Opinion ID: 498120
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Heading Rank: 2

Heading: Collateral Estoppel by Judgment

Text: 15 Collateral estoppel by judgment forecloses relitigation in a subsequent action of a fact essential for rendering a judgment in a prior action between the same parties, even when different causes of action are involved. A & P Gen. Contractors, Inc., supra, 10 Off. Translations Supreme Court of Puerto Rico Opinions 983, 110 D.P.R. 753 (1981). at 996. Although the development of the doctrine of collateral estoppel by judgment in Puerto Rico has varied--with some courts treating it as an independent concept while others have considered it as a modality of res judicata--this concept nevertheless has always been considered a variant of res judicata in which identity of causes is not necessary. Id. Our analysis, therefore, necessarily must focus on the initial action in the Superior Court as compared with the subsequent counterclaim in the federal district court. 16 At the outset we acknowledge that in the third proceeding (in the Superior Court of Puerto Rico), involving similar facts and a similar counterclaim, the Superior Court denied Texaco's motion for summary judgment based on res judicata and collateral estoppel. The Supreme Court of Puerto Rico denied certiorari. We do not know the reasons for the Superior Court's summary decision. We nevertheless hold that collateral estoppel by judgment applies. 17 In the instant case, it is clear that the parties in the district court are identical to and are acting in the same capacity as the parties involved in the initial proceeding in the Superior Court. In determining the requirement of identity of things, we must look to  'the object or matter over which the action is exercised.'  Futura Development Corp. v. Centex Corp., 761 F.2d 33, 44 (1st Cir.1985) (quoting Lausell Marxauch v. Diaz de Yanez, 103 D.P.R. 533 (1975) (translation provided without page reference)). The test is whether the court, in deciding the second litigation, would contradict a prior decision litigating a right. A & P Gen. Contractors, Inc. v. Asoc. Cana, Inc., supra, 10 Off. Translations at 998, 110 D.P.R. at 765. The summary eviction proceeding was based in part on rights arising from the franchise agreement, also at issue in the counterclaim. Deciding appellants' counterclaim in their favor necessarily would enforce rights arising from a contract that the Superior Court found was breached by them. 18 The unlawful detainer proceeding was final and on the merits. Appellants had a full and fair opportunity to litigate. Their failure to present any evidence was their own choice, since the court specifically had instructed them that all evidence relevant to the affirmative defenses could be presented. The Superior Court in the initial eviction proceeding filed a lengthy and careful opinion after a four day trial. In its opinion, the court explicitly stated that the evidence presented established beyond any doubt a number of facts. These included the facts that appellants sold misbranded gasoline; that appellants had failed to pay their rent; and that a survey of gasoline stations in the same area where appellants' station was located, including three other Texaco stations, indicated that appellants sold gasoline at the highest price. Collateral estoppel by judgment indeed would apply regardless of whether the court in the first proceeding explicitly found certain facts if such findings were necessarily indispensable to the conclusion reached. Long v. District Court, 72 P.R.R. 737, 739 (1951). It must certainly apply, therefore, where a court makes its findings explicit. 19 The Superior Court necessarily had to consider, and expressly did consider, whether appellants and appellee had violated the franchise agreement and the PMPA. Since these were indispensable facts that were necessarily included in ascertaining the right of Texaco to evict, the judgment was a binding adjudication to that effect. Indeed, appellants conceded at oral argument before us that, in determining the first action, the Superior Court had to find that appellants violated the lease or it could not have held for Texaco. 20 Accordingly, we hold that appellants' first counterclaim, alleging that Texaco violated the franchise agreement and the PMPA, is barred by collateral estoppel by judgment. 2 III. 21 This brings us to the alleged antitrust violations. We find them to be without merit and completely frivolous. 22 Appellants basically alleged that Texaco, as a monopoly, instituted a pricing system that manipulated the market and controlled distributors, resulting in an anticompetitive effect. We agree with the district court that appellants' conclusory allegations were insufficient to defeat Texaco's motion for summary judgment, and that what modicum of factual elements could be extracted from the conclusory pleadings did not support an antitrust cause of action. 23 On appeal, appellants argue that when antitrust violations are involved the summary judgment standard is more stringent than in other cases, and that Texaco had the burden of proving that no inference of monopoly power is possible. Appellants misconstrue the law. The Supreme Court clearly has placed the burden on the movant to come forward with evidence to prove the essential elements of the cause of action. Celotex Corp. v. Catrett, 477 U.S. 317, ---- (1986). Fed.R.Civ.P. 56(e) requires that [w]hen a motion for summary judgment is made and supported ... an adverse party may not rest upon the mere allegations or denials of the adverse party's pleading ... [T]he adverse party's response ... must set forth specific facts showing that there is a genuine issue for trial. There is Supreme Court dictum that summary judgment procedures, specifically as applied to complex antitrust cases, should be used cautiously when motive and intent are integral elements of the cause of action. See Poller v. C.B.S., 368 U.S. 464, 491 (1962). Although Poller has not been overruled, the courts, including the Supreme Court, now more freely approve the granting of summary judgment in antitrust cases. See, e.g., Matsushita Electric Industrial Co. v. Zenith Radio Corp., 475 U.S. 574 (1986); Monsanto Co. v. Spray-Rite Service Corp., 465 U.S. 752 (1984); Amnook Enterprises v. Time Inc., 612 F.2d 604, 622-23 (2d Cir.1979), cert. denied, 448 U.S. 914 (1980). Our Court specifically has rejected special summary judgment treatment in antitrust cases, holding that the particular circumstances involved are what control. White v. Hearst Corp., 669 F.2d 14, 17 (1st Cir.1982). Although appellants were entitled to all favorable reasonable inferences supported by the record, their own unsupported assessment of the situation is insufficient to raise a genuine issue of material fact. First Nat'l Bank v. Cities Service Co., 391 U.S. 253, 289-90 (1968). 24 Moreover, as the district court indicated, the few factual elements which could be extracted from the conclusory pleadings did not support an antitrust violation. 3 Appellants' allegation that Texaco did not deliver the quantity of gasoline contracted for can be summarily dismissed. The Superior Court in the initial proceeding found that Texaco did not breach the contract and that it was entitled to terminate the contract. Appellants' allegations concerning Texaco's pricing arrangement also fail. It is merely a promotional plan. Under the arrangement, Texaco sells gasoline to its dealers at prices over the prevailing market gasoline price, with a rebate for sales below market price if certain amounts are sold. Appellants do not allege nor could they prove how Texaco would be liable for appellants' inability to sell enough to qualify for the rebate. Texaco's rebate policies did not control, either directly or indirectly, appellants' selling price. On the contrary, as we observed in Butera v. Sun Oil Co., 496 F.2d 434, 437 (1st Cir.1974), the appellant there remains free to reduce his margin and try to make more money by underselling his competitors, or he may increase his margin knowing that he will lose sales but hoping to maximize his profit because of the greater per sale income.