as
Plaintiff’s claims against The Age should also be dismissed on both 12(b)(5) and 12(b)(6) grounds.
IV. 	MOTION TO DISMISS FOR I MPROPER S ERVICE
A. Applicable Legal Standard
Alternatively, The Age Defendants argue that the claims against them should be dismissed
under Federal Rule of Civil Procedure 12(b)(5) (“Rule 12(b)(5)”) for insufficient service of process.
ECF No. 167 at 19-21. Rule 12(b)(5) provides for the dismissal of claims due to insufficient service
of process. Fed. R. Civ. P. 12(b)(5). “A party filing a motion under… Rule 12(b)(5) is essentially
contesting the manner in which process or service was performed.” LD White Sugar Corp. v. Able
Sales Company, Inc., 2021 WL 11962976, at *1 (D.P.R., Mar. 24, 2021). In other words, Rule
12(b)(5) allows a defendant to challenge “the mode of delivery or the lack of delivery of the summons
and complaint.” Fernández-Salicrup v. Figueroa-Sancha, 2011 WL 13135962, at *1 (D.P.R. May 2,
2011) (citing 5B C. Wright & A. Miller, Federal Practice and Procedure § 1353 (3d ed. 2002)). Under
such challenge, “the Court refers to the rules governing service of process,” which “are governed by
Federal Rule of Civil Procedure 4.” LD White Sugar, 2021 WL 11962976, at *1. Once adequately
challenged, the burden shifts to the plaintiff to show service was proper. Rivera-López v. Municipality
of Dorado, 979 F.2d 885, 887 (1st Cir. 1992).
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B. Analysis
Plaintiff has not met his burden to show compliance with Federal Rule of Civil Procedure 4(f)
(“Rule 4(f)”) for serving The Age Defendants in a foreign country. Fed. R. Civ. P. 4(f). Rule 4(f)(1)
allows service at a place not within any judicial district of the United States “by any internationally
agreed means of service that is reasonably calculated to give notice, such as those authorized by the
Hague Convention on the Service Abroad of Judicial and Extrajudicial Documents…” (“Hague
Convention”). Fed. R. Civ. P. 4(f)(1); see also Fed. R. Civ. P. 4(h)(2) (providing that a corporation
outside the United States must be served in any manner prescribed by Rule 4(f) for serving an
individual); Rodríguez v. Suzuki Motor Corp., 570 F.3d 402 (1st Cir. 2009). The Hague Convention
supersedes both Rule 4 and state laws regarding service of process where they allow for service via
methods inconsistent with the Hague Convention. Volkswagenwerk Aktiengesellschaft v. Schlunk,
486 U.S. 694, 699 (1988). Under the Hague Convention, the primary means by which service is
accomplished is through the receiving country’s “Central Authority,” which the Hague Convention
requires that each signatory nation establish to act as an agent to receive a request for service and
arrange for service of documents. Hague Convention, art. 10, Feb. 10, 1969, 20 U.T.S. 361. The Age
Defendants contend, and Plaintiff does not provide evidence to refute, that service was not sent
through Australia’s Central Authority. ECF No. 167 at 19-20. However, the Hague Convention also
allows service of process through other means as long as they are not objectionable to the receiving
state and said service is permitted by the state where the summons was issued. See Water Splash, Inc.
v. Menon, 581 U.S. 271 (2017) (holding that service of process via international mail is permissible
under the Hague Convention so long as the receiving state does not object to such service and the
form of service is authorized by the rules governing service in the forum from which the mailed
service originated). Therefore, further analysis is warranted.
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Personal service is 	contemplated under 	the terms of the Hague Convention. Hague
Convention, art. 10, Feb. 10, 1969, 20 U.T.S. 361, art. 10(b), (c). However, the Convention does not
itself make such service proper. Instead, it must be shown that the service of process comported with
local laws in the place of service. See Brockmeyer v. May, 282 F.3d 798, 804 (9th Cir, 2004) (holding
that while the Hague Convention does not object to service by mail, it still must be a legal method of
service under the laws of the receiving state). See also Fed. R. Civ. P. 4 Advisory Committee's Note,
1993 Amendment (stating that under Rule 4(f)(2), "[s]ervice by methods that would violate foreign
law is not generally authorized.").
Plaintiff has failed to show that service was proper under Australian law as to both The Age
and its reporters, Ms. Grieves and Mr. McKenzie. With regards to service of the newspaper itself,
The Age Defendants assert that a copy of the complaint and summons were “purportedly served on
March 10, 2025, through ‘James’, an individual with no known last name whose authority to accept
service for The Age does not exist.” ECF No. 167 at 20-19 (citing ECF No. 73 at 3). Further, The
Age Defendants points out that “the document confirming service of process upon The Age fails to
properly identify the alleged process server, and to provide a declaration attesting to such service that
complies with applicable federal law.” Id. As to Ms. Grieves and Mr. McKenzie, The Age Defendants
assert that the service was not directed to the journalists individually but rather “was handed to a third
party identified as Sam Rowe.” Id. at 20 (citing ECF No. 93). Plaintiff does not contest these
assertions; in fact, Plaintiff admits that service under the Hague Convention was not followed. ECF
No. 186 at 7 (“Plaintiff acknowledges that formal Hague service has not yet been perfected”). Instead,
Plaintiff argues that Defendants received actual service and appeared through counsel without any
prejudice and that “personal service” on foreign defendants is valid under the Hague Convention. Id.
However, the appearance of The Age Defendants has not waived the requirement for sufficient
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service. All The Age Defendants’ filings have been by special appearance without consenting to the
Court’s jurisdiction. See ECF Nos. 78, 87, 95, 109, 120, 167, 171, 206, 212, 223, 231, 232, 236.
Additionally, the fact that a form of service is allowed by the Hague Convention does not alone make
service proper; the Plaintiff has not shown that the service on The Age Defendants was proper under
the laws of Australia. Brockmeyer, 282 F.3d at 804. Absent proper service, the Court lacks personal
jurisdiction over The Age Defendants, and the action must be dismissed accordingly.5
V. 	MOTION TO DISMISS FOR FAILURE TO S TATE A CLAIM
A. Applicable Legal Standard
Finally, both The Age Defendants and the NYT Defendants move to dismiss under Federal
Rule of Civil Procedure 12(b)(6) (“Rule 12(b)(6)”). A defendant may move to dismiss an action
pursuant to Rule 12(b)(6) for “failure to state a claim upon which relief can be granted.” Fed. R. Civ.
P. 12(b)(6). In order to survive a motion to dismiss under Rule 12(b)(6), a complaint must allege “a
plausible entitlement to relief.” Rodríguez-Ortiz v. Margo Caribe, Inc., 490 F.3d 92, 95 (1st Cir. 2007)
(quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 559 (2007)). “Plausible, of course, means
something more than merely possible, and gauging a pleaded situation’s plausibility is a ‘context-
specific’ job that compels us ‘to draw on’ our ‘judicial experience and common sense.’” Schatz v.
Republican State Leadership Committee, 669 F.3d 50, 55 (1st Cir. 2012) (quoting Ashcroft v. Iqbal,
556 U.S. 662, 679 (2009)).
Such a task requires a two-pronged analysis. “First, the court must sift through the averments
5 Plaintiff argues that any technical defect in service can be cured by reasonable extension or alternate means. ECF No.
186 at 7. While technical noncompliance with service rules does not require dismissal if the defendant has actual notice
of the lawsuit and suffers no prejudice, Plaintiff’s service is not only a minor technical error but shows “flagrant disregard
of the requirements of the rules” and this justifies dismissal. 4A C. Wright and A. Miller, Federal Practice &
Procedure, Civ.2d § 1088. Plaintiff’s assertion that failure to effect service was a mere technical defect is inapposite when
considering the type of errors courts generally consider as technical defects. See United Food & Comm'l Workers Union
Int'l v. Alpha Beta Co., 736 F.2d 1371, 1382 (9th Cir.1984) (holding that putting the incorrect time to file an answer on
the summons constitutes a “technical error” and that defendant received sufficient notice).
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in the complaint, separating conclusory legal allegations (which may be disregarded) from allegations
of fact (which must be credited).” Rodríguez-Reyes v. Molina-Rodríguez, 711 F.3d 49, 53 (1st Cir.
2013). “Similarly, a court does not accept as true allegations that while not stating ultimate legal
conclusions, are nevertheless so threadbare or speculative that they fail to cross the line between the
conclusory and the factual.” Air Sunshine, Inc. v. Carl, 663 F.3d 27, 33 (1st Cir. 2011) (internal
quotations omitted). In short, “to avoid dismissal, the plaintiff must provide the grounds upon which
his claim rests through factual allegations sufficient ‘to raise a right to relief above the speculative
level.’” Torres v. Bella Vista Hosp., Inc., 523 F. Supp. 2d 123, 133 (D.P.R. 2007) (quoting Twombly,
550 U.S. at 555, 570).
“Second, the court must consider whether the winnowed residue of factual allegations gives
rise to a plausible claim of relief.” Air Sunshine, Inc., 663 F.3d at 33. In making this determination
under Rule 12(b)(6), the court must limit its focus to the allegations of the complaint and “accept as
true ‘all well-pleaded factual averments and indulg[e] all reasonable inferences in the plaintiff’s
favor.’” Doyle v. Hasbro, Inc., 103 F.3d 186, 190 (1st Cir. 1996) (quoting Aulson v. Blanchard, 83
F.3d 1, 3 (1st Cir. 1996)). In addition to the complaint, the court can consider “(a) ‘implications from
documents’ attached to or fairly ‘incorporated into the complaint,’ (b) ‘facts’ susceptible to ‘judicial
notice,’ and (c) ‘concessions’ in plaintiff’s ‘response to the motion to dismiss.’” Schatz, 669 F.3d at
55 (quoting Arturet-Vélez v. R.J. Reynolds Tobacco Co., 429 F.3d 10, 13 n.2 (1st Cir. 2005)). “We
appropriately draw on our ‘judicial experience and common sense’ in evaluating a complaint, but we
may not disregard factual allegations ‘even if it strikes a savvy judge that actual proof of those facts
is improbable.’” Manning v. Boston Medical Center Corp., 725 F.3d 34, 43 (1st Cir. 2013). Although
all inferences must be made in plaintiff’s favor, the court need not accept “bald assertions,
unsupportable conclusions, periphrastic circumlocutions, and the like.” Aulson, 83 F.3d at 3.
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Dismissal under Rule 12(b)(6) is appropriate only if the facts alleged, taken as true, do not warrant
recovery. Id.
B. Analysis
Plaintiff’s complaint includes claims against the Media Defendants for conspiracy to violate
civil rights under Section 1985(3), for tortious interference with business relations, and for
defamation. ECF No. 121 at 4-6. Defendants argue that all three claims should be dismissed for failure
to state a claim upon which relief may be granted under Rule 12(b)(6). ECF No. 165 at 8-23; ECF
No. 167 at 21-29. Defendants also argue that Plaintiff’s Section 1985(3) claim is time-barred. ECF
No. 165 at 19-20; ECF No. 167 at 25. Each claim is discussed in turn.
1. 	Section 1985(3)
Section 1985(3) allows suits against those who conspire to deprive others of the equal
protection of the laws, or of the equal privileges and immunities under the law. 42 U.S.C. § 1985(3).
To bring a Section 1985(3) claim, a plaintiff must plead “(1) a conspiracy; (2) a conspiratorial purpose
to deprive the plaintiff of the equal protection of the laws; (3) an overt act in furtherance of the
conspiracy, and, lastly, (4) either an injury to person or property or a deprivation of a constitutionally
protected right.” Soto Padró v. Public Building Authority, 675 F3d 1, 4 (1st Cir. 2012) (citations
omitted). Furthermore, the first element of a Section 1985 claim requires showing racial, or otherwise
class-based, “invidiously discriminatory animus behind the conspirators' action.” Id.
The factual allegations in the complaint are insufficient to plead a claim under Section
1985(3). First, Plaintiff’s complaint fails to plead “in some detail, through reference to material facts,
the relationship or nature of the cooperation between the state actors and the private individuals,
including how the conspiracy was made or ‘hatched’…” Rosado v. Sabat, 204 F. Supp. 252 (citing
Slotnick v. Staviskey, 560 F.3d 31, at 33 (1st Cir. 1977)). “For conspiracy purposes, simply alleging
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that defendants acted jointly and in concert and under color of law is insufficient.” Id. at 267 (citing
McGillicuddy v. Clements, 746 F.2d 76 (1st Cir. 1984)). Plaintiff’s complaint does exactly that. The
only information its reader can ascertain is that the Media Defendants conspired with OCIF and the
IRS to publish false information about the Bank, which the Media Defendants then published despite
knowing the claims were unsubstantiated. ECF No. 121 at 4. The complaint is devoid of any
additional factual allegations. Moreover, according to the NYT Defendants’ motion to dismiss, the
alleged publication of false information refers to two articles authored in-part or in whole by Mr.
Goldstein in October of 2020 and June of 2022. ECF Nos. 58-1, 58-2. However, Plaintiff’s complaint
does not even mention the articles. The complaint simply states that during the June 30, 2022 press
conference, the J5 Defendants and OCIF representatives allegedly misrepresented the reasons for the
investigation into the Bank, which was “widely reported by” the Media Defendants. ECF No. 121 at
3. “A complaint containing only conclusory, vague, or general allegations of conspiracy to deprive a
person of constitutional rights cannot withstand a motion to dismiss.” Martinez-Machicote v. Ramos-
Rodriguez, 553 F. Supp. 2d 45, 49-50 (2007).
Even more fatal, Plaintiff does not allege that the conspiracy was motivated by “some racial,
or perhaps otherwise class-based, invidiously discriminatory animus.” Griffin v. Breckenridge, 403
U.S. 88, 102 (1971). Plaintiff’s only reference to this element is a conclusory statement that Plaintiff
“is a member of a protected class,” without specifying what class. See Pérez-Sánchez v. Pub. Bldg.
Auth., 531 F.3d 104, 107 (1st Cir. 2008); ECF No. 121 at 1. Plaintiff argues that “reading the pleading
in context and with the required liberality, it is apparent that Defendants targeted him because of his
race and religion…and [his] political and ideological stance…” ECF No. 177 at 12. Discrimination
based on race, religion, or political and ideological beliefs is not at all apparent from Plaintiff’s
complaint, and suggesting as much is far-fetched, even construing Plaintiff’s complaint in the most
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liberal fashion. Moreover, Section 1985(3) provides no remedy for animus based on political beliefs.
See Pérez-Sánchez v. Pub. Bldg. Auth., 531 F.3d 104, 109 (1st Cir. 2008). Furthermore, Plaintiff’s
complaint does not explain how the conspiracy was motivated by his membership in that protected
class. Instead, Plaintiff’s complaint alludes to an economic or commercial conspiracy, and courts
cannot “construe 1985(3) to reach conspiracies motivated by economic or commercial animus.”
United Bhd. of Carpenters v. Scott, 463 U.S. 825, 838(1983); see also Sanchez v Autoridad de Energia
Electrica, 360 F Supp 2d 302, 313 (D.P.R. 2004). Therefore, it is recommended that the Section
1985(3) claim against the Media Defendants be dismissed.6
2. 	Tortious Interference
A cause of action for tortious interference with a contractual relationship arises under Article
1536 of the Puerto Rico Civil Code.7 Gen. Office Prod. Corp. v. A.M. Capen’s Sons, Inc., 115 P.R.
Dec. 553, 558 (1984). In order to prevail on a tortious interference claim, a plaintiff must establish
“(1) that a contract exists, (2) that the defendant interfered with that contract, (3) fault on the part of
the defendant, (4) damage to the plaintiff, and (5) a nexus between the defendant's fault and the
6 The Media Defendants argue that even if Plaintiff’s Section 1985(3) claim survives, it is time barred. ECF No. 165 at
10-11; ECF No. 167 at 24-25. See also Rodríguez-García v. Municipality of Caguas, 354 F.3d 91, 96 (1st Cir. 2004)
(“Sections 1981, 1983, and 1985 borrow the forum state’s statute of limitations for personal injury claims.”). The one-
year statute of limitations for Plaintiff’s claim under Section 1985 begins when the plaintiff knows or has reason to know
of the existence and cause of the injury which is the basis of his action. See Moran Vega v. Cruz Burgos, 537 F.3d 14, 20
(1st Cir. 2008) (“Section 1983 [and by extension, Section 1985] claims generally accrue when the plaintiff knows or has
reason to know of the injury on which the action is based.” (internal citations omitted)); Álamo-Hornedo v. Puig, 745
F.3d 578, 581 (1st Cir. 2014); Rodríguez-García, 354 F.3d at 96-97 (“Federal law determines the date on which the claim
accrued. Under federal law, the limitations period begins to run when the plaintiff knows or has reason to know of the
injury which is the basis for his claim.”) (internal citations omitted). According to Plaintiff’s complaint, the claims against
the Media Defendants resulted from actions in 2022; however, Plaintiff alleges that he did not find out about the alleged
conspiracy until April of 2024, “after a contested FOI process.” ECF No. 121 at 4. Thus, it was not until April of 2024
that Plaintiff knew or should have known of the alleged conspiracy. As Plaintiff allegedly found out about the conspiracy
6 months before the filing of the original complaint in November of 2024, such claim would not be time-barred if it
survived the Media Defendants’ 12(b)(6) motion to dismiss.
7 Article 1802 of the Puerto Rico Civil Code of 1930, Puerto Rico’s previous tort statute, was replaced by Article 1536
when the new Puerto Rico Civil Code was enacted in November 2020. PR Laws Ann. tit. 31 § 10801. However, Articles
1802 and 1536 have provisions that “are extremely similar and thus can be used interchangeably.” Orellano-Laureano v.
Instituto Médico del Norte, Inc., 2023 WL 4532418, at *6 n.5 (D.P.R. July 13, 2023). Courts in this district accordingly
apply caselaw analyzing Article 1802 to claims arising under Article 1536. See e.g., Dumanian v. FirstBank P.R., 2024
WL 197429, at *3 n.4 (D.P.R. 2024).
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plaintiff's damage.” Alpha Biomedical & Diagnostic Corp. v. Philips Med. Sys. Netherland BV, 828
F. Supp. 2d 425, 433 (D.P.R. 2011); New Comm Wireless Servs. v. SprintCom, Inc., 287 F.3d 1, 9
(1st Cir.2002); Gen. Office Prods. Corp., 115 PR Dec. at 558. Plaintiff runs into several problems
with this claim.
First, Plaintiff’s complaint does not contain any allegations regarding the existence of a
contract. The complaint does discuss a “$17.5 million sale to Qenta” that was allegedly lost; however,
it does not identify any contractual terms or obligations binding the parties.8 See Gen. Office Prods.
Corp. v. A.M. Capen’s Sons, Inc., 780 F.2d 1077, 1081 (1st Cir. 1986) (“If what is affected is… a
profitable financial relationship where there is no contract, the action does not lie…”); Dolphin Int’l,
Inc. v. Ryder Truck Lines, Inc., 27 P.R. Offic. Trans. 869, 882-83 (1991) (holding that there is not a
tortious interference claim “if what is affected is a mere expectancy or a profitable financial
relationship.”) (internal citation omitted); Future Development of Puerto Rico v. E.L.A., 276
F.Supp.2d 228, 242 (D.P.R. 2003) (dismissing a tortious interference action that alleged “a general
loss of business opportunity”). The complaint does not even refer to the sale to Qenta as an
“agreement”, only that the Plaintiff “arranged” the sale. As the existence of a contract is
“indispensable” in a tortious interference claim, Plaintiff’s claim should be dismissed. Dolphin Int’l,
Inc., 27 P.R. Offic. Trans. at 869.
Second, even assuming that there was a valid contract, Plaintiff has not alleged any facts
showing that the Media Defendants acted intentionally to interfere with the contractual relationship
or even had knowledge that one existed. Under Puerto Rico law, “the ‘fault’ element of tortious
8 Moreover, the Act that governs the operations of international financial institutions such as EPB in Puerto Rico, Act No.
273-2012, as amended, otherwise known as the “International Financial Center Regulatory Act,” provides that any sale
or transfer of stock, interest or participation in the capital of an international financial institution “shall be null ab initio if
the written authorization of the Commissioner has not been obtained.” P.R. Laws Ann. tit. 7, § 3089. Hence, before the
Commissioner authorizes such a contract, it does not exist for purposes of satisfying the element of an extant contract for
the purposes of a tortious interference claim.
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interference requires a stronger showing” than the other elements. New Comm Wireless Servs., 287
F.3d at 10. Specifically, “[t]he fault element requires that the defendant’s interference be intentional
and with knowledge of the contract's existence.” Alpha Biomedical, 828 F. Supp. 2d at 433 (citing
New Comm Wireless Servs., 287 F.3d at 10; Figueroa v. Walgreens of San Patricio, Inc., 155 DPR
560 (2001)). However, the prejudiced party need only show or present facts allowing the court to
infer that the third person has acted tortiously. Gen. Office Prods. Corp., 115 PR Dec. at 558-59.
Plaintiff’s complaint does not contain any facts alleging the Media Defendants’ knowledge of any
contract or intent to interfere with one, nor does Plaintiff allege enough facts to allow the court to
infer that the Media Defendants acted tortiously. Accordingly, Plaintiff’s tortious interference claim
should be dismissed.9
3. 	Defamation
Plaintiff’s last cause of action against the Media Defendants is for defamation. “In Puerto Rico
the tort of defamation can be either intentional or negligent, depending on whether the defamed is a
private or public figure, and can come in the form of slander or libel.” Segarra Jiménez v. Banco
Popular, Inc., 421 F.Supp.2d 452, 458 (D.P.R. 2006). “Libel is defamation that comes in the written
form.” Id. (citing Sociedad de Gananciales v. El Vocero de P.R., 135 D.P.R. 122, 126 (1994)).
“Slander, on the other hand, takes place when the defamation is oral and, as with libel, all other
elements of the defamation claim must be present.” Segarra Jiménez v. Banco Popular, Inc., 421
9 The Media Defendants also argue that any tortious interference claim would be time-barred. Tortious interference claims
under Puerto Rico’s general tort statute are subject to a one-year limitations period that “begins to run from the time the
aggrieved person had knowledge” of the harm. Flovac, Inc. v. Airvac, Inc., 817 F.3d 849, 856 (1st Cir. 2016) (quotations
and internal citations omitted). Plaintiff had knowledge of the harm of the allegedly false statements in 2022 when the
Media Defendants “widely covered” the June 30, 2022 press conference. However, Plaintiff alleges that he did not become
aware of any conspiracy to interfere with his business until April of 2024, when he received information through the
FOIA process. Plaintiff’s inclusion of this information in his complaint is sufficient at the motion to dismiss stage to allow
for equitable tolling. Thus, if Plaintiff’s tortious interference claim were to survive the Media Defendants’ 12(b)(6)
motions, it would not be time-barred.
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F.Supp.2d at 458 (citing Ojeda v. El Vocero de P.R., 137 D.P.R. 315, 326 (1994)). “In order for a
private figure, such as plaintiff … to prove defamation under Puerto Rico law, whether it be libel
(written) or slander (oral), she must prove the following: (1) that the alleged defamatory statements
are false; (2) that the defamatory statements (written or spoken) were negligently made to another;
and (3) that the plaintiff suffered damages.” Luis Santiago v. Santiago, 731 F.Supp.2d 202, 209
(D.P.R. 2010) (quoting Díaz Rodríguez v. Torres Martir, 394 F.Supp.2d 389, 392 (D.P.R. 2005)).
Plaintiff’s complaint clearly alleged libel, the publication of allegedly false statements;
however, Plaintiff’s allegations of slander are not clear. Nevertheless, Plaintiff’s complaint fails to
state a claim upon which relief can be granted as to either form of defamation. According to Plaintiff’s
complaint, the Media Defendants published “damaging and unsubstantiated allegations of tax evasion
and 	money 	laundering, 	regarding 	Plaintiff 	and 	the bank, 	despite knowing 	that 	these were
unsubstantiated.” ECF No. 121 at 4. Moreover, Plaintiff alleges that the Media Defendants “widely
reported” a press conference on June 30, 2022, where the investigation into and closure of the bank
was announced, and illegal activity was falsely implied. Id. at 3. Such statements allegedly damaged
“Plaintiff’s reputation and business.” Id. However, Plaintiff does not specifically identify any
statement published by the Media Defendants that was false or how the Media Defendants acted
negligently, or with actual malice, in publishing the same. Plaintiff merely alleges that the press
conference “falsely implied criminal wrongdoing by Plaintiff”. Furthermore, there are no facts
connecting the statements made during the press conference to statements published or spoken by the
Media Defendants. ECF No. 121 at 5. “However, even if it is assumed that said statements are in fact
false[,] there is no evidence that the [Media D]efendant's conduct damaged [P]laintiff's reputation or
honor” beyond Plaintiff’s conclusory statement that his reputation and business were damaged from
their reporting on the press conference. Santiago, 731 F.Supp.2d at 209; ECF No. 121 at 3. Even
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making all reasonable inferences in Plaintiff’s favor, his complaint does not sufficiently allege the
elements of a defamation claim for either libel or slander.10
VI. 	CONCLUSION
For the aforementioned reasons, it is recommended that the Media Defendants’ motions to
dismiss (ECF Nos. 165, 167) be GRANTED and that Plaintiff’s claim against the Media Defendants
be DISMISSED WITH PREJUDICE.
The parties have fourteen (14) days to file any objections to this report and recommendation
unless otherwise ordered by the court. Failure to file the same within the specified time waives the
right to object to this report and recommendation. Fed. R. Civ. P. 72(b)(2); Fed. R. Civ. P. 6(c)(1)(B);
D.P.R. Civ. R. 72(d); see also 28 U.S.C. § 636(b)(1); Henley Drilling Co. v. McGee, 36 F.3d 143,
150–51 (1st Cir. 1994); United States v. Valencia, 792 F.2d 4 (1st Cir. 1986).
IT IS SO RECOMMENDED.
In San Juan, Puerto Rico, this 6th day of February, 2026.
s/Marcos E. López
U.S. Magistrate Judge
10 It is unclear whether such a claim, if it survived, would be time-barred, because the one-year statute of limitations
periods for claims arising from Puerto Rico’s Libel and Slanders Act, P.R. Laws Ann. tit. 32 at § 3141 and Article 1536
of the Civil Code, starts from the time the party became aware of the defamation. P.R. LAWS ANN. tit. 31 § 9496. Unless
shown otherwise, this is assumed to be the day the allegedly defamatory statements were published. Ojeda v. El Vocero,
37 P.R. Offic. Trans. 12 (1994). NYT Defendants assert that they only published two articles written regarding Plaintiff
and the bank sale, one in October of 2022 and the other in June of 2022. ECF No. 165 at 11. However, no such mention
of the NYT articles is included by Plaintiff in the complaint, nor does Plaintiff allege any specific publications by The
Age. Finally, Plaintiff does not indicate when he learned of the alleged defamation.
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