Court Opinion

ID: 2961592
Source: CourtListenerOpinion
Date Created: 2015-09-21 20:45:07.344892+00
Date Added: 2024-06-11T11:42:20.568270
License: Public Domain

USCA1 Opinion

	

          November 17, 1992                            UNITED STATES COURT OF APPEALS                                FOR THE FIRST CIRCUIT                                _____________________        No. 92-1020                              LIQUILUX GAS CORPORATION,                                Plaintiff, Appellant,                                          v.                              MARTIN GAS SALES, ET AL.,                                Defendants, Appellees.                                 ____________________                     APPEAL FROM THE UNITED STATES DISTRICT COURT                           FOR THE DISTRICT OF PUERTO RICO                    [Hon. Jose Antonio Fuste, U.S. District Judge]                                              ___________________                                 ____________________                                        Before                                 Breyer, Chief Judge,                                         ___________                            Aldrich, Senior Circuit Judge,                                     ____________________                              and Boudin, Circuit Judge.                                          _____________                                 ____________________            Fernando L.  Gallardo with  whom Woods  & Woods  was on brief  for            _____________________            ______________        appellant.            Danilo M. Eboli, with whom Jose  A. Axtmayer, Francisco A. Besosa,            _______________            _________________  ___________________        Goldman  Antonetti  Ferraiuoli  &  Axtmayer,  Timothy   McCormick  and        ___________________________________________   ___________________        Thompson & Knight were on brief for appellees.        _________________                                 ____________________                                 ____________________                      ALDRICH,  Senior  Circuit Judge.   In  Puerto Rico,                                _____________________            liquified petroleum  gas (LPG)  must be refined  or imported.            In 1982  Caribbean Oil Refining  Company, a main  Puerto Rico            importer, closed  operations, and  Martin Gas Sales,  Inc., a            Texas corporation, contemplated becoming  a replacement.   It            contracted with Empire Gas Company, a Puerto Rico wholesaler,            that Empire would buy all its gas from Martin.  Allegedly  to            reward  Ramon  Gonzalez  Cordero,  Empire's   president,  for            obtaining the  contract, and to  encourage him to  seek other            Martin purchasers, Martin agreed to pay  him 1  cents royalty            on  every  gallon  of  gas offloaded  at  Martin's  terminal.            Thereafter Martin became an importer under the name of Puerto            Rico Fuels and duly paid the royalty.                      Plaintiff Liquilux Gas Corporation,  another Puerto            Rico wholesaler,  and competitor  of Empire, became  a Martin            customer.   It learned of  the royalty agreement  on June 25,            1987 and  brought this  Puerto Rico antitrust  action against            Martin  and   Gonzalez  on   November  20,  1990.     Without            considering   the  merits,   the   district   court   granted            defendants'  motion  to  dismiss for  lack  of  jurisdiction,            holding  that original  jurisdiction lay  in the  Puerto Rico            Public  Service  Commission  (PSC).   It  denied  plaintiff's            motion for reconsideration and entered  judgment accordingly.            Liquilux duly appealed.  We affirm.                                         -2-                      Between 1982 and 1987 much occurred.  Puerto Rico's            antitrust statute,  known as  Act 77, 10  L.P.R.A.    257  et                                                                       __            seq.   (1988),   exempts   government-regulated   companies.1            ___            Section  1002(c)  of  PSC's  enabling statute,  Law  109,  27            L.P.R.A.     1001  et  seq.  (1988),  granting  it  exclusive                               __  ___            jurisdiction, reads,                           "Public-service   company"  includes                      any  public  carrier, conduit  conveyance                      enterprise,   gas  enterprise,   electric                                    _______________                      power  enterprise,  telephone enterprise,                      telegraph     enterprise,    dry     dock                      enterprise, travel bureau, transportation                      broker,  dock operator,  warehouser, toll                      bridge    enterprise,    nuclear    power                      enterprise,  communal television  antenna                      enterprise,    and    moving   enterprise                      offering  to  render  or rendering  their                      services  or  offering   to  deliver   or                      delivering  products,  for  pay,  to  the                      _________________________________________                      public in  general or to  a part thereof,                      ________________________________________                      in  Puerto Rico.    It  does not  include                      persons   rendering  service   for  their                      exclusive use or that of their tenants.            (Emphasis  supplied.)  Until May 15, 1986 the definition of a            gas  enterprise, section  1002(q),  read in  connection  with            section  1002(c),  did  not  expressly  include  Puerto  Rico            refineries and importers.  On February 27, 1984, however, the                                            ____________________            1.        The legal regulation of public utilities,                      insurance   companies   and   any   other                      enterprises   or   entities  subject   to                      special regulation by  the Government  of                      the Commonwealth of Puerto Rico or by the                      United   States   Government,   including                      cooperatives,  shall  not be  affected by                      this act.            Section 257.  (Historical note).                                         -3-            PSC  decided that  they fell  within the  statutory language.            See   Caribbean  Gulf  Refining   Corp.  v.   Public  Service            ___   _________________________________       _______________            Commission, Superior Court, San  Juan Part, Civil No. 84-1534            __________            (May  5, 1986).    Martin disagreed,  and litigation  ensued.            While this  was in progress the  legislature concerned itself            with an amendment.  The Superior Court  moved faster.  On May            5,  1986  it decided  that  importers, Puerto  Rico  Fuels v.                                                   ___________________            Public  Service Commission,  Civil  No. 84-1533,  as well  as            __________________________            refineries,  Caribbean Gulf Refinery,  supra, were not within                         _______________________   _____            the statute.                      Martin's comfort  was short lived.   Ten days later            the legislature amended section 1002(q), the underlined words            being the additions.                      "Gas enterprise" includes any  person who                      owns,  controls, operates or manages as a                      public  service  company  any   plant  or                      business   in   Puerto   Rico   for   the                      importing,     production,    generation,                      _________                      transmission,    delivery,   supply    or                      distribution  of  natural,  processed  or                      derived gas, or any liquid susceptible to                      be converted into  gas and distributed by                      pipelines,  cylinders  or  any   type  of                      container for residential, commercial and                                    ___________________________                      industrial   purposes  [substituted   for                      _____________________                      "lighting, heating, or power"].  It being                                                       ________                      understood  that   gas  "production"  and                      _________________________________________                      "import"  enterprises are,  among others,                      _________________________________________                      those   refineries,   import   companies,                      _________________________________________                      distribution-wholesale  companies  and/or                      _________________________________________                      seaport   terminals    engaged   in   the                      _________________________________________                      importing,     production,    processing,                      _________________________________________                      traffic, storage, distribution or sale of                      _________________________________________                      liquified  petroleum  gas  or  any  other                      _________________________________________                      mixture of hydrocarbons known as refinery                      _________________________________________                      gas, regardless of  whether they sell  or                      _________________________________________                                         -4-                      serve their product  to a limited  number                      _________________________________________                      of persons and/or wholesalers.                      _____________________________                      Rather   than  applying   for  a   license,  Martin            terminated  its Puerto  Rico  business  the following  month,            selling  out,  lock,  stock  and  barrel  to  an  independent            corporation,  known  as Puerto  Rico  Fuels, Inc.    For some            reason,  not presently  important,  Martin continued  to make            royalty  payments  to Gonzalez  to  October  17, 1986.    The            district  court ruled  that as  at the  time of  suit section            1002(q)   included  importers,  the   district  court  lacked            jurisdiction as to  all payments after May 15, 1986.  It went            on  to  hold   that  the  amendment  was  retroactive  as  to            jurisdiction, sweeping up all previous acts as well.                      Since  the amendment  made no  provision as  to its            retroactivity, we  decide for  ourselves how the  Puerto Rico            Supreme  Court would  resolve that  question.   As this  is a            question  of law we owe  no deference to  the district court.            Brewer v. Madigan, 945 F.2d 449, 452 (1st Cir. 1991).  We see            ______    _______            several possible conclusions.                      1.   The  PSC's initial  interpretation of  section            1002(q) prior to the amendment was correct.                      2.   The amendment was a legislative pronouncement,            or clarification, of original  intent that was  automatically            retroactive.                                         -5-                      3.    The  amendment  was an  alteration,  but  was            intended to  be, and  could be, retroactive  in effect;  this            being the district court's view.                      The Superior Court's  principal opinion,  Caribbean                                                                _________            Gulf Refinery, had held  that the phrase "delivering products            _____________            . . . to the  public in general,  or to  a part thereof,"  in            section 1002(c) did not clearly cover local refiners who sold            only to a few wholesalers, and that in view of the ambiguity,            they were not within  the act, citing Puerto Rico  Lighterage                                                  _______________________            v. Caribe Tugboat Corp., 111 D.P.R.  686 (1981) (ambiguity as               ____________________            to jurisdiction  is to  be resolved against  the Commission).            We  do not  need to  determine the  correctness of  this pre-            amendment  analysis.    Neither  do  we  need  to  review the            district  court's  holding  that  the 1986  amendment  was  a            procedural  change only,  that,  as such,  is presumed  to be            retroactive.   White Star Bus Line, Inc. v. District Court of                           _________________________    _________________            San Juan,  60  P.R.R. 348,  349-350  (1942).   The  amendment            ________            included   substantive   effects,  notably   the  retroactive            remission of what otherwise would have  been a triple damages            penalty,  that could raise  questions.  We  are not required,            however, to consider this approach.  Rather, we hold that the            amendment was not a  change at all, but a  clarification that            did not alter the law, and merely explicated it.                      Clarification,  effective  ab  initio,  is  a  well                                                 __  ______            recognized principle.   Red Lion Broadcasting Co. v. FCC, 395                                    _________________________    ___                                         -6-            U.S. 367  (1969).   Determination of whether  new legislative            action is alteration, or  merely clarification, may depend on            a  number of factors.   One may  be the  fit in language.   A            significant one is the fact that the new enactment  clarifies            an ambiguity.  United States v. Montgomery Cty, 761 F.2d 998,                           _____________    ______________            1003 (4th Cir. 1985).   Especially is this so when,  as here,            the enactment  follows fast  upon the  ambiguity's discovery,            Callejas v. McMahon, 750  F.2d 729, 731 (9th Cir.  1984), and            ________    _______            the legislature  affirms the  agency.  Red  Lion Broadcasting                                                   ______________________            Co.            ___                      In  addition the Red  Lion court said,  395 U.S. at                                       _________            380-381, "Subsequent legislation declaring  the intent of  an            earlier  statute is  entitled  to great  weight in  statutory            construction."   In accordance with  this we note  the Puerto            Rico legislature's expression of what it understood itself to            be doing.  See Report of the Comm'n on Gov't of the Senate of                       ___            Puerto Rico on  S.B. 819  of April 10,  1986 and  Explanatory            Memo, cited  in E.L.A. v.  Enron Corp., P.R.  Superior Court,                            ______     ___________            San Juan Part, Civil No. KPE 90-90-185 (904) (Nov. 14, 1990).                      [The] extremely broad definition  of "gas                      enterprise"  was  incorporated in  Public                      Law No.  24 of May  15, 1986 to  clear up                      unequivocally  that  the jurisdiction  of                      the  Commission included  producers . . .                      and   importers   that   had   previously                      questioned the  Commission's jurisdiction                      over their operations.                      We need not pursue the matter further.  Examination            shows that the 1986 amendment satisfies all the requirements,                                         -7-            including good  sense, that point to  its being clarification            rather than an alteration of the earlier statute.  It follows            that Martin was within  PSC's exclusive jurisdiction from the            outset and,  accordingly, exempt from Act 77.   The dismissal            for lack of jurisdiction must be affirmed.                                             ________                                         -8-