QUALITY CLEANING PRODUCTS R.C., INC.; Rafael Correa, Plaintiffs, Appellants, v. SCA TISSUE NORTH AMERICA, LLC, Defendant, Appellee, John Doe; Richard Roe Defendants.
No. 14-1405
United States Court of Appeals, First Circuit
July 21, 2015
200
Given this littered legal landscape, it cannot be said that there is no room for principled disagreement about the viability of differential-benefits claims under the ADA. While the answer to that question seems much clearer than the MCAD admits, it is not the slam dunk that the appellants suggest. In short, resolving the preemption question presented here calls for exactly the sort of extensive legal analysis that places the facially conclusive preemption exception out of reach.
The conclusion that no exception to the Younger doctrine applies here is reinforced by the appellants’ utter failure to explain how they will be irreparably harmed by allowing the MCAD to resolve this matter. That failure is important because the common thread that links the various Younger exceptions is that, in particular situations, closing the door of the federal court to a federal question will result in irreparable harm. See NOPSI, 491 U.S. at 366, 109 S.Ct. 2506; Kugler v. Helfant, 421 U.S. 117, 123-24, 95 S.Ct. 1524, 44 L.Ed.2d 15 (1975); Younger, 401 U.S. at 53-54, 91 S.Ct. 746. And only when it is crystal clear that the state tribunal either lacks the authority to proceed or can provide no meaningful relief can a party hope to demonstrate the degree of irreparable harm needed to justify federal-court intervention. See NOPSI, 491 U.S. at 366-67, 109 S.Ct. 2506.
Here, the MCAD is competent to adjudicate the federal issues presented in this case and adequate review is available in the state courts. The record strongly suggests that the appellants will suffer no harm apart from the typical inconvenience that accompanies defending against charges that have been lodged. That inconvenience is not weighty enough to tip the scales: the Younger Court admonished long ago that “the cost, anxiety, and inconvenience of having to defend against a single [proceeding are not] ‘irreparable’ in the special legal sense of that term. Instead, the threat to the plaintiff‘s federally protected rights must be one that cannot be eliminated by his defense against a single [proceeding].” Younger, 401 U.S. at 46, 91 S.Ct. 746.
III. CONCLUSION
We need go no further. For the reasons elucidated above, we conclude that under Sprint‘s reformulation of the Younger doctrine, abstention is appropriate and no cognizable exception to abstention pertains. It follows inexorably, as night follows day, that the dismissal of this action must be
Affirmed.
Alejandro Jose Cepeda-Díaz, with whom Raúl M. Arias and McConnell Valdés LLC were on brief, for appellee.
HOWARD, Chief Judge.
Eleven years after Appellee SCA Tissue North America (“SCA“) allegedly breached its distribution agreement with Appellant Quality Cleaning Products (“QCP“), QCP filed this breach of contract action. The district court dismissed the action as time-barred under the applicable three-year statute of limitations. Applying Puerto Rico‘s statute of limitations and accrual rules, as we must when sitting in diversity, we affirm.
I.
SCA manufactures cleaning products and paper goods such as napkins, bath and facial tissue, and liquid soap. In August 1997, QCP entered into a distribution agreement with SCA which designated QCP as a non-exclusive, authorized Puerto Rican distributor and wholesaler of SCA‘s “Tork” brand product line. QCP agreed that it would not distribute any of SCA‘s competitors’ products and, in return, SCA promised to offer QCP all promotions and discounts that it extended to any other Puerto Rican distributor. QCP claims that SCA breached that agreement in 2001, when SCA agreed to sell its “Tork” products at a reduced rate to a third company, Bunzl/Melissa Sales Corp. (“Bunzl“), and when it granted Bunzl a five percent discount or profit on every sale of “Tork” products that Bunzl made to other distributors in Puerto Rico.
QCP filed this breach of contract action on December 7, 2012—over a decade later. In Puerto Rico, Act 75 governs distribution agreements. See
II.
We review the district court‘s dismissal on statute of limitations grounds de novo, and affirm “only if the record, construed in the light most flattering to the pleader [the party opposing dismissal], leaves no plausible basis for believing that the claim may be timely.” Erlich v. Ouellette, Labonte, Roberge & Allen, P.A., 637 F.3d 32, 35 (1st Cir.2011) (internal quotation marks omitted).
Act 75 imposes a three-year statute of limitations “from the date of the definite termination of the dealer‘s contract, or of the performing of the detrimental acts, as the case may be.”
Under this traditional rule, Act 75‘s limitations period began to run when SCA allegedly breached its agreement with QCP. QCP‘s amended complaint identifies SCA‘s breach (the Bunzl agreement) as taking place around the time that two companies merged to form Bunzl. The complaint alleges that the merger, and thus the breach, occurred in 2001. Because QCP did not file its complaint until 2012, the complaint facially indicates that Act 75‘s three-year statute of limitations has been far exceeded.
Nevertheless, QCP invokes both the continuing violation doctrine and the discovery rule in an attempt to argue that its Act 75 claim did not accrue until years later. In order to establish when QCP‘s claim accrued, we thus must determine whether those doctrines apply to Act 75.
A. Does State or Federal Accrual Law Apply?
A threshold question, disputed by the parties, is whether we look to Puerto Rico or federal law in making that accrual determination. Federal courts sitting in diversity apply the substantive law of the state and, pursuant to statute, Puerto Rico is treated as a state for diversity purposes. See Erie R.R.Co. v. Tompkins, 304 U.S. 64, 78, 58 S.Ct. 817, 82 L.Ed. 1188 (1938);
QCP‘s contention is mistaken. In fact, it directly conflicts with the Supreme Court‘s remark in Ragan v. Merchants Transfer & Warehouse Co. that a cause of action in a diversity action “accrues and comes to an end when local law so declares.” 337 U.S. 530, 533, 69 S.Ct. 1233, 93 L.Ed. 1520 (1949). Relying on this plain statement, several other circuits have held that it “is long since settled” that state law governs “when a state-created cause of action accrues.” Walko Corp. v. Burger Chef Sys., Inc., 554 F.2d 1165, 1171 (D.C.Cir.1977); accord Cantor Fitzgerald Inc. v. Lutnick, 313 F.3d 704, 709-10 (2d Cir.2002); Joyce v. A.C. & S., Inc. 785 F.2d 1200, 1203 (4th Cir.1986). We agree.
Moreover, this rule makes eminent sense because a federal court sitting in diversity must apply related state-law rules that form “an integral part of the several policies served by the [state‘s] statute of limitations.” Walker v. Armco Steel Corp., 446 U.S. 740, 751, 100 S.Ct. 1978, 64 L.Ed.2d 659 (1980) (holding that whether filing of the complaint tolls the statute of limitations is governed by state law); see also, e.g., West v. Am. Tel. & Tel. Co., 311 U.S. 223, 239, 61 S.Ct. 179, 85 L.Ed. 139 (1940) (applying Ohio law requiring a plaintiff to make a pre-lawsuit demand before the statute of limitations begins to run). State accrual rules fit comfortably within this category. When state law commands that the statute of limitations hourglass is to be turned is no less an “integral part” of a state‘s statute of limitations scheme than how long the state allows the sand to drain.
To remove all doubt, we take this opportunity to clearly hold that a federal court sitting in diversity must apply the relevant state‘s statute of limitations, including its accrual rules. The mere fact that a diversity-based action is brought “in a federal court instead of in a State court a block away, should not lead to a substantially different result.” Guaranty Trust Co., 326 U.S. at 109, 65 S.Ct. 1464. Accordingly, we decline QCP‘s invitation to graft a federal common law of accrual onto local statutes of limitation when sitting in diversity.
B. Applying Puerto Rico‘s Accrual Rules to QCP‘s Claim
We thus look to Puerto Rico law to resolve whether the continuing violation doctrine or the discovery rule applies. We discuss each doctrine in turn.
i. The Continuing Violation Doctrine
QCP first argues that the discounts SCA granted pursuant to the Bunzl agreement—which continued at least until 2010, and perhaps extend into the present—constitute a continuing violation of the distribution agreement. In narrow circumstances, typically including Title VII and other discrimination claims, the continuing violation doctrine permits a plaintiff to recover for injuries occurring outside of the limitations period. See Pérez-Sánchez v. Pub. Bldg. Auth., 531 F.3d 104, 107 (1st Cir.2008). As long as a related act falls within the limitations period, the doctrine allows a lawsuit to be delayed in cases—such as hostile work environment claims—in which a course of “repeated conduct” is necessary before “a series of wrongful acts blossoms into an injury on which suit can be brought.” Ayala v. Shinseki, 780 F.3d 52, 57 (1st Cir.2015) (internal quotation marks omitted). The doctrine does not apply, however, to allow the late filing of a claim based on a discrete discriminatory act that occurs on a specific day, and thus does not permit a plaintiff “to avoid filing suit so long as some person continues to violate his rights,” Pérez-Sánchez, 531 F.3d at 107; see also Nat‘l R.R. Passenger Corp. v. Morgan, 536 U.S. 101, 113, 122, 122 S.Ct. 2061, 153 L.Ed.2d 106 (2002). In that sense, the doctrine is not truly “about a continuing [violation], but about a cumulative violation.” Limestone Dev. Corp. v. Village of Lemont, Ill., 520 F.3d 797, 801 (7th Cir. 2008).
Courts have largely, if not exclusively, held that application of the continuing violation doctrine is cabined to certain civil rights or tort actions.2 See e.g., Lutz v. Chesapeake Appalachia, LLC, 717 F.3d 459, 466 & n. 5 (6th Cir.2013) (citing cases noting that courts have been reluctant to apply the continuing violation doctrine outside of the Title VII context); Schaffhauser v. Citibank (S.D.) N.A., 340 Fed.Appx. 128, 131 (3d Cir.2009) (“[O]ur decisions have limited the continuing violation doctrine to the employment discrimination context.“). The only Puerto Rico Supreme Court case that we have found arguably endorsing the concept of a continuing wrong tracks this delineation, and applies the concept in the employment discrimination context. See Sánchez v. Elec. Power Auth., 142 P.R. Dec. 880, 1997 P.R.--Eng. 878520, slip op. at 3-4 (1997) (García, J., concurring); id. slip op. at 8-9 (Naveira de Rodón, J., concurring). We are not aware of any case in which a court, including the Puerto Rico Supreme Court, has applied the doctrine to a contract claim. See 1 Corman, supra § 7.2.1, at 487 (“The tort concept of continuing wrong, which postpones the time of accrual of the cause of action, does not apply to actions for breach of contract.“). And this apparent resistance to applying the doctrine in contract cases makes sense. Unlike a prolonged series of wrongful acts, a contract breach is a single, readily ascertainable, event. Cf. 51 Am.Jur.2d Limitation of Actions § 139, at 601 (2011) (noting that a breach “occurs when a party fails to perform when performance is due“).
Given this general principle, and the dearth of any Puerto Rico authority on point, we see no basis to assume that the Puerto Rico Supreme Court would extend the continuing violation doctrine to Act 75 claims. In fact, that conclusion is all the more likely because, when that court has considered mechanisms that might prolong Act 75‘s limitation period, the court has emphasized the need for expeditious resolution of commercial disputes. In an effort to “encourage diligence and speed in commercial relations” and to “expedite mer-
Ultimately, we see no basis to apply the continuing violation doctrine to Act 75 and thus prolong the statute of limitations. “A federal court sitting in diversity cannot be expected to create new doctrines expanding state law.” Gill v. Gulfstream Park Racing Ass‘n, 399 F.3d 391, 402 (1st Cir. 2005).
ii. The Discovery Rule
QCP also raises the discovery rule as an alternative ground to escape the limitations bar, claiming that it had no knowledge of SCA‘s alleged breach until 2011. The rule “delays accrual of a cause of action until the plaintiff has ‘discovered’ it.” Merck & Co., Inc. v. Reynolds, 559 U.S. 633, 645, 130 S.Ct. 1784, 176 L.Ed.2d 582 (2010). The Puerto Rico Civil Code‘s general statute of limitations explicitly includes a discovery rule. See
We need not definitively resolve whether Act 75 nevertheless incorporates a discovery rule, however, because a basic infirmity abounds. QCP did not raise the discovery rule in its initial opposition to SCA‘s motion to dismiss. Instead, it only sought refuge in the discovery rule in its Rule 59(e) motion for reconsideration. In that motion, QCP first claimed that it had no
As we have held time and again, however, a Rule 59(e) motion “does not provide a vehicle for a party to undo its own procedural failures” or to “introduce new evidence or advance arguments that could and should have been presented to the district court prior to judgment.” Emmanuel v. Int‘l Bhd. of Teamsters, Local Union No. 25, 426 F.3d 416, 422 (1st Cir. 2005) (internal quotation marks omitted); Aybar v. Crispin-Reyes, 118 F.3d 10, 16 (1st Cir.1997) (holding that plaintiffs could not rely on a new argument in a motion for reconsideration to toll the statute of limitations). Accordingly, because QCP did not raise the discovery rule until its motion for reconsideration, “the district court scarcely can be said to have abused its discretion in refusing to reconsider its decision based on the plaintiff‘s newly raised argument.” Cochran v. Quest Software, Inc., 328 F.3d 1, 11 (1st Cir.2003).5
III.
For the foregoing reasons, the district court‘s order dismissing QCP‘s complaint is affirmed.
Pablo Javier RIVERA-CORRALIZA, on his own behalf and as President of PJ Entertainment, Inc.; Carlos Cruz-Alverio; Jaime Rodríguez-Vega; Ellis Linfernal-Cruz, on his own behalf and as President of the Asociación de Operadores de Máquinas de Entretenimiento de Adultos Del Oeste, Inc.; Ricardo Hernándezechevestre on his own behalf and as President of Ricardo‘S Entertainment Corp., Plaintiffs, Appellants,
v.
Juan Carlos Puig-MORALES; Aileen De León-García; Víctor R. Pérez-Pillot; Zulma I. Rivera-Gómez; David Caraballo-Maldonado; María C. Medina-Ortiz; Abimael Rodríguez-López; Alfredo E. Pérez-Rivera; Héctor O. Gadea-Rivera; Rafael A. Diez De Andino; Milton Vescovacci-Nazario; Marisol Flores-Cortés; John Doe I-XX, all in their personal capacities, Defendants, Appellees.
No. 13-2138.
United States Court of Appeals, First Circuit.
July 22, 2015.