Garcia Quintero v. Commonweath of PR ( 1997 )

USCA1 Opinion

                                [NOT FOR PUBLICATION]
[NOT FOR PUBLICATION]









                            UNITED STATES COURT OF APPEALS
UNITED STATES COURT OF APPEALS

                                FOR THE FIRST CIRCUIT
FOR THE FIRST CIRCUIT



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          No. 96-1770



                            MARIO GARCIA-QUINTERO, ET AL.,

                                Plaintiffs, Appellees,



                                          v.



                         COMMONWEALTH OF PUERTO RICO, ET AL.,

                               Defendants, Appellants.



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                     APPEAL FROM THE UNITED STATES DISTRICT COURT

                           FOR THE DISTRICT OF PUERTO RICO



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                   [Hon. Salvador E. Casellas, U.S. District Judge]
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                                        Before



                                Selya, Circuit Judge,
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                            Coffin, Senior Circuit Judge,
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                              and Stahl, Circuit Judge.
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               Carlos Lugo-Fiol, Solicitor  General, Edda  Serrano-Blasini,
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          Deputy  Solicitor  General,  and   Edgardo  Rodriguez-Quilichini,
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          Assistant Solicitor General, on brief for appellants.

               David  P. Freedman, Mario J.  Pab n and O'Neill  & Borges on
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          brief for appellee First National Bank of Boston.

               Jose M. Mu oz-Silva, Charles A. Cuprill-Hernandez, Carlos A.
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          Surillo Pumarada and Charles  A. Cuprill-Hernandez Law Offices on
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          various briefs for appellee Northwestern Trading Co.



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                                    MARCH 11, 1997



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                    Per Curiam.  This case had its genesis in  racketeering
Per Curiam.
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          charges filed by  the Puerto Rico Department  of Justice (PR-DOJ)



          against,  inter  alia,   Delta  Petroleum  (PR),  Ltd.,   Delta's
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          president, (Mario O.  Garcia-Quintero), and Northwestern  Trading



          Co.   Coincident with the filing of those charges, PR-DOJ seized,



          without   prior  judicial   authorization,   two  bank   accounts



          maintained by  Delta.  One such account was held by Banco Central



          Hispa o for the benefit of First National Bank of Boston (Bank of



          Boston).  The second was held directly by Bank of Boston.



                    Garcia-Quintero,  Bank  of  Boston,   and  Northwestern



          Trading  pursued various  avenues of  relief.   During this  time



          frame,  however,   Delta  became   the  subject  of   Chapter  11



          proceedings in the bankruptcy court; a trustee was appointed; and



          Bank of Boston opted  to remove an earlier-filed action  from the



          commonwealth courts to the bankruptcy court.  In due season, Bank



          of  Boston  cross-claimed  against   PR-DOJ,  alleging  that  the



          aforementioned seizures were illegal and should be nullified.1



                    After considerable procedural skirmishing, the district



          court withdrew its earlier reference to the bankruptcy court  and



          assumed jurisdiction over the adversary proceeding.  Both Bank of



          Boston and Northwestern Trading  then moved for summary judgment.



          PR-DOJ did not  file an opposition  to either  motion.  By  order



          dated  August 9, 1995,  the district  court granted  the motions.




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               1Throughout  this opinion,  we use  "PR-DOJ" as  a shorthand

          reference for  all appellants (who  include not  only PR-DOJ  but

          also  the Commonwealth  of Puerto  Rico  and divers  officers and

          agents of the Commonwealth).



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          PR-DOJ  moved for reconsideration, Fed. R. Civ. P. 59(e), but the



          court, by order dated February 5, 1996, refused to budge.  PR-DOJ



          now appeals.  We summarily affirm.



                    The  district court has  written two  orders explaining



          its reasoning,  and we see scant  need to wax longiloquent.   See
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          Lawton v. State Mut. Life Assurance Co. of Am., 101 F.3d 218, 220
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          (1st  Cir. 1996)  (stating that  "when a  lower court  produces a



          comprehensive, well-reasoned decision, an appellate  court should



          refrain from writing  at length to no other end  than to hear its



          own  words resonate");  In re  San Juan  Dupont Plaza  Hotel Fire
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          Litig.,  989 F.2d 36, 38 (1st Cir. 1993) (similar).  Accordingly,
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          we affirm  the judgment for substantially  the reasons elucidated



          in the district court's orders, adding a few brief comments.



                    1.   It is  important to bear in  mind that this appeal
1.



          tests only the denial of PR-DOJ's motion for reconsideration.  In



          considering  such  an assignment  of error,  we will  not reverse



          unless the record displays  a palpable abuse of discretion.   See
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          Air Line Pilots Ass'n v. Precision Valley Aviation, Inc., 26 F.3d
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          220, 227  (1st Cir. 1994);  Fragoso v.  Lopez, 991 F.2d  878, 888
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          (1st Cir. 1993).  We detect none here.



                    2.   PR-DOJ  vigorously  (if  belatedly)  contests  the
2.



          district court's  jurisdiction, and  urges that the  court should



          have  reconsidered because  the removed  action should  have been



          remanded to the  commonwealth courts.   We need  not address  the



          obvious  question anent the  existence of  appellate jurisdiction



          vis- -vis the  denial  of  a  motion  to  remand,  see  generally
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          Thermtron  Prods., Inc.  v.  Hermansdorfer, 423  U.S. 336  350-52
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          (1976),  inasmuch  as the  appellant's  attacks  on the  district



          court's subject matter jurisdiction fail.



                    A  federal court appropriately exercises subject matter



          jurisdiction over state court claims upon removal when the claims



          are  sufficiently "related"  to bankruptcy  proceedings.   See 28
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          U.S.C.    1334, 1452 (1994). "[T]he  test for determining whether



          a  civil  proceeding is  related  to  bankruptcy  is whether  the



          outcome of that  proceeding could conceivably have  any effect on



          the  estate  being administered  in  bankruptcy."   In  re G.S.F.
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          Corp.,  938 F.2d  1467, 1475  (1st Cir.  1991) (quoting  Pacor v.
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          Higgins, 743  F.2d 984, 994 (3d  Cir. 1984)).  In  this case, the
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          district court properly exercised jurisdiction over the claims to



          compel the return of the seized property because those claims had



          a direct and significant  effect on the bankruptcy estate.2   See
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          United States  v. Star Rte. Box  1328, 137 B.R. 802,  805 (D. Or.
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          1992) (holding  that a  case involving federal  civil forfeitures



          satisfied  the  relatedness test).    Moreover,  the claims  were



          properly  withdrawn by  the  district court  from the  bankruptcy



          court.  See 28 U.S.C.   157(d) (1994).
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                    3.     PR-DOJ  offers  as  an   additional  reason  for
3.


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               2To be  sure, PR-DOJ  emphasizes that the  issues concerning

          the seized  property depend  primarily on Puerto  Rico forfeiture

          law.    But  "federal  courts  are  not  lightly  to   relinquish

          jurisdiction, and  . . . even  a difficult issue of  state law or

          parallel pending state litigation  is not automatically a warrant

          to abstain."  Lundborg v. Phoenix Leasing, Inc., 91 F.3d 265, 272
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          (1st  Cir. 1996).   Thus, the  district court  did not  abuse its

          considerable discretion by deeming itself competent to  determine

          straightforward issues of Puerto Rico law.



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          reconsideration  its complaint  that the  district court  entered



          summary judgment without  offering it an opportunity  to mount an



          opposition.  This is  sheer persiflage.  The record  reveals that



          PR-DOJ  had  ample opportunity  to  oppose  the summary  judgment



          motions, and  instead neglected  to do  so.3   What is  more, the



          district court did not grant the motions merely because they were



          unopposed; rather, the court,  following settled precedent,  see,
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          e.g., Kelly v. United States, 924  F.2d 355, 358 (1st Cir. 1991);
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          Mendez  v.  Banco  Popular,  900  F.2d  4,  7  (1st  Cir.  1990),
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          considered the motions on their merits, in light of the record as



          constituted, and determined that judgment in favor of the movants



          was legally appropriate.



                    The sockdolager,  of course, is that  PR-DOJ, even now,



          has not suggested any  credible reason why Bank of  Boston and/or



          Northwestern Trading are not entitled to judgment.  The claimants



          are  parties  possessing  cognizable   interests  in  the  seized



          property.    See P.R.  Laws Ann.  tit. 34,     1723 (1991).   The
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          criminal proceedings  fizzled out,  and under  the law  of Puerto



          Rico,  acquittal  on  criminal  charges  renders  a  governmental



          seizure of  the acquitted person's  property invalid.   See Carlo
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          del Toro v.  Secretario de Justicia, 7 P.R. Off. Trans. 392, 398-
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          99 (1982).   In the face of  clear precedent, the district  court




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               3PR-DOJ's  lament that it was  lulled into a  false sense of

          security  by a  stay granted  earlier in  the proceedings  by the

          bankruptcy  court holds little water.   Given the  record in this

          case, no  reasonable lawyer would  have concluded  that the  stay

          endured  after  the district  court  withdrew  the reference  and

          assumed jurisdiction.



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          acted appropriately in noticing  the acquittals and striking down



          the seizures.



                    We need go no further.  Concluding, as  we do, that the



          instant appeal is entirely without merit, we summarily affirm.







          Affirmed.
Affirmed.
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