A.M. Capen's Co. Inc. v. American Trading & Production

• Decision Date: 01 November 1999
• Docket Number: Nos. 98-2236,ROSSY-ASENCIO,98-2237,s. 98-2236
• Parties: (1st Cir. 2000) A.M. CAPEN'S CO., INC., Plaintiff, Appellee, v. AMERICAN TRADING AND PRODUCTION CORPORATION, BLASAND RAFAELA FULANA DE TAL, Defendants, Appellants. A.M. CAPEN'S CO., INC., Plaintiff, Appellant, v. AMERICAN TRADING AND PRODUCTION CORPORATION, BLASAND RAFAELA FULANA DE TAL, Defendants, Appellees. . Heard
• Court: U.S. Court of Appeals — First Circuit

Page 469

202 F.3d 469 (1st Cir. 2000)

A.M. CAPEN'S CO., INC., Plaintiff, Appellee, v. AMERICAN TRADING AND PRODUCTION CORPORATION, BLAS ROSSY-ASENCIO AND RAFAELA FULANA DE TAL, Defendants, Appellants.

A.M. CAPEN'S CO., INC., Plaintiff, Appellant, v. AMERICAN TRADING AND PRODUCTION CORPORATION, BLAS ROSSY-ASENCIO AND RAFAELA FULANA DE TAL, Defendants, Appellees.

Nos. 98-2236, 98-2237.

United States Court of Appeals, for the First Circuit.

Heard Nov. 1, 1999.

Decided February 8, 2000.

APPEALS FROM THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF PUERTO RICO. Hon. Daniel R. Domnguez, U.S. District Judge.

Jose Enrique Colon-Santana for appellants American Trading and Production Corporation, Blas Rossy-Asencio, Rafaela Gonzalez-Ruiz, and their conjugal partnership.

Fernando L. Gallardo, with whom Woods & Woods and Philip E. Roberts were on brief, for appellee A.M. Capen's Co., Inc.

Before Torruella, Chief Judge, Wallace,^* Senior Circuit Judge, and Lynch, Circuit Judge.

TORRUELLA, Chief Judge.

For the second time, this Court is asked to determine whether the Puerto Rico Dealers' Act of 1964, 10 L.P.R.A. §§ 278a-d (1994) ("Act 75"), applies to the circumstances of this case. On appeal from entry of a preliminary injunction, a prior panel of this Court reached an initial determination that the claims of plaintiff-appellee, A.M. Capen's Co., Inc., against defendant-appellant, American Trading & Production Corp. ("ATAPCO"), were likely to be resolved in Capen's favor under the laws of Puerto Rico, specifically Act 75. See generally A.M. Capen's Co. v. American Trading & Prod. Corp., 74 F.3d 317 (1st Cir. 1996). However, on appeal from judgment below for Capen's, this Court must again consider whether Capen's is a dealer under Act 75. For the reasons further discussed in this opinion, we reverse the decision of the district court.

As we observed in our recent opinion, Triangle Trading Co. v. Robroy Industries, Inc., 200 F.3d 1, 1-2 (1st Cir. Dec. 29, 1999), there is much case law carving out the scope of Puerto Rico's dealership act. In order to honor the legislative intent of Act 75, the Puerto Rico and federal courts have taken steps to restrict the definition of who is a "dealer" within the broad framework of section 278(a). See id. at 4-5. We now take one more step down that path and hold that under the facts of this case, appellee fails to qualify for the remedies of the statute because it did not operate as a "dealer" in Puerto Rico.

I.

The undisputed facts underlying this action are as follows. Capen's, a New Jersey corporation with its principal place of business in that state, entered into an agreement with ATAPCO's predecessor to be the exclusive distributor of Globe-Weiss and Steelmaster office products in Puerto Rico, along with thirty-seven other countries in the Caribbean and Central and South America. The arrangement continued after ATAPCO, whose principal place of business is Missouri, took over. However, the parties never signed a formal contract because they could not agree on choice-of-law and forum-selection clauses.

The negotiations took place in Missouri and New Jersey. Pursuant to the agreement, ATAPCO's products were shipped to Capen's in New Jersey. Capen's would generally take orders from its Puerto Rican customers in New Jersey via telephone or fax, although an agent would actually travel to Puerto Rico two to three times a year for that purpose. Capen's would then ship the products directly to its customers in Puerto Rico and send bills from New Jersey to Puerto Rico. Capen's did not advertise in Puerto Rico, nor did it maintain a warehouse, showroom, inventory, employees, office, address, or telephone number in Puerto Rico. Likewise, Capen's is not qualified to do business in Puerto Rico. See A.M. Capen's Co. v. American Trading & Prod. Corp., 973 F. Supp. 247, 253-55 (D.P.R. 1997).

In December 1993, ATAPCO terminated the exclusive aspect of the dealership, and it authorized Blas Rossy-Asencio as a sales representative for Puerto Rico effective January 1994.¹ The trial court entered a preliminary injunction in favor of Capen's on June 16, 1995, which this Court affirmed. See A.M. Capen's, 74 F.3d at 319. In July 1997, the district court resolved Capen's pending cross-motion for partial summary judgment on liability. First, the court observed that ATAPCO had failed to provide additional evidence on Capen's dealership status within the established time frame;² consequently, the court concluded that there was no reason to reconsider its original finding, based on the same record and affirmed by the court of appeals, that Act 75 covered Capen's dealership. See A.M. Capen's, 973 F. Supp. at 257-58. Then, based on the material facts it deemed admitted, the court found Act 75 liability against ATAPCO as a matter of law. See id. at 260. Damages were set after a bench trial, by opinion and order entered on March 31, 1998.³ See A.M. Capen's Co. v. American Trading & Prod. Corp., 12 F. Supp. 2d 222, 224-30 (D.P.R. 1998).

II.

Summary judgment is only appropriate if there is no genuine issue as to any material fact and the moving party is entitled to judgment as a matter of law. See Fed. R. Civ. P. 56(c). We normally review the district court's summary judgment de novo, "viewing 'the entire record in the light most hospitable to the party opposing summary judgment, indulging all reasonable inferences in that party's favor.'" Euromotion, Inc. v. BMW of N. Am., Inc., 136 F.3d 866, 869 (1st Cir. 1998) (quoting Griggs-Ryan v. Smith, 904 F.2d 112, 115 (1st Cir. 1990)); see also Morris v. Government Dev. Bank, 27 F.3d 746, 748 (1st Cir. 1994). However, in this case, the district court properly admitted the uncontested facts submitted by the plaintiff-appellant when ATAPCO failed to comply with the local rules and oppose the motion in the appropriate form.⁴ See A.M. Capen's, 973 F. Supp. at 256 (citing Stepanischen v. Merchants Despatch Transp. Corp., 722 F.2d 922, 930-31 (1st Cir. 1983). Because we limit our review to "the record as it stood before the district court at the time of its ruling," J. Geils Band Employee Benefit Plan v. Smith Barney Shearson, Inc., 76 F.3d 1245, 1250 (1st Cir. 1996) (citing Voutour v. Vitale, 761 F.2d 812, 817 (1st Cir. 1985)), there are no facts in dispute.⁵

Consequently, the only matter before the Court is the applicability of Act 75,⁶ a matter we previously considered and provisionally affirmed. ATAPCO argues that we are not bound by our earlier decision which was rendered as a preliminary opinion for the purposes of reviewing an injunction. In this case, because the record was fully developed before the first panel, there is a tension between the limited binding authority of a decision regarding a preliminary injunction and the law of the case doctrine. See Cohen v. Brown University, 101 F.3d 155, 167 (1st Cir. 1996) (citing 1B James W. Moore et al., Moore's Federal Practice ¶ 0.404[1] (2d ed. 1993)), cert. denied, 520 U.S. 1186 (1997); see also Ackerley Communications of Mass., Inc. v. City of Cambridge, 135 F.3d 210, 213-15 (1st Cir. 1998) (implying that legal opinion was law of case in preliminary injunction setting where facts were undisputed). However, the law of the case doctrine only directs our discretion; it does not limit our power. See Arizona v. California 460 U.S. 605, 618 (1983); see also Cochran v. M & M Transp. Co., 110 F.2d 519, 521-22 (1st Cir. 1940) (quoting Messinger v. Anderson, 225 U.S. 436, 444 (1912)). Two traditional considerations weigh in favor of reopening our initial determination. First, as we acknowledged in our prior opinion, "'conclusions as to the merits of the issues presented on preliminary injunction are to be understood as statements of probable outcomes,' rather than as comprising the law of the case." 74 F.3d at 322 (quoting Narragansett Indian Tribe v. Guilbert, 934 F.2d 4, 6 (1st Cir. 1991)). Thus, it is implicit that "a party losing the battle on likelihood of success may nonetheless win the war at a succeeding trial on the merits." Jimenez Fuentes v. Torres Gaztambide, 807 F.2d 236, 238 (1st Cir. 1986). Second, we review an award of a preliminary injunction only for abuse of discretion. See A.M. Capen's, 74 F.3d at 319. Therefore, the scope of review given a case that comes to us in the posture of a preliminary injunction is more deferential than that given to one which comes to us on appeal from final judgment. See, e.g., Rodrguez-Burgos v. Electric Energy Auth., 853 F.2d 31, 37 (1st Cir. 1988) (considering case upholding a permanent injunction); Goyco de Maldonado v. Rivera, 849 F.2d 683, 686 (1st Cir. 1988) (distinguishing case heard on appeal from issuance of interim injunction); Rosario Nevarez v. Torres Gaztambide, 820 F.2d 525, 527 (1st Cir. 1987) (noting that review is limited to plaintiff's likelihood of success, and not a "clear-cut ruling," on the merits).

III.

Thus, we turn to Capen's status as a dealer under Act 75. In departing from the legal determination of our colleagues in this circuit, we take into account that the initial decision was not intended to be binding, and that the court did not fully contemplate the meaning of dealer under the Act, but rather considered the Act only in the context of Puerto Rico's interest in the action. See A.M. Capen's, 74 F.3d at 321-22.

In a statutory construction case, we begin with the language of the statute, and only if the language is ambiguous or leads to an unreasonable interpretation do we turn to the legislative history and other aids. The words that are not defined within the statute are given their ordinary meaning, with all due consideration to the context. See Brady v. Credit Recovery Co., 160 F.3d 64, 66 (1st Cir. 1998); Grunbeck v. Dime Sav. Bank, 74 F.3d 331, 336 (1st Cir. 1996); Riva v. Massachusetts, 61 F.3d 1003, 1007 (1st Cir. 1995).

Act 75 defines a dealer as: "a person actually interested in a dealer's contract because of his...