Court Opinion

ID: 195785
Source: CourtListenerOpinion
Date Created: 2011-02-07 02:48:27+00
Date Added: 2024-06-11T13:01:13.679099
License: Public Domain

UNITED STATES COURT OF APPEALS
                    FOR THE FIRST CIRCUIT
                                         

No. 94-1067

                 CASAS OFFICE MACHINES, INC.,

                     Plaintiff, Appellee,

                              v.

             MITA COPYSTAR AMERICA, INC., ET AL.,

                   Defendants, Appellants.

                                         

         APPEAL FROM THE UNITED STATES DISTRICT COURT

               FOR THE DISTRICT OF PUERTO RICO

       [Hon. Gilberto Gierbolini, U.S. District Judge]
                                                                 

                                         

                            Before

                  Torruella, Circuit Judge, 
                                                      

               Campbell, Senior Circuit Judge,
                                                         

                  and Boudin, Circuit Judge.
                                                       

                                         

Ricardo  F.  Casellas,  with  whom  Mario  Arroyo,  and   Fiddler,
                                                                              
Gonzalez & Rodriguez, were on brief for appellants.
                            

Luis  A. Melendez-Albizu, with whom Luis Sanchez-Betances, Sanchez
                                                                              
Betances & Sifre,  Nilda M. Cordero de Gomez, and Jorge E. Perez-Diaz,
                                                                             
Federal Litigation Division, United States Department of Justice, were
on brief for appellee.
                                         
                      December 14, 1994
                                         

          CAMPBELL, Senior Circuit  Judge.  Mita Copystar  of
                                                     

America, Inc.  ("Mita")  appeals from  the  district  court's

order  granting  summary  judgment  and  issuing  a permanent

injunction in favor of Casas Office Machines, Inc. ("Casas").

The  action began  when Casas  sued Mita  and two  fictitious

defendants,  John Doe and Richard Roe,  in the Superior Court

of Puerto Rico,  San Juan Part.  Organized  under the laws of

California  and with its  principal place of  business in New

Jersey, Mita removed the action to the United States District

Court for the District of Puerto Rico.  After removal, Casas,

by  an amendment  to its  complaint, replaced  the fictitious

defendants with  two named defendants, Caguas  Copy, Inc. and

Oficentro  J.P., Inc.,  which,  like Casas,  are Puerto  Rico

corporations.  Complete diversity  of citizenship between the

parties was thus destroyed, although this fact was not called

to  the district court's attention at the time.  The district

court  proceeded to deny  Mita's motions  to dismiss  and for

summary  judgment,  and  it  allowed  Casas's  motion  for  a

permanent injunction enjoining Mita from impairing a contract

entered into with Casas.  Now, for the  first time on appeal,

Mita  points out  the  jurisdictional problem  caused by  the

addition of the nondiverse  parties.  Mita asks us  to vacate

the judgment below and order the district court to remand the

action  to  the Superior  Court of  Puerto  Rico.   Mita also

attacks the district court's  decision on the merits, arguing

                             -2-

that  summary judgment  was  improper and  that the  district

court erred in granting the permanent injunction.

                              I.

          Incorporated   in  Puerto  Rico,  Casas  sells  and

distributes   office  and  photocopying   equipment  in  that

Commonwealth.  In 1983, Casas entered into an  agreement with

Mita,  a supplier  of office  and photographic  equipment, to

distribute Mita products in Puerto Rico.  As noted, Mita is a

California  corporation with its  principal place of business

in  New  Jersey.   Following  a period  of  strained business

relations, Casas and Mita executed a second agreement in 1989

(the "1989 Agreement") granting  Casas the exclusive right to

distribute Mita's  products in  the "Greater San  Juan" area.

Paragraph  5 of  the 1989  Agreement, however,  provided that

Casas's inability to meet or exceed 85% of a set  sales quota

would result in termination  of the exclusivity provisions of

the contract.  Asserting that Casas had failed to achieve the

85% threshold, Mita terminated Casas's exclusive distribution

rights      but  retained  Casas  as  a  distributor      and

designated  two new  distributors in  the "Greater  San Juan"

area.  

          Casas responded on February 1, 1991, by suing Mita,

John  Doe, and Richard Roe1  in the Superior  Court of Puerto

                    
                                

1.  Paragraph 3 of Casas's complaint said:

                             -3-

Rico,  San  Juan  Part.   Casas  alleged  that  (1) Mita  had

deprived  Casas of its  exclusive distribution rights without

just cause  in violation of P.R.  Laws Ann. tit. 10,     278-

278d 91976) (referred to in the complaint and hereinafter  as

"Law 75"), (2)  defendants had conspired to  deprive Casas of

its  right to sell and distribute Mita products, (3) Mita had

impaired  Casas's exclusive  distribution agreement,  and (4)

defendants   had   intentionally   interfered  with   Casas's

contractual relationship with Mita.  Casas sought preliminary

and permanent injunctive relief, as well as monetary damages.

          Alleging the existence  of diversity  jurisdiction,

Mita removed the  action to the United  States District court

for  the  District   of  Puerto  Rico   on  March  6,   1991.

Thereafter, Casas amended its  complaint twice.  An amendment

                    
                                

          Codefendants John Doe and Richard Roe are
          fictitious   names   used  to   refer  to
          defendants  whose  names  are unknown  at
          present.  Said defendants are the natural
          persons and/or  corporate and/or judicial
          entities  who  together  with  MITA  have
          conspired,   with    knowledge   of   the
          contractual relationship between MITA and
          Casas,  to  deprive  the latter  of  said
          contractual  relationship,  directly  and
          indirectly interfering therewith, causing
          the  damages  hereinafter  itemized.   To
                                                               
          plaintiff's     best    knowledge     and
                                                               
          understanding, John Doe  and Richard  Roe
                                                               
          are   citizens   and  residents   of  the
                                                               
          Commonwealth of Puerto Rico and  are also
                                                               
          liable  to  plaintiff  pursuant   to  the
                                                               
          allegations mentioned hereinafter.
                                                       

(emphasis added).

                             -4-

filed  on March 9, 1992, added a fifth count,2 and eliminated

Casas's  request  for a  preliminary  (but  not a  permanent)

injunction.  By a second motion  to amend, brought on May 14,

1992, Casas sought to  replace the fictitious defendants with

Caguas  Copy,   Inc.  ("Caguas")  and  Oficentro  J.P.,  Inc.

("Oficentro")    the corporations that Mita had designated as

new  distributors   in  the   Greater  San  Juan   area  upon

terminating Casas's exclusive distribution rights.  Paragraph

3 of Casas's Second Amended Complaint read:

          Codefendants   Caguas   Copy,  Inc.   and
                                                               
          Oficentro    J.P.,    Inc.   are,    upon
                                                               
          information    and   belief,    corporate
                                                               
          entities organized pursuant  to the  laws
                                                               
          of the Commonwealth  of Puerto Rico, with
                                                               
          Principal offices located  at Suite  B-3,
                                                               
          Goyco  Street #  10,  Caguas,  P.R.,  and
                                                               
          Diamante  Street  #  24,   Villa  Blanca,
                                                               
          Caguas,   P.R.,   respectively.      Said
                                                    
          defendants   are  the   corporate  and/or
          judicial entities who together  with MITA
          have  conspired,  with  knowledge of  the
          contractual relationship between MITA and
          Casas,  to  deprive  the latter  of  said
          contractual  relationship,  directly  and
          indirectly interfering therewith, causing
          the  damages  hereinafter  itemized.   To
                                                               
          plaintiff's     best    knowledge     and
                                                               
          understanding,  Caguas   Copy,  Inc.  and
                                                               
          Oficentro  J.P.,  Inc.  are citizens  and
                                                               
          residents of the  Commonwealth of  Puerto
                                                               
          Rico  and  are also  liable  to plaintiff
                          
          pursuant  to  the  allegations  mentioned
          hereinafter.

                    
                                

2.  Count Five  alleged  that defendants  had  illicitly  and
tortiously contracted  for the distribution of  Mita products
in Puerto Rican  territories in which Mita had  granted Casas
the exclusive right to distribute its products. 

                             -5-

(emphasis  added).  Four days  later, on May  18, 1992, Casas

moved the  district  court for  an  expedited review  of  its

second  motion  to amend  its  complaint.   Such  review  was

necessary,  said  Casas,  because  Oficentro  was  under  the

protection  of the  United  States Bankruptcy  Court for  the

District  of  Puerto  Rico      which  had  ordered that  all

creditors file their  proof of  claims on or  before June  8,

1992    and Casas could  not file a proof of claim  until its

motion to  amend was  granted.   The  district court  allowed

Casas's second amendment in early June 1992.

          In   the  meantime,  Mita  had  moved  for  summary

judgment  on February 12, 1992.  It argued primarily that (1)

Mita did  not impair its contractual  relationship with Casas

because  it merely enforced its rights under the terms of the

1989  Agreement, (2) even if it were found that Mita impaired

its contractual relationship with  Casas, Mita had just cause

to do so,  and (3) Casas's suit  was barred by the  equitable

doctrine  of laches.  On March 16, 1992, Casas opposed Mita's

motion for  summary judgment, and brought  a cross-motion for

partial interlocutory  summary judgment on its  Law 75 claims

(Counts One and Three), renewing  its request for a permanent

injunction.3  Mita,  in turn,  filed, on April  13, 1992,  an

                    
                                

3.  In  its  original  complaint,  Casas  had  requested  the
district court to 

          issue  a   permanent  injunction  against
          Mita,  ordering it  [(1)]  to  cease  and

                             -6-

opposition to Casas's  cross-motion for  summary judgment  in

which   it  maintained,  inter   alia,  that   (1)  permanent
                                                 

injunctive  relief is  not available  under Law  75, and  (2)

ordering permanent  injunctive relief  in this case  would be

unconstitutional.   Finally, in  a separate motion,  filed on

June 4, 1992, Mita sought to dismiss Casas's complaint on the

grounds that Casas had engaged in a fraud upon the court.

          The United States magistrate judge  reviewed Mita's

motions  to dismiss  and  for summary  judgment,  as well  as

Casas's cross-motion for summary  judgment.  In a  report and

recommendation  issued on  September 2, 1993,  the magistrate

judge concluded that (1) Casas had not committed fraud on the

court, (2) Casas  was not  barred by the  doctrine of  laches

from pursuing its claims under Law  75, (3) Mita did not have

just  cause  under  Law  75 to  terminate  Casas's  exclusive

distribution rights because it failed to demonstrate that the

quota provision in the 1989  Agreement was reasonable at  the

                    
                                

          desist  from  continuing  with  the  acts
          which constitute impairment of  the terms
          of the distribution relationship existing
          between  it and  Casas,  . .  . [(2)]  to
          abstain   from   appointing,    choosing,
          designating   or   arranging  for   other
          additional    distributors   and/or    in
          substitution  of Casas[,] and . . . [(3)]
          to   abstain   from  terminating   and/or
          altering  the  distribution  relationship
          existing   between    both   parties   or
          performing any act or omission whatsoever
          in  impairment  thereof, all  pursuant to
          the provisions of Law 75.

                             -7-

time of Casas's  nonperformance, (4)  a permanent  injunction

may be  ordered under Law 75,  and (5) Mita  had impaired its

contractual  relationship  with  Casas.    Consequently,  the

magistrate judge  recommended that  the  district court  deny

Mita's motions to dismiss and for summary judgment, and grant

Casas's cross-motion for summary judgment.

          In  its opinion  and  order filed  on November  18,

1993,  the  district  court  adopted all  of  the  magistrate

judge's  recommendations,  thereby  granting  Casas's  cross-

motion  for summary judgment on its Law 75 claims (Counts One

and  Three).4    Casas   Office  Machines  v.  Mita  Copystar
                                                                         

Machines, 847 F. Supp. 981, 983 (D.P.R. 1993).  In a judgment
                    

entered  the  same  day,  the district  court  denied  Mita's

motions  to dismiss  and  for summary  judgment, and  granted

Casas's motion for  an injunction permanently enjoining  Mita

from  impairing  the  1989  Agreement  without  just  cause.5
                                                                       

Mita,  pursuant to  28 U.S.C.    1292(a)(1)  (1988),6 appeals

                    
                                

4.  The district court did  not decide Counts Two, Four,  and
Five of Casas's complaint, and, to our knowledge, they remain
unresolved. 

5.  The district  court emphasized  in its opinion  and order
that  it  was  not  placing Mita  in  involuntary  servitude.
According  to  the  district  court, Mita  could  impair  its
contractual relationship with Casas in the future if it could
demonstrate just cause for doing so.

6.  Section 1292(a)(1) provides in relevant part:

          [T]he  courts  of   appeals  shall   have
          jurisdiction of appeals from:

                             -8-

from this interlocutory  decision.  Mita argues  principally:

(1) that diversity jurisdiction  was defeated when Caguas and

Oficentro were substituted for the fictitious defendants; (2)

that  the district court improperly entered summary judgment;

and (3) that the district court improperly issued a permanent

injunction.

                             II.

          Before  we  reach  the  issue   of  subject  matter

jurisdiction,   we  respond  to   Casas's  challenge  to  our

appellate jurisdiction.   Casas maintains  that, under Carson
                                                                         

v. American  Brands, Inc., 450 U.S. 79, 101 S. Ct. 993, 67 L.
                                     

Ed. 2d  59 (1981), jurisdiction  under   1292(a)(1)  does not

exist  unless the  appellant demonstrates  that the  district

court's interlocutory  order "might  have a  serious, perhaps

irreparable,  consequence,  and   that  the   order  can   be

effectually challenged  only by immediate appeal."   450 U.S.

at  84 (internal  quotations omitted).   According  to Casas,

Mita  has  failed to  satisfy  these  requirements.   Casas's

argument is not well taken.

                    
                                

                 (1)  Interlocutory orders  of
               the  district   courts  of  the
               United States . . ., or of  the
               judges    thereof,    granting,
               continuing, modifying, refusing
               or  dissolving injunctions,  or
               refusing to  dissolve or modify
               injunctions,  except  where   a
               direct review may be had in the
               Supreme Court.

                             -9-

          The  Supreme  Court  has  said  that     1292(a)(1)

provides appellate  jurisdiction  over two  types of  orders:

those "that grant  or deny injunctions and  [those] that have

the practical  effect of granting or  denying injunctions and

have   `serious,   perhaps   irreparable,   consequence[s].'"

Gulfstream Aerospace Corp. v.  Mayacamas Corp., 485 U.S. 271,
                                                          

287-88,  108 S. Ct.  1133, 99 L.  Ed. 2d 296  (1988) (quoting

Carson,  450  U.S.  at 84).    Thus,  courts  of appeals,  in
                  

determining whether they have appellate jurisdiction  under  

1292(a)(1), must, in the first instance, decide "`whether the

order appealed  from  specifically  [granted  or]  denied  an

injunction or merely had the  practical effect of doing so.'"

Morgenstern  v. Wilson,  29 F.3d 1291,  1294 (8th  Cir. 1994)
                                  

(quoting  Kausler v.  Campey,  989 F.2d  296,  298 (8th  Cir.
                                        

1993)).   If the  interlocutory order in  question "expressly

grants or denies  a request for injunctive relief, the Carson
                                                                         

requirements  need not be  met and  the order  is immediately

appealable as  of right under   1292(a)(1)."  Morgenstern, 29
                                                                     

F.3d at 1294-95 (observing that the  majority of the circuits

agree with  this principle, and citing  cases); see Feinstein
                                                                         

v.  Space Ventures, Inc., 989 F.2d 49, 49 n.1 (1st Cir. 1993)
                                    

(accepting  appellate  jurisdiction under     1292(a)(1), and

noting the distinction between "an interlocutory  order which

has the incidental effect of denying [or granting] injunctive

relief" and an order that "clearly and directly grant[s] a[n]

                             -10-

.  . . injunction").  On the  other hand, "if an order merely

has  the   practical  effect   of  granting  or   denying  an

injunction,  the Carson  . .  . test[s]  must be  satisfied."
                                   

Morgenstern, 29 F.3d at 1295.
                       

          Here, the district court's order  expressly granted

Casas's motion for an  injunction barring Mita from impairing

the 1989 Agreement without  just cause.  Casas, 847  F. Supp.
                                                          

at 990.  Accordingly, for the reasons discussed, the district

court's  order was  immediately appealable  as of  right, and

Mita  was not required to satisfy the Carson criteria.  Thus,
                                                        

we  have appellate jurisdiction.  We now consider our subject

matter jurisdiction.    

                             III.

          Mita  argues  that  there   is  no  subject  matter

jurisdiction in federal  court because complete diversity  of

citizenship was destroyed when the fictitious defendants were

replaced with  Caguas and Oficentro after  removal.  Although

Mita raises this  issue for the first time  on appeal, we are

obliged  to  address  it   because  a  defense  of   lack  of

jurisdiction over  the subject matter is  expressly preserved

against waiver by Fed.  R. Civ. P. 12(h)(3).   E.g., Halleran
                                                                         

v. Hoffman, 966 F.2d 45, 47  (1st Cir. 1992).  Casas responds
                      

that, diversity jurisdiction, once established at the time of

removal,  could not be lost by  replacement of the fictitious

defendants with Caguas  and Oficentro, which  Casas describes

                             -11-

as   nondiverse,  dispensable  parties.    Alternatively,  if
                                         

jurisdiction  was  indeed  defeated  by  the substitution  of

Caguas and Oficentro after removal,  Casas asks us to restore

it, nunc  pro  tunc,  by  dismissing  the  diversity-spoiling
                               

defendants without prejudice.
                                        

                              A.

          This   case   involves    no   federal    question.

Jurisdiction stands or  falls upon diversity of  citizenship.

It has long been settled that a "lack of `complete diversity'

between   the  parties   deprives   the  federal   courts  of

jurisdiction over the lawsuit."  Sweeney v. Westvaco Co., 926
                                                                    

F.2d 29, 41 (1st Cir.) (citing Strawbridge v. Curtiss, 7 U.S.
                                                                 

(3 Cranch)  267, 2 L. Ed.  435 (1806)), cert.  denied, 112 S.
                                                                 

Ct.  274, 116  L.  Ed. 2d  226 (1991).    There was  complete

diversity between  the parties on  March 6,  1991, when  Mita

removed the case  to federal  court: Casas is  a Puerto  Rico

corporation,  and Mita  was  incorporated in  California  and

maintains  its principal  place  of business  in New  Jersey.

That  the fictitious  defendants, John  Doe and  Richard Roe,

might reside in Puerto Rico     as suggested by Casas in  the

original  complaint      was properly  disregarded  under  28

U.S.C.    1441(a)  (1988), which  provides in  relevant part:

"For purposes of removal . . ., the citizenship of defendants

sued  under fictitious  names shall  be disregarded."   After

removal,  however, Casas  replaced the  fictitious defendants

                             -12-

with Caguas  and Oficentro, which were  clearly identified as

Puerto  Rico corporations, like  Casas itself.   The issue is

whether  this  substitution,  which unquestionably  destroyed

complete  diversity, also  defeated  federal  subject  matter

jurisdiction.  We hold that it did.    

          Casas  argues that  as  diversity jurisdiction  was

established at the commencement of the proceeding, it was not

later defeated by the mere naming of  the fictitious parties,

who were  dispensable,  not indispensable.   E.g.,  Freeport-
                                                                         

McMoRan  Inc. v. K N Energy, Inc.,  498 U.S. 426, 428, 111 S.
                                             

Ct. 858, 112 L. Ed. 2d 951 (1991) (per curiam) (holding that,

because  there  was  complete   diversity  when  the   action

commenced,  diversity jurisdiction  was not  defeated by  the

addition   of  a   nondiverse   plaintiff,   which  was   not

indispensable);  Wichita R.R.  &  Light Co.  v. Public  Util.
                                                                         

Comm'n, 260 U.S. 48,  54, 43 S. Ct. 51, 67 L. Ed. 124 (1922).
                  

Under the general principle reflected in the above cases, the

existence of  federal jurisdiction here might  seem to depend

simply upon whether Caguas  and Oficentro were dispensable or

indispensable parties.   But "[f]ederal courts  are courts of

limited  jurisdiction,  and  .  . .  may  exercise  only  the

authority  granted to  them  by Congress."   Commonwealth  of
                                                                         

Mass. v. Andrus,  594 F.2d  872, 887 (1st  Cir. 1979);  e.g.,
                                                                        

Owen Equip. & Erection Co.  v. Kroger, 437 U.S. 365,  374, 98
                                                 

S.  Ct. 2396,  57  L. Ed.  2d 274  (1978)  ("The limits  upon

                             -13-

federal jurisdiction, whether imposed by  the Constitution or

by  Congress,  must  be  neither  disregarded nor  evaded.").

Thus,  specific legislative  directives override  the general

principles  announced  in  these  cases, e.g.,  28  U.S.C.   
                                                         

1367(b) (Supp. V 1993)  (supplemental jurisdiction).7   Here,

as  we explain  below,  Congress has  indicated that  federal

diversity jurisdiction is defeated so long as, after removal,

fictitious defendants  are  replaced with  nondiverse,  named

defendants,   regardless  of  whether   they  happen   to  be

dispensable or indispensable to the action.

          As part of the  Judicial Improvements and Access to

Justice  Act of  1988, Pub.  L. No.  100-702, 102  Stat. 4669

(1988), Congress  enacted 28  U.S.C.   1447(e)  (1988), which

provides:

               If after removal the plaintiff seeks
          to   join  additional   defendants  whose
          joinder  would   destroy  subject  matter
          jurisdiction, the court may deny joinder,

                    
                                

7.  Under 28 U.S.C.    1367(b), for instance, federal courts,
sitting   in   diversity,   "shall   not   have  supplemental
jurisdiction . . . over claims  by plaintiffs against persons
made  parties under  Rule 14,  19, 20,  or 24 of  the Federal
Rules of Civil  Procedure . . . when  exercising supplemental
jurisdiction over such claims  would be inconsistent with the
jurisdictional requirements of section 1332."  This  statute,
which  refers expressly  to  both  compulsory and  permissive
joinder, "does not allow joinder of additional parties if  to
do  so would defeat the rule of complete diversity."  Charles
A. Wright,  Law of Federal Courts    9, at 38  (1994).  Thus,
                                             
where Congress has specifically  so provided, the addition of
nondiverse,   dispensable   parties  will   defeat  diversity
jurisdiction,  even if  such  jurisdiction has  already  been
established at the start of the federal proceeding.  

                             -14-

          or permit joinder  and remand the  action
          to the State court.

Although  this provision  relates expressly  to joinder,  the

legislative history  to the Judicial Improvements  and Access

to  Justice Act of 1988 indicates that   1447(e) applies also

to the identification of fictitious defendants after removal.

H.R.  Rep.  No. 889,  100th  Cong.,  2d  Sess. 72-73  (1988),

reprinted in 1988  U.S.C.C.A.N. 5982, 6033  ("Th[e] provision
                        

also  helps  to identify  the  consequences  that may  follow

removal of a case with unidentified fictitious defendants.");

e.g.,   Lisa   Combs    Foster,   Note,   Section   1447(e)'s
                                                                         

Discretionary Joinder and  Remand: Speedy  Justice or  Docket
                                                                         

Clearing?, 1990 Duke L.J. 118, 121, 132  ("[I]f after removal
                     

the plaintiff  identifies the  Doe defendant as  a nondiverse

party, then pursuant to section 1447(e)  the court may either

deny joinder or permit joinder and remand.").  

          Federal  courts  and  commentators  have  concluded

that,  under     1447(e),  the  joinder  or  substitution  of

nondiverse  defendants  after   removal  destroys   diversity

jurisdiction,   regardless   whether   such  defendants   are
                                      

dispensable or indispensable to the action.  E.g., Yniques v.
                                                                      

Cabral,  985  F.2d 1031,  1034  (9th  Cir. 1993);  Washington
                                                                         

Suburban Sanitary Comm'n v.  CRS/Sirrine, Inc., 917 F.2d 834,
                                                          

835 (4th Cir. 1990);  Rodriguez by Rodriguez v.  Abbott Lab.,
                                                                        

151  F.R.D.  529,  533  n.6  (S.D.N.Y.  1993);  Vasilakos  v.
                                                                     

Corometrics  Medical  Sys.,  Inc.,  No.  93-C-5343,  1993  WL
                                             

                             -15-

390283,  at *1-2 (N.D. Ill. 1993); Righetti v. Shell Oil Co.,
                                                                        

711  F. Supp.  531, 535  (N.D. Cal.  1989); David  D. Siegel,

Commentary  on 1988 and 1990 Revisions of Section 1441, in 28
                                                                      

U.S.C.A.   1441 (1994) (observing that when a plaintiff moves

to substitute a nondiverse,  named defendant for a fictitious

defendant, "the  plaintiff will meet the  new subdivision (e)

of   1447, which leaves it entirely to the court to determine

whether to refuse the addition and keep the case or allow the

addition  and then  remand  the  case  for  want  of  federal

jurisdiction  (caused by  the  loss of  diversity)"); Foster,

Note, supra, at 121 ("Significantly, section 1447(e) does not
                       

require  the  court,  in  considering whether  joinder  of  a

nondiverse party should be permitted to deprive the court  of

jurisdiction,    to   determine   whether    the   party   is

`indispensable'  to  the  action  according to  Federal  Rule

19(b).  Unlike  the approach under the Federal Rules, joinder

of  a  non-indispensable  party  can  deprive  the  court  of

jurisdiction.").   We  find these  decisions persuasive.   We

conclude that diversity jurisdiction  was lost in the present

case  when the court allowed Casas to identify the fictitious

defendants as Caguas and Oficentro.

          Section 1447(e)'s legislative history supports this

conclusion.   In  enacting    1447(e), Congress  considered a

proposal  that  would have  allowed  the  joinder of  certain

nondiverse  parties  and, at  the  same  time, permitted  the

                             -16-

district  court,  in its  discretion,  to keep  the  case and

decide it  on the merits.  H.R. Rep. No. 889, 100th Cong., 2d

Sess.  72-73 (1988),  reprinted  in 1988  U.S.C.C.A.N.  5982,
                                               

6033-34 ("The  most obvious alternative [to    1447(e)] would

be to provide that  `the court may deny joinder,  dismiss the

action,  or permit  joinder  and either  remand to  the state

court  or  retain  jurisdiction.'");  see  David  D.  Siegel,
                                                     

Commentary on 1988 Revision of Section 1447, in 28 U.S.C.A.  
                                                           

1447  (1994);  Foster,  Note,  supra, at  137-38.    Congress
                                                

rejected  the  proposal,  however,  because  it  would   have

represented  a "departure from the traditional requirement of

complete diversity," and "provide[d]  a small enlargement  of

diversity jurisdiction."  H.R. Rep. No. 889, 100th Cong.,  2d

Sess.  72-73 (1988),  reprinted  in  1988 U.S.C.C.A.N.  5982,
                                               

6033-34.   We think that,  had Congress decided  that federal

courts   could  retain  jurisdiction   over  cases  in  which

plaintiffs  joined  or  substituted  dispensable,  nondiverse

defendants  after removal, it would have made that plain in  

1447(e).        

          This is not to say that it is unimportant whether a

nondiverse  defendant  whom  a  plaintiff seeks  to  join  or

substitute after removal  is dispensable or indispensable  to

the action.  If the  defendant is indispensable, the district

court's choices are limited to denying joinder and dismissing

the action pursuant  to Fed. R. Civ. P. 19,  or else allowing

                             -17-

joinder and remanding the case to the state court pursuant to

  1447(e).  See Yniques, 985 F.2d  at 1035.  If, on the other
                                   

hand, the  defendant is  dispensable, the district  court has

the options, pursuant  to   1447(e),  of denying joinder  and

continuing  its  jurisdiction  over the  case,  or permitting

joinder  and  remanding the  case to  state court.8   Id.   A
                                                                     

district  court may not, however, do what the court below did

here, that is,  substitute the  nondiverse, named  defendants

for  the fictitious defendants     thereby  defeating federal

diversity jurisdiction    and then continue  to deal with the

merits of the dispute. 

                              B.

          Although diversity jurisdiction  was defeated  when

Caguas  and Oficentro  were  substituted  for the  fictitious

defendants  after  removal,  jurisdiction could  be  restored

retroactively  in  appropriate circumstances,  if  Caguas and

Oficentro were  dispensable parties, by  dismissing them from

the action.   In  Newman-Green, Inc. v.  Alfonzo-Larrain, 490
                                                                    

U.S.  826 109  S. Ct.  2218, 104  L. Ed.  2d 893  (1989), the

Supreme  Court held that  federal courts of  appeals have the

authority    like that  given to the district courts  in Fed.

                    
                                

8.  "[A] district court, when confronted with an amendment to
add  a  nondiverse  nonindispensable  party, should  use  its
discretion  in deciding  whether to  allow that  party to  be
added."   Hensgens v.  Deere & Co., 833  F.2d 1179, 1182 (5th
                                              
Cir.  1987)  (describing  factors that  district  courts  may
consider in deciding whether or not to permit the addition of
dispensable, nondiverse parties). 

                             -18-

R. Civ. P. 21     to dismiss dispensable,  nondiverse parties
                                                    

to  cure defects in diversity jurisdiction.  490 U.S. at 832-

38.  Casas asks us to  exercise this power here by dismissing

Caguas and Oficentro without prejudice.  
                                                  

          Courts  may not,  of course,  dismiss indispensable
                                                                         

parties  from   an  action  in  order   to  preserve  federal

jurisdiction.    But,  contrary   to  Mita's  assertions,  we

conclude that Caguas  and Oficentro are dispensable  parties.

Mita's principal  contention is that  Casas is barred  by the

doctrine of judicial estoppel  from asserting that Caguas and

Oficentro are dispensable parties  because Casas, in a motion

requesting relief from the automatic stay, represented to the

United  States Bankruptcy  Court for  the District  of Puerto

Rico  that Oficentro  is  an indispensable  party.   In  that

motion, Casas argued in the bankruptcy court that:

               2.   Creditor  CASAS wishes  to duly
          serve process, litigate and try the above
          mentioned  lawsuit  in the  U.S. District
          Court  against Debtor  [(Oficentro)], and
          the other defendants [(Mita  and Caguas)]
          before a  jury.  If CASAS  is not allowed
                                                               
          to  serve process and litigate its claims
                                                               
          against    Debtor,    CASAS   would    be
                                                               
          effectively   precluded  from   obtaining
                                                               
          recovery under  its tortious interference
                                                               
          and  contract  in   prejudice  of   third
                                                               
          party's claims,  due  to  a  lack  of  an
                                                               
          indispensable   party.     Concomitantly,
                                                               
          CASAS'  constitutional  right  to have  a
                                                               
          trial by jury on all its  legally tenable
                                                               
          claims would be impaired.
                                              

(emphasis added).  

                             -19-

          While  this  assertion is  manifestly at  odds with

Casas's present  position, we  are disinclined under  all the

circumstances to find that it  created an estoppel.  Judicial

estoppel is a judge-made doctrine designed to prevent a party

who  plays "fast  and  loose with  the  courts" from  gaining

unfair   advantage  through   the   deliberate  adoption   of

inconsistent positions  in successive suits.   See Scarano v.
                                                                      

Central R.R. Co., 203 F.2d 510, 513 (3d Cir. 1953).  Here, it
                            

does not appear that Casas succeeded in gaining any advantage

as a result of its earlier inconsistent statement made to the

bankruptcy  court.  While the court granted Casas's motion to

lift  the stay,  it  did so  on  grounds other  than  Casas's

representation  that Caguas and Oficentro were indispensable.

Mita  itself does  not  allege  that  it  relied  on  or  was

prejudiced by the statement in any way.  There is the further

fact that Mita  has played as "fast  and loose" as  has Casas

with the issue of  subject matter jurisdiction.  It  was Mita

   the party now seeking remand to the Commonwealth courts   

that removed the  case here.   After  the fictitious  parties

were identified, it made no effort to remand.  Only after the

district court ruled against it  did Mita decide that federal

jurisdiction  was a mistake.   We conclude that  Casas is not

estopped from taking the position it adopts now.  See Milgard
                                                                         

Tempering, Inc.  v. Selas Corp.,  902 F.2d  703, 716-17  (9th
                                           

                             -20-

Cir. 1990); 18  Charles Wright et  al., Federal Practice  and
                                                                         

Procedure   4477, at 781 (Supp. 1994).9  
                     

          Mita  next argues  that  Caguas and  Oficentro  are

indispensable  parties  under   a  Federal  Rules   of  Civil

Procedure  19(b)  analysis.   It  submits  that, because  the

permanent  injunction  compels  it  to  resume  an  exclusive

distribution relationship with Casas  in the Greater San Juan

area,   Caguas's  and   Oficentro's  contractual   rights  to

distribute  Mita  products  in  that  area   are  necessarily

canceled.   Moreover, Mita points out that Casas is seeking a

declaratory judgment decreeing Mita's distribution agreements

with  Caguas  and  Oficentro  null and  void.    Under  these

circumstances, says  Mita, this action cannot  "in equity and

good conscience" proceed without  Caguas and Oficentro, which

are entitled to protect their contractual interests.   We are

not persuaded.  A leading commentator writes:

          When  a  person is  not  a  party to  the
          contract  in litigation and has no rights
          or obligations under that  contract, even
          though  he may have  obligated himself to
          abide by the result of the pending action
          by another contract that is not at issue,
          he   will   not   be   regarded   as   an
          indispensable   party   in   a  suit   to
          determine obligations  under the disputed

                    
                                

9.  We agree with  Casas that International Travelers  Cheque
                                                                         
Co.  v. Bankamerica  Corp., 660  F.2d 215,  223-24 (7th  Cir.
                                      
1981) is distinguishable.   In that case, the  district court
had expressly relied on plaintiff's previous statement that a
party  was indispensable.  There was no such reliance in this
case.

                             -21-

          contract, although he may be a Rule 19(a)
          party to be joined if feasible.

7  Charles A. Wright et al., Federal Practice and Procedure  
                                                                       

1613, at  199-200 (1986) (footnotes omitted)  (citing cases);

see Ferrofluidics Corp. v. Advanced  Vacuum Components, Inc.,
                                                                        

968  F.2d  1463, 1472  (1st Cir.  1992) ("`[I]t  is generally

recognized  that a person does not become indispensable to an

action to  determine rights  under a contract  simply because

that  person's   rights  or  obligations  under  an  entirely

separate  contract will  be  affected by  the  result of  the

action.'" (quoting  Helzberg's Diamond Shops, Inc.  v. Valley
                                                                         

West Des Moines Shopping  Ctr., Inc., 564 F.2d 816,  820 (8th
                                                

Cir.  1977) (explaining the  rationale for the  rule))).  The

present  case fits  within  this principle.    As to  Casas's

request for  declaratory judgment,  Casas,  in its  appellate

brief,   "voluntarily   relinquishes   its   request   for  a

declaratory judgment seeking the  annulment of [Caguas's] and

[Oficentro's] dealership agreements."

          Although the  only claims  before us on  appeal are

those alleging violation of  Law 75, we note that  Caguas and

Oficentro are  similarly dispensable parties  with respect to

the remaining claims.   In each of the remaining  claims, the

defendants  are  alleged  to  be  joint  tortfeasors  or  co-

conspirators and are thus  jointly and severally liable.   It

is   well-established   that   joint   tortfeasors   and  co-

conspirators are generally  not indispensable  parties.   See
                                                                         

                             -22-

Goldman, Antonetti, Ferraiuoli, Axtmayer &  Hertell v. Medfit
                                                                         

Int'l, 982 F.2d 686, 691 (1st Cir. 1993); 7 Charles Wright et
                 

al., Federal Practice and Procedure   1623, at 346-47 (2d ed.
                                               

1986) ("[C]o-conspirators, like other joint tortfeasors, will

not be deemed indispensable parties.") 

          That Caguas  and Oficentro are dispensable  to this

action does not,  in and of  itself, compel their  dismissal.

While the Supreme Court held in Newman-Green that "the courts
                                                        

of  appeals  have  the  authority to  dismiss  a  dispensable

nondiverse  party," 490  U.S. at  837, it  "emphasize[d] that

such authority should be exercised sparingly," id.  The Court
                                                              

explained:  "the appellate  court  should carefully  consider

whether the  dismissal of  a nondiverse party  will prejudice

any  of the parties  in the litigation.   It may  be that the

presence  of  the   nondiverse  party  produced  a   tactical

advantage for  one party or another."   Id. at 838.   In this
                                                       

context, Mita  argues that Casas gained  a tactical advantage

by  Caguas's and  Oficentro's  presence in  the case  because

Casas was able to obtain financial and business records under

Federal Rules of Civil Procedure 33(a) and 34(a), which apply

expressly  to parties.  We do not agree, however, with Mita's

suggestion that these records  would have been beyond Casas's

reach  had  Caguas  and  Oficentro  not  been  designated  as

parties.  Under Fed. R. Civ.  P. 34(c), "A person not a party

to  the  action may  be  compelled to  produce  documents and

                             -23-

things  or to  submit to  an inspection  as provided  in Rule

45."10

          Thus, neither  Casas nor Mita  gained a significant

tactical advantage by the presence of Caguas and Oficentro in

the lawsuit.  Nevertheless, we  are concerned that Caguas and

Oficentro could  themselves face prejudice if  dismissed from

this   suit.     Caguas   and   Oficentro,  while   initially

characterized as John Doe  and Richard Roe, were contemplated

as  parties  to  this litigation  from  the  start,  and have

actively participated in  it since  June of  1992, when  they

were  substituted for  the  fictitious defendants.   Had  the

jurisdictional  defect been  called to  the  district court's

attention at that point, the district court would have either

dismissed  Caguas and  Oficentro  from  this action,  thereby

requiring Casas  to sue  them separately in  the commonwealth

court,  or joined them to  this action, thereby remanding the

entire  case to the  commonwealth court.   Either way, Caguas

and Oficentro  would have had their liability determined in a

single proceeding.   Instead,  because of the  jurisdictional

oversight, dismissal  of Caguas  and Oficentro at  this stage

could subject them to a new lawsuit before a new judge in the

Superior Court of Puerto Rico.  

                    
                                

10.  Mita baldly  asserts that  Casas could not  have secured
under Rule 45 the documents and information it obtained under
Rules  33 and 34.   Mita fails, however,  to explain why this
would be so. 

                             -24-

          In  Newman-Green, there  was a  similar difficulty.
                                      

The problem there was  remedied by terminating the litigation

against the dismissed defendant with  prejudice.  490 U.S. at

838.   A similar remedy may be  appropriate in this case.  We

note,  however, that  Newman-Green presents  a  stronger case
                                              

than  this  one  for  dismissing the  nondiverse  party  with

prejudice,  since  the  nondiverse  party in  that  case  had

already  had its  claim  adjudicated by  the district  court.

Here, by  contrast, Caguas  and Oficentro  have  not yet  had

their claims adjudicated by  the district court.   Since this

case is closer than  the case in Newman-Green and  since this
                                                         

issue  has not been argued by  either party, we think it best

to allow it to be decided initially by the district court, on

remand, where the parties will have an opportunity to present

their arguments.   

          Accordingly, we dismiss  Caguas and Oficentro  from

this action to preserve  jurisdiction but direct the district

court, on remand, to  determine whether the injury to  Caguas

and Oficentro  from being  dismissed from this  proceeding is

such  that  their dismissal  should  be  ordered  to be  with

prejudice to any further suit by Casas.  Caguas and Oficentro

having  been  dismissed, complete  diversity is  restored per

Newman-Green, and we retain subject matter  jurisdiction over
                        

the claims between Casas and Mita.

                             IV.

                             -25-

          Having  disposed of  the jurisdictional  issues, we

come to the merits of Mita's appeal.  This appeal, of course,

is interlocutory, see note 6,  supra, being taken solely from
                                                

the  granting  of  the  injunction  against  Mita.    But the

injunction  can  stand only  if  the  court properly  awarded

summary judgment.  We accordingly confront the merits of that

ruling.

          On summary judgment, we review the district court's

decision de novo.   Velez-Gomez  v. SMA Life  Assur., Co.,  8
                                                                     

F.3d  873, 874-75 (1st Cir.  1993).  A  court of appeals will

uphold summary  judgment only  if the record,  viewed in  the

light most favorable to the nonmovant, reveals that there are

no genuine issues  of material  fact and that  the movant  is

entitled to  judgment as a matter  of law.  Celotex  Corp. v.
                                                                      

Catrett, 477 U.S. 317, 324-25, 106  S. Ct. 2548, 91 L. Ed. 2d
                   

265 (1986).

          Mita's primary  argument is that  genuine issues of

material fact  preclude the  granting of summary  judgment to

Casas on its Law  75 claims.  Specifically, Mita  argues that

genuine issues  exist as  to: (1) whether  Mita impaired  its

contract  with Casas and (2) whether Mita had "just cause" to

do so.   To understand these arguments, we will  need to step

back and take a look at the applicable law.

          Law  75  protects  Puerto Rico-based  dealers  from

summary cancellation of  their dealership contracts  by their

                             -26-

principal  suppliers  after the  dealers  have  established a

favorable  market  for the  principal's  goods.   See  Warner
                                                                         

Lambert Co. v. Superior  Court of Puerto Rico, 101  P.R. Dec.
                                                         

378, 387 (1973), translated  in, 1 Official Translations 527,
                                           

541  (1973).   The stated  purpose of  the law is  to protect

local  dealers from  abusive practices  by suppliers  who are

financially stronger than they  are.  See Medina &  Medina v.
                                                                      

Country  Pride  Foods, Ltd.,  88  J.T.S.  6162, 6168  (1988),
                                       

translated in, 858  F.2d 817,  820 (1st Cir.  1988).   Toward
                         

that end, Law 75 prohibits suppliers  from taking any actions

that  would impair  such  contracts, unless  they have  "just

cause" for doing so:

          Notwithstanding   the   existence  in   a
          dealer's contract of  a clause  reserving
          to  the parties  the unilateral  right to
          terminate  the existing  relationship, no
          principal  or  grantor  may  directly  or
          indirectly perform any act detrimental to
          the established relationship or refuse to
          renew   said   contract  on   its  normal
          expiration, except for just cause.

P.R. Laws Ann. tit. 10,   978a.  

          Law  75 establishes  a  rebuttable  presumption  of

impairment  when  a  supplier   appoints  another  dealer  in

violation  of its  exclusive  dealership  agreement with  its

original dealer:

          For the  purposes of  this Act  . .  . it
          shall  be presumed,  but for  evidence to
          the contrary, that a principal or grantor
          has impaired the existing  relationship .
          .  .  when   the  principal  or   grantor
          establishes  a distribution  relationship

                             -27-

          with one or  more additional dealers  for
          the area  of Puerto Rico, or  any part of
          said  area in conflict  with the contract
          existing between the parties.

P.R. Laws Ann. tit.  10,   278a-1(b)(2).  The  district court

adopted the magistrate's  determination that this presumption

applied  to  Mita.   Mita  disputes this  holding  on appeal.

However, Mita did not  dispute impairment before the district

court and, therefore,  waived its right to  make the argument

on  appeal.   Even without  the presumption,  moreover, Casas

presented  ample  evidence  of impairment  of  the  exclusive

dealership   through  Mita's   appointment   of  Caguas   and

Oficentro,  evidence which Mita did  not dispute.  See, e.g.,
                                                                        

Draft-Line Corp. v. Hon Co.,  781, 844 (D.P.R. 1991),  aff'd,
                                                                        

983 F.2d 1046 (1st Cir. 1993); General Office Prods. Corp. v.
                                                                      

Gussco  Mfg.  Inc.,  666 F.  Supp.  328,  331 (D.P.R.  1987).
                              

Accordingly,  the only issue  on appeal is  whether there was

"just cause" for the impairment.

          Law 75's "just cause" limitation applies even where

a contract includes a  clause providing for termination under

specified  circumstances.    Because  many  such  termination

clauses were tied to distribution quotas or goals, amendments

to Law 75  in 1988 clarified what  "just cause" meant  in the

context of contracts that contain such clauses:

          The  violation  or nonperformance  by the
          dealer of  any provision included  in the
          dealer's contract fixing rules of conduct
          or distribution quotas  or goals  because
          it does not  adjust to  the realities  of

                             -28-

          the Puerto Rican  market at  the time  of
          the  violation  or nonperformance  by the
          dealer  shall not  be deemed  just cause.
          The   burden   of  proof   to   show  the
          reasonableness of the  rule of conduct or
          of the quota or  goal fixed shall rest on
          the principal or grantor.

P.R. Laws  Ann. tit. 10,   278a-1(c)(1988).  Thus  failure to

meet a distribution quota will only constitute just cause for

impairment  under Law  75  if  that  quota  is  shown  to  be

"reasonable"  given the state  of the Puerto  Rican market at

the  time of the alleged  violation.  See  Newell Puerto Rico
                                                                         

Ltd. v. Rubbermaid, Inc., 20 F.3d 15, 22-23 (1st Cir. 1994).
                                    

          The contract between  Mita and Casas  granted Casas

an exclusive dealership in the greater San Juan area, so long

as Casas met  85% of  a specific performance  quota.11   Mita

terminated the  exclusive dealership when, it  alleges, Casas

failed to meet 85% of the quota.  Under Law 75, however, Mita

could  not impair its contract without just cause.  Under the

above  provisions  of  Law  75,  Mita  had  "just  cause"  to

terminate  the exclusivity  provision only  if the  quota was

adjusted to the realities  of the Puerto Rican market  at the

time of Casas's failure to meet the quota.   Moreover, Law 75

                    
                                

11.  The  quota called for Casas  to sell 300  copiers and to
generate $450,000  in sales of such copiers  during the first
13  months of the contract,  between April 1,  1989 and April
30, 1990.  Thus, to preserve the exclusivity provision, Casas
had to  sell 255 copiers (85%  of 300).  If  Casas fell below
255 copiers, it could  still retain a nonexclusive dealership
unless  its sales were 50%  below quota, in  which event Mita
could terminate any relationship whatsoever. 

                             -29-

places  on  Mita's  shoulders   the  burden  of  proving  the

reasonableness  of the  quota.   Thus,  once Casas  moved for

summary judgment  and alleged an absence  of evidence showing

that the quota provision was reasonable, Mita was required to

come forth  with such  evidence in  order to  survive summary

judgment.   Celotex, 477 U.S. at 325 (Where the nonmovant has
                               

the burden of proof, the movant need do no more than aver "an

absence of evidence to support the nonmoving party's case".);

Pagano v. Frank, 983 F.2d 343, 347 (1st Cir. 1993).
                           

          Mita contends that it submitted evidence sufficient

to  raise  a  genuine  issue  of  material  fact  as  to  the

reasonableness of  the quota.   It points to  letters between

its  counsel  and  Casas's  counsel,  and  a  declaration  by

Masaharu Ishidoya,  vice  president of  Mita's  international

division,   describing   the   negotiation  of   the   quota.

Ishidoya's  declaration indicated that Casas itself requested

that the  exclusivity provision be conditioned  upon a yearly

performance goal.  At his deposition, Ishidoya indicated that

the  300  copier  quota  in  the contract  was  a  negotiated

reduction from a quota of 500 copiers first proposed by Mita.

The 1989  contract contained express language  in which Casas

"acknowledges  that the  annual quotas  . .  . adjust  to the

realities  of the market" in Puerto Rico.  Ishidoya states in

his declaration  that he relied  upon Casas's representations

to that effect.  Mita also submitted a copy of  the letter it

                             -30-

sent  to  Casas, terminating  the  exclusive  dealership with

Casas.   In that letter,  Mita stated it  was terminating the

exclusivity  provision  in  the  contract  because  Casas had

failed  to  meet  the  quota  percentages  set  forth  in the

contract.

          Mita  further submitted  the declaration  of Rafael

Martinez  Margarida, the  Managing  Partner  and  Partner-in-

Charge of Management Consulting Services at Price Waterhouse.

Mita  retained Martinez as an expert witness to testify as to

the   reasonableness  of   the  contract   quota.     In  his

declaration, Martinez stated  that he examined  Puerto Rico's

External  Trade Statistics  ("PRETS")  for  imports  of  copy

machines to Puerto  Rico for  the period of  1985-1990.   The

declaration included the following table:

YEAR    QTY. IMPORTED       VALUE     GROWTH OVER PRIOR YEAR
                                                                        

1985       3,054          3,427,143             N/A
1986       4,170          6,058,273             77%
1987       7,375          8,103,991             34%
1988       6,026          8,148,662              1%
1989       7,056          9,259,856             14%
1990       8,983         10,032,200              8%

Martinez noted that the value of imports increased every year

between 1985 and 1990.  Martinez also noted that the quota in

the contract was a projection  based on Casas's actual  sales

figures in 1985 (279  units), 1986 (153 units) and  1987 (230

units).  Finally, Martinez noted that  Casas's sales for 1989

(80  units) and  1990  (110  units) decreased  significantly,

while  the overall  number of  imports increased  during that

                             -31-

same  period.     Martinez  concluded  that   the  quota  was

reasonable given the historical  trend, that Casas "failed to

capitalize  on  the  opportunities  available  in  a  growing

market,"  and that its failure  to meet the  quota "cannot be

attributable to the conditions of  the Puerto Rico market for

photocopying machines."

          Casas points to various alleged flaws in Martinez's

methodology,  and argues  that these  flaws require  that his

declaration  be   completely  excluded  as   unprobative  and

incompetent.  Casas  argues that, in  failing to deduct  from

the import figures the number of copiers exported from Puerto

Rico, Martinez based his conclusions on an inaccurate picture

of  the internal copier market.  Casas also argues that these

same  import figures  include  imports of  all categories  of

copiers,  not just the categories of  copiers that Casas sold

as part of  its exclusive dealership  agreement, and thus  do

not accurately reflect the precise market in  which Casas was

operating.12   Casas  also  argues that  the quota,  although

based  on historical  sales  figures,  unreasonably  required

                    
                                

12.  Casas also  argues that the yearly  data was irrelevant,
since Mita must provide evidence about the market on or about
May  1990, when the contract was terminated.  This is plainly
wrong.  Law 75  requires Mita to prove the  reasonableness of
the  quota "at the time of the violation or nonperformance by
the  dealer."  P.R. Laws Ann. tit.  10,   278a-1(c).  Casas's
alleged nonperformance  occurred  during the  period  between
April 1989 and May 1990.  Under the plain terms of Law 75, it
is the condition  of the  market during that  period that  is
relevant,  not the  condition of  the  market at  the precise
point of the contract's impairment by the supplier.

                             -32-

Casas  to double  its market  share in  13 months.   Finally,

Casas  argues  that  Martinez  failed  to   consider  various

relevant  factors in  his analysis,  including the  effect of

increased  intrabrand competition,  changes in the  number of

dealers  in the market, the effect of Hurricane Hugo, and the

impact of  the local economic recession.   Accordingly, Casas

argues, Martinez's  declaration must be excluded,  and Mita's

remaining evidence  is insufficient to raise  a genuine issue

of fact.

          The district  court found  that Mita had  failed to

present  evidence sufficient to  raise a genuine  issue as to

the reasonableness of the quota.  The court stated:

             The  magistrate  found, and  we agree,
          that the quota provision was unreasonable
          at the time of Casas' nonperformance.  In
          support of its  claim that the  quota was
          reasonable,  Mita presented  an unsworn13
          declaration by Rafael Martinez Margarida,
          a  certified public accountant (CPA).  In
          this  declaration  the CPA  asserted that
          his  examination  of   the  Puerto   Rico
          External Trade's [sic] Statistics (PRETS)
          reflected    a    growing   market    for
          photocopying  machine  imports  from  the
          period of 1985 to 1990, inclusive.  Thus,
          he concluded, Casas'  failure to meet the
          quota  could not be  attributed to market
          conditions.
             As the magistrate found,  Casas proved
          that   Mita's   argument  was   based  on
          erroneous statistics.  Among  the factors
          cited  by the  magistrate  which we  find
          most convincing, the CPA's  report failed
          to take into account essential aspects of

                    
                                

13.  The  unsworn   declaration  was  made   under  pain  and
penalties of perjury.  28 U.S.C.   1746.

                             -33-

          the  Puerto  Rican  market  such  as  the
          effects   of   Hurricane  Hugo   and  the
          recession  on  the  economy.    The CPA's
          report also failed  to take into  account
          the  effect  of  intrabrand   rivalry  on
          Casas's market share, a  rivalry fostered
          by Mita's impairment of  Casas' exclusive
          distributorship.
             Additionally,  Mita's  data as  to the
          market  for  copying  machines in  Puerto
          Rico   erroneously   included  types   of
          copying apparatus that were  not machines
          manufactured by Mita  and sold to  Casas.
          Thus,  Mita's  evidence  exaggerated  the
          size of the market by including within it
          devices such as thermocopying mechanisms,
          which  were  not among  those apparatuses
          made  and  sold  to Casas  by  Mita,  and
          minimized market conditions by failing to
          include   negative    factors   such   as
          Hurricane   Hugo,   the  recession,   the
          intrabrand rivalry etc.   Clearly, Mita's
          evidence  fails  to  create a  sufficient
          question to prevent the entry  of summary
          judgment in Casas'  favor since Mita  has
          the  burden of  proving that  the quota's
          [sic]  were  reasonable  at  the  time of
          Casas'  nonperformance,  given the  legal
          presumption    that    they   were    not
          unreasonable.
             Thus,   it  was   "unreliable,  lacked
          probative value, and does  not constitute
          competent evidence." [Citing Magistrate's
          Report.]     Mita  claims  now  that  its
          failure to submit more probative evidence
          was due to  its lack of time  in which to
          gather  and  present  it.   We  find this
          excuse pathetic and unconvincing.

          Casas,  847 F. Supp. at  988-89.  Mita argues that,
                           

in  granting summary  judgment to  Casas, the  district court

exceeded its authority by improperly weighing the conflicting

evidence,  supra, and  deciding  an issue  of material  fact,

notably,  that the  quota provision  was unreasonable  at the

time of  Casas's nonperformance.  In  particular, Mita claims

                             -34-

that  the  district court  improperly  discredited Martinez's

testimony    and   that   this    constituted   error   since

determinations of  credibility and how much  weight to accord

testimony cannot be made at summary judgment and must be left

to the fact  finder at trial.   See Greenburg v.  Puerto Rico
                                                                         

Maritime Shipping Auth., 835 F.2d 932, 936 (1st Cir. 1987).
                                   

          Casas  responds that  the  district  court did  not

weigh  Martinez's declaration, but  instead properly excluded

it  under Fed.  R.  Civ.  P.  56(e)14.    Under  Rule  56(e),

affidavits supporting  or opposing summary  judgment must set

forth facts that would be admissible in evidence.  A district

court may  exclude expert testimony  where it finds  that the

testimony has  no foundation or rests  on obviously incorrect

assumptions or  speculative  evidence.   Quinones-Pacheco  v.
                                                                     

American Airlines,  Inc.,  979  F.2d  1, 6  (1st  Cir.  1992)
                                    

(excluding expert opinion where based on flawed assumptions);

Merit Motors, Inc. v. Chrysler Corp., 569 F.2d 666, 673 (D.C.
                                                

Cir.   1977)  (excluding  expert  testimony  for  failure  to

consider important factors).  Such decisions are reviewed for

                    
                                

14.  Fed. R. Civ. P. 56(e) provides:

          Supporting and  opposing affidavits shall
          be  made on personal knowledge, shall set
          forth such  facts as would  be admissible
          in evidence, and shall show affirmatively
          that  the affiant is competent to testify
          to the matters stated therein.

Fed. R. Civ. P. 56(e).

                             -35-

abuse of discretion.  Quinones-Pacheco, 979 F.2d at 6.  Casas
                                                  

argues  that the district  court properly excluded Martinez's

declaration as based on flawed data and, faced with a lack of

evidence  as to  the  reasonableness of  the quota,  properly

entered summary judgment in its favor.  

A.   Martinez's Declaration was not Excludable
                                                          

          It is not  clear that the  district court meant  to

treat Martinez's declaration as excludable under Fed. R. Civ.

P. 56(e).  The court nowhere articulated such  a ruling.  But

if  we assume the court  meant to exclude  the declaration as

incompetent for  summary judgment purposes, we  think it went

too far.   We  may accept  that Martinez's  opinion, standing

alone,  was  worth little  more  than the  inferences  a fact

finder might reasonably draw from  the factual data stated in

his  declaration.   Martinez was  not said  to have  had some

special familiarity  with, or  expertise in, the  Puerto Rico

copier market, apart from the data he presented and sought to

interpret.    However, that  data,  including  the PRETS  and

Casas's past sales figures, was admissible and, examined in a

light  most favorable  to Mita,  tends to  support Martinez's

conclusion  that the quota was  reasonable.  We  see no basis

under  Fed.  R.  Civ.  P.  56(e)  for  excluding  the  entire

declaration altogether. 

          Under  Rule 56(e),  an  affidavit must  meet  three

requirements.  It:

                             -36-

          [1]  shall be made on personal knowledge,
          [2] shall set forth  such facts as  would
          be admissible in evidence, and  [3] shall
          show  affirmatively  that the  affiant is
          competent  to  testify  to   the  matters
          stated therein.

Fed. R.  Civ. P. 56(e).   Unless a  party moves to  strike an

affidavit under Rule 56(e),  any objections are deemed waived

and a court may consider the affidavit.  See  Davis v. Sears,
                                                                         

Roebuck & Co., 708 F.2d 862, 864 (1st Cir. 1983).  The moving
                         

party  must  specify  the   objectionable  portions  of   the

affidavit and  the specific grounds  for objection.   See 10A
                                                                     

Charles Wright et al., Federal Practice & Procedure   2738 at
                                                               

507  (2d ed. 1983).  Furthermore, a court will disregard only

those  portions of  an  affidavit that  are inadmissible  and

consider the rest of  it.  See Lee  v. National Life  Assur.,
                                                                        

632 F.2d 524 (5th  Cir. 1980) ("Where the  affidavit includes

both  competent and  incompetent evidence,  the  Court should

disregard   the   incompetent   evidence,   but   give   full

consideration  to that  which  is competent. . . .   This  is

nothing more  than the procedure  which would be  followed at

trial."); Wright,   2738 at 509.

          In moving  below to strike  the Martinez deposition

under Rule 56(e), Casas  made much the same arguments  it now

makes on appeal.  Casas did not  argue under the first clause
                                           

in  Rule  56(e)  that   Martinez  lacked  personal  knowledge
                                                                         

sufficient to testify as to the PRETS and sales figures.  Nor

did  Casas argue  under the  third clause  that Martinez  was

                             -37-

incompetent to provide  his expert  interpretation of  these.
                       

Rather,  Casas argued, under the second clause of Rule 56(e),

that  the  facts  contained   in  the  declaration  were  not

admissible in evidence because,  in essence, they were simply

not  sufficiently   material  to,   and  probative  of,   the

reasonableness of the quota.

          The district court characterized the declaration as

containing "erroneous  statistics."   Casas, 847 F.  Supp. at
                                                       

988.    But neither  Casas nor  the  court asserted  that the

figures in the declaration were not accurate reproductions of

Puerto Rico's External Trade Statistics, nor did they dispute

the  correctness   of  the   other  data  mentioned   in  the

declaration.   The court's reason for  calling the statistics

"erroneous" seems not  to have been their  inaccuracy as such

but  rather  its  belief  that  they  did  not constitute  an

accurate  measure  of the  Puerto  Rico copier  market.   The

district  court  also  criticized  the  alleged  failure   of

Martinez's declaration to account for the impact of Hurricane

Hugo,  the effect of the  local recession, and  the impact of

intrabrand rivalry, matters raised in Casas's materials.  

          But the increase in copier imports between 1989 and

1990, as reflected in  the PRETS, implicitly rebutted Casas's

evidence that the hurricane and the local recession had had a

materially adverse effect on  the Puerto Rican copier market.

In  finding that  the  declaration failed  to consider  these

                             -38-

"essential  aspects"  of  the  market,   the  district  court

overlooked the  relevant inference  that could be  drawn from

the  rise in  copier imports  shown in  the PRETS  figures.15

See Adickes v. S.H. Kress & Co., 398 U.S. 144, 158, 90 S. Ct.
                                           

1598,  26 L.  Ed  2d 142  (1970);  Aponte-Santiago v.  Lopez-
                                                                         

Rivera, 957 F.2d 40, 41 (1st Cir. 1992) (the court at summary
                  

judgment "must  view the evidence and  all factual inferences

therefrom  in  the light  most  favorable  to the  non-moving

party").  

          Casas's argument that the  PRETS and other data did

not  account for the impact of intrabrand competition is more

troubling.   See infra.  While the PRETS figures suggest that
                                  

the market grew in spite of the hurricane and recession, they

indicate  nothing  directly  about  the  possible  impact  of

increased intrabrand  competition.  However, it  is one thing

to  note this silence of the evidence, another to exclude the

PRETS  figures because of it.   Evidence may  be relevant and

admissible even  though, standing alone, it  fails to address

                    
                                

15.  The  cases  that Casas  cites  in  its brief,  Quinones-
                                                                         
Pacheco and Merit Motors,  are distinguishable.  In Quinones,
                                                                        
the  expert testimony with respect to damages was based on an
assumption that was clearly unsupported by the record, namely
that  the plaintiff was permanently disabled.  979 F.2d at 6.
Similarly, in  Merit Motors,  the expert testimony  failed to
                                       
account for significant factors that were clearly relevant to
the issue at hand.   569 F.2d at 673.   By contrast, in  this
case, it remains  open to debate whether  Hurricane Hugo, the
recession,  or intrabrand  competition had  an effect  on the
Puerto Rico market,  and what that  effect was, if any.   The
impact  of  these  factors  is  precisely  the  issue  to  be
resolved.

                             -39-

every issue raised in a case.  As noted below, Mita presented

other evidence  that arguably bolsters its  position that the

quota  was   reasonable.  Given  the   unlikelihood  of  ever

unearthing  irrefutable statistical evidence, we do not think

the PRETS  and other statistics, and accompanying inferences,

were  so  weak  that  they  should  be  rejected as  material

evidence in this case.  

          The  district  court found  that the  PRETS figures

were also "erroneous" because they included  other categories

of  copying machines that were not the types of machines sold

by Casas.  Casas, 847 F. Supp.  at 988.  Casas pointed to the
                            

fact  that the  1990 PRETS  figure included  imports of  five

categories of copiers, while Casas sold copiers in only three

of  these categories.    This "exaggerated  the  size of  the

market."  The absolute  size of the market was  not, however,

the issue.   Rather, the issue was  the trend in  the market,

i.e. whether the market was increasing or decreasing, whether

Casas's sales were consistent with the trend, and whether the

quota was  consistent with  Casas's historical market  share.

Martinez explained in his deposition that it was necessary to

include the  additional categories in the  1990 PRETS figures

in  order to  obtain comparable yearly  data, since  prior to

that year the data for the copier market had  not been broken

up  into the  five  subcategories.   The  inclusion of  these

categories did  not necessarily make his  testimony about the

                             -40-

trend in the market any less probative.  Casas did not attack

the  comparability  of  the  figures and  failed  to  present

evidence suggesting  that excluding the  categories, if  this

had indeed been possible, would have resulted in a  different

trend.  

          We  conclude  that the  reasons  set  forth by  the

district  court were  insufficient  bases  for rejecting  the

Martinez declaration altogether,  assuming this was what  the

court  intended to  do.   Nor do  we find  Casas's additional

arguments  sufficient  for  its  outright  exclusion.   Casas

complains: that Martinez failed to deduct export figures from

the  import figures in order to  obtain a true measure of the

internal copier market; that  Martinez failed to consider the

fact that  the quota, according  to Casas, required  Casas to

double its market share within thirteen months; that Martinez

failed to consider  the fact  that during the  period of  the

contract, Casas had a  smaller region of exclusive dealership

than before.  

          While  these additional  arguments are  not without

force, a party may not exclude, on summary judgment, relevant

and  otherwise  admissible  factual evidence  solely  on  the

ground  that  the  evidence  leaves a  number  of  unanswered

questions or  that it  appears somewhat less  persuasive than

the  movant's evidence  offered  in rebuttal.   If  there are

genuine issues  of fact,  the nonmovant  is entitled to  have

                             -41-

these  resolved  in the  trial forum,  where the  fact finder

hears live witnesses and can better assess all the facts.  

          We conclude    if the district court intended to do

so    that it  did not have sufficient grounds  for excluding

Mita's declaration under Fed. R. Civ. P. 56(e).

B.   Sufficiency of Mita's Evidence to Raise Issue of Fact
                                                                      

          Having  found no  adequate  basis  to exclude  from

consideration  Martinez's  declaration,   we  next   consider

whether  that  declaration  and  Mita's  other evidence  were

sufficient  to  raise  a genuine  issue  of  fact  as to  the

reasonableness of  the  quota in  light  of the  Puerto  Rico

market.16 

          It  is  instructive  first to  review  the  summary

judgment  standard.    "By  its  very  terms,  this  standard

provides  that the  mere  existence of  some alleged  factual

dispute  between the  parties  will not  defeat an  otherwise

properly  supported   motion   for  summary   judgment,   the

requirement  is that  there is  no genuine issue  of material
                                                                         

fact."  Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248-48
                                                   

(1986).    For  a dispute  to  be  "genuine,"  there must  be

sufficient evidence to  permit a reasonable trier  of fact to

                    
                                

16.  Casas does not  address this issue  on appeal.   Casas's
only argument on appeal  is that the district court  properly
excluded the  Martinez declaration.   Although this  could be
interpreted  as  a  concession  that  summary   judgment  was
improper  if  the  Martinez declaration  was  admissible,  we
nevertheless  proceed to  address  the key  summary  judgment
issue.

                             -42-

resolve the issue in the non-movant's favor.  Boston Athletic
                                                                         

Ass'n v. Sullivan,  867 F.2d  22, 24 (1st  Cir. 1989);  Astra
                                                                         

Pharmaceutical Prod., Inc. v. Beckman Instruments, Inc.,  718
                                                                   

F.2d  1201, 1204  (1st Cir.  1983).   The evidence  cannot be

merely colorable, but must  be sufficiently probative to show

differing  versions of fact which justify  a trial.  However,

the evidence must at  all times be  viewed in the light  most

favorable  to the  nonmovant, and  all doubts  and reasonable

inferences  must  be  resolved  in  the   nonmovant's  favor.

Adickes 398 U.S. at 158; Rogen v. Ilikon Corp., 361 F.2d 260,
                                                          

266 (1st Cir. 1966).  Moreover,  this court may not weigh the

evidence.    Summary  judgment   "admit[s]  of  no  room  for

credibility determinations, no room for the measured weighing

of  conflicting evidence  such as  the trial  process entails

. . . ."  Greenburg,  835 F.2d at  936.  If the  facts permit
                               

more  than one  reasonable  inference, the  court on  summary

judgmentmay notadopttheinferenceleastfavorabletothenonmovant.

          Viewing  Mita's  evidence  in  its  most  favorable

light, we think that, although the  question is close, Mita's

evidence   and  the   reasonable  inferences   therefrom  are

sufficient to raise a genuine  issue as to the reasonableness

of  the quota.  First,  the contract executed  by the parties

contains a  clause in which  Casas expressly agreed  that the

quota  was reasonable in light of the realities of the Puerto

Rico  market.   We  do not  suggest that  such  a clause  was

                             -43-

binding, since public policy  would presumably not permit the
                   

provisions  of Law 75 to  be contracted away.17   However, we

think  Casas's express  agreement  in the  contract that  the

quota  was  reasonable  is  admissible  evidence  tending  to

establish the reasonableness  of the quota at  the time Casas

signed  the  contract.    Bolstering the  weight  of  Casas's

concession  were  the  letters   from  Mita's  attorneys  and

Ishidoya's testimony showing  that Casas had been  successful

in renegotiating  the quota downward from 500 to 300 copiers.

Its ability  to do  so suggests  a  degree of  parity in  the

parties' bargaining  positions, making  it  more likely  that

Casas  really believed the quota to be reasonable at the time

it signed the contract.18

          In   addition,  inferences   from  the   PRETS  and

historical sales figures  contained in Martinez's declaration

                    
                                

17.  Cf.  P.R.  Laws  Ann.  tit.  30,     3372  (1991)  ("The
                    
contracting parties may make  the agreement and establish the
clauses  and  conditions  which   they  may  deem  advisable,
provided they are  not in contravention  of laws, morals,  or
public order."); In re Pagan Ayala, 117 D.P.R. 180, 187 & n.4
                                              
(1986), Translated  in, 17  Official Translations 216,  223 &
                                  
n.4 (1986) (suggesting that contracts  exempting attorneys ex
ante from malpractice suits are void).

18.  Casas argues that any  evidence of reasonableness of the
quota at a  time prior  to the period  of nonperformance  was
irrelevant here.  However, viewed in the light most favorable
to Mita, we think that evidence of reasonableness immediately
prior to the  term of  the contract was  material.   Combined
with Martinez's declaration indicating  that the Puerto  Rico
copier market did not subsequently decrease, but rather grew,
this evidence  is probative of the  continuing reasonableness
of  the quota between April  1989 and May  1990, the relevant
period.  See note 12, supra.
                                       

                             -44-

suggest that if  the quota was  reasonable when the  contract

was signed, it remained  so during the term of  the contract.

The  contract required Casas to sell 255 copiers (85% of 300)

during  a 13-month  period in order  to retain  its exclusive

dealership.  This  figure was  not grossly out  of line  with

Casas's historical 12-month sales  figures: (297 in 1985, 153

in 1986, and  230 in 1987).  The  PRETS figures indicate that

the market for copiers actually increased during  the term of

the contract (from  7,056 in 1989 to 8,983 in  1990).  If the

quota  was based roughly on past sales, and if the market for

copiers did  not suffer  any decrease, it  could be  inferred

from  this evidence that the quota was reasonable in light of

the Puerto Rico market.  

          Casas,  to  be  sure,  presented   much  persuasive

evidence in opposition.  Summary judgment, however, is  not a

substitute  for trial.  We  do not think  Casas's evidence so

undermined Mita's case that  Mita can be said to  have failed

to   raise   a  genuine   issue   of   fact  concerning   the

reasonableness of the quota.  At most, it indicated that many

issues  of  fact remained  to be  resolved  at trial.   Casas

presented  a declaration  by its  president, stating  that he

thought the quota unreasonable and that Mita had imposed  the

quota unilaterally by threatening to cancel their preexisting

distribution relationship.   Mita's vice  president, however,

asserted that  he "relied on Casas'  representations that the

                             -45-

performance goal and the related  percentages were reasonable

for the relevant  market."  Mita's evidence tends  to suggest

that  the  quota was  arrived  at  through bargaining,  Casas

having  persuaded Mita  to lower  the quota  from 500  to 300

copiers.   The Casas  declaration also states  that Hurricane

Hugo  and the  local recession  had an  effect on  the copier

market.  As  we have previously  said, however, Mita's  PRETS

figures minimized  these effects  by showing that  the copier

market increased during the term of the contract.  

          Casas's   strongest   argument   is   that   Mita's

statistical evidence of market growth and of past sales fails

to account  for the fact  that, prior to 1988,  Casas was the

only distributor  of Mita  products  for all  of Puerto  Rico

(even  though  its  contract  then  was  nonexclusive).    By

contrast,  during the term of the  contract, Casas argues, it

faced stiff intrabrand competition.  Its exclusive dealership

covered only a portion  of Puerto Rico, the greater  San Juan

area.   While it could  also sell Mita  products elsewhere in

Puerto Rico on a nonexclusive basis, it now faced competition

from two other authorized  Mita dealers outside the exclusive

San Juan area as  well as from alleged unauthorized  sales of

Mita's copiers by Caguas and Oficentro.  According to  Casas,

its  competitors sold  327 Mita  copiers during  the 13-month

period  of the contract.  Casas argues that Mita's past sales

figures simply  do not  address the  issue of this  increased

                             -46-

intrabrand  competition, hence  they  say nothing  as to  the

quota's reasonableness during the relevant period.

          But  we   do  not  think  that   this  argument  so

undermines Mita's case as  to eliminate any contested factual

issue.  It is unclear how to assess the effects of intrabrand

competition in  calculating the reasonableness of  the quota.

The fact that  other nonexclusive dealers  were able to  sell

327  Mita copiers during  the relevant period  outside of San

Juan is a double-edged sword.  While, to be sure, these sales

suggest that Casas faced stern competition, it also indicates

the  existence of a strong  demand for Mita  copiers on which

Casas  was presumably free to capitalize to the extent it was

capable.    It  is  unclear,  moreover,  in  measuring  quota

reasonableness,  how   intrabrand   competition  is   to   be

distinguished from the  effects of  competition from  copiers

made by  other  manufacturers.   Such interbrand  competition

would have existed earlier as well as  in 1989-90.  While the

new  factor of  intrabrand competition doubtless  weakens the

predictive value  of Casas's  earlier sales figures,  it does

not totally vitiate their  relevance to quota reasonableness.

Casas knew when  it signed the contract  that its exclusivity

would  be limited to the  San Juan area,  and presumably also

knew of the  intrabrand competition it faced  elsewhere.  The

evidence permits  an inference that in  Casas's then judgment

the quota was  reasonable despite the  anticipated interbrand

                             -47-

and intrabrand competition.  Thereafter, the overall trend in

copier imports was up suggesting    at least, as one possible

interpretation of  the data    that  Casas's poor performance

was  due not to lack of opportunity  but to some fault of its

own.

          We conclude that Mita presented evidence sufficient

to  raise a  genuine issue  as to  the reasonableness  of the

quota.       Particularly    where   the    standard    here,

"reasonableness," is  so  amorphous, and  "hard" evidence  to

prove "reasonableness" so obviously  difficult to come by and

subject  to multiple  interpretations, we are  disinclined to

deny Mita its day  in court by raising the  threshold barrier

of proof too high.  See Rogen, 361 F.2d at 265-66 (suggesting
                                         

that delicate issues of fact  "may well indicate a preference

for the antennae of the factfinder over the cruder instrument

of summary judgment");  Newell, 20 F.3d  at 23 (deferring  to
                                          

the jury's judgment that supplier  failed to meet its  burden

of proving that  a quota was "reasonable" under  Law 75).  To

the extent that we  have doubts about the  appropriateness of

summary judgment, we  are required to resolve them  in Mita's

favor.

          Throughout its brief, Casas repeatedly asserts that

Mita has failed  to satisfy  its burden of  proving that  the

quota  is reasonable.    This misapprehends  the burden  Mita

faces at summary  judgment.   Mita is not  required to  prove

                             -48-

that the quota was  reasonable.  Rather it was  only required

to  present evidence sufficient  to raise a  genuine issue of

fact  as to reasonableness.   The burden is  one of producing

enough evidence  to show that it is  entitled to a trial, not

that it will necessarily  be successful at trial.   See First
                                                                         

Nat'l Bank of Arizona v. Cities Serv. Co., 391 U.S. 253, 288-
                                                     

89, 88 S. Ct. 1575, 20 L. Ed. 2d 569 (1966) ("It is true that

the  issue  of material  fact required  by  Rule 56(c)  to be

present  to  entitle  a party  to  proceed  to  trial is  not

required to be  resolved conclusively in  favor of the  party

asserting its existence; rather, all that is required is that

sufficient evidence supporting the claimed factual dispute be

shown  to require  a jury  or judge  to resolve  the parties'

differing  versions of the truth at trial.")  We believe Mita

has  satisfied  this  burden.    We  conclude  that Mita  has

presented  evidence sufficient  to raise  a genuine  issue of

material fact as to the reasonableness of the quota given the

condition of  the Puerto Rican  copier market.   Weighing the

evidence, assessing the credibility of the experts: these are

task that must be left to the trier of fact.19  

                    
                                

19.  Without making too much  of this, we note that  Casas in
its brief almost concedes that there exist disputed issues of
fact.   After listing  the  evidence it  presented about  the
unreasonableness of the quota, it states: "Among others, this
evidence raises material  questions of fact as  to the effect
of Hurricane Hugo, the recession, the  intrabrand competition
of  MITA  machines,  and   the  manipulation  of  statistical
information by MITA's expert  in order to artificially create
a 'growing market'."  We agree.

                             -49-

                              V.

          In accordance with this opinion, we  hereby dismiss

Caguas  and  Oficentro  from  this suit  and  remand  to  the

district court  to determine whether the  dismissal of Caguas

and Oficentro  should be with  or without prejudice.   Having

determined that the district  court erred in granting Casas's

motion for  partial summary  judgment, we vacate  the court's

order granting  Casas a  permanent injunction.   The parties'

claims will  proceed in the district  court consistently with

this opinion.20

          So ordered.  Each party shall bear its own costs.
                                                                      

                    
                                

20.  We do not reach Mita's remaining argument that,  even if
summary judgment was proper, the district court's issuance of
the permanent injunction was improper.

                             -50-