Aggarwal v. Ponce School of Medicine

Decision Date04 October 1984
Docket NumberNo. 84-1163,84-1163
PartiesDeep AGGARWAL, Plaintiff, Appellant, v. PONCE SCHOOL OF MEDICINE, Defendant, Appellee.
CourtU.S. Court of Appeals — First Circuit

Luis A. Gonzalez Perez, Santruce, P.R., with whom Woods, Woods & Mayo, Santruce, P.R., was on brief, for plaintiff, appellant.

Charles R. Cuprill, Ponce, P.R., with whom Hector R. Cuprill, Ponce, P.R., Jose E. Otero, Oscar Davila Suliveres, Victor M. Caparros Cabrera, Hato Rey, P.R., and Luis G. Estades, hijo, San Juan, P.R., were on brief, for defendant, appellee.

Before CAMPBELL, Chief Judge, BREYER, Circuit Judge, and SELYA, * District Judge.

SELYA, District Judge.

The appellant, Deep Aggarwal, formerly toiled in the academic vineyards of the appellee, Ponce School of Medicine (PSM), as an associate professor of physiology. Somewhere along the way, the seeds of discontent were sown; and, in early May of 1981, PSM notified Dr. Aggarwal that his services would no longer be required after July 31, 1981. That separation from service took place as scheduled.

Dr. Aggarwal fled to Wisconsin, mulled over his plight at some length, and eventually decided that he would not permit PSM to plow him under without a struggle. This decision fructified in August of 1983, when Dr. Aggarwal filed suit in the United States District Court for the District of Puerto Rico. His complaint invoked that court's diversity jurisdiction, 28 U.S.C. Sec. 1332, and sought money damages aggregating $500,000 for breach of contract. Simultaneous with the filing of its answer, PSM moved pursuant to Rule 5 of the Local Rules of the District of Puerto Rico to require the appellant to post bond. Since this rule is central to the matters here at issue, its full text follows:

When the plaintiff is domiciled outside of Puerto Rico or is a foreign corporation, a bond shall be required to secure the costs, expenses and attorneys' fees which may be awarded. All proceedings in the action shall be stayed until bond is given, which shall not be less than five hundred dollars (500.00). The Court may require an additional bond upon a showing that the original bond is not sufficient security, and stay the proceeding in the action until such additional bond is given.

After the lapse of ninety (90) days from the service of the order requiring bond or additional bond, without the bond having been given, the Court may dismiss the action.

This rule shall be liberally interpreted in favor of the plaintiff so as not to preclude his right to sue through excessive bond requirement. Consistent with this, the Court, for good cause shown, may dispense with this requirement.

It is beyond cavil that the appellant, who claimed in his complaint to be "domiciled and residing in the state of Wisconsin," was--and remains--within the reach of D.P.R.L.R. 5.

On October 5, 1983, before Dr. Aggarwal had responded to the Rule 5 motion and prior to the expiration of the time for so doing, see D.P.R.L.R. 8(F), the court granted PSM's request. While the motion was silent as to any proposed principal amount for the bond, the district judge took note of the ad damnum contained in the complaint, and wrote in pertinent part:

... Using the amount claimed and the nature of the claim as a yardstick, the court must determine the bond to be posted in order to reasonably protect the interest of defendants [sic]. The bond is placed at $5,000.00 which is to be posted within 30 days from date hereof, or otherwise the complaint is to be dismissed.

Dismayed by the bitter fruit of this unwanted harvest, the appellant seasonably pressed for relief from the order. Dr. Aggarwal contended that the practical effect of the bond requirement was to deprive him of any judicial remedy, and implored the court to exempt him from posting the mandated security by reason of his impecunity. Dr. Aggarwal attached to his motion an affidavit which recited in substance that he had been out of work since July of 1981; that his only income was a monthly gratuity ($200) from his relatives in India; that his valiant (albeit unspecified) efforts to find gainful employment had been uniformly unavailing; and that his present checking account balance was roughly $350. The record before us reflects no stated opposition to this motion. Yet, the parties agree that it was orally denied at a Fed.R.Civ.P. 16 status/scheduling conference held before the district court on November 22.

In early December, Dr. Aggarwal again moved for relief vis-a-vis the bond. He reiterated his plea of poverty; expressed his "particular[ ] interest" in continuing the prosecution of the case; and averred that he had "made every effort possible to obtain the sum required as bond, but due to his extremely limited financial resources" had come up empty. PSM filed a formal opposition to this motion, in which it stalwartly defended the propriety of the bond. But, PSM did not in any way controvert or cast doubt upon the appellant's description of his straitened circumstances. The district court responded in January of 1984 by a written order in which it both denied Dr. Aggarwal's latest imprecation and dismissed the action for noncompliance with the October 5 surety decree. In so doing, the district judge concluded:

[T]he Court finds that plaintiff has no attachable property in Puerto Rico and his likelihood of success on the merits is tenuous. The bond was set at 1% of the amount claimed in the complaint and, considering the length, complexity, and cost of this suit, plaintiff's failure in posting a non-resident bond renders this case as DISMISSED.

No finding was made upon, nor any comment addressed to, Dr. Aggarwal's allegations of impoverishment.

Judgment was entered in favor of PSM on January 31, 1984. The appellant promptly moved pursuant to Fed.R.Civ.P. 60(b)(6) for relief from the judgment. Dr. Aggarwal challenged the district court's assessment of his chances of success on the merits, and again displayed the tatterdemalion banner of impecunity. He characterized the bond amount as "excessive" in relation to his meagre resources and questioned the constitutionality of so draconian an application of D.P.R.L.R. 5. PSM's objection, filed on February 17, 1984, did not contest (or even touch upon) Dr. Aggarwal's financial condition. The record before us is devoid of any indication of judicial action below on this motion, presumably because an appeal was taken from the judgment of dismissal, also on February 17, 1984.

This court has, in the not too distant past, had occasion to consider the constitutionality of D.P.R.L.R. 5 on its face, and has held it harmless against such a challenge. Hawes v. Club Escuestre El Comandante, 535 F.2d 140, 144-45 (1st Cir.1976). And, we have likewise determined that the promulgation and perpetuation of Local Rule 5 was a proper exercise of the power ceded to the district courts by Congress, see Fed.R.Civ.P. 83, to design and implement idiocratic procedural rules. Hawes, 535 F.2d at 143-44. There is nothing in the case before us which in any way signals the need for a retreat from the twin holdings of Hawes. Indeed, as we observed at that time:

Even in the absence of a standing local rule, a federal district court has the inherent power to require security for costs when warranted by the circumstances of the case.

Id. at 143. See also McClure v. Borne Chemical Co., 292 F.2d 824, 835 (3d Cir.1961).

But, Hawes was careful to note that the nondomiciliary plaintiffs in that case did not attack D.P.R.L.R. 5 as applied. Hawes, 535 F.2d at 145. Hawes, therefore, left open the possibility of ferment arising out of particular applications of the rule, warning that

[T]he district court is under an obligation to evaluate each case individually, and to exercise its inherent discretion to apply the requirements of Rule 5 so as to facilitate a just and speedy disposition on the merits, as required by Fed.R.Civ.P. 1.

Id.

The instant case takes up, in a very real sense, where Hawes left off. The appellant's sortie is two-pronged: he claims that the imposition of substantial surety for costs upon one in his beggarly circumstances is an unconstitutional denial of equal protection and of access to the courts; and that, given the appellant's indigency, the judge abused the "inherent discretion" which Hawes, id., directed the district court to exercise.

It has long been a basic tenet of the federal courts to eschew the decision of cases on constitutional grounds unless and until all other available avenues of resolution were exhausted. Mills v. Rogers, 457 U.S. 291, 305, 102 S.Ct. 2442, 2451, 73 L.Ed.2d 16 (1982); Hagans v. Lavine, 415 U.S. 528, 546-47, 94 S.Ct. 1372, 1383-84, 39 L.Ed.2d 577 (1974); Ashwander v. Tennessee Valley Authority, 297 U.S. 288, 341, 347-48, 56 S.Ct. 466, 480, 483, 80 L.Ed. 688 (1936) (Brandeis, J., concurring). We have routinely followed such an approach. E.g., In re Justices of the Supreme Court of Puerto Rico, 695 F.2d 17, 22 (1st Cir.1982). Indeed, to look the other way would be "gratuitously to hold a farthing candle to the sun." Lopez v. Bulova Watch Co., 582 F.Supp. 755, 762 (D.R.I.1984). Mindful, then, of this prudential precept, we turn first to a consideration of the argument that the district judge, by imposing a $5,000 bond requirement in this case, overstepped the encincture of his discretion.

We are aware that the question of security for costs is procedural in nature, Hawes, 535 F.2d at 143 & n. 3, and that a trial court's discretion in administering procedural matters--even those which may arguably affect substantive rights--is wide. Id. at 143-44. See Smith v. Ford Motor Co., 626 F.2d 784, 796 (10th Cir.1980), cert. denied, 450 U.S. 918, 101 S.Ct. 1363, 67 L.Ed.2d 344 (1981); United States v. Simmons, 476 F.2d 33, 35 (9th Cir.1973); Lance, Inc. v. Dewco Services, 422 F.2d 778, 783-84 (9th Cir.1970). But discretion, as the term implies, necessarily...

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