Puerto Rico distributor sues Stryker over contract termination
RMC’s lawsuit alleges breach of contract and seeks $4.9 million in damages along with supply reinstatement.
San Juan-based RMC Orthopedic & Surgical Inc. (RMC), a distributor of orthopedic medical devices, has filed a lawsuit against Stryker Corp. and its subsidiaries, Wright Medical Technology Inc. and Wright Medical Group Inc., alleging breach of contract and violations of Puerto Rico’s Act 75.
The complaint, filed in the U.S. District Court for the District of Puerto Rico, accuses Stryker of unlawfully terminating RMC’s exclusive distribution agreement after more than 30 years of partnership. The lawsuit seeks $4.9 million in damages for lost business, unsold inventory and reputational harm.
Since 1991, RMC had been the exclusive distributor of Wright Medical products in Puerto Rico, supplying hospitals and orthopedic surgeons with specialized devices for reconstructive surgeries.
Over the years, RMC claims it invested heavily in developing the local market, including warehousing inventory, promoting Wright’s brand and training surgeons on product use.
RMC reports the partnership achieved strong sales, even during challenging periods like natural disasters and the COVID-19 pandemic. However, after Stryker acquired Wright Medical in 2020, the relationship reportedly began to change. In January 2022, Stryker allegedly terminated RMC’s distribution agreement without providing a specific cause.
“The termination notice did not comply with section 14 of the Distributor Agreement … nor were any terms or conditions met,” the lawsuit states. Despite the notice, Stryker continued to supply RMC with products until May 2023, creating uncertainty about the contract’s status.
The lawsuit details the financial impact of the termination, with RMC holding $1.2 million in unsold inventory, $2.1 million in lost profits and $1.6 million in goodwill damages.
“Through RMC’s efforts, annual sales for defendants’ lines were robust, increasing year after year,” the filing states.
RMC argues that its contributions were integral to Wright Medical’s success in Puerto Rico and that Stryker’s actions jeopardize both the company and local health care providers.
Beyond financial losses, RMC claims that Stryker’s refusal to supply products has harmed patient care. Orthopedic surgeons have reportedly expressed “indignation, frustration and concerns” over the lack of access to essential medical devices, forcing some to use alternative products that prolong surgeries and increase risks.
“American citizens in Puerto Rico have been and continue to be deprived of the supply of Wright Medical/Stryker products and technologies,” the complaint alleges, describing the situation as discriminatory compared to mainland U.S. markets.
Puerto Rico’s Act 75, designed to protect local distributors, requires manufacturers to demonstrate just cause before terminating exclusive agreements. RMC contends that Stryker’s actions violate the statute and constitute unfair treatment.
