Liquilux Gas Corp. v. Martin Gas Sales
U.S. Court of Appeals for the First Circuit
Liquilux Gas Corp. v. Martin Gas Sales
Opinion
USCA1 Opinion
November 17, 1992
UNITED STATES COURT OF APPEALS
FOR THE FIRST CIRCUIT
_____________________
No. 92-1020
LIQUILUX GAS CORPORATION,
Plaintiff, Appellant,
v.
MARTIN GAS SALES, ET AL.,
Defendants, Appellees.
____________________
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF PUERTO RICO
[Hon. Jose Antonio Fuste, U.S. District Judge]
___________________
____________________
Before
Breyer, Chief Judge,
___________
Aldrich, Senior Circuit Judge,
____________________
and Boudin, Circuit Judge.
_____________
____________________
Fernando L. Gallardo with whom Woods & Woods was on brief for
_____________________ ______________
appellant.
Danilo M. Eboli, with whom Jose A. Axtmayer, Francisco A. Besosa,
_______________ _________________ ___________________
Goldman Antonetti Ferraiuoli & Axtmayer, Timothy McCormick and
___________________________________________ ___________________
Thompson & Knight were on brief for appellees.
_________________
____________________
____________________
ALDRICH, Senior Circuit Judge. In Puerto Rico,
_____________________
liquified petroleum gas (LPG) must be refined or imported.
In 1982 Caribbean Oil Refining Company, a main Puerto Rico
importer, closed operations, and Martin Gas Sales, Inc., a
Texas corporation, contemplated becoming a replacement. It
contracted with Empire Gas Company, a Puerto Rico wholesaler,
that Empire would buy all its gas from Martin. Allegedly to
reward Ramon Gonzalez Cordero, Empire's president, for
obtaining the contract, and to encourage him to seek other
Martin purchasers, Martin agreed to pay him 1 cents royalty
on every gallon of gas offloaded at Martin's terminal.
Thereafter Martin became an importer under the name of Puerto
Rico Fuels and duly paid the royalty.
Plaintiff Liquilux Gas Corporation, another Puerto
Rico wholesaler, and competitor of Empire, became a Martin
customer. It learned of the royalty agreement on June 25,
1987 and brought this Puerto Rico antitrust action against
Martin and Gonzalez on November 20, 1990. Without
considering the merits, the district court granted
defendants' motion to dismiss for lack of jurisdiction,
holding that original jurisdiction lay in the Puerto Rico
Public Service Commission (PSC). It denied plaintiff's
motion for reconsideration and entered judgment accordingly.
Liquilux duly appealed. We affirm.
-2-
Between 1982 and 1987 much occurred. Puerto Rico's
antitrust statute, known as Act 77, 10 L.P.R.A. 257 et
__
seq. (1988), exempts government-regulated companies.1
___
Section 1002(c) of PSC's enabling statute, Law 109, 27
L.P.R.A. 1001 et seq. (1988), granting it exclusive
__ ___
jurisdiction, reads,
"Public-service company" includes
any public carrier, conduit conveyance
enterprise, gas enterprise, electric
_______________
power enterprise, telephone enterprise,
telegraph enterprise, dry dock
enterprise, travel bureau, transportation
broker, dock operator, warehouser, toll
bridge enterprise, nuclear power
enterprise, communal television antenna
enterprise, and moving enterprise
offering to render or rendering their
services or offering to deliver or
delivering products, for pay, to the
_________________________________________
public in general or to a part thereof,
________________________________________
in Puerto Rico. It does not include
persons rendering service for their
exclusive use or that of their tenants.
(Emphasis supplied.) Until May 15, 1986 the definition of a
gas enterprise, section 1002(q), read in connection with
section 1002(c), did not expressly include Puerto Rico
refineries and importers. On February 27, 1984, however, the
____________________
1. The legal regulation of public utilities,
insurance companies and any other
enterprises or entities subject to
special regulation by the Government of
the Commonwealth of Puerto Rico or by the
United States Government, including
cooperatives, shall not be affected by
this act.
Section 257. (Historical note).
-3-
PSC decided that they fell within the statutory language.
See Caribbean Gulf Refining Corp. v. Public Service
___ _________________________________ _______________
Commission, Superior Court, San Juan Part, Civil No. 84-1534
__________
(May 5, 1986). Martin disagreed, and litigation ensued.
While this was in progress the legislature concerned itself
with an amendment. The Superior Court moved faster. On May
5, 1986 it decided that importers, Puerto Rico Fuels v.
___________________
Public Service Commission, Civil No. 84-1533, as well as
__________________________
refineries, Caribbean Gulf Refinery, supra, were not within
_______________________ _____
the statute.
Martin's comfort was short lived. Ten days later
the legislature amended section 1002(q), the underlined words
being the additions.
"Gas enterprise" includes any person who
owns, controls, operates or manages as a
public service company any plant or
business in Puerto Rico for the
importing, production, generation,
_________
transmission, delivery, supply or
distribution of natural, processed or
derived gas, or any liquid susceptible to
be converted into gas and distributed by
pipelines, cylinders or any type of
container for residential, commercial and
___________________________
industrial purposes [substituted for
_____________________
"lighting, heating, or power"]. It being
________
understood that gas "production" and
_________________________________________
"import" enterprises are, among others,
_________________________________________
those refineries, import companies,
_________________________________________
distribution-wholesale companies and/or
_________________________________________
seaport terminals engaged in the
_________________________________________
importing, production, processing,
_________________________________________
traffic, storage, distribution or sale of
_________________________________________
liquified petroleum gas or any other
_________________________________________
mixture of hydrocarbons known as refinery
_________________________________________
gas, regardless of whether they sell or
_________________________________________
-4-
serve their product to a limited number
_________________________________________
of persons and/or wholesalers.
_____________________________
Rather than applying for a license, Martin
terminated its Puerto Rico business the following month,
selling out, lock, stock and barrel to an independent
corporation, known as Puerto Rico Fuels, Inc. For some
reason, not presently important, Martin continued to make
royalty payments to Gonzalez to October 17, 1986. The
district court ruled that as at the time of suit section
1002(q) included importers, the district court lacked
jurisdiction as to all payments after May 15, 1986. It went
on to hold that the amendment was retroactive as to
jurisdiction, sweeping up all previous acts as well.
Since the amendment made no provision as to its
retroactivity, we decide for ourselves how the Puerto Rico
Supreme Court would resolve that question. As this is a
question of law we owe no deference to the district court.
Brewer v. Madigan, 945 F.2d 449, 452 (1st Cir. 1991). We see
______ _______
several possible conclusions.
1. The PSC's initial interpretation of section
1002(q) prior to the amendment was correct.
2. The amendment was a legislative pronouncement,
or clarification, of original intent that was automatically
retroactive.
-5-
3. The amendment was an alteration, but was
intended to be, and could be, retroactive in effect; this
being the district court's view.
The Superior Court's principal opinion, Caribbean
_________
Gulf Refinery, had held that the phrase "delivering products
_____________
. . . to the public in general, or to a part thereof," in
section 1002(c) did not clearly cover local refiners who sold
only to a few wholesalers, and that in view of the ambiguity,
they were not within the act, citing Puerto Rico Lighterage
_______________________
v. Caribe Tugboat Corp., 111 D.P.R. 686 (1981) (ambiguity as
____________________
to jurisdiction is to be resolved against the Commission).
We do not need to determine the correctness of this pre-
amendment analysis. Neither do we need to review the
district court's holding that the 1986 amendment was a
procedural change only, that, as such, is presumed to be
retroactive. White Star Bus Line, Inc. v. District Court of
_________________________ _________________
San Juan, 60 P.R.R. 348, 349-350 (1942). The amendment
________
included substantive effects, notably the retroactive
remission of what otherwise would have been a triple damages
penalty, that could raise questions. We are not required,
however, to consider this approach. Rather, we hold that the
amendment was not a change at all, but a clarification that
did not alter the law, and merely explicated it.
Clarification, effective ab initio, is a well
__ ______
recognized principle. Red Lion Broadcasting Co. v. FCC, 395
_________________________ ___
-6-
U.S. 367 (1969). Determination of whether new legislative
action is alteration, or merely clarification, may depend on
a number of factors. One may be the fit in language. A
significant one is the fact that the new enactment clarifies
an ambiguity. United States v. Montgomery Cty, 761 F.2d 998,
_____________ ______________
1003 (4th Cir. 1985). Especially is this so when, as here,
the enactment follows fast upon the ambiguity's discovery,
Callejas v. McMahon, 750 F.2d 729, 731 (9th Cir. 1984), and
________ _______
the legislature affirms the agency. Red Lion Broadcasting
______________________
Co.
___
In addition the Red Lion court said, 395 U.S. at
_________
380-381, "Subsequent legislation declaring the intent of an
earlier statute is entitled to great weight in statutory
construction." In accordance with this we note the Puerto
Rico legislature's expression of what it understood itself to
be doing. See Report of the Comm'n on Gov't of the Senate of
___
Puerto Rico on S.B. 819 of April 10, 1986 and Explanatory
Memo, cited in E.L.A. v. Enron Corp., P.R. Superior Court,
______ ___________
San Juan Part, Civil No. KPE 90-90-185 (904) (Nov. 14, 1990).
[The] extremely broad definition of "gas
enterprise" was incorporated in Public
Law No. 24 of May 15, 1986 to clear up
unequivocally that the jurisdiction of
the Commission included producers . . .
and importers that had previously
questioned the Commission's jurisdiction
over their operations.
We need not pursue the matter further. Examination
shows that the 1986 amendment satisfies all the requirements,
-7-
including good sense, that point to its being clarification
rather than an alteration of the earlier statute. It follows
that Martin was within PSC's exclusive jurisdiction from the
outset and, accordingly, exempt from Act 77. The dismissal
for lack of jurisdiction must be affirmed.
________
-8-
Reference
- Status
- Published