Opinion
No. Civil 04-1858CCC.
September 30, 2005
OPINION AND ORDER
Overseas Military Sales Corporation (Overseas), a company dedicated to selling automobiles exclusively on the military base at Fort Buchanan, Puerto Rico, has sued Puerto Rico's Department of Consumer Affairs (DACO) for a declaratory judgment that it is subject only to the United States' jurisdiction on the matter of vehicle sales and their warranties pursuant to the federal enclave doctrine and that DACO has infringed said doctrine by entertaining and presiding over complaints filed against it.
Overseas filed an Emergency Motion for Preliminary Injunction on September 14, 2004 ( docket entry 8). Defendants filed a Motion to Dismiss ( docket entry 24). Plaintiff also filed a Motions for Final Entry of Default Judgment against Nieves-Nieves ( docket entries 18, 21, and 22). The matters were referred to the Magistrate Judge (docket entry 27and 30), who issued two Report and Recommendations ( docket entries 39 and 43). Overseas filed a Motion for Default Judgment and Requesting Adoption of the Magistrate Judge's Report and Recommendation ( docket entry 40) as to Nieves-Nieves.
We must determine whether this action would require this federal court to re-adjudicate the very same issues that were determined by the Supreme Court in Rodríguez-Planell v. Overseas Military Sales Corp., 2003 JTS 141 (see attachment), and, whether it is an attempt to obtain direct review of the Puerto Rico Supreme Court's decision in the lower federal courts. ASARCO v. Kadish, 109 S.Ct. 2037, 2048 (1989).Rodríguez-Planell is a case in which the factual scenario is essentially identical to ours; that is, a dissatisfied car owner, resident of Puerto Rico, purchased his vehicle from Overseas and filed a complaint with DACO. The Supreme Court of Puerto Rico there ruled that "a Puerto Rico resident may petition for such remedies as are provided in the Motor Vehicle Warranty Regulations, approved by the Consumer Affairs Department (hereinafter DACO, its Spanish Acronym), to bring a claim for the alleged defects of an automobile which he acquired at a distributor authorized to do business exclusively within military bases." Id., at 106. In sum, we must determine whether this lawsuit, as stated by our Circuit in Federación de Maestros de Puerto Rico v. Junta de Relaciones del Trabajo de Puerto Rico 410 F.3d. 17, 26 (1st Circuit 2005), "shares the characteristics of the suits in Rooker and Feldman, i.e. loser in state court invites federal district court to overturn state-court judgment."
We are using the certified translation, the page numbering of which is the same as the original Spanish language opinion.
The Magistrate Judge concluded at page 14 of her report (docket entry 43) that "this Court does not have subject matter jurisdiction to entertain this case under the Rooker Feldman Doctrine." She concluded that the Supreme Court of Puerto Rico ruled "upon the same controversy we face today in this case," Report and Recommendation, at page 9, referring to that court's ruling quoted above from Rodríguez-Planell. The Magistrate Judge correctly outlined the facts of said case:Rodríguez-Planell bought from Overseas Military Sales Corp. ("Overseas" is a plaintiff in this case and a defendant in the Commonwealth case) a 2000 Jeep Cherokee, filed a claim before DACO against Overseas alleging it had paint defects and Overseas appeared before DACO, without submitting to the jurisdiction of said agency and requested dismissal of the claim. It contended that it had its facilities at Fort Buchanan, engaged in selling motor vehicles exclusively on military bases in Puerto Rico and conducted business solely with members of the armed forces pursuant to a car sales program of the United States Department of Defense. It argued, therefore, that DACO lacked jurisdiction to decide the controversy and that local law did not apply to it.
Overseas requested review by the Puerto Rico Circuit Court of Appeals which held that DACO had no jurisdiction over the matter since jurisdiction of local for a over controversies or events occurring on a United States military base in Puerto Rico is limited to cases where there is no applicable federal law and the failure to apply local law would result in a legal loophole. The Supreme Court of Puerto Rico reversed, holding that "pursuant to the `Federal enclave' doctrine, the United States Congress exercised its exclusive jurisdiction within Fort Buchanan by expressly allowing the application of such State laws Favoring consumers as were not inconsistent with the provisions of the Magnus on-Moss Act, supra. Since the Motor Vehicle Warranty Regulations, supra, do not conflict with the aforesaid federal law, appellee has available to him such remedies as are provided in local law to bring an action for alleged defects exhibited by the vehicle acquired from overseas" Rodríguez-Planell, supra, at 110.
Rodríguez-Planell explained, with regard to the federal enclave doctrine, that:
[W]hen the events in controversy take place within a United States military base, we have ruled on the jurisdictional conflict by adopting the Federal enclave doctrine. In this way, in Roberts v. U.S.O. Council of P.R., 145 D.P.R. 58 (1998) . . . we explained that said doctrine — which is derived from Art. I, Section 8, Clause 17, of the U.S. Constitution — postulates that the Federal Congress has exclusive jurisdiction to establish what law shall govern within United States military bases. Nevertheless, we clarify that such plenary power does not extend, absent more, to conferring exclusive jurisdiction on the Federal courts to decide such controversies as are produced there. That is to say, according to the standard set forth in Roberts, with the military bases of the United States, the Federal government has exclusive jurisdiction in the legislative arena, but not in the judicial.
Regarding this point, we have stated that the concept of "legislative jurisdiction" refers to who has the authority to regulate, through legislation, a given subject matter, event or situation. Put another way, " legislative jurisdiction" refers to what law applies" to a given controversy. . . . While, on the other hand, "judicial jurisdiction refers to what court (State or Federal) is authorized to decide such controversies as arise within the enclave.
The essence and scope of the aforesaid " legislative jurisdiction" were developed by this Court in Quiles Vda. De Font v. Colsa, Inc., 147 D.P.R. 360 (1999). On that occasion we stated that, in spite of the fact that ordinarily the legislation applicable to a controversy originating on a military base is Federal law, this presupposes that Congress effectively has legislated on the matter to be decided. In other words, that the application of Federal law to such situations is conditioned on Congress, by virtue of the plenary power vested in it to regulate the activities of the military base, having legislated on the subject matter specifically at issue. In accordance therewith, we concluded in that, in view of the fact that there was no Federal legislation to specifically address the controversy, it would be proper to apply the local law on damages.
In spite of the fact that in Ouiles, supra, the application of the Puerto Rican law was in response to the fact that there was no applicable Federal law, we have likewise ruled that there are situations in which it is proper to apply local laws even though there also exists Federal law pertinent to the controversy. . . . Said conclusion is not inconsistent with what was set forth in Roberts, supra, at p. 70, where we point out that even in Federal enclaves, states can reserve given domains or controversies over which they may legislate or act, as long as that exercise is not inconsistent with Federal purposes of the enclave.
Therefore, it can be said that in spite of the fact that the usual in controversies originating in a Federal Enclave is that the legislation passed by the United States Congress is applied, said operation is not automatic. Hence, we may properly apply State law when there is no Federal legislation to address the controversy directly, or when the former is not preempted by the latter, expressly or implicitly.Rodríguez-Planell, supra, at 107-108. (Emphasis in the original.) (Citations omitted.)
The Court went on to discuss the Magnuson-Moss Warranty Federal Trade Commission Improvement Act, 15 U.S.C. § 2301, et seq., and determined that there did not exist in the letter or purposes of that statute any intention to preempt State legislation. It concluded, on the contrary, that "the federal act itself provides for coexistence with state laws" and cited 15 U.S.C. § 2311(b)(1), which provides that "nothing in [ 15 U.S.C. § 3201 et. seq] shall invalidate or restrict any right or remedy of any consumer under State law or another Federal law."Rodríguez-Planell, Id., at 109. It concluded that the DACO regulations obeyed the minimum guarantees established by the Magnuson-Moss Act and that they not only adhered to the federal minimum regulations, but actually provided greater consumer protections. The Court also noted that "the vehicle in question is not one for military use nor does it travel exclusively within the grounds of the `military enclave,' but, rather travels along the avenues and streets of Puerto Rico. Id., at 110.
The Rodríguez-Planell case falls within one of the three situations which are listed in Federación de Maestros de Puerto Rico, 410 F3d. at 23, as qualifying under the "Ended" test set forth in Exxon Mobil Corp. v. Sandi Basic Industries, 125 S.Ct. 1517, to wit: "when the highest state court in which review is available has affirmed the judgment below and nothing is left to be resolved, then without a doubt the state proceedings have `ended.'"
Among Overseas' objections, it states that it is not seeking review by this court of the decision in Rodríguez-Planell. At paragraph 36, plaintiff states that "[it] has been exceedingly careful to avoid any misconception that it is seeking review by this Court of the Rodríguez-Planell judgment." Plaintiff's allegations in the amended complaint tell a different story. The challenges to the determination of the Supreme Court in this case are found in several paragraphs of the amended complaint:
"38. Even though the United States Supreme Court, the First Circuit Court of Appeals, and the United States District Court of Puerto Rico have consistently held that the laws of Puerto Rico generally do not apply within a federal enclave such as Fort Buchanan, in Rodríguez-Planell . . . the Puerto Rico Supreme Court recently held otherwise."
Footnote 4 "The Puerto Rico Supreme Court has issued such a contradictory opinion. . . ."
"39. In Rodríguez-Planell, the Puerto Rico Supreme Court effectively eliminated the federal enclave doctrine and converted it into a doctrine of preemption. . . ."
Footnote 5 "Not only is Rodríguez-Planell in direct contravention to federal law, it also contradicts recent precedents of the Puerto Rico Supreme Court itself."
"40. Because Rodríguez-Planell practically eliminated the federal enclave doctrine, Daco is now unlawfully entertaining cases filed before it, relating to activities occurring within Fort Buchanan."
Footnote 6 "It should be noted that . . . in accordance with precedent . . ., DACO had been dismissing every administrative complaint filed before DACO against Overseas. AfterRodríguez-Planell, however, DACO has ignored [the precedent] and the federal case law on the federal enclave doctrine."
In its prayer for declaratory judgment, at paragraph 44, Overseas requests that we "(b) [establish] that, contrary to the Puerto Rico Supreme Court's decision in Rodríguez-Planell, DACO has no jurisdiction over complaints filed before it pertaining to Overseas' business activities which pertain to events exclusively occurring solely within a federal enclave within Puerto Rico's territorial boundaries, including Fort Buchanan."
It is quite clear that Overseas is asking us to review the unfavorable Rodríguez-Planell decision and reverse it. Rooker-Feldman is keyed to Title 28 U.S.C. § 1257, of which its Puerto Rico counterpart § 1258 specifically provides that "[final judgments or decrees rendered by the Supreme Court of the Commonwealth of Puerto Rico may be reviewed by the Supreme Court [of the United States] by writ of certiorari. . . ." See, Federación de Maestro de Puerto Rico, supra, at 27. Overseas was the losing party in Rodríguez-Planell, a case in which it had the opportunity to litigate in the commonwealth courts the same issues presented here to the fullest. It now seeks a second bite of the apple, requesting that we readjudicate the issues and declare that DACO regulation and remedies are inapplicable and that DACO cannot decide claims by consumers against Overseas. Such a claim could succeed only if we were to hold that the decision of the Supreme Court of Puerto Rico inRodríguez-Planell was incorrect, in violation of Rooker-Feldman.
For the above stated reasons, we ADOPT the Magistrates' Report and Recommendation and DENY the Motion for Preliminary Injunction ( docket entry 8) GRANT defendants' Motion to Dismiss (docket entry 24). The Magistrate also recommended that default judgment be entered as to co defendant Ernesto Nieves-Nieves (docket entry 30). We REJECT that recommendation, however, as contrary to the determination that this court lacks subject matter jurisdiction. Accordingly, plaintiff's Motion for Default Judgment and Requesting Adoption of the Magistrate Judge's Report and Recommendation ( docket entry 40) as to Nieves-Nieves as well as his related motions to enter default against Nieves ( docket entries 18, 21, and 22) are DENIED. Judgment will enter dismissing this case.
SO ORDERED.