Antilles Cement Corp. v. Cemex De Puerto Rico, Inc.
670 F.3d 310
| 1st Cir. | 2012Background
- Antilles challenges two Puerto Rico laws, Law 109 and Law 132, as potentially preempted by the Buy American Act (BAA) and as violating the Dormant Foreign Commerce Clause.
- The district court initially struck Law 109 and 132 as conflicting with the Foreign Commerce Clause, then on remand held BAA preempts both laws as applied to Commonwealth projects.
- Law 109 requires cement and other construction materials on public works funded by Commonwealth or federal funds to be Puerto Rico–origin; cement may be Puerto Rico–manufactured only if its raw materials are sourced locally.
- Law 132 imposes labeling requirements on foreign-made cement and prohibits sale of unlabeled foreign cement in Puerto Rico; it mirrors BAA labeling in some respects but is more burdensome on foreign cement sellers.
- Antilles, a foreign cement importer, has standing to challenge the laws, arguing they discriminate against foreign cement and hinder its ability to compete in Puerto Rico public works.
- The issues on appeal focus on whether BAA preempts Laws 109 and 132 and whether the laws violate the Dormant Foreign Commerce Clause, with standing addressed as a threshold question.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does BAA preempt Laws 109 and 132 as applied to Commonwealth projects? | Antilles: BAA preempts stricter PR rules on Commonwealth projects. | Commonwealth/Cemex: BAA does not preempt where PR may act as market participant and non-conflictingly with BAA. | BAA preemption not established; no express preemption and no irreconcilable conflict; laws may coexist. |
| Does the market participant doctrine shield Law 109 from Dormant Foreign Commerce Clause review? | Antilles: Law 109 acts as market participant, not a regulator, so allowed. | Commonwealth: distinctions insufficient; market participant status applies to some activities but not others. | Law 109 is shielded as market participant; applicable when Commonwealth acts as buyer in construction market. |
| Does Law 132 violate the Dormant Foreign Commerce Clause by discriminating against foreign cement? | Antilles: labeling requirement discriminates against foreign cement, blocking foreign competition. | Commonwealth: labeling aids compliance with BAA and law 109; nondiscriminatory purposes can justify. | Law 132 violates the Dormant Foreign Commerce Clause to the extent it discriminates; sever labeling regime but keep non-discriminatory labeling. |
| Do Antilles’ and Cemex's standing arguments affect the preemption ruling? | Antilles has concrete and redressable injury from local laws. | Standing not in dispute; interest is protected by BAA preemption claim. | Standing established; redressability shown via potential BAA preemption. |
Key Cases Cited
- Cordova & Simonpietri Insurance Agency Inc. v. Chase Manhattan Bank N.A., 649 F.2d 36 (1st Cir. 1981) (Puerto Rico's autonomy; relevance to Congress's intent and BAA applicability)
- Jusino Mercado v. Puerto Rico, 214 F.3d 34 (1st Cir. 2000) (statutory interpretation of Congress's treatment of Puerto Rico)
- Wardair Can., Inc. v. Fla. Dep't of Revenue, 477 U.S. 1 (1986) (national uniformity; foreign commerce considerations)
- S.-Cent. Timber Dev., Inc. v. Wunnicke, 467 U.S. 82 (1984) (market participant doctrine and state regulation boundaries)
- Gibbons v. Ogden, 22 U.S. (9 Wheat.) 1 (1824) (supremacy of federal law; preemption concept)
- Reeves, Inc. v. Stake, 447 U.S. 429 (1980) (market participant considerations in state commerce)
- In re Pharm. Indus. Average Wholesale Price Litig., 582 F.3d 156 (1st Cir. 2009) (statutory interpretation and preemption framework)
- Hillsborough Cnty., Fla. v. Automated Med. Labs., Inc., 471 U.S. 707 (1985) (preemption and field occupancy considerations)
- United States v. Rule Indus., Inc., 878 F.2d 535 (1st Cir. 1989) (BAA domestic materials and public works framework)