Court Opinion

ID: 9406108
Source: CourtListenerOpinion
Date Created: 2023-06-29 21:00:56.455288+00
Date Added: 2024-06-11T17:20:26.824661
License: Public Domain

United States Court of Appeals
                       For the First Circuit

No. 22-1158

CÁMARA DE MERCADEO, INDUSTRIA Y DISTRIBUCIÓN DE ALIMENTOS, INC.,

                       Plaintiff, Appellant,

                                v.

    DOMINGO EMANUELLI-HERNÁNDEZ, in his official capacity as
 Attorney General for the Commonwealth of Puerto Rico, and JAIME
 A. LAFUENTE GONZÁLEZ, in his official capacity as President of
  the Bureau of Transportation and other Public Services of the
                   Commonwealth of Puerto Rico,

                      Defendants, Appellees.

           APPEAL FROM THE UNITED STATES DISTRICT COURT
                 FOR THE DISTRICT OF PUERTO RICO

        [Hon. Raúl M. Arias-Marxuach, U.S. District Judge]

                              Before

                       Barron, Chief Judge,
                     Thompson, Circuit Judge,
                  and Burroughs, District Judge.

     Luís Sánchez Betances, with whom Sánchez Betances, Sifre &
Muñoz Noya was on brief, for appellant.
     Omar Andino-Figueroa, Deputy Solicitor General of Puerto
Rico, with whom Fernando Figueroa-Santiago, Solicitor General of
Puerto Rico, and Mariola Abreu-Acevedo, Assistant Solicitor
General, were on brief, for appellees.

       Of the District of Massachusetts, sitting by designation.
June 29, 2023

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            Burroughs, District Judge.        Plaintiff-Appellant, Cámara

de   Mercadeo,    Industria    y    Distribución       de    Alimentos,    Inc.

("Appellant")    brought    this    action   on     behalf   of   its   members,

businesses in the food distribution and sale industry, seeking

declaratory and injunctive relief from a series of regulations

related   to   freight    tariffs   and   implementing       circular    letters

promulgated by the Transportation and other Public Services Bureau

of the Commonwealth of Puerto Rico                ("NTSP,"   for its Spanish

acronym).        Below,    Appellant      alleged     that    the   challenged

regulations are unlawful under and preempted by the Puerto Rico

Oversight Management Stability Act ("PROMESA"), 48 U.S.C. §§ 2101

et seq.,1 for two reasons.      First, because the regulations did not

     1    "In 2016, Congress passed [PROMESA] to address the
Commonwealth's fiscal crisis, facilitate restructuring of its
public debt, ensure its future access to capital markets, and
provide for its long-term economic stability."       In re Fin.
Oversight & Mgmt. Bd. for P.R., 37 F.4th 746, 750 (1st Cir. 2022)
(citing 48 U.S.C. § 2194(m)-(n)), cert. denied sub nom. Pierluisi
v. Fin. Oversight & Mgmt. Bd. for P.R., 143 S. Ct. 1070 (2023).
PROMESA, in turn, established the Financial Oversight and
Management Board for Puerto Rico, "whose members are appointed by
the President, with wide-ranging authority to oversee and direct
many aspects of Puerto Rico's financial recovery efforts." Id.
(citing 48 U.S.C. §§ 2141-2147).    For one, "PROMESA grants the
Board exclusive authority to certify Fiscal Plans." In re Fin.
Oversight & Mgmt. Bd. for P.R., 916 F.3d 98, 112 (1st Cir. 2019).

            Additionally,

            [u]nder section 204, the Oversight Board "may
            take such actions as it considers necessary to
            ensure that [Commonwealth laws], contract[s],
            rule[s], executive order[s] or regulation[s]
            will not adversely affect the territorial
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comply with the 2020 or 2021 certified Fiscal Plans and second,

because   the   regulations    were   not   approved   by   the   Financial

Oversight   and   Management    Board   for   Puerto   Rico   ("FOMB"    or

"Oversight Board"), as mandated by Section 204(b)(4) of PROMESA

and the Oversight Board's policy implementing that provision of

PROMESA (the "Policy").2      Defendants-Appellees, Domingo Emanuelli-

Hernández, Attorney General for Puerto Rico, and Jaime A. Lafuente

González, President of NTSP (collectively, "Appellees"), moved to

dismiss the complaint on several grounds, including that the

            government's compliance with the Fiscal Plan,
            including by preventing the execution or
            enforcement of [such law], contract, rule,
            executive order or regulation."

In re Fin. Oversight & Mgmt. Bd. for P.R., 60 F.4th 9, 12 (1st
Cir. 2023) (alterations in original) (first citing 48 U.S.C.
§ 2144(a)(5), (b)(5); and then citing In re Fin. Oversight & Mgmt.
Bd. for P.R., 634 B.R. 187, 200-01 (D.P.R. 2021)).

          Section   204(b)(4)   provides   that   the  Board   has
"[a]uthority to review certain rules, regulations, and executive
orders . . . issued by the Governor (or the head of any department
or agency of the territorial government) in the same manner as
such provisions apply to a contract."     48 U.S.C. § 2144(b)(4).
The provisions as to contracts, in turn, state that "[t]he
Oversight Board may establish policies to require prior Oversight
Board approval of certain contracts . . . to ensure such proposed
contracts promote market competition and are not inconsistent with
the approved Fiscal Plan." Id. § 2144(b)(2).

          Finally, the Oversight Board may "seek judicial
enforcement of its authority to carry out its responsibilities."
Id. § 2124(k).
     2    See Fin. Oversight & Mgmt. Bd. for P.R., FOMB Policy:
Review of Rules, Regulations, and Orders (revised October 31,
2019), https://drive.google.com/file/d/1WqEoSQSo7VhXybHbqJK8MTid
kQyjrwIv/view.

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Oversight Board is the only entity that can bring an action to

strike down a tariff as inconsistent with a Fiscal Plan and

PROMESA.

                The district court granted Appellees' motion to dismiss

the complaint in its entirety, finding that (1) regardless of

whether        the   regulations   were   inconsistent   with    the   certified

Fiscal Plan, they were not null and remained enforceable, because

the Oversight Board had not taken action to invalidate them; and

(2) there is no private right of action to enforce PROMESA.3

Appellant appeals the district court's judgment.

                After carefully considering the briefs and record on

appeal, we affirm.

                First, Appellant concedes that it "does not challenge on

appeal the precise bases and essential holding for the district

court's dismissal [of] its claim: that PROMESA does not create a

private cause of action."           In failing to raise any argument that

the district court erred in reaching this conclusion, Appellant

has waived the issue.          See United States v. Mayendía-Blanco, 905

F.3d 26, 32 (1st Cir. 2018) ("We deem an argument to be waived

when       a   party   'intentionally     relinquishes   or     abandons   it.'"

(quoting United States v. Rodríguez, 311 F.3d 435, 437 (1st Cir.

       3  The complaint included a Contracts Clause claim, which
the district court also dismissed. Appellant does not appeal the
dismissal of this claim.

                                        - 5 -
2002))).

            Nevertheless, Appellant asks that the Court consider a

separate argument that it raised in its opening brief: that Section

204(b)(4) of PROMESA and the Oversight Board's Policy established

"a   new   tier"    in   the    "Puerto      Rico   administrative      rulemaking

process," which, pursuant to the Puerto Rico Administrative Act

("LPAU," for its Spanish acronym) and/or "'core administrative law

principles' incorporated into the Administrative Procedure Act

('APA'), 5 U.S.C. § 500 et seq.," requires that any regulation be

approved by the Oversight Board                before it becomes valid and

enforceable.       Appellant argues that because the NTSP's regulations

were not approved by the Oversight Board, they are invalid and

unenforceable.

            This argument has also been waived.              See Iverson v. City

of Boston, 452 F.3d 94, 102 (1st Cir. 2006) (collecting cases).

In reply, Appellant asserts that it did make this argument to the

lower court, citing its opposition to Appellees' motion to dismiss

and its motion to alter or amend the district court's judgment

under Federal Rule of Civil Procedure 59(e).              In its opposition to

Appellees'     motion     to    dismiss,      Appellant      asserted    that    the

regulations are "null and unenforceable" and "null and void,"

because Section 204(b)(4) of PROMESA and the Oversight Board's

Policy require that the Board approve regulations before they are

promulgated,       and   the   Board   has    either   not    approved    them    or

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expressly rejected them.        Yet the brief does not mention the LPAU,

the    APA,   administrative      law,     or    any    other        cause      of    action

supporting such a claim, or otherwise develop this argument.                            This

is insufficient to preserve the issue for appeal.                          See McCoy v.

Mass. Inst. of Tech., 950 F.2d 13, 22 (1st Cir. 1991) (declining

to consider an argument which, below, a party made only "passing

mention of," and for which the party "failed to provide any

analysis of the statutory scheme [or] present any legal authority

directly supporting their thesis"); id. ("Arguments raised in the

District Court in a perfunctory and underdeveloped . . . manner

are    waived    on    appeal."      (alteration            in    original)      (quoting

Kensington      Rock   Island   Ltd.     P'ship        v.    American      Eagle       Hist.

Partners, 921 F.2d 122, 124–25 (7th Cir. 1990))).

              Additionally,     in   its    Rule       59(e)        motion,     Appellant

advanced an under-developed but also entirely different theory

than it does here, namely, that promulgation of the regulations

without the Oversight Board's approval constitutes a due process

violation.      This too is insufficient to preserve an argument based

on Puerto Rico or federal administrative law.                      "Overburdened trial

judges cannot be expected to be mind readers.                     If claims are merely

insinuated rather than actually articulated in the trial court, we

will   ordinarily      refuse   to   deem       them    preserved         for   appellate

review."      Id. at 22.

              Further,   Appellant     "make[s]        no        effort   to    fit    [its]

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situation within the 'narrowly configured and sparingly dispensed'

exceptions to the raise-or-waive rule (as it is known)."          Reyes-

Colón v. United States, 974 F.3d 56, 62 (1st Cir. 2020) (quoting

Daigle v. Me. Med. Ctr., Inc., 14 F.3d 684, 688 (1st Cir. 1994)).

Although this Court may "in its discretion, . . . consider theories

not articulated below," "exceptions of this kind . . . should be

'few and far between,'" and "[t]he typical case involves an issue

that is one of paramount importance and holds the potential for a

miscarriage of justice."      B & T Masonry Constr. Co. v. Pub. Serv.

Mut. Ins. Co., 382 F.3d 36, 41 (1st Cir. 2004) (quoting Nat'l Ass'n

of Soc. Workers v. Harwood, 69 F.3d 622, 627 (1st Cir. 1995)); see

also Correa v. Hosp. S.F., 69 F.3d 1184, 1196 (1st Cir. 1995)

(explaining     that   such   "appellate   discretion   should   not   be

affirmatively exercised unless error is plain and the equities

heavily preponderate in favor of correcting it").         Appellant has

not shown, and we do not conclude, that these considerations are

present here.

          We therefore affirm the district court's dismissal of

Appellant's complaint.

          Affirmed.

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