21 F.4th 1
1st Cir.2021Background
- After Hurricane Maria (Sept. 2017), Disaster Solutions provided emergency services to the City of Santa Isabel pursuant to a Purchase Order, three Resource Request Forms, and a Letter of Authorization that together listed personnel, roles, and some rates but did not state a total price or contain a fully integrated written contract.
- Disaster Solutions performed work from Oct. 2–12, 2017; the City ordered work to stop on Oct. 12. Disaster Solutions invoiced the City (Oct. 22 and a second invoice in Nov. 2017) and alleged nonpayment totaling $368,879.89 (plus interest).
- Disaster Solutions sued the City for breach of contract (filed Nov. 2018). The City moved to dismiss under Rule 12(b)(6), arguing Disaster Solutions had not alleged an enforceable municipal contract under Puerto Rico law.
- The district court requested the parties to supply Puerto Rico emergency-procurement materials and to brief federal preemption issues. Disaster Solutions did not timely present argument or documents about executive orders or federal preemption prior to judgment.
- The district court dismissed for failure to plead a written, comptroller-registered municipal contract as required under Puerto Rico law and denied Disaster Solutions’ Rule 59(e) motion for reconsideration as procedurally waived and meritless on the merits.
- The First Circuit affirmed: diversity jurisdiction was satisfied; the dismissal was proper because Disaster Solutions did not plead a written, filed contract; Disaster Solutions waived late-raised preemption and executive-order arguments, and the district court did not abuse discretion in denying reconsideration.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Existence of enforceable municipal contract under Puerto Rico law | Documents (Purchase Order, Resource Request Forms, Letter of Authorization), read together, formed a written contract enforceable against the City | Documents are incomplete, not a single written contract and were not registered with the Puerto Rico Comptroller as required | Affirmed dismissal: plaintiff failed to plead a written, comptroller-filed municipal contract required by PR law |
| Federal preemption by Stafford Act / GSA Disaster Purchasing Program | Federal disaster declarations and GSA program preempt Puerto Rico requirements that municipal contracts be in writing/registered | Federal program and GSA guidance do not preempt state/local procurement rules; plaintiff waived the argument by not timely raising it | Waived and rejected on merits: no preemption shown; GSA guidance defers to local procurement rules |
| Effect of Puerto Rico executive orders / comptroller letters on filing/contract requirements | Executive Order 2017-053 (and comptroller letters) relaxed or extended filing/contract formalities after Maria | Those materials were not timely raised; even if considered they did not eliminate the written/filing requirement | Waived and rejected on merits: plaintiff could have but did not timely present those public documents; they did not render plaintiff’s documents a perfected contract |
Key Cases Cited
- D.B. Zwirn Special Opportunities Fund, L.P. v. Mehrotra, 661 F.3d 124 (1st Cir. 2011) (LLC citizenship rules for diversity jurisdiction)
- Harry v. Countrywide Home Loans, Inc., 902 F.3d 16 (1st Cir. 2018) (standard of review for Rule 12(b)(6) dismissal)
- Biltcliffe v. CitiMortgage, Inc., 772 F.3d 925 (1st Cir. 2014) (Rule 59(e) relief is narrow: manifest error, new evidence, or other limited grounds)
- Iverson v. City of Boston, 452 F.3d 94 (1st Cir. 2006) (arguments not presented to the district court are ordinarily waived)
- Negrón-Almeda v. Santiago, 528 F.3d 15 (1st Cir. 2008) (abuse-of-discretion review for denial of Rule 59(e) motions)
- Town of Norwood v. New England Power Co., 202 F.3d 408 (1st Cir. 2000) (courts ordinarily may ignore claims or defenses a party fails to proffer)
- Fothergill v. United States, 566 F.3d 248 (1st Cir. 2009) (plain-error doctrine standards)