UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF INDIANA

)

ALEJANDRO YEATTS, )

)

Plaintiff, )

)

v. ) No. 3:16-cv-706

)

ZIMMER BIOMET HOLDINGS, INC., ) JURY TRIAL DEMANDED

)

)

Defendant. )

)

)

AMENDED COMPLAINT

This is an action for damages for defamation, brought by Plaintiff Alejandro 

Yeatts against Zimmer Biomet Holdings, Inc. (“Zimmer Biomet”). Beginning on or about 

October 24, 2014, and on at least one occasion thereafter, Zimmer Biomet has 

intentionally published false statements regarding Plaintiff, damaging his reputation, 

inflicting severe emotional distress, and causing monetary and other damages. 

I. PARTIES

1. Plaintiff Alejandro Yeatts is a resident of Argentina. From 2005 until 

September 4, 2015, he was employed by Biomet Argentina, SA (“Biomet Argentina”), a 

subsidiary of the Defendant, Zimmer Biomet, or its predecessor, Biomet, Inc. (“Biomet”).

2. Defendant Zimmer Biomet is a Delaware corporation headquartered in 

Warsaw, Indiana, which manufactures and sells medical devices. Zimmer Biomet was 

formed in 2015, when Zimmer Holdings, Inc., a Delaware corporation, acquired LVB 

Acquisition, Inc., a Delaware corporation that owned Biomet.

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II. JURISDICTION AND VENUE

3. This Court has jurisdiction over this matter pursuant to 28 U.S.C. § 

1332(a)(2), because the matter in controversy exceeds the sum of $75,000, exclusive of 

interest and costs, and is between a citizen of a State and a citizen of a foreign state.

4. Venue is appropriate in this Court pursuant to 28 U.S.C. § 1391(b).

III. FACTS

A. Plaintiff is Employed by Biomet Argentina, SA and Exposes 

Illegal Activity by the Company, Leading to an Internal 

Investigation

5. In April 2005, Plaintiff was hired as Managing Director of Biomet Argentina, 

SA. Plaintiff moved his family from Costa Rica to Argentina in order to take the position.

6. Several months after beginning his employment with Biomet Argentina, 

Plaintiff reported to his superior, the President of Biomet International (a subsidiary of 

Biomet), a number of ongoing improprieties by Biomet Argentina employees, including 

bookkeeping improprieties, forged FDA certificates, and sales of products without 

required authorization and registration. 

7. At a July 2007 Biomet sales meeting, Plaintiff attended a presentation by 

Biomet’s Compliance Officer regarding the Foreign Corrupt Practices Act (“FCPA”). This 

was the first occasion on which Plaintiff was provided with training concerning the FCPA. 

In her presentation, the Compliance Officer advised, inter alia, that doctors employed by 

any government could not be provided with money or other things of value in order to 

obtain business. Following the presentation, Plaintiff informed the Compliance Officer 

that, since before Plaintiff joined the company, Biomet Argentina employees had paid 

commissions to induce government-employed doctors to use Biomet products. The 

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Compliance Officer advised Plaintiff that she would look into the matter and get back to 

Plaintiff.

8. In March 2008, having heard nothing further from the Compliance Officer, 

Plaintiff approached an in-house attorney for Biomet International at a meeting of the 

American Academy of Orthopaedic Surgeons, and told her about the payments he had 

reported to the Compliance Officer. The attorney said she would look into the matter and 

get back to Plaintiff.

9. A year after Plaintiff first reported the violations, in August 2008, Plaintiff 

informed Wilber C. Boren, IV, the President of Biomet International (“Boren”), of the 

ongoing payments he had reported to the Compliance Officer and the attorney, and 

expressed his concern over their legality.

10. The concerns Plaintiff expressed led to an internal investigation, and in 

December 2008, Plaintiff was instructed to cease Biomet Argentina’s payments to 

government-employed doctors.

B. After Learning that its Brazilian Distributor Had Engaged in 

Illegal Conduct, Biomet Purports to “Terminate” the Distributor, 

But Creates a New Distribution System Using Nominee 

Distributors to Allow the Distributor to Continue to Sell Biomet 

Products in Brazil

11. Until 2008, Biomet sold medical devices in Brazil pursuant to a distribution 

agreement between Biomet and Prosintese, a Brazilian company owned and operated by 

Sergio Galindo. However, Biomet learned, by early 2008 at the latest, that Prosintese 

had made illegal payments to doctors employed by the Brazilian government who used 

Biomet products. Therefore, in a May 2008 letter (the “Termination Letter”), Biomet 

General Counsel Bradley Tandy told Galindo that Biomet was terminating its relationship 

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with Prosintese because of information the company had learned regarding Prosintese's

business practices. The Termination Letter stated that Galindo and Prosintese would not 

be allowed to import, market, or sell Biomet products in Brazil.

12. Brazilian law required that certain Biomet products be registered with the 

Brazilian government before they could be sold in that country, and Prosintese held the 

necessary registrations for Biomet products. Upon receipt of the Termination Letter, 

Galindo made clear to Biomet International that it would not be able to sell its products in 

Brazil without the necessary registrations, that it would require several years and more 

than $1 million for Biomet to obtain new registrations, and that Galindo would not permit 

the company to continue to use Prosintese’s registrations without compensation.

13. Biomet International therefore agreed to a “settlement” with Galindo, 

pursuant to which Prosintese would retain the registrations necessary for Biomet to sell 

its products in Brazil. In order to preserve the fiction that Galindo and Prosintese had 

been “terminated,” Boren suggested that four new companies related to Prosintese be

formed, ostensibly by associates of Galindo, to act as Biomet’s distributors (the “New

Distributors”). Boren knew that Galindo would work directly with these new distributors, 

and intended as much. As part of the “settlement” with Galindo, Biomet agreed to provide 

the new distributors with $3 million in Biomet products, at no cost. Boren directed, 

supervised and implemented the termination of Prosintese and the implementation of the 

new distribution system, including the formation of the New Distributors. In-house 

counsel for Biomet participated in the negotiation and implementation of this agreement 

and arrangement, and approved it.

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14. In May 2009, Biomet International entered into distribution agreements with 

the New Distributors. From 2009 until 2013, with the full knowledge and approval of 

Boren and Biomet counsel, Biomet used the New Distributors, in whose activities Galindo 

was directly involved, to sell its products in Brazil.

C. Biomet Enters into a Deferred Prosecution Agreement, Falsely 

Representing to the United States Government That the 

Company Had Severed Ties with Galindo and Prosintese

15. On March 26, 2012, Biomet and the United States Department of Justice 

(“DOJ”) entered into a deferred prosecution agreement (“the 2012 DPA”), pursuant to 

which DOJ agreed to defer prosecution of a criminal information charging the company 

with five felonies, including violations of the FCPA based on improper payments made by 

the company to government-employed doctors in Argentina and Brazil. Pursuant to the 

2012 DPA, Biomet agreed to pay a criminal penalty of $17,280,000, to cooperate with law 

enforcement authorities in investigating violations of the FCPA, to implement and 

maintain a corporate compliance program, to engage an independent corporate 

compliance monitor, and to make periodic reports to DOJ regarding its corporate 

compliance program. 

16. In the 2012 DPA, Biomet admitted to having knowledge of Prosintese’s 

payments to government-employed doctors in Brazil since at least 2001. Biomet also 

admitted that between 2001 and 2008, Biomet International had authorized the payment 

of more than $1,000,000, “some or all of which” was used to bribe Brazilian doctors. 

17. Biomet’s General Counsel, Brad Tandy, and two other attorneys 

representing the company, signed the 2012 DPA on behalf of the company, “stipulat[ing]” 

that it was “true and accurate.” 

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18. However, as Biomet – including Boren and others in the company – knew at 

the time the 2012 DPA was signed, Biomet’s representation in the 2012 DPA that it had 

“terminated its relationship” with Galindo and Prosintese was false. Biomet had 

knowingly and deliberately continued to sell its products in Brazil through Galindo and the 

New Distributors after its purported “termination” of Galindo and Prosintese in May 2008. 

In fact, despite its knowing false representation in the 2012 DPA, Biomet continued to sell 

its products in Brazil through Galindo and the New Distributors after the company 

executed the 2012 DPA in March 2012. 

D. Biomet’s Breach of the 2012 Deferred Prosecution Agreement is 

Discovered, and Biomet Enters into a Second Deferred 

Prosecution Agreement.

19. When the United States learned of Biomet’s breach of the 2012 DPA, it 

negotiated a second deferred prosecution agreement (the “2017 DPA”), with Defendant, 

which had acquired Biomet. In the 2017 DPA, Defendant admitted that Biomet had 

breached the 2012 DPA by continuing to distribute Biomet products in Brazil through 

Galindo, and at least one of the New Distributors, after the May 2008 Termination Letter.

20. In the 2017 DPA, DOJ agreed to defer prosecution of a superseding 

criminal information charging the company with violating the FCPA, in exchange for 

Defendant’s payment of approximately $24 million in criminal fines, disgorgement, and 

interest, and Defendant’s agreement to take additional remedial measures.

E. Biomet Falsely Blames Plaintiff for Its Breach of the Deferred 

Prosecution Agreement

21. As described above, when Biomet, realized that it would be unable to sell its 

products in Brazil if it in fact severed its relationship with Galindo and Prosintese, it 

hatched a plan to use the New Distributors to permit the company to continue to do 

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business with Galindo and Prosintese while appearing to have ended their relationship. 

To protect itself, Biomet, through Boren, determined to use Plaintiff as an unwitting dupe 

who could be blamed if this plan was exposed.

22. When Biomet purported to “terminate” Galindo and Prosintese as its 

Brazilian distributor in May 2008, Plaintiff was employed by Biomet as Managing Director 

of Biomet Argentina, SA. In that position, Plaintiff had had no involvement whatsoever in 

Biomet’s operations in Brazil. 

23. However, in September 2008 – as part of his plan to allow Biomet to 

continue to use Galindo and Prosintese as its Brazilian distributor, while preserving the 

fiction that it had “terminated” Galindo and Prosintese - Boren wrote Plaintiff to inform 

him that Plaintiff would be offered the position of Managing Director for South America, 

including Brazil, effective November 2008. And in November 2008, Boren wrote to 

Plaintiff, stating that Plaintiff would become Business Manager for South America, 

including Brazil, in January 2009. 

24. However, despite his assignment of responsibility for Brazil to Plaintiff, 

Boren gave Plaintiff no information about the company’s ongoing negotiations with 

Prosintese and Galindo. In a January 2009 email to Boren, Plaintiff specifically asked 

Boren for clarification regarding Prosintese’s ongoing role in Brazil, asking whether 

Biomet could, or could not, sell its products to Prosintese. In his response, Boren did not 

tell Plaintiff that Biomet had severed its relationship with Galindo and Prosintese, or that 

Plaintiff, as the Biomet executive with responsibility for Brazil, should have no interaction 

with them. Instead, Boren simply stated that he would handle matters concerning Brazil, 

and that any future inquiries concerning Brazil should come to his (Boren’s) attention. 

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25. Plaintiff understood, consistent with the Termination Letter, that Prosintese 

and Galindo were themselves prohibited from selling Biomet products in Brazil. However, 

Plaintiff was never told, by Boren or anyone else at Biomet, that Galindo and Prosintese 

were not to be involved with the New Distributors, or that he should have no contact with 

Galindo or Prosintese. In fact, he was led to believe the opposite – that Biomet expected 

and intended that Galindo would be directly involved with the New Distributors.

26. Plaintiff also understood that Galindo and Prosintese held the registrations 

required to sell Biomet products in Brazil, and, consistent with Biomet's expectations and 

plans, that Galindo was involved in the New Distributors’ importation and sale of Biomet 

products. Plaintiff therefore continued to interact with Galindo, as part of his 

responsibilities, with the knowledge and approval of his superiors and Biomet counsel.

27. Despite Plaintiff’s position of responsibility for Biomet’s Brazilian operations, 

Plaintiff was not consulted by the company in connection with the 2012 DPA. In other 

words, although Biomet represented, in the 2012 DPA, that it had “terminated its 

relationship” with Galindo and Prosintese, no one asked Plaintiff if that statement was 

true. Plaintiff was not consulted because, had Plaintiff been consulted, Plaintiff would 

have learned that the company was representing to the United States that Biomet had 

severed its relationship with Galindo and Prosintese, which Plaintiff knew was not true. 

Boren and Defendant knew that in that event, Plaintiff – who had gone to great lengths to 

expose and terminate FCPA violations by Biomet employees, persisting in that effort 

even when his efforts were ignored by superiors – would have taken action to prevent the 

company from making false representations in the 2012 DPA, by alerting company 

officials or, if necessary, United States government officials, to the false representation. 

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28. When Biomet’s breach of the 2012 DPA became known, the company 

dispatched an attorney to meet with Plaintiff. In that meeting, Biomet’s attorney accused 

Plaintiff of continuing to do business with Galindo following the Termination Letter, and of 

concealing this fact from his superiors. Plaintiff explained that Boren had negotiated and 

established the new distribution system before Plaintiff assumed any responsibility for 

Biomet’s Brazilian operations, and that Plaintiff was never instructed not to do business 

with Galindo or Prosintese – to the contrary, he was instructed by his superior, Boren, to 

continue to do business with them - and that his interactions with Galindo and Prosintese 

were approved by his superiors and Biomet counsel. Because he was following his 

superior’s instructions, with the approval of Biomet’s counsel, Plaintiff did not believe that 

his interactions with Galindo and Prosintese were improper, and therefore did not conceal

those interactions from Boren or anyone else at Biomet. The 2017 DPA describes 

several occasions between the May 2, 2008, Termination Letter and the signing of the 

2012 DPA on which Plaintiff explicitly informed his superiors of ongoing interactions with 

Galindo and Prosintese, and of the link between Galindo/Prosintese and the New 

Distributors. 

29. In April 2014, Biomet Argentina suspended Plaintiff from his employment, 

and Plaintiff’s employment with Biomet ended in 2015. 

E. Defendant Publishes False and Defamatory Statements

Concerning Plaintiff

30. Biomet maintains a “Biomet Inc. Restricted Parties List” (the “Restricted 

Parties List”), containing the names of individuals and entities identified by Biomet as 

posing “significant and unacceptable” risks to the company’s efforts to comply with “the 

anti-corruption and anti-bribery laws in all countries in which Biomet operates.” Biomet 

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instructs recipients of the Restricted Parties List that: 

All Biomet employees, agents, third parties, and any individual or entity 

performing services for or on behalf of Biomet, anywhere in the world may 

not do business with any entity on the Restricted Parties List.

32. On October 24, 2014, Antje Petersen-Schmalnauer, Chief Compliance 

Officer, Vice President and General Counsel of Biomet Inc. sent an email, addressed to 

“CPWAR DueDiligence (Mailbox)” and others, which informed its readers, including 

persons outside Biomet, that Plaintiff had been placed on the Restricted Parties List 

because he posed a “significant and unacceptable” risk to the company’s efforts to 

comply with “anti-corruption and anti-bribery laws.” The email went on to instruct “[a]ll 

Biomet employees, agents, third parties, and any individual or entity performing services 

for or on behalf of Biomet,” that they “may not do business with” Plaintiff. 

33. The Restricted Parties List circulated with the October 24, 2014, email 

stated that Plaintiff had been placed on the Restricted Parties List “in connection with 

[Biomet’s] corruption-related investigation involving Biomet Brazil.” At the time this email 

was sent, it was widely known, within and without the company, that an internal 

investigation of corruption in Brazil had revealed that the company had violated the FCPA 

in Brazil for many years. It was further widely known, within and without the company, 

that Biomet had entered into a deferred prosecution agreement to avoid prosecution for 

this crime. Defendant’s statement – that Plaintiff had engaged in this corrupt and criminal 

activity – was false, and defamatory per se. 

34. At the time the October 24, 2014, email and Restricted Parties List were 

published, Defendant was aware that its statement that Plaintiff had engaged in improper 

activity was false, or acted in reckless disregard of that falsity.

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35. Defendant has republished the Restricted Parties List on occasion since 

October 24, 2014, including a republication on May 16, 2016, continuing to identify 

Plaintiff as posing a risk to Biomet’s efforts to comply with anti-bribery laws because of 

improper activity supposedly uncovered by the company’s anti-corruption investigation in 

Brazil. As described above, however, this was, and is, false. 

36. On each occasion that it has published the Restricted Parties List since 

October 24, 2014, Defendant has acted with knowledge that its statement that Plaintiff 

engaged in improper activity was false, or in reckless disregard of that falsity. 

37. Defendant’s publication of this false statement concerning Plaintiff has 

effectively “blackballed” Plaintiff, making it impossible for him to secure employment. In

adddition to monetary damages, this has caused Plaintiff – who is 51 years old and has a 

wife and 3 children under age 21 - severe emotional distress.

COUNT ONE: DEFAMATION 

38. Plaintiff realleges and incorporates herein by reference each allegation set 

forth in ¶¶ 1-37, supra.

39. Defendant’s statement in the October 24, 2014, email, and in publications 

made by Defendant thereafter, including the Restricted Parties List published by 

Defendant on May 16, 2016, that Plaintiff poses a risk to Biomet’s efforts to comply with 

anti-bribery laws because of improper activity supposedly uncovered by the company’s 

anti-corruption investigation in Brazil, was false, and defamed Plaintiff.

40. Defendant published this defamatory statement on October 24, 2014, May 

16, 2016, and, on information and belief, on other occasions.

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41. Each time Defendant published this defamatory statement, Defendant acted 

with malice, knowing that it was false, or with reckless disregard of its falsity.

42. Defendant’s publication and republication of this defamatory statement has 

damaged Plaintiff’s reputation for honesty, integrity, morality, and law-abidingness; 

exposed Plaintiff to harassment, public contempt, and ridicule; caused Plaintiff to lose 

professional stature; impaired his employment and earning opportunities for the rest of 

his life; and caused Plaintiff to suffer great pain and mental anguish.

WHEREFORE, Plaintiff demands judgment against Defendants for actual, general, 

special, and compensatory damages in an amount greater than $75,000 plus the costs of 

this action, including attorney’s fees and such other relief deemed to be just and 

equitable; and further demands judgment against Defendants for punitive damages.

PRAYER FOR RELIEF

WHEREFORE, Plaintiff prays for judgment against Defendants and the following 

relief:

A. That judgment be entered against Defendants for special damages, 

compensatory damages, and punitive damages in an an amount in excess of $75,000, 

exclusive of interest and costs;

B. That all costs of this action be assessed against Defendants, including all 

reasonable attorney’s fees, costs, and expenses of this action; and

C. Such other and further relief as the Court may deem just and proper.

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JURY DEMAND

Plaintiff demands a trial by jury of all issues properly triable by jury in this action.

Dated: 1 May 2017 Respectfully submitted,

______/s/____________

Paul F. Enzinna

Ellerman Enzinna

1050 W30th Street, NW

Washington, DC 20007

202.753.5553

penzinna@ellermanenzinna.com

Counsel for Plaintiff Alejandro Yeatts

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CERTIFICATE OF SERVICE

I certify that on 1 May 2017, a copy of the foregoing Amended Complaint was filed 

using the CM/ECF system, which will then send notification of such filing to all counsel of 

record.

____/s/__________ 

Paul F. Enzinna

Ellerman Enzinna, PLLC

1050 30th Street, NW

Washington, DC 20007

202.753.5553

penzinna@ellermanenzinna.com

Counsel for Plaintiff Alejandro Yeatts

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