San Juan Dupont Plaza Hotel Fire Litigation, In re

• Decision Date: 06 October 1989
• Docket Number: No. 89-1552,89-1552
• Citation: 888 F.2d 940
• Parties: In re SAN JUAN DUPONT PLAZA HOTEL FIRE LITIGATION PLAINTIFFS' STEERING COMMITTEE, Appellant, v. TOURISM COMPANY OF PUERTO RICO, Appellee. . Heard
• Court: U.S. Court of Appeals — First Circuit

Page 940

888 F.2d 940

In re SAN JUAN DUPONT PLAZA HOTEL FIRE LITIGATION

PLAINTIFFS' STEERING COMMITTEE, Appellant, v. TOURISM COMPANY OF PUERTO RICO, Appellee.

No. 89-1552.

United States Court of Appeals, First Circuit.

Heard Oct. 6, 1989.

Decided Nov. 8, 1989.

John E. Mudd, San Juan, P.R., with whom Peter Berkowitz, Alvaro Calderon, Hato Rey, P.R., Stanley M. Chesley, Cincinnati, Ohio, John Cummings, III, New Orleans, La., Wendell H. Gauthier, Metairie, La., David C. Indiano, San Juan, P.R., Will Kemp, Harvey B. Nachman, Santurce, P.R., Jorge Ortiz Brunet, Hato Rey, P.R., Jorge M. Suro-Ballester, Santurce, P.R., and Francisco M. Troncoso, Old San Juan, P.R., were on brief, for appellant.

Manuel Alvarado with whom Juan A. Moldes and Saldana, Rey, Moran & Alvarado, Hato Rey, P.R., were on brief, for appellee.

Before CAMPBELL, Chief Judge, TIMBERS, ^* Senior Circuit Judge, and BREYER, Circuit Judge.

LEVIN H. CAMPBELL, Chief Judge.

This is an appeal from the district court's dismissal of claims for damages against the Tourism Company of Puerto Rico. The issue on appeal is whether the district court correctly held that the Puerto Rico Tourism Company is an arm of the Commonwealth of Puerto Rico and, therefore, immune from suit under the Eleventh Amendment. Finding that the Tourism Company comes within the protective umbrella of the Eleventh Amendment, we affirm.

This case arose out of the December 31, 1986 fire in the San Juan Dupont Plaza Hotel in San Juan, Puerto Rico, which resulted in ninety-six deaths, as well as severe personal injuries and property damage. In the aftermath of the fire, over two thousand plaintiffs brought suits against close to two hundred defendants, among them the appellee Tourism Company of Puerto Rico ("Tourism Company"). The suits, many of which were brought in or removed to federal court, were based on various theories of liability. They were consolidated in the United States District Court for the District of Puerto Rico and the appellant Plaintiffs' Steering Committee ("PSC"), a team of trial attorneys, was assigned as representative of the plaintiffs.

On December 1, 1987, the Tourism Company, which is a public corporation created by Puerto Rico law in order to "promote, develop, and improve the tourist industry," ¹ moved for dismissal. The Tourism Company maintained that under the Eleventh Amendment it is immune from suit in federal court. On February 3, 1989, after extensive discovery on the issue of whether the Tourism Company was an arm of the Commonwealth, the district court dismissed all claims against the Tourism Company on Eleventh Amendment grounds, and entered a final judgment pursuant to Federal Rule 54(b). On March 10, 1989, the court denied PSC's motion to alter or amend the judgment. This appeal followed.

I. The Timeliness of this Appeal

The Tourism Company argues that this court lacks jurisdiction over this appeal, because the district court erred in extending PSC's time for appealing. PSC's initial notice of appeal was timely filed on March 15, 1989. However, this first notice of appeal simply stated that "all plaintiffs, through the Plaintiffs' Steering Committee hearby appeal" and did not name or otherwise specify the particular appellants. There were over 2,000 original plaintiffs.

Federal Rule of Appellate Procedure 3(c) provides that a notice of appeal "shall specify the party or parties taking the appeal." The Supreme Court has held this requirement to be jurisdictional and has construed it strictly. See Torres v. Oakland Scavenger Co., 487 U.S. 312, 108 S.Ct. 2405, 2408, 101 L.Ed.2d 285 (1988). Following Torres, this court held that the phrase, "All plaintiffs appeal," did not satisfy Rule 3(c)'s specificity requirement in a situation in which not all of the original eight plaintiffs were appealing, and the notice was unclear as to which plaintiffs were actually appealing. See Santos-Martinez v. Soto-Santiago, 863 F.2d 174 (1st Cir.1988).

On April 19, 1989, this court entered an order directing PSC to show cause why its appeal should not be dismissed in light of its failure to specify the appellants. We recommended that PSC move in the district court for an extension of time under Appellate Rule 4(a)(5). ² PSC followed this advice. In its motion in the district court, PSC explained that it had neglected to list all plaintiffs, because it thought it would be wasteful and unnecessary to do so in light of what PSC said had been the earlier practice of not listing all plaintiffs individually on appeals in this litigation. The district court granted the motion, ruling that the failure to list all plaintiffs was due to PSC's excusable neglect, "because of their [sic] understanding of their appointment and previous experience with appeals as asserted in their motion." On May 22, PSC filed its second notice of appeal, this time with a twenty-nine page list containing the names of all plaintiffs.

The Tourism Company now argues that the extension of time should not have been granted. It contends that an extension of time under Rule 4(a)(5) can be granted only where the failure to file timely notice of appeal resulted from acts of third parties (other than appellant's counsel) or an extraordinary event. See 650 Park Avenue Corp. v. McRae, 836 F.2d 764, 767 (2d Cir.1988). Cf. Spound v. Mohasco Industries, Inc., 534 F.2d 404, 411 (1st Cir.) ("Excusable neglect calls for 'circumstances that are unique or extraordinary.' "), cert. denied, 429 U.S. 886, 97 S.Ct. 238, 50 L.Ed.2d 167 (1976).

We uphold the extension. First, tending to make appellants' conduct "excusable" is the fact that their original appeal may have been adequate as filed. The original notice of appeal said that all plaintiffs appealed "through the Plaintiffs' Steering Committee." The PSC, as the district court observed, represents "by its very nature ... all plaintiffs." The Supreme Court observed in Torres, "[I]f a litigant files papers in a fashion that is technically at variance with the letter of a procedural rule, a court may nonetheless find that the litigant has complied with the rule if the litigant's action is the functional equivalent of what the rule requires." 108 S.Ct. at 2408-09. The Court further stated that Rule 3(c) is satisfied by "some designation that gives fair notice of the specific individual or entity seeking to appeal." Id. at 2409. By representing that all plaintiffs were appealing "through the Plaintiffs' Steering Committee," appellants arguably gave fair notice of the specific appellants, since the PSC existed precisely to represent all the active plaintiffs in this case. Such notice may, therefore, have satisfied Rule 3(c).

We need not decide this, however. The only issue is whether, assuming the first notice was defective, the neglect was excusable. Certainly there were circumstances here--the PSC's representative status, the extraordinary size of the plaintiff group, the reasonableness of the first notice--which made any error in appellants' initial filing an excusable blunder. The district court did not err in so holding. Cf. Chipser v. Kohlmeyer & Co., 600 F.2d 1061, 1063 n. 2 (5th Cir.1979) (noting that under amended Rule 4(a) "flexibility is intended in the granting of extensions").

II. Applicability of the Eleventh Amendment to the Tourism Company

The Eleventh Amendment immunizes the states from suits for damages in federal court, in the absence of abrogation by Congress or waiver by the state. See generally Fitzpatrick v. Bitzer, 427 U.S. 445, 96 S.Ct. 2666, 49 L.Ed.2d 614 (1976); Edelman v. Jordan, 415 U.S. 651, 94 S.Ct. 1347, 39 L.Ed.2d 662 (1974). The Commonwealth of Puerto Rico is treated as a state for Eleventh Amendment purposes. See Ramirez v. Puerto Rico Fire Service, 715 F.2d 694, 697 (1st Cir.1983). Whether a state-created entity such as the Tourism Company is an "arm of the state," entitled to Eleventh Amendment protection, depends primarily on "whether it performs a governmental function, whether it functions with substantial autonomy, to what extent it is financed independently of the state treasury, and if a judgment sought to be entered against the [entity] will be satisfied out of the state treasury." Figueroa-Rodriguez v. Aquino, 863 F.2d 1037, 1042 (1st Cir.1988); Culebras Enterprises Corp. v. Rivera Rios, 813 F.2d 506, 517 (1st Cir.1987). Other factors relevant to the Eleventh Amendment inquiry include whether the entity "has been separately incorporated; ... whether it has the power to sue and be sued and to enter into contracts; whether its property is immune from state taxation, and whether the sovereign has immunized itself from responsibility for the [entity's] operations." Ainsworth Aristocrat International Party v. Tourism Co., 818 F.2d 1034, 1037 (1st Cir.1987).

This court previously addressed the issue of whether the Eleventh Amendment applies to the Tourism Company in Ainsworth, supra. In Ainsworth, the district court had held that the Tourism Company was protected by the Eleventh Amendment. On appeal, this court held that the district court had failed to apply the relevant factors. The statutes dealing with the Tourism Company led us to go further and to surmise that these factors weighed in favor of finding that the Tourism Company was not an arm of the state. 818 F.2d at 1037-38. However, we declined to resolve that issue because the record was incomplete both as to the degree of control the Governor's administration exerts over the Tourism Company and the funding it receives from the Commonwealth of Puerto Rico. See id. ³

In this case, there is a substantial record, and the district court has made the relevant factual findings. On the basis of that record and these findings, we affirm the lower court's finding that the Tourism Company is an arm of the Commonwealth of Puerto Rico for Eleventh Amendment purposes.

Regarding the extent of control exerted by the Governor's administration, the district court found that...