Ramallo Bros. Printing, Inc. v. El Día, Inc.

• Decision Date: 18 June 2007
• Docket Number: No. 06-2512.,06-2512.
• Citation: 490 F.3d 86
• Court: U.S. Court of Appeals — First Circuit
• Parties: RAMALLO BROS. PRINTING, INC., Plaintiff, Appellant, v. El DÍA, INC.; Editorial Primera Hora, Inc.; Advanced Graphic Printing, Inc.; Carlos Nido, Defendants, Appellees.

490 F.3d 86

RAMALLO BROS. PRINTING, INC., Plaintiff, Appellant, v. El DÍA, INC.; Editorial Primera Hora, Inc.; Advanced Graphic Printing, Inc.; Carlos Nido, Defendants, Appellees.

No. 06-2512.

United States Court of Appeals, First Circuit.

Heard May 8, 2007.

Decided June 18, 2007.

Camilo K. Salas III, with whom Salas & Co., L.C., John F. Nevares, and John F. Nevares and Associates P.S.C., were on brief, for appellant.

Lee H. Simowitz, with whom Bruce W. Sanford, Mark A. Cymrot, Baker & Hostetler LLP, Salvador Antonetti-Zequeira, and Fiddler González & Rodríguez, PSC, were on brief, for appellees.

Before BOUDIN, Chief Judge, SELYA, Senior Circuit Judge, and STAFFORD,^* Senior District Judge.

STAFFORD, Senior District Judge.

Appellant, Ramallo Bros. Printing, Inc. ("Ramallo"), appeals from the district court's dismissal of its complaint on res judicata and collateral estoppel grounds. We AFFIRM.

I.

A.

Briefly summarized, the facts as alleged in Ramallo's complaint are as follows. Ramallo is a commercial printer whose business includes, among other things, the printing of corporate supplements that are inserted in and delivered with newspapers of general circulation in Puerto Rico. Appellees, El Día, Inc. ("El Día"), and Editorial Primera Hora, Inc. ("Editorial Primera Hora"), own and publish newspapers in Puerto Rico that occasionally contain corporate supplements. El Día owns and prints El Nuevo Día, a leading newspaper in Puerto Rico. Editorial Primera Hora owns Primera Hora, a Puerto Rican daily newspaper printed by El Día.

Appellee, Advanced Graphic Printing, Inc. ("AGP"), is a commercial printing business established by El Día as a department of El Nuevo Día. Among other things, AGP prints corporate supplements for insertion in El Nuevo Día and Primera Hora. As a matter of policy, El Día and Editorial Primera Hora require that all corporate supplements inserted into El Nuevo Día and Primera Hora be printed by AGP.

On February 24, 2006, Ramallo celebrated its fortieth anniversary. To commemorate the event, Ramallo prepared and printed a corporate supplement to celebrate and advertise its accomplishments as a commercial printer. Ramallo tendered its corporate supplement to El Día for insertion in El Nuevo Día and Primera Hora, but Carlos Nido,¹ El Nuevo Día's Vice President of Sales, informed Ramallo that its fortieth anniversary supplement could not be inserted into either El Nuevo Día or Primera Hora because it had not been printed by AGP. Ramallo thereafter filed this lawsuit, challenging the policy that makes printing by AGP a requirement for insertion of corporate supplements into El Nuevo Día and Primera Hora.

B.

In 2002, approximately four years before Ramallo filed this case, Ramallo filed another lawsuit against the same defendants that are sued here. See Ramallo Bros. Printing, Inc. v. El Día, Inc., 392 F.Supp.2d 118 (D.P.R.2005) ("Ramallo I"). At the time of Ramallo I, El Día had designated Creative Minds, a former El Nuevo Día staff unit that was then a division of AGP, to be its exclusive agent for producing and printing any corporate supplements that were inserted into El Nuevo Día and Primera Hora. The district court in Ramallo I described the relevant policy regarding corporate supplements as follows:

Creative Minds performs all the functions needed to produce the supplement, including preparation of editorial content and artwork, sales of advertising, coordination of the printing and insertion in the newspaper. Defendants' stated reasons for the policy of using only Creative Minds to produce corporate supplements are the need to maintain editorial integrity, to ensure the content is accurate and comports with its style and content policies, and to take advantage of cost savings.

Id. at 124-25.

In Ramallo I, Ramallo challenged El Día's policy of inserting into its newspapers only corporate supplements produced and printed by Creative Minds. Ramallo claimed, among other things, that such policy violated both federal and Commonwealth antitrust laws. The district court rejected Ramallo's claims, finding no antitrust violations at all. In particular, the district court found that (1) El Día's supplement policy had no significant anti-competitive effect, given that corporate supplements constitute "a de minimis part of the advertising and printing business in Puerto Rico," Ramallo I, 392 F.Supp.2d at 136; (2) the printing and delivery of corporate supplements did not comprise separate products (a tying product and a tied product) but, rather, two components of a single product—the preparation of a section of the newspaper, id. at 136-37; (3) the businesses featured in the corporate supplements were not coerced into buying any product because the supplements were financed entirely through advertising revenues, id. at 137; and (4) corporate supplements are an editorial product, the newspaper's control of which is protected by the First Amendment. Id. Ramallo having filed no appeal, the district court's decision in Ramallo I has become final.

C.

In this case, in its amended complaint,² Ramallo challenges the newspapers' refusal to insert its fortieth anniversary corporate supplement in El Nuevo Día and Primera Hora. Specifically, Ramallo alleges that, by tying the printing of the fortieth anniversary supplement to the delivery of that supplement in El Nuevo Día and Primera Hora, the newspapers restrained trade and eliminated competition in the printing and delivery markets for corporate supplements, all in violation of the Sherman Act and the antitrust laws of Puerto Rico.

The district court (in the person of the same district judge who presided over Ramallo I) dismissed Ramallo's claims, explaining:

A comparison of Plaintiff's current complaint with its complaint in Ramallo I reveals that the factual underpinning for both cases is materially identical. . . . Plaintiff alleges in both complaints that Defendants' corporate supplement printing policy is intended to foreclose competition in the printing market. . . .

Indeed, the only difference between the factual allegations in these two cases is that Ramallo I focused on the effect that Defendants' policy had on Plaintiff's ability to print supplements for third parties, whereas Plaintiff's current claims challenge the application of Defendants' policy to a corporate supplement that Plaintiff recently printed for itself, rather than a third party.

Dist. Ct. Order at 8.

The district court rejected Ramallo's argument that the doctrines of res judicata and collateral estoppel were inapplicable because the two cases were different, the more recent case involving events that post-dated the earlier case altogether, and the two cases involving supplements prepared for different purposes. The district court found that the distinctions advanced by Ramallo were legally insignificant. Characterizing Ramallo's new case as "nothing more than a second challenge to Defendants' overall corporate supplement printing policy," the district court determined that Ramallo's current claims were barred by the doctrines of both res judicata and collateral estoppel.

II.

A.

We review de novo a district court's dismissal of a case on res judicata and collateral estoppel grounds. Gonzalez-Pina v. Rodriguez, 407 F.3d 425, 429-30 (1st Cir.2005). We accept as true the factual allegations of the complaint and draw all reasonable inferences in the plaintiff's favor. Greene v. Rhode Island, 398 F.3d 45, 48 (1st Cir.2005). Because the judgment in Ramallo I was entered by a federal court exercising federal question jurisdiction, the applicability of res judicata and collateral estoppel is a matter of federal law. Maher v. GSI Lumonics, Inc., 433 F.3d 123, 126 (1st Cir.2005).

B.

The Supreme Court long ago described the doctrine of collateral estoppel, or issue preclusion, as follows:

The general principle announced in numerous cases is that a right, question, or fact distinctly put in issue, and directly determined by a court of competent jurisdiction, as a ground of recovery, cannot be disputed in a subsequent suit between the same parties or their privies; and, even if the second suit is for a different cause of action, the right, question, or fact once so determined must, as between the same parties or their privies, be taken as conclusively established, so long as the judgment in the first suit remains unmodified. This general rule is demanded by the very object for which civil courts have been established, which is to secure the peace and repose of society by the settlement of matters capable of judicial determination. Its enforcement is essential to the maintenance of social order; for the aid of judicial tribunals would not be invoked for the vindication of rights of person and property if, as between parties and their privies, conclusiveness did not attend the judgments of such tribunals in respect of all matters properly put in issue, and actually determined by them.

S. Pac. R.R. Co. v. United States, 168 U.S. 1, 48-49, 18 S.Ct. 18, 42 L.Ed. 355 (1897). More recently, the Court explained that the doctrine "means simply that when an issue of ultimate fact has once been determined by a valid and final judgment, that issue cannot again be litigated between the same parties in any future lawsuit." Ashe v. Swenson, 397 U.S. 436, 443, 90 S.Ct. 1189, 25 L.Ed.2d 469 (1970); see also Keystone Shipping Co. v. New England Power Co., 109 F.3d 46, 51 (1st Cir.1997) (explaining that "[t]he principle of collateral estoppel, or issue preclusion, ... bars relitigation of any factual or legal issue that was actually decided in previous litigation between the parties, whether on the same or a different claim") (internal quotation marks and citations omitted).

A party seeking to invoke the doctrine of collateral estoppel must establish that (1) the issue sought to be precluded in the later action is the same as that involved in the earlier action; (2) the issue was...