Universal Insurance Company v. Office of the Insurance Commis, 755 F.3d 34

Background

A June 2009 car accident involved a vehicle rented from Enterprise and insured by Universal; the injured driver, Fonseca, submitted a claim to Universal, which was denied in January 2010.
Fonseca requested administrative review before the Puerto Rico Office of the Insurance Commissioner (OIC); the OIC fined Universal and ordered claim adjustment in January 2012 and told Universal it could request a hearing.
Universal timely requested a hearing but the parties agreed there were no material factual disputes and submitted memoranda; Universal argued Graves Amendment immunity (49 U.S.C. § 30106).
The OIC issued a decision on June 19, 2012 rejecting Universal’s Graves Amendment defense, denied Universal’s timely motion for reconsideration, and warned that the administrative decision would become final and unappealable if no timely appeal to the Puerto Rico Court of Appeals was filed.
Instead of appealing to the Puerto Rico Court of Appeals, Universal filed a federal declaratory and injunctive action in the U.S. District Court for the District of Puerto Rico; the district court dismissed the federal suit on res judicata grounds.
The First Circuit affirmed, holding the OIC decision was final and unappealable for res judicata purposes and that no applicable exception (reservation of rights or public-policy) defeated preclusion.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether the OIC administrative decision bars Universal’s federal suit under res judicata	Universal argued its federal suit was not barred because it reserved rights and could challenge the OIC’s application of the Graves Amendment in federal court	OIC argued the administrative decision was final and unappealable and thus preclusive under Puerto Rico res judicata law	Held: Res judicata bars the federal action; OIC decision preclusive because final, same cause/subject and same parties
Whether Universal’s asserted “reservation of rights” prevents application of res judicata	Universal referenced a reservation of rights in district-court filings and contended it undermined preclusion	OIC maintained no valid preserved federal claim; Universal had full opportunity to litigate before OIC	Held: Reservation-of-rights argument was waived on appeal (undeveloped and only cross‑referenced); court declined to consider it
Whether a public-policy exception to res judicata applies given alleged misapplication of congressional intent (Graves Amendment)	Universal asked for a public-policy carve-out because the OIC allegedly misapplied federal law (Graves Amendment)	OIC relied on finality and efficiency interests; no special circumstances to invoke the public-policy exception	Held: No public-policy exception — parties had a full, fair administrative adjudication and no special circumstances justified relitigation
Whether administrative decisions acting in a judicial capacity may have res judicata effect	Universal implicitly challenged preclusive force of an administrative adjudication	OIC argued that administrative determinations made in a judicial capacity are entitled to preclusive effect	Held: Administrative decision entitled to res judicata effect where agency acted in judicial capacity and parties had adequate opportunity to litigate

Key Cases Cited

R.G. Fin. Corp. v. Vergara-Nuñez, 446 F.3d 178 (1st Cir.) (elements of res judicata under Puerto Rico law)
Haag v. United States, 589 F.3d 43 (1st Cir.) (res judicata preclusion principle)
Atwater v. Chester, 730 F.3d 58 (1st Cir.) (federal courts must give state-court preclusive effect if state would)
Boateng v. InterAm. Univ., Inc., 210 F.3d 56 (1st Cir.) (identity of parties/causes in preclusion analysis)
García-Monagas v. De Arellano, 674 F.3d 45 (1st Cir.) (same-object and common nucleus of operative facts test)
Aunyx Corp. v. Cannon U.S.A., Inc., 978 F.2d 3 (1st Cir.) (administrative agencies acting in a judicial capacity may impose preclusion)
R.I. Dep’t of Envtl. Mgmt. v. United States, 304 F.3d 31 (1st Cir.) (requirements for presenting appellate arguments; condemns cross-referencing district-court memoranda)
United States v. Zannino, 895 F.2d 1 (1st Cir.) (appellate waiver doctrine for undeveloped arguments)
Giragosian v. Bettencourt, 614 F.3d 25 (1st Cir.) (appellate waiver principles)
Barreto-Rosa v. Varona-Mendez, 470 F.3d 42 (1st Cir.) (public-policy exception to res judicata under Puerto Rico law)
Núñez Colón v. Toledo-Dávila, 648 F.3d 15 (1st Cir.) (scope and limits of public-policy exception to preclusion)