R&D Master Enterprises, Inc. v. The Financial Oversight and Management Board for Puerto Rico
3:21-cv-01317
D.P.R.Apr 12, 2022Background
- Plaintiffs (R&D Master Enterprises, Pro Pave Corp., Matrix Transport, José A. Rovira González and spouse María Magdalena Díaz Vila) sued the Financial Oversight and Management Board for Puerto Rico and its Executive Director, alleging constitutional violations, PROMESA violations, and seeking mandamus, declaratory and injunctive relief.
- Dispute centers on the Economic Development Bank of Puerto Rico’s (BDE) September 2018 sale of a loan portfolio (~$384.27M) to PR Recovery via a Loan Sale Agreement; PR Recovery later sought collection from Plaintiffs.
- Plaintiffs allege the Board failed to review/approve the Agreement as PROMESA requires for transactions ≥ $10,000,000.
- BDE filed a state-court complaint on November 7, 2019 challenging the Agreement; Plaintiffs filed the federal complaint in 2021.
- Defendants moved to dismiss under Rule 12(b)(6), arguing Plaintiffs’ §1983 and PROMESA claims are time-barred. The Court granted the motion and dismissed all claims with prejudice on April 12, 2022.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Plaintiffs’ §1983 claims are timely | The proper remedy is mandamus compelling Board review; did not contest timeliness | Claims accrued in 2019 (collection/foreclosure actions and/or public notice via state complaint), so 2021 suit is beyond the 1‑year Puerto Rico personal‑injury SOL | Dismissed: §1983 claims time‑barred (accrual in 2019; 1‑year SOL applies) |
| Whether PROMESA claim is timely | PROMESA claim seeks relief for Board’s failure to review; Plaintiffs did not identify a different SOL | PROMESA provides no SOL; borrow most analogous state period (1 year for personal injury) — claim accrued in 2019, so untimely | Dismissed: PROMESA claim time‑barred under borrowed 1‑year SOL |
| Whether the state‑court action tolled the federal claims | Plaintiffs did not assert tolling | State complaint did not toll because it was not an identical subsequent action (different parties, relief, and claims) | No tolling: state suit did not toll federal SOL |
| Whether equitable tolling or other tolling applies | Plaintiffs alleged Board misconduct but did not plead facts showing concealment or misconduct causing delay | No factual predicate for equitable tolling; plaintiffs failed to show concealment or that Board caused delayed filing | No equitable tolling: dismissal appropriate |
Key Cases Cited
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007) (plausibility standard for pleading)
- Alternative Energy, Inc. v. St. Paul Fire & Marine Ins. Co., 267 F.3d 30 (1st Cir. 2001) (documents relied on in complaint may be considered on 12(b)(6))
- Álvarez‑Mauras v. Banco Popular of Puerto Rico, 919 F.3d 617 (1st Cir. 2019) (affirmative defenses like SOL can support dismissal on the face of the complaint)
- Blackstone Realty LLC v. FDIC, 244 F.3d 193 (1st Cir. 2001) (same)
- Martínez‑Rivera v. Commonwealth of Puerto Rico, 812 F.3d 69 (1st Cir. 2016) (federal law governs accrual; accrual when plaintiff knows or has reason to know of injury)
- Vistamar, Inc. v. Fagundo‑Fagundo, 430 F.3d 66 (1st Cir. 2005) (accrual when facts give rise to suspicion sufficient to put plaintiff on notice)
- Algonquin Gas Transmission, LLC v. Weymouth, Massachusetts, 919 F.3d 54 (1st Cir. 2019) (borrow the most analogous state SOL when federal statute provides none)
- Graham Cty. Soil & Water Conservation Dist. v. U.S. ex rel. Wilson, 545 U.S. 409 (2005) (borrowing state limitations when federal statute silent)
- Rodríguez v. Suzuki Motor Corp., 570 F.3d 402 (1st Cir. 2009) (tolling statute does not toll for nonidentical claims)
- Alamo‑Hornedo v. Puig, 745 F.3d 578 (1st Cir. 2014) (identicality requirement for tolling; same parties, relief, and claims)
- Neverson v. Farquharson, 366 F.3d 32 (1st Cir. 2004) (standards for equitable tolling)
- Benítez‑Pons v. Commonwealth of Puerto Rico, 136 F.3d 54 (1st Cir. 1998) (equitable tolling requires misconduct or concealment to excuse delay)
- Trans‑Spec Truck Serv., Inc. v. Caterpillar Inc., 524 F.3d 315 (1st Cir. 2008) (dismissal appropriate where complaint’s dates show SOL exceeded and no basis for tolling)