Ortiz-Bonilla v. Federación De Ajedrez De Puerto Rico, Inc. , 734 F.3d 28 ( 2013 )

United States Court of Appeals
For the First Circuit
No. 12-1022
RAFAEL ORTIZ-BONILLA; LUIS J. TORRES-BAUZÁ;
JUAN MARTÍN SANTA-TORRES; JULIO GUZMÁN-FREIRE;
CRISTÓBAL VEGA-ADORNO; JUAN JAVIER HERNÁNDEZ-LEBRÓN,
Plaintiffs, Appellants,
FERNANDO MARTÍNEZ-BUITRAGO,
Plaintiff,
v.
FEDERACIÓN DE AJEDREZ DE PUERTO RICO, INC.,
Defendant, Appellee.
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF PUERTO RICO
[Hon. Gustavo A. Gelpí, U.S. District Judge]
Before
Torruella, Howard, and Thompson,
Circuit Judges.
Donato Rivera-de Jesús, for appellants.
Albéniz Couret-Fuentes, with whom Lee R. Sepulvado-Ramos,
Jorge A. Galiber-Sánchez, and Sepulvado & Maldonado, PSC were on
brief, for appellee.
August 21, 2013
THOMPSON, Circuit Judge. In this case, we are called
upon to referee a dispute between a group of chess players and
their opponent, the Puerto Rico Chess Federation. Having come to
a stalemate over events leading up to and during a chess federation
meeting, the chess players filed suit against the federation in
Puerto Rico Superior Court, alleging violations of their rights
protected by the United States and Puerto Rico constitutions and
Puerto Rico law. The chess federation removed the case to federal
court pursuant to 28 U.S.C. § 1441. The chess players filed a
second case, similar to the first, again in Puerto Rico court, this
time excluding and waiving any claims under federal law. The chess
federation removed this case as well, the district court
consolidated the two, and declared jurisdiction over the second
case under the All Writs Act, 28 U.S.C. § 1651(a). The district
court ultimately granted summary judgment in favor of the chess
federation and dismissed the chess players' claims. They now
appeal, first challenging the district court's exercise of
jurisdiction over their claims and then the court's dismissal of
several of their Puerto Rico law claims. After careful
consideration we affirm in part and reverse in part.
Background
Appellants Rafael Ortiz-Bonilla, Luis José Torres-Bauzá,
Juan Martín Santa-Torres, Julio Guzmán-Freire, Cristóbal Vega-
Adorno, and Juan Javier Hernández-Lebrón (collectively "the
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Chessplayers"), are members of the Puerto Rico Chess Federation,
appellee Federación de Ajedrez de Puerto Rico, Inc. ("FAPR"). FAPR
is a private, not-for-profit corporation, organized under the laws
of the Commonwealth of Puerto Rico, established for the promotion
and dissemination of chess. As a member of the international chess
federation, Fédération Internationale des Eches ("FIDE"), FAPR also
participates in international chess competitions.
Every two years, FAPR elects a Board of Directors in
charge of the administration of the affairs of the organization.
The election of interest in this case was scheduled to take place
at the ordinary meeting scheduled for January 2011. On November 7,
2010, one of the Chessplayers, Cristóbal Vega-Adorno, submitted his
candidacy for FAPR President in the upcoming election. The next
day, ten FAPR members submitted a petition calling for an
extraordinary meeting on November 20, 2010, to amend FAPR's
constitution and restructure its organization administratively and
fiscally.
FAPR's then-administrator, Vance Berríos, sent a message
to the group e-mail address "ajedrezpr@yahoo.com" (it is not
entirely clear which members subscribed to this group e-mail
address). Berríos's message contained a notification written by
FAPR's then-President, Omar Añeses Bocanegra, summoning all active
members to a special meeting to be held on November 20, for the
purpose of amending the FAPR constitution. Añeses's message
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contained the text of the proposed amendments and a section titled
"The Right to Participate in Meetings" that featured excerpts from
the FAPR constitution pertaining to membership, voting rights, and
new members. Five members, including three of the Chessplayers,
responded to Añeses twice, challenging the validity of the
extraordinary meeting. Añeses did not respond to those messages.
When several members of FAPR, including some of the
Chessplayers, arrived at the extraordinary meeting they were barred
from participating. Añeses excluded those members claiming they
were not active members in good standing and denied permission to
other members wanting to renew their memberships on the spot in
order to participate in the meeting. And so the meeting was held
without those members, with a quorum of sixty-four active members
(fifteen members appeared via proxy). The proposed amendments were
approved and the FAPR constitution was amended.
A. The First Case
Unwilling to proceed like pawns, a few weeks later, on
December 10, 2010, the Chessplayers filed a Request for Injunction
against FAPR in the Superior Court of Puerto Rico, seeking
invalidation of the November 20 meeting and the newly adopted
constitutional amendments. This request alleged FAPR violated
rights guaranteed to its members under the Constitution of the
United States, the Constitution of Puerto Rico, and the General
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Corporations Law of Puerto Rico. FAPR's counterplay was to remove
the case to the Federal District Court of Puerto Rico.
The Chessplayers moved to remand, arguing lack of federal
jurisdiction and in the alternative, appropriate application of the
doctrine of abstention. Characterizing their claims under the
United States Constitution as passing references that merely
presented an alternative theory for relief, the Chessplayers relied
predominantly on issues of Puerto Rico law and described their
claims as Commonwealth law issues that in no way depended on the
resolution of any substantial federal issues. Alternatively, the
Chessplayers asked the district court to abstain from adjudicating
any substantial federal questions and instead remand to the Puerto
Rico court to allow that court to adjudicate the case on the merits
of the Puerto Rico law issues and make moot any federal questions.
The district court denied the Chessplayers' request for
remand, ruling they had pled a claim under the United States
Constitution, and also denied their request for abstention. The
Chessplayers moved to partially vacate the district court's order
denying remand, again arguing lack of subject matter jurisdiction;
the district court denied this motion. Soon after that, the
Chessplayers filed a motion to amend their first request for
injunction, voluntarily dismissing the federal claims the district
court found in their first case. But, the district court denied
this motion as well.
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B. The Second Case
Knowing they could not win by resigning, the Chessplayers
filed a second Request for Injunction against FAPR again in the
Superior Court of Puerto Rico. This second request alleged the
same facts as the first, but omitted all claims of violations of
rights guaranteed by the United States Constitution. The
Chessplayers' complaint explicitly waived any claims they might
have had under the United States Constitution.
Like the first round, FAPR removed the second case to
federal court arguing that it contained identical facts, claims,
and parties as the first case, and so the district court had
subject matter jurisdiction over the second case and supplemental
jurisdiction over the related Puerto Rico law claims therein.1
FAPR argued the Chessplayers filed this second case in an attempt
to divest the district court of the jurisdiction it previously
asserted over the first case.
C. The Consolidated Cases
The next day, FAPR moved to consolidate the cases, and
the district court granted its request. FAPR then filed an answer
to the Chessplayers' second complaint asserting there was no viable
cause of action against them because as a private association FAPR
1
According to FAPR's translation of the second request,
paragraph twenty-four alleged violations of "rights that are
federal in origin (under the United States legal system)" in
addition to rights protected by the Commonwealth of Puerto Rico.
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was not a state actor and thus was entitled to the court's
deference regarding its private determinations. The Chessplayers
moved to vacate the consolidation but the district court denied
their motion. In response, the Chessplayers moved to remand the
second case, stressing all federal claims in the second case were
removed and expressly waived,2 so there was no federal subject
matter jurisdiction warranting removal.
Although the second case had already been removed and
consolidated with the first case, FAPR filed a petition with the
court the following day to enter an order retaining removal
jurisdiction over the second case under the All Writs Act, and/or,
in the alternative, enjoining the Chessplayers from prosecuting the
second case in state court under either the Anti-Injunction Act or
the All Writs Act. The district court denied the Chessplayers'
request for remand of the second case, and found moot FAPR's
petition, explaining its reasoning in an electronic order:
The Court shall not remand to state court consolidated
case 11-1208. Said case presents identical facts and
claims to the instant case, and was filed subsequent to
this court sustaining the removability of the present
case. Plaintiffs, hence, have attempted to thwart this
court's removal jurisdiction by filing the second case.
2
In their motion to remand, the Chessplayers also explained
FAPR relied upon an erroneous English translation of the second
request, "the claims of the co-plaintiffs in this case are
protected by rights that are federal in origin." According to the
Chessplayers, an accurate translation of paragraph twenty-four
states their claims "could be protected by rights that are federal
in origin." The Chessplayers argued this correct translation makes
clear their second case pleads no federal claims.
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Removal of 11-1208 is hence proper under the All-Writs
Act in order for this court to sustain its jurisdiction.
(emphasis added).
The Chessplayers then filed a motion for leave to file an
interlocutory appeal regarding the district court's denial of their
request to remand the second case; the district court denied this
motion.
Finding themselves in a closed position, the Chessplayers
moved for voluntary dismissal of their United States and Puerto
Rico constitutional claims for lack of case or controversy, as both
parties initially agreed that there were insufficient allegations
to establish state action for the purposes of federal jurisdiction.
Ignoring the issue of state action for the moment, FAPR opposed
dismissal of the federal claims, asserting the Chessplayers were
simply trying to somehow divest the district court of jurisdiction
or find a way to have the case returned to state court. The
district court denied the Chessplayers' motion.
FAPR then moved for summary judgment dismissing the
consolidated cases, arguing its conduct did not constitute state
action and the Chessplayers' Puerto Rico law claims did not warrant
judicial intervention into the affairs of FAPR as a private
association, and they failed to establish the four criteria
required for an award of preliminary injunction. The Chessplayers
opposed, arguing for summary judgment in their favor on what they
asserted was now a request for permanent injunction. The district
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court considered FAPR's motion as it applied to the Chessplayers'
request for a permanent injunction, ultimately granting summary
judgment in favor of FAPR, and dismissed the Chessplayers' claims
under the United States and Puerto Rico constitutions premised on
state action by FAPR. As to the Chessplayers' Puerto Rico law
claims, the district court determined that FAPR's actions did not
warrant judicial intervention and dismissed the claims. The
district court's order did not include any discussion of the
requirements for permanent injunction beyond success on the merits.
Checkmated, the Chessplayers now appeal the district court's grant
of summary judgment, arguing both cases should have been remanded
to the Puerto Rico court for lack of subject matter jurisdiction.
As to the merits of their claims, they do not appeal the district
court's dismissal of their claims under the United States and
Puerto Rico constitutions, but assert their Commonwealth claims
should have been decided, on the merits, in their favor. We have
jurisdiction over this appeal pursuant to 28 U.S.C. § 1291.
Discussion
We divide our analysis into two parts. In the first we
discuss the issues concerning federal subject matter jurisdiction,
and then address the district court's dismissal of the
Chessplayers' Puerto Rico law claims.
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A. Federal Subject Matter Jurisdiction
The Chessplayers generally assert that both cases
belonged in the Puerto Rico court and not federal district court.
FAPR contends the district court properly denied remand of both
cases. To resolve this issue, we must determine whether the
district court had federal subject matter jurisdiction over the
cases. We review questions of federal subject matter jurisdiction
de novo, when the relevant facts are not in dispute, and the
removing party bears the burden of persuasion for the existence of
federal jurisdiction. Samaan v. St. Joseph Hosp., 670 F.3d 21, 27
(1st Cir. 2012); BIW Deceived v. Local S6, Indus. Union of Marine
& Shipbuilding Workers of Am., 132 F.3d 824, 830-31 (1st Cir.
1997). We begin by setting forth some guiding principles.
When a civil action is originally filed in state court,
removal to federal court is proper only if the action could have
initially been brought in federal court. 28 U.S.C. § 1441(a).
This is so because of the "important federalism concerns at play in
considering removal jurisdiction." Rosselló-González v. Calderón-
Serra, 398 F.3d 1, 11 (1st Cir. 2004); see also Franchise Tax Bd.
v. Constr. Laborers Vacation Trust for S. Cal., 463 U.S. 1, 7-8
(1983). For cases, like this one, where there is no diversity of
citizenship between parties, removal jurisdiction turns on whether
the case falls within "federal question" jurisdiction: "The
district courts shall have original jurisdiction of all civil
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actions arising under the Constitution, laws, or treaties of the
United States." 28 U.S.C. § 1331. But there is "no mechanical
test for determining when an action aris[es] under federal law."
R.I. Fishermen's Alliance, Inc., v. R.I. Dep't of Envtl. Mgmt., 585
F.3d 42, 47-48 (1st Cir. 2009) (citing Franchise Tax Bd., 463 U.S.
at 8). As the Supreme Court has noted, the phrase "arising under"
has "resisted all attempts to frame a single, precise definition
for determining which cases fall within, and which cases fall
outside, the original jurisdiction of the district courts."
Franchise Tax Bd., 463 U.S. at 8.
The jurisdictional question is determined from what
appears on the plaintiff's claim, without reference to any other
pleadings. Templeton Bd. of Sewer Comm'rs v. Am. Tissue Mills of
Mass., Inc., 352 F.3d 33, 37 (1st Cir. 2003). There are two types
of actions that may come within federal question jurisdiction. The
first category "involves direct federal questions; that is, suits
in which the plaintiff pleads a cause of action that has its roots
in federal law (say, a claim premised on the United States
Constitution or on a federal statute)." R.I. Fishermen's Alliance,
585 F.3d at 48. These cases, which constitute the "vast majority"
of cases brought under the general federal question jurisdiction of
the district courts, are those "in which federal law creates the
cause of action." Merrell Dow Pharm. Inc. v. Thompson, 478 U.S.
804, 808 (1986). Where a complaint "is so drawn as to seek
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recovery directly under the Constitution or laws of the United
States," the federal court must entertain the suit. Bell v. Hood,
327 U.S. 678, 681 (1946); see also Ortiz De Arroyo v. Barcelo, 765
F.2d 275, 279 (1st Cir. 1985).
If a claim does not allege a federal cause of action, "we
must inquire into whether some element of the [plaintiff's] claim
depends on the resolution of a substantial, disputed question of
federal law." Templeton, 352 F.3d at 36. These constitute the
second (and more controversial) category of cases, those with an
"embedded federal question," meaning suits in which the plaintiff
pleads a state-law cause of action that necessarily turns on some
construction of federal law. Id. at 37 (citing Merrell Dow Pharm.
Inc., 478 U.S. at 808-09); Almond v. Capital Props., Inc., 212 F.3d
20, 23 (1st Cir. 2000). These are cases where the issue is
governed by state law, but "a federal issue is decisive to the
dispute and the federal ingredient . . . is sufficiently
substantial to confer the arising under jurisdiction." One & Ken
Valley Housing Grp. v. Me. State Hous. Auth., 716 F.3d 215, 224
(1st Cir. 2013) (alteration in original) (quoting W. 14th St.
Commercial Corp. v. 5 W. 14th Owners Corp., 815 F.2d 188, 196 (2d
Cir. 1987)) (internal quotation marks omitted). In evaluating the
constitutional claims, we do not pass on the merits of the case.
See Ortiz De Arroyo, 765 F.2d at 279. "A federal court that
exercises federal question jurisdiction over a single claim may
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also assert supplemental jurisdiction over all state-law claims
that arise from the same nucleus of operative facts." BIW
Deceived, 132 F.3d at 833; see 28 U.S.C. § 1367(a). With these
principles in mind, we turn our analysis to the removal of the
Chessplayers' first case.
1. The First Case
The first request for injunction, the Chessplayers argue,
should have been remanded back to the Puerto Rico court for lack of
federal subject matter jurisdiction. According to the
Chessplayers, the first case merely mentioned the United States
Constitution and relied predominantly on Puerto Rico law claims
that did not depend on the resolution of a federal question. They
further assert any references made to the United States
Constitution were only alternative legal theories for their Puerto
Rico law claims. FAPR contends that on its face, the first case
alleged violations of federal constitutional rights and there is
nothing therein to suggest the Chessplayers intended to limit their
claims to Puerto Rico law.3
FAPR effected removal of the first case pursuant to §
1441, so we begin by asking whether the federal district court
would have had original jurisdiction over the first case, had it
3
On appeal, the Chessplayers do not reprise their argument
below that the district court should have abstained from deciding
the federal issues and instead confine their argument to lack of
subject matter jurisdiction.
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been filed in that court. BIW Deceived, 132 F.3d at 830. There is
no basis for diversity jurisdiction in this case, so we look to
whether the district court would have had subject matter
jurisdiction over the first case as one "arising under the
Constitution, laws, or treaties of the United States." 28 U.S.C.
§ 1331.
The Chessplayers' complaint first asserted FAPR "receives
public funds from the Government of the Commonwealth of Puerto
Rico, currently amounting to $200 Thousand a year, for the public
purpose of carrying out programs to quantitatively and
qualitatively organize, further, and develop chess in Puerto Rico"
and Puerto Rico public schools. According to the Chessplayers, the
actions of FAPR board members (attributable to the organization)
amounted to state action "because of the funds that the
Commonwealth of Puerto Rico contributes annually to the FAPR." The
complaint went on to allege:
23. In addition to the right of the plaintiff and the
other members of FAPR to vote in the assembly that is the
subject of this request, their right to attend and
participate in the same was also violated; without
considering whether or not they would be allowed to vote
at the relevant time. The above violated the right to
freedom of speech and to freedom of association of the
co-plaintiffs guaranteed by the Constitution of the
Commonwealth of Puerto Rico and the Constitution of the
United States of America. . . .
37. The series of arguments contained in this petition,
and specially the elements just described, illegally
injured the right to vote, and the rights of freedom of
speech and of free association of the above-mentioned
members of the FAPR. These are rights that are
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guaranteed by the Constitution of the Commonwealth of
Puerto Rico and the Constitution of the United States of
America . . . .
48. If the remedy granted herein is not granted,
plaintiffs will suffer serious and irreparable harm as
members of the FAPR, consisting of the fact that they
will lose the right of direct vote and the exercise of
their freedom of expression and of association in all of
the matters to be considered in assemblies of the FAPR,
including decisions with an impact on the use of public
funds that the institution receives as a direct allotment
from the PR Legislative Assembly; and particularly
including the right to vote directly for the president
and the other members of the Board of Directors of the
FAPR every two years; and the right of freedom of
expression and freedom of association guaranteed by the
Constitution of the Commonwealth of PR and the
Constitution of the United States of America. (emphasis
added).
These paragraphs plainly allege state action violations of speech
and association rights guaranteed by the Constitution of the United
States, claims "premised on the United States Constitution." R.I.
Fishermen's Alliance, 585 F.3d at 48. The Chessplayers "seek
recovery directly under the Constitution" of the United States, and
their federal question appears on the face of their request. Bell,
327 U.S. at 681. Accordingly, the federal courts must entertain
the suit. See id.; see also W. Side Belt R.R. Co. v. Pittsburgh
Constr. Co., 219 U.S. 92, 99 (1911) (explaining an assertion of a
right under the Constitution of the United States necessarily
raises a federal question).
It is immaterial that a claimant in retrospect views her
federal claims as surplus, or after removal, moves to strike the
federal claims. See Ching v. Mitre Corp., 921 F.2d 11, 13 (1st
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Cir. 1990). The plaintiff is the "master of the claim; he or she
may avoid federal jurisdiction by exclusive reliance on state law."
Caterpillar, Inc. v. Williams, 482 U.S. 386, 392 (1987). Here, the
Chessplayers, as masters of their claim, could have avoided federal
jurisdiction by relying exclusively on Puerto Rico law. See id. at
399. Thus, the Chessplayers' decision to allege a violation of
their rights under the United States Constitution opened the door
for FAPR to remove the case to federal court. See id.; see also
Ching, 921 F.2d at 14.
The Chessplayers argue the first case did not pose a
"substantial" federal question, and any mention of the United
States Constitution was merely an alternative legal theory to their
state law claims. These arguments are unavailing as the
Chessplayers ignore the crucial fact that their first request posed
a direct federal question. An investigation into whether a cause
of action asserts a "substantial" federal question is relevant only
for state-law causes of action containing embedded federal
questions. Templeton, 352 F.3d at 36 (stating that if the
complaint does not allege a federal cause of action, the inquiry is
then into "whether some element of the claim depends on the
resolution of a substantial, disputed question of federal law").
The Chessplayers' first request alleged violations of their rights
guaranteed by the Constitution of the United States, which
constituted a "direct federal question" as "a claim premised on the
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United States Constitution," so we need not continue our analysis
to the "substantial" question query. R.I. Fishermen's Alliance,
585 F.3d at 48; see also Templeton, 352 F.3d at 36.
Next citing a handful of out-of-circuit cases and one
Supreme Court case, the Chessplayers argue federal jurisdiction
will not extend to cases where the federal question appears only in
an alternative argument for relief. But this standard is applied
to cases that assert causes of action created by state law, not
direct federal question cases. Unlike the plaintiffs in the cases
they cite, the Chessplayers asserted an explicit federal question,
clear on the face of their first complaint, not a state-law cause
of action containing an embedded federal question.4 While the
Chessplayers urge us to apply these inquiries to their first case,
we cannot; the "substantial" element and "alternative theory"
analyses are inapplicable in the present case because the
Chessplayers pled in part an explicit federal question under the
United States Constitution.
4
The cases cited by the Chessplayers explain that the
"alternative legal theory" inquiry is applied in cases where state
law creates the cause of action. See Dixon v. Coburg Dairy, Inc.,
369 F.3d 811 (4th Cir. 2004); Howery v. Allstate Ins. Co., 243 F.3d
912 (5th Cir. 2001); Rains v. Criterion Sys. Inc., 80 F.3d 339 (9th
Cir. 1996); Mulcahey v. Columbia Organic Chems. Co., 29 F.3d 148(4th Cir. 1994). The Chessplayers also rely on Christianson v.
Colt Indus. Operating Corp., 486 U.S. 800 (1988). However, the
Supreme Court in Christianson reasoned that the complaint itself
alleged no federal claim, so the inquiry centered on whether patent
law was a necessary element of one of the well-pleaded state-law
claims. Id. at 809.
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Accordingly, we conclude the district court had subject
matter jurisdiction over the Chessplayers' first request for
injunction, and thus could exercise supplemental jurisdiction over
the Puerto Rico law claims arising from the "same nucleus of
operative facts." See BIW Deceived, 132 F.3d at 833.
2. The Second Case
As we explained, the district court denied the
Chessplayers' motion to remand the second case and deemed removal
of it from the Puerto Rico court proper under the All Writs Act, 28
U.S.C. § 1651(a). The Chessplayers challenge the district court's
subject matter jurisdiction over the second filed action, arguing
that there was no original jurisdiction under § 1441 and that
removal of the second case pursuant to the All Writs Act was
improper. Although FAPR sought relief in the district court under
both the All Writs and Anti-Injunction Acts, on appeal it plays
around the issue of whether removal was proper under the All Writs
Act. Instead it makes an argument based on an interpretation of
the Anti-Injunction Act that other federal jurisdictions have
adopted. FAPR contends the Chessplayers made an illegal move by
filing the second case, in an attempt to thwart the district
court's jurisdiction over the same claims presented in first case.
FAPR reasons the district court properly prevented the Chessplayers
from continuing in Puerto Rico court, thereby protecting its
jurisdiction over the first case, as authorized by the Anti-
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Injunction Act. And so we examine whether the district court had
jurisdiction over the second case. We start by considering the
appropriateness of the All Writs Act as a vehicle for removal.
The All Writs Act provides that the "Supreme Court and
all courts established by Act of Congress may issue all writs
necessary or appropriate in aid of their respective jurisdictions
and agreeable to the usages and principles of law." 28 U.S.C.
§ 1651(a). It is a "residual source of authority to issue writs
that are not otherwise covered by statute." Clinton v. Goldsmith,
526 U.S. 529, 537 (1999) (quoting Carlisle v. United States, 517
U.S. 416, 429 (1996)) (internal quotation marks omitted). "[W]here
a statute specifically addresses the particular issue at hand, it
is that authority, and not the All Writs Act, that is controlling."
Syngenta Crop Prot., Inc. v. Henson, 537 U.S. 28, 32 (2002)
(quoting Pa. Bureau of Corr. v. U.S. Marshals Serv., 474 U.S. 34,
43 (1985)). The "right of removal is entirely a creature of
statute," and the Supreme Court has made clear that a suit
"'commenced in a state court must remain there until cause is shown
for its transfer under some act of Congress.'" Id. (quoting Great
N. Ry. Co. v. Alexander, 246 U.S. 276, 280 (1918)). The removal
statute is the controlling authority for removal, and the All Writs
Act cannot excuse "compl[iance] with the statutory requirements for
removal." Id. at 32-33.
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Applying these standards to this case, it is clear the
district court lacked jurisdiction over the second case under the
All Writs Act. The district court's order denying the
Chessplayers' motion to remand the second case states, "[s]aid case
presents identical facts and claims to the [first] one, and was
filed subsequent to this court sustaining the removability of the
[first] case. Plaintiffs, hence, have attempted to thwart this
court's removal jurisdiction by filing the second case." The order
goes on to proclaim removal of the second case "proper under the
All-Writs Act in order for this court to sustain its jurisdiction."
The district court's order is concise, but it is clear the court
deemed removal proper "under the All-Writs Act" and not any other
statutory provision. The statutory requirements for removal may
not be avoided by relying upon the All Writs Act and accordingly,
the Act could not provide the district court with jurisdiction over
the second case. See id. at 33.
We also find no basis for jurisdiction pursuant to the
removal statute, 28 U.S.C. § 1441(b). As we have explained above,
removal of a case from state court to federal district court under
§ 1441 is proper only if the district court has original subject
matter jurisdiction over the case. And so, to remove the second
case pursuant to § 1441, it must have posed, on its face, a direct
federal question or a state-law cause of action that necessarily
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turned on some construction of federal law. See R.I. Fishermen's
Alliance, 585 F.3d at 48; Templeton, 352 F.3d at 36.
Unlike the first complaint, the Chessplayers' second
request did not assert claims "premised on the United States
Constitution." R.I. Fishermen's Alliance, 585 F.3d at 48. No
elements of their state law claims required "resolution of a
substantial, disputed question of federal law." Templeton, 352
F.3d at 36. They expressly waived any federal claims in their
second request. As such, the district court was mistaken in its
assertion that the second case made identical claims to the first.
And therefore no basis for federal subject matter jurisdiction
existed, and the original jurisdiction required for removal
pursuant to § 1441 was absent.5 Consequently, we find the district
court erroneously concluded it had jurisdiction over the second
case and so we remand it to the district court with instructions to
5
Because the district court incorrectly deemed the All Writs
Act a proper vehicle for removal of the second case it never ruled
on the merits of FAPR's alternative argument that the court was
nonetheless correct in preventing the second case from proceeding
in the Commonwealth court pursuant to an exception to the Anti-
Injunction Act. Given the particular circumstances of this case,
we need not decide--and we express no view on--that argument now.
Instead, we leave the issue to be litigated on remand if necessary.
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remand to the Commonwealth court.6 We proceed to our review of the
last claims.7
B. Summary Judgment
To remind the reader, FAPR's motion for summary judgment
addressed the Chessplayers' initial request for a preliminary
injunction. In their opposition to FAPR's motion, the Chessplayers
clarified their position: they were now seeking a permanent, not a
preliminary, injunction and they claimed entitlement to summary
judgment on that request (the ultimate claim in their consolidated
cases).
In ruling on FAPR's motion for summary judgment the
district court found no state action and dismissed all of the
Chessplayers' claims premised on such a theory under the United
States and Puerto Rico constitutions. The court also dismissed all
6
We do not accept jurisdiction over cases that belong in
state court, as 28 U.S.C. § 1447(c) requires us to remand them back
to state court if, before final judgment, it appears we incorrectly
assumed jurisdiction. See Franchise Tax Bd., 463 U.S. at 8.
7
The Chessplayers also argue that even if the district court
did have jurisdiction over the first case and not the second, the
exercise of jurisdiction was vitiated by the consolidation of the
cases, which prevented them from effectively pursuing their second
case in Puerto Rico state court, where they had already obtained a
preliminary injunction hearing. This argument was not raised below
and is therefore waived. Martex Farms, S.E. v. U.S. Envtl. Prot.
Agency, 559 F.3d 29, 33 (1st Cir. 2009). We further note the
Chessplayers do not reprise their argument below, seeking
abstention by the federal court, so we also consider this issue
waived. Beatty v. Michael Bus. Mach. Corp., 172 F.3d 117, 120 n.2
(1st Cir. 1999).
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claims based on Puerto Rico law. Citing Finn v. Beverly Country
Club, 683 N.E.2d 1191, 1193 (Ill. App. Ct. 1997),8 the district
court noted that the conduct of a voluntary association is subject
to judicial review only when it fails to exercise powers consistent
with its own rules. It then concluded that after reviewing the
submitted documents, the constitution and bylaws of FAPR, none of
the actions taken by FAPR were done in an arbitrary or capricious
manner, and thus judicial intervention was not warranted.
On appeal, the Chessplayers do not challenge the district
court's dismissal of their constitutional claims premised on state
action. They focus only on their Commonwealth claims, arguing that
FAPR's actions preceding and during the extraordinary meeting
violated the FAPR constitution and the General Corporations Law of
Puerto Rico. They reprise their argument to the district court
that FAPR's actions were clearly arbitrary and capricious and
inconsistent with its own internal rules.
8
The district court explained that because FAPR cited
Illinois case law in its summary-judgment motion and the
Chessplayers also referenced this same law in their response, it
would likewise apply this principle of judicial noninterference in
making its determinations. Puerto Rico and other legal authorities
recognize the same standard. See Universidad del Turabo v. L.A.I.,
126 D.P.R. 497 (P.R. 1990); 6 Am. Jur. 2d Associations and Clubs
§ 27. Louisiana (the only other state that operates, like Puerto
Rico, under a civil code) also uses this standard. See English v.
Nat'l Collegiate Athletic Ass'n, 439 So. 2d 1218, 1221-22 (La. Ct.
App. 1983).
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1. Standard of Review
We review the district court's grant of summary judgment
de novo. Shafmaster v. United States, 707 F.3d 130, 135 (1st Cir.
2013). And we view the record in the light most favorable to the
Chessplayers, as the unsuccessful party, drawing all reasonable
inferences in their favor. See Gerald v. Univ. of P.R., 707 F.3d
7, 16 (1st Cir. 2013). Summary judgment is appropriate when there
is "no genuine issue of material fact, and the moving party is
entitled to judgment as a matter of law." Kelley v. Corr. Med.
Servs., Inc., 707 F.3d 108, 115 (1st Cir. 2013); Fed. R. Civ. P.
56(a). That the matter was resolved on cross motions does not
change our standard of review. Segrets, Inc. v. Gillman Knitwear
Co., 207 F.3d 56, 61 (1st Cir. 2000). "Cross motions simply
require us to determine whether either of the parties deserves
judgment as a matter of law on facts that are not disputed."
Barnes v. Fleet Nat'l Bank, N.A., 370 F.3d 164, 170 (1st Cir. 2004)
(quoting Wightman v. Springfield Terminal Ry., 100 F.3d 228, 230
(1st Cir. 1996)) (internal quotation marks omitted). We are not
bound by the reasoning of the district court, but rather, "may
affirm the entry of summary judgment on any ground made manifest by
the record." Harrington v. Aggregate Indus.-Ne. Region, Inc., 668
F.3d 25, 30 (1st Cir. 2012) (citing Houlton Citizens' Coal. v. Town
of Houlton, 175 F.3d 178, 184 (1st Cir. 1999)).
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The issuance of a permanent injunction would be
appropriate only if the district court made four findings: "(1)
plaintiffs prevail on the merits; (2) plaintiffs would suffer
irreparable injury in the absence of injunctive relief" (i.e., an
injury for which there is no adequate remedy at law); "(3) the harm
to plaintiffs would outweigh the harm the defendant would suffer
from the imposition of an injunction; and (4) the public interest
would not be adversely affected by an injunction." Asociación de
Educación Privada de P.R., Inc. v. García-Padilla, 490 F.3d 1, 8
(1st Cir. 2007).
2. Relevant Law
Many jurisdictions, including Puerto Rico and Illinois,
consider the constitution and bylaws of a not-for-profit
organization to constitute a contract between the organization and
its members. Diamond v. United Food & Commercial Workers Union
Local 881, 768 N.E.2d 865, 870 (Ill. App. Ct. 2002); Universidad
del Turabo, 126 D.P.R. 497. These are a unique type of contract
in which the member, either expressly or implicitly, "agrees to
abide by all rules and regulations adopted by the organization."
Diamond, 768 N.E.2d at 869 (quoting Blackshire v. Nat'l Ass'n for
the Advancement of Colored People (NAACP), Inc., 673 N.E.2d 1059,
1061 (Ill. App. Ct. 1996)) (internal quotation marks omitted); Lee
v. Snyder, 673 N.E.2d 1136, 1139 (Ill. App. Ct. 1996) (quoting
Engel v. Walsh, 101 N.E. 222, 223-24 (Ill. 1913)); Universidad del
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Turabo, 126 D.P.R. 497. The constitution or bylaws may provide
procedures to resolve issues that arise within the organization and
might also expressly endow authority in an officer or director to
interpret the constitution or bylaws. See, e.g., Finn, 683 N.E.2d
at 1193-94; Edwards v. Ind. State Teachers Ass'n, 749 N.E.2d 1220,
1225 (Ind. Ct. App. 2001). Where this sort of authority is
granted, the members, through their contractual relationship with
the organization, agree that the authorized officer has the power
to interpret and the members may be bound by those interpretations;
accordingly, the court gives deference to the authorized officer's
interpretations. Diamond, 768 N.E.2d at 870; see Finn, 683 N.E.2d
at 1194.
That is not to say there is no place for judicial
intervention. The organization's bylaws and constitution are a
contract, and thus by virtue, can be breached. Diamond, 768 N.E.2d
at 870. And "if the organization provides no avenue for internal
review or appeal, then judicial intervention in an internal dispute
may be appropriate." 6 Am. Jur. 2d Associations and Clubs § 27;
see also Engel, 101 N.E. at 224. "[C]ourts generally will not
interfere with the internal affairs of a voluntary association
absent mistake, fraud, collusion or arbitrariness." Poris v. Lake
Holiday Prop. Owners Ass'n, 983 N.E.2d 993, 1001 (Ill. 2013); Finn,
683 N.E.2d at 1193. But, the conduct of voluntary associations
will be subject to judicial review "when they fail to exercise
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power consistently with their own internal rules or when their
conduct violates the fundamental right of a member to a fair
hearing." Finn, 683 N.E.2d at 1193; see also Diamond, 768 N.E.2d
at 870; Hernández v. Asociación Hosp. del Maestro, Inc., 106 D.P.R.
72 (P.R. 1977).9
In our de novo review we must examine the record before
us to determine whether the district court properly awarded summary
judgment to FAPR on the Chessplayers' request for injunction. The
heart of the Chessplayers' argument is that FAPR acted in an
arbitrary and capricious manner, based on unauthorized or erroneous
interpretations of the organization's constitution. They do not
detail the four specific requirements for permanent injunction, but
instead focus their argument as a challenge to the district court's
determination on the merits (which is where the district court
ended its analysis). The Chessplayers' appeal is limited to the
district court's grant of summary judgment on the following issues:
exclusion of certain members from the extraordinary meeting; proxy
voting; freezing renewals and new memberships; and notification of
the extraordinary meeting only though e-mail. We take each of the
Chessplayers' assigned claims of error in turn.
9
We note that while no one has presented this argument here,
judicial intervention into the dealings of a private association is
warranted when other due-process type violations have occurred.
Finn, 683 N.E.2d at 1193; Hernández, 106 D.P.R. 72; Diamond, 768
N.E.2d at 870.
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a. Exclusion of Existing Members
The Chessplayers challenge FAPR's exclusion of certain
members from participating in the extraordinary meeting on the
grounds they were not "active" members. They specifically take
issue with former president Añeses's definition for "active"
membership, which he enforced prior to and at the extraordinary
meeting. The definition of "active" imposed by Añeses allowed
members who were "up to date with the payment of their membership
fees" and "also participated in at least one chess tournament
sponsored by the Federation during the immediately preceding twelve
months" to participate in the November 20 meeting. Citing Article
III of the FAPR constitution, the Chessplayers assert this
definition of "active" member is contrary to the organization's
rules and regulations. FAPR maintains the exclusion of certain
members was based in sound reasoning.
We look to the FAPR constitutional provisions regarding
member voting in extraordinary meetings. Article VI(2) of the FAPR
constitution states that in meetings "whether ordinary or
extraordinary, only active members whose annual dues are current
may participate. The same day of the meeting - and before it
begins - a member may bring his membership current." Article III
requires FAPR members to "remain active attending the meetings,
participating in the activities, and paying the assigned dues."
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There are no additional definitions for "active" in the FAPR
constitution.
The constitution states the "Board of Directors will
govern with the best criteria and will be the supreme body, with
the exception of the assembly." It goes on to grant the President
powers to "act as the Federation's official representative and will
make whatever decisions he/she needs to take when the Board of
Directors or the Assembly is not meeting." But FAPR's constitution
contains no provision granting the President or any other Board
Member the power to interpret the terms of the constitution.
Accordingly, there is no authorized officer whose interpretations
require our deference. See Diamond, 768 N.E.2d at 870.
The definition of "active" employed by Añeses draws from
the FIDE (the International Chess Federation) handbook,
specifically the section pertaining to the criteria for ranking the
top FIDE chess players. Six times each year, the Qualification
Commission of FIDE prepares a list of the top active players; a
player will not be included on the list if he or she is inactive.
The handbook describes inactivity as when a player has played "no
rated games in a one year period." Añeses's definition of "active"
combined the FIDE handbook's description of inactivity for
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inclusion in the top players list with Article III of the FAPR
constitution.10
But the FAPR constitution does not require the adoption
of terms in the FIDE handbook pertaining to ratings, nor does it
state that terms as described by FIDE must or may be employed by
FAPR. FIDE is mentioned only twice in the FAPR constitution:
Article II(b) states FAPR will "divulge the game of chess" as
regulated by the FIDE, and Article IV(a) states FAPR "must be
affiliated with the F.I.D.E." There is no specific provision in
the FAPR constitution for the implementation of FIDE terminology or
definitions. Rather, Article III defines "the members" of FAPR
without any reference to the FIDE. Thus, Añeses's incorporation of
the FIDE description of "inactivity," taken from the criteria for
inclusion in the top rated players list, to the FAPR constitutional
provisions for member participation in meetings was not grounded in
any FAPR constitutional provision. Nor was his interpretive action
authorized by any power enunciated in the constitution, so we owe
it no deference. See Diamond, 768 N.E.2d at 870. As such, FAPR
"fail[ed] to exercise power consistently with its own internal
rules," and so its "conduct is subject to judicial review." Finn,
683 N.E.2d at 1193.
10
Añeses's message, sent to the group e-mail address,
justified this definition of active, stating the FIDE provisions
complement the rules and regulations of FAPR, and FIDE considered
active members those who participated in activities (which he
clarified as "tournaments, etc.") in the previous twelve months.
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Applying de novo review, we conclude the Chessplayers
successfully demonstrated this action was arbitrary and warranted
judicial intervention.
b. Proxy Voting
The minutes from the extraordinary meeting clearly state
that fifteen of the sixty-three member quorum voted by proxy. The
Chessplayers assert the inclusion of votes by proxy was not
authorized by any FAPR provision and was inconsistent with the
Rules of Parliamentary Procedure adopted in Article VI of its
constitution. FAPR contends inclusion of votes by proxy was
permissible.
We turn to Article VI of the FAPR constitution--"About
the Meetings"--which states that meetings "whether ordinary or
extraordinary . . . will be guided by Roberts Rules of Order."
Robert's Rules state, "[p]roxy voting is not permitted in ordinary
deliberative assemblies unless the laws of the state in which the
society is incorporated require it, or the charter or by-laws of
the organization provide for it." RONR (11th ed.), p. 428-29.
It is clear that the November 20 meeting was not an
ordinary meeting, rather it was an extraordinary meeting. And
Robert's Rules regarding proxy voting pertain specifically to
"ordinary deliberative assemblies" and are silent as to
extraordinary meetings or deliberative assemblies. As the
November 20 meeting was not an ordinary meeting, the limitations on
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proxy voting enunciated in Robert's Rules cannot be applied as
though it were an ordinary deliberative assembly. While the FAPR
constitution is silent on the specific issue of proxy voting, the
inclusion of proxy votes at the extraordinary meeting does not
appear to be inconsistent with the FAPR constitution, as it
incorporates Robert's Rules of Order. The Chessplayers have not
shown they prevail even on the merits of this claim, and we
conclude the district court did not err in its grant of summary
judgment on this issue.
c. Freezing Renewals
The Chessplayers argue FAPR violated its constitution
by prohibiting existing members from renewing their memberships up
to or on the day of the extraordinary meeting, thereby preventing
them from participating. FAPR plays around this argument, and
admits the constitution provides for payment of dues on the day of
an assembly. They contend Article VI(2)'s participation provision
may be limited based on the previously discussed "active"
membership requirement as defined by former president Añeses.
We turn again to Article VI(2) of the FAPR constitution,
the provision pertaining to member voting: "The same day of the
meeting - and before it begins - a member may bring his membership
current." It is clear from the text of Article VI(2) that existing
members who wished to bring their membership current on November 20
were entitled to do so. As we already determined, Añeses's
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adoption of the FIDE definition of "active" to bar member
participation in meetings was not supported by the FAPR
constitution, and was an exercise of power inconsistent with the
organization's internal rules. See Diamond, 768 N.E.2d at 870. We
believe this claim has merit.
d. Barring New Members
Next, the Chessplayers allege FAPR violated its own
constitution by refusing to allow new members to join the
organization. FAPR counters that admission as a member is not
automatic, as provided in the constitution. The Chessplayers point
to Articles V and VI(1) of the FAPR constitution to support their
claim that new members could participate in the meeting if they
joined no later than November 30. But the Chessplayers' citations
are to provisions that pertain to meetings for Board of Directors
elections, not extraordinary meetings, the type of meeting at issue
in this case. FAPR correctly refers to Article III(b), which
states any person with knowledge of chess or interest in learning
may "apply for admission" and "acquire it by majority decision" of
the Board. The November 20 extraordinary meeting was not for the
election of Board of Directors; thus FAPR's refusal to allow new
members to apply and participate in the extraordinary meeting was
not inconsistent with its internal rules. See Diamond, 768 N.E.2d
at 870; Finn, 683 N.E.2d at 1193. We find no arbitrary or
capricious action.
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e. Notification by E-mail
The last issue for our review is the notification FAPR
provided for the extraordinary meeting. The Chessplayers claim
they never authorized FAPR to provide them notice via e-mail, and
so notification of the extraordinary meeting sent only by e-mail
violated Puerto Rico corporations law. We note that this is the
only argument, on appeal, for which the Chessplayers invoke a
specific provision of Puerto Rico law. So we apply the relevant
provision from Puerto Rico law for the analysis of this issue.
P.R. Laws Ann. tit. 14, § 3661 (2009) addresses notice by
electronic transmission, and subsection (d) clarifies that this
section applies to any corporation not authorized to issue capital
stock (for which all references to stockholders are deemed to refer
to members of the corporation). Section 3661(b)(2) states that
notice shall be deemed given "by electronic mail, when directed to
an electronic mail address at which the stockholder has consented
to receive notice."
It is undisputed that FAPR's former administrator Berríos
sent the notification for the extraordinary meeting only by e-mail,
not to individual e-mail addresses, but rather to the group address
"ajedrezpr@yahoo.com." FAPR stops short of arguing its members
consented to receiving notice via e-mail and instead merely cites
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prior instances of notification for meetings sent by e-mail.11 It
argues only that e-mail correspondence was customary. However, we
find nothing in § 3661 to support the contention that prior receipt
or customary practice constitutes consent. Because FAPR did not
have the consent of its members to issue e-mail only notification,
we find the Chessplayers have carried their burden to show success
on the merits, that this was indeed arbitrary and capricious action
by FAPR.
As previously noted, because the district court concluded
its analysis after finding no merit to any of the Chessplayers'
claims, it became unnecessary for the court to discuss any of the
three remaining permanent injunction elements. Because we disagree
in part with that conclusion, remand is necessary to allow the
district court to determine if the Chessplayers have satisfied the
remaining elements for the issuance of a permanent injunction.
See McNeil Nutritionals, LLC v. Heartland Sweeteners, LLC, 511 F.3d
350, 357, 369 (3d Cir. 2007) (where the district court erroneously
"denied injunctive relief only on the basis that [plaintiff] did
not demonstrate a likelihood of success on the merits, and
[plaintiff] raises appellate arguments limited to that basis,"
deciding only the merits issue and remanding for a consideration of
the remaining factors); Idaho Watersheds Project v. Hahn, 187 F.3d
11FAPR members were previously alerted to extraordinary
meetings held in July 2010 and October 2010 by e-mails sent to this
group address.
-35-
1035, 1037 (9th Cir. 1999) (where the district court erred in
concluding that the appellants failed to establish a likelihood of
success on the merits, remanding for the district court to consider
the possibility of irreparable injury and whether the balance of
hardships tips in favor of the appellants); Black & Decker, Inc. v.
Hoover Serv. Ctr., 886 F.2d 1285, 1296 (Fed. Cir. 1989) (same);
Tatro v. Texas, 625 F.2d 557, 558 n.1 (5th Cir. 1980) (same). In
our review of the record before us, we note that the Chessplayers,
in opposing FAPR's motion for summary judgment, did file a
statement of facts citing to affidavits of individual Chessplayers
which discuss how the arbitrary actions harmed their interest and
which arguably address the remaining three factors for permanent
injunction.12 As to those claims we find meritorious the district
court will have to determine if this record supports a finding that
the Chessplayers suffered irreparable injury, whether the harm to
them outweighs the harm to the defendants from the imposition of an
injunction, and whether the public interest would not be adversely
affected by the issuance of an injunction.
Conclusion
To recap, we find the district court had federal subject
matter jurisdiction over the first case. The district court did
12
For example, one affidavit stated the amendments to the FAPR
constitution "violated my most fundamental democratic rights" yet
Berríos and Añeses "went ahead and re-structured the organization
in such a way that it is practically impossible for an outsider
like me to gain an elective position in a fair election."
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not have subject matter jurisdiction over the second case, and we
remand it to the district court with instructions to remand it to
the Commonwealth court where it was originally filed. Utilizing
our de novo review, we conclude the district court correctly
granted summary judgment to FAPR in part. However, the
Chessplayers showed success on the merits for three of their
appealed claims, and we remand those claims to the district court
for further consideration in accordance with this court's decision.
Each party shall bear its own costs.
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