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<pre>                  United States Court of Appeals <br>                      For the First Circuit <br>                       ____________________ <br> <br>No. 98-2236 <br> <br>                     A.M. CAPEN'S CO., INC., <br>                       Plaintiff, Appellee, <br> <br>                                v. <br> <br>           AMERICAN TRADING AND PRODUCTION CORPORATION, <br>          BLAS ROSSY-ASENCIO AND RAFAELA FULANA DE TAL, <br>                     Defendants, Appellants. <br> <br>                       ____________________ <br> <br>No. 98-2237 <br> <br>                     A.M. CAPEN'S CO., INC., <br>                      Plaintiff, Appellant, <br> <br>                                v. <br> <br>           AMERICAN TRADING AND PRODUCTION CORPORATION, <br>          BLAS ROSSY-ASENCIO AND RAFAELA FULANA DE TAL, <br>                      Defendants, Appellees. <br> <br>                       ____________________ <br> <br>          APPEALS FROM THE UNITED STATES DISTRICT COURT <br> <br>                 FOR THE DISTRICT OF PUERTO RICO <br> <br>         [Hon. Daniel R. Domnguez, U.S. District Judge] <br> <br>                       ____________________ <br> <br>                              Before <br> <br>                     Torruella, Chief Judge, <br>                                  <br>                  Wallace, Senior Circuit Judge, <br> <br>                    and Lynch, Circuit Judge. <br> <br>                      _____________________ <br> <br>    Jos Enrique Coln-Santana for appellants American Trading and <br>Production Corporation, Blas Rossy-Asencio, Rafaela Gonzlez-Ruiz, <br>and their conjugal partnership. <br>    Fernando L. Gallardo, with whom Woods & Woods and Philip E. <br>Roberts were on brief, for appellee A.M. Capen's Co., Inc. <br> <br> <br>                       ____________________ <br> <br>                         February 8, 2000 <br>                       ____________________

  TORRUELLA, Chief Judge.  For the second time, this Court <br>is asked to determine whether the Puerto Rico Dealers' Act of 1964, <br>10 L.P.R.A.  278a-d (1994) ("Act 75"), applies to the <br>circumstances of this case.  On appeal from entry of a preliminary <br>injunction, a prior panel of this Court reached an initial <br>determination that the claims of plaintiff-appellee, A.M. Capen's <br>Co., Inc., against defendant-appellant, American Trading & <br>Production Corp. ("ATAPCO"), were likely to be resolved in Capen's <br>favor under the laws of Puerto Rico, specifically Act 75.  See <br>generally A.M. Capen's Co. v. American Trading & Prod. Corp., 74 <br>F.3d 317 (1st Cir. 1996).  However, on appeal from judgment below <br>for Capen's, this Court must again consider whether Capen's is a <br>dealer under Act 75.  For the reasons further discussed in this <br>opinion, we reverse the decision of the district court. <br>  As we observed in our recent opinion, Triangle Trading <br>Co. v. Robroy Industries, Inc., No. 98-2366, slip op. at 2 (1st <br>Cir. Dec. 29, 1999), there is much case law carving out the scope <br>of Puerto Rico's dealership act.  In order to honor the legislative <br>intent of Act 75, the Puerto Rico and federal courts have taken <br>steps to restrict the definition of who is a "dealer" within the <br>broad framework of section 278(a).  See id. at 7-9.  We now take <br>one more step down that path and hold that under the facts of this <br>case, appellee fails to qualify for the remedies of the statute <br>because it did not operate as a "dealer" in Puerto Rico.

                                I. <br>  The undisputed facts underlying this action are as <br>follows.  Capen's, a New Jersey corporation with its principal <br>place of business in that state, entered into an agreement with <br>ATAPCO's predecessor to be the exclusive distributor of Globe-Weiss <br>and Steelmaster office products in Puerto Rico, along with thirty- <br>seven other countries in the Caribbean and Central and South <br>America.  The arrangement continued after ATAPCO, whose principal <br>place of business is Missouri, took over.  However, the parties <br>never signed a formal contract because they could not agree on <br>choice-of-law and forum-selection clauses.   <br>  The negotiations took place in Missouri and New Jersey. <br>Pursuant to the agreement, ATAPCO's products were shipped to <br>Capen's in New Jersey.  Capen's would generally take orders from <br>its Puerto Rican customers in New Jersey via telephone or fax, <br>although an agent would actually travel to Puerto Rico two to three <br>times a year for that purpose.  Capen's would then ship the <br>products directly to its customers in Puerto Rico and send bills <br>from New Jersey to Puerto Rico.  Capen's did not advertise in <br>Puerto Rico, nor did it maintain a warehouse, showroom, inventory, <br>employees, office, address, or telephone number in Puerto Rico.  <br>Likewise, Capen's is not qualified to do business in Puerto Rico.  <br>See A.M. Capen's Co. v. American Trading & Prod. Corp., 973 F. <br>Supp. 247, 253-55 (D.P.R. 1997). <br>  In December 1993, ATAPCO terminated the exclusive aspect <br>of the dealership, and it authorized Blas Rossy-Asencio as a sales <br>representative for Puerto Rico effective January 1994.  The trial <br>court entered a preliminary injunction in favor of Capen's on <br>June 16, 1995, which this Court affirmed.  See A.M. Capen's, 74 <br>F.3d at 319.  In July 1997, the district court resolved Capen's <br>pending cross-motion for partial summary judgment on liability.  <br>First, the court observed that ATAPCO had failed to provide <br>additional evidence on Capen's dealership status within the <br>established time frame; consequently, the court concluded that <br>there was no reason to reconsider its original finding, based on <br>the same record and affirmed by the court of appeals, that Act 75 <br>covered Capen's dealership.  See A.M. Capen's, 973 F. Supp. at 257- <br>58.  Then, based on the material facts it deemed admitted, the <br>court found Act 75 liability against ATAPCO as a matter of law.  <br>See id. at 260.  Damages were set after a bench trial, by opinion <br>and order entered on March 31, 1998.  See A.M. Capen's Co. v. <br>American Trading & Prod. Corp., 12 F. Supp. 2d 222, 224-30 (D.P.R. <br>1998).

                               II.  <br>  Summary judgment is only appropriate if there is no <br>genuine issue as to any material fact and the moving party is <br>entitled to judgment as a matter of law.  See Fed. R. Civ. P. <br>56(c).  We normally review the district court's summary judgment de <br>novo, "viewing 'the entire record in the light most hospitable to <br>the party opposing summary judgment, indulging all reasonable <br>inferences in that party's favor.'"  Euromotion, Inc. v. BMW of N. <br>Am., Inc., 136 F.3d 866, 869 (1st Cir. 1998) (quoting Griggs-Ryan <br>v. Smith, 904 F.2d 112, 115 (1st Cir. 1990)); see also Morris v. <br>Government Dev. Bank, 27 F.3d 746, 748 (1st Cir. 1994).  However, <br>in this case, the district court properly admitted the uncontested <br>facts submitted by the plaintiff-appellant when ATAPCO failed to <br>comply with the local rules and oppose the motion in the <br>appropriate form.  See A.M. Capen's, 973 F. Supp. at 256 (citing <br>Stepanischen v. Merchants Despatch Transp. Corp., 722 F.2d 922, <br>930-31 (1st Cir. 1983).  Because we limit our review to "the record <br>as it stood before the district court at the time of its ruling," <br>J. Geils Band Employee Benefit Plan v. Smith Barney Shearson, Inc., <br>76 F.3d 1245, 1250 (1st Cir. 1996) (citing Voutour v. Vitale, 761 <br>F.2d 812, 817 (1st Cir. 1985)), there are no facts in dispute. <br>  Consequently, the only matter before the Court is the <br>applicability of Act 75, a matter we previously considered and <br>provisionally affirmed.  ATAPCO argues that we are not bound by our <br>earlier decision which was rendered as a preliminary opinion for <br>the purposes of reviewing an injunction.  In this case, because the <br>record was fully developed before the first panel, there is a <br>tension between the limited binding authority of a decision <br>regarding a preliminary injunction and the law of the case <br>doctrine.  See Cohen v. Brown University, 101 F.3d 155, 167 (1st <br>Cir. 1996) (citing 1B James W. Moore et al., Moore's Federal <br>Practice  0.404[1] (2d ed. 1993)), cert. denied, 520 U.S. 1186 <br>(1997); see also Ackerley Communications of Mass., Inc. v. City of <br>Cambridge, 135 F.3d 210, 213-15 (1st Cir. 1998) (implying that <br>legal opinion was law of case in preliminary injunction setting <br>where facts were undisputed).  However, the law of the case <br>doctrine only directs our discretion; it does not limit our power.  <br>See Arizona v. California, 460 U.S. 605, 618 (1983); see also <br>Cochran v. M & M Transp. Co., 110 F.2d 519, 521-22 (1st Cir. 1940) <br>(quoting Messinger v. Anderson, 225 U.S. 436, 444 (1912)).  Two <br>traditional considerations weigh in favor of reopening our initial <br>determination.  First, as we acknowledged in our prior opinion, <br>"'conclusions as to the merits of the issues presented on <br>preliminary injunction are to be understood as statements of <br>probable outcomes,' rather than as comprising the law of the case."  <br>74 F.3d at 322 (quoting Narragansett Indian Tribe v. Guilbert, 934 <br>F.2d 4, 6 (1st Cir. 1991)).  Thus, it is implicit that "a party <br>losing the battle on likelihood of success may nonetheless win the <br>war at a succeeding trial on the merits."  Jimnez Fuentes v. <br>Torres Gaztambide, 807 F.2d 236, 238 (1st Cir. 1986).  Second, we <br>review an award of a preliminary injunction only for abuse of <br>discretion.  See A.M. Capen's, 74 F.3d at 319.  Therefore, the <br>scope of review given a case that comes to us in the posture of a <br>preliminary injunction is more deferential than that given to one <br>which comes to us on appeal from final judgment.  See, <br>e.g., Rodrguez-Burgos v. Electric Energy Auth., 853 F.2d 31, 37 <br>(1st Cir. 1988) (considering case upholding a permanent <br>injunction); Goyco de Maldonado v. Rivera, 849 F.2d 683, 686 (1st <br>Cir. 1988) (distinguishing case heard on appeal from issuance of <br>interim injunction); Rosario Nevrez v. Torres Gaztambide, 820 F.2d <br>525, 527 (1st Cir. 1987) (noting that review is limited to <br>plaintiff's likelihood of success, and not a "clear-cut ruling," on <br>the merits). <br>                               III. <br>  Thus, we turn to Capen's status as a dealer under Act 75.  <br>In departing from the legal determination of our colleagues in this <br>circuit, we take into account that the initial decision was not <br>intended to be binding, and that the court did not fully <br>contemplate the meaning of dealer under the Act, but rather <br>considered the Act only in the context of Puerto Rico's interest in <br>the action.  See A.M. Capen's, 74 F.3d at 321-22. <br>  In a statutory construction case, we begin with the <br>language of the statute, and only if the language is ambiguous or <br>leads to an unreasonable interpretation do we turn to the <br>legislative history and other aids.  The words that are not defined <br>within the statute are given their ordinary meaning, with all due <br>consideration to the context.  See Brady v. Credit Recovery Co., <br>160 F.3d 64, 66 (1st Cir. 1998); Grunbeck v. Dime Sav. Bank, 74 <br>F.3d 331, 336 (1st Cir. 1996); Riva v. Massachusetts, 61 F.3d 1003, <br>1007 (1st Cir. 1995).  <br>  Act 75 defines a dealer as:  "a person actually <br>interested in a dealer's contract because of his having effectively <br>in his charge in Puerto Rico the distribution, agency, concession <br>or representation of a given merchandise or service."  10 L.P.R.A. <br> 278(a) (emphasis added).  Although the underscored text does not <br>explicitly "require[] a dealer to be a resident of Puerto Rico, to <br>be authorized to do business in the Commonwealth, or to have a <br>place of business such as an official showroom or warehouse on the <br>Island," as do the comparable statutes in New Jersey and Missouri,  <br>A.M. Capen's, 74 F.3d at 322, it does strongly suggest that the <br>dealer must operate in Puerto Rico under similar requirements.  The <br>alternative, that the phrase could simply refer to a company with <br>a contractual right to distribute in Puerto Rico, regardless of the <br>locale of the bulk of its business, is a less likely reading.  <br>First, under such circumstances, Puerto Rico would have little or <br>no interest in providing the dealer with an additional remedy for <br>the breach of contract, and second, Puerto Rico would face <br>significant legal and practical problems regulating conduct outside <br>its borders. <br>  While we gain no additional insight from the definition <br>of a dealer's contract, the legislative history confirms an <br>interpretation of "in Puerto Rico" that incorporates requirements <br>that an Act 75 dealer be located in, be a resident of, or be <br>authorized to do business in Puerto Rico.  The statement of <br>legislative purpose for Law 75 reads: <br>    "The Commonwealth of Puerto Rico cannot remain <br>  indifferent to the growing number of cases in <br>  which domestic and foreign enterprises, <br>  without just cause, eliminate their dealers <br>  . . . as soon as these have created a <br>  favorable market and without taking into <br>  account their legitimate concerns. <br> <br>    The Legislative Assembly of Puerto Rico <br>  declares that the reasonable stability in the <br>  dealer's relationship in Puerto Rico is vital <br>  to the general economy of the country, to the <br>  public interest and to the general welfare <br>  . . . ." <br> <br>Roberco, 122 D.P.R. at 121-22, 22 Offic. Trans. at 113-14 (emphasis <br>added) (quoting 18-3 Diario de Sesiones 1531 (1954)).  In addition, <br>"the Industry and Commerce Committee submitted a report <br>recommending the bill's approval as a means to tackle the problem <br>of termination of a dealer's contract without just cause, in <br>prejudice to the local dealer, who 'has created a favorable market <br>for the products, and . . . has effectively assumed his <br>responsibilities.'"  Id. (quoting 18-3 Diario de Sesiones 1531). <br>  The legislative history clearly focuses on the problems <br>faced by dealers in Puerto Rico who are terminated once they have <br>invested in and created a favorable market for a principal's <br>product.  See Draft-Line Corp. v. Hon Co., 781 F. Supp. 841, 843-44 <br>(D.P.R. 1991), aff'd, 983 F.2d 1046 (1st Cir. 1993); see also <br>Franceschini, 591 F. Supp. at 415 ("The scant legislative history <br>of the statute refers solely to the problems faced by dealers in <br>Puerto Rico who created a favorable market . . . ."); Roberco, 122 <br>D.P.R. at 121-22, 22 Offic. Trans. at 113-14 (discussing <br>legislative intent to protect local dealers).  The courts that have <br>interpreted the statute and its legislative history uniformly <br>conclude that the statute was enacted to prevent "economic <br>exploitation of local dealers."  A.M. Capen's, 74 F.3d at 321 <br>(quoting Draft-Line, 781 F. Supp. at 844); see also Roberco, 122 <br>D.P.R. at 121, 22 Offic. Trans. at 113 ("Act 75 was created to <br>avoid the harm resulting from the practice of some manufacturers <br>who arbitrarily break with local dealers"); J. Soler Motors, Inc. <br>v. Kaiser Jeep Int'l Corp., 108 D.P.R. 134, 8 P.R. Offic. Trans. <br>138, 143 (1978) (Act 75 "has the purpose of protecting the Puerto <br>Rican intermediaries").  Because there is no evidence to the <br>contrary, we similarly ascertain that the legislature sought to <br>protect the interests of commercial distributors working in Puerto <br>Rico.  See A.M. Capen's, 74 F.3d at 321 (citing Ballester Hermanos, <br>Inc. v. Campbell Soup Co., 797 F. Supp. 103, 106 (D.P.R. 1992)). <br>  Based on the facts before us, we cannot conclude that <br>Capen's operates "in Puerto Rico" for purposes of Act 75.  Capen's <br>presence in Puerto Rico is almost nonexistent; Puerto Rico is <br>merely one of the destination markets for the ATAPCO goods that it <br>distributes.  Capen's has no employees, no office space or <br>warehouses, and no assets in Puerto Rico.  Other than the two or <br>three times a year that an agent visits Puerto Rico to take orders <br>directly, all other contact and orders are made through New Jersey, <br>where Capen's maintains a place of business and is incorporated. <br>                            CONCLUSION <br>  After careful consideration and review, based on the <br>parties' limited connection to Puerto Rico, we conclude that Act 75 <br>should not apply to this case.  We therefore reverse and remand for <br>proceedings consistent with this opinion.</pre>

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