United States Court of Appeals
For the First Circuit
No. 04-2306
VÍCTOR GONZÁLEZ-ÁLVAREZ, CARMEN ECHEVARRÍA-VÉLEZ,
and the conjugal partnership composed by them,
Plaintiffs, Appellants,
v.
LUIS RIVERO-CUBANO, JANE DOE,
and the conjugal partnership composed by them,
JUAN R. PEDRÓ-GORDIÁN, LIZET E. QUIÑONES,
and the conjugal partnership composed by them,
Defendants, Appellees.
No. 04-2373
LUIS ALFONSO-DELGADO, LYDIA MORA-DELGADO,
and the conjugal partnership composed by them,
Plaintiffs, Appellants,
v.
LUIS RIVERO-CUBANO, JANE DOE,
and the conjugal partnership composed by them,
JUAN R. PEDRÓ-GORDIÁN, LIZET E. QUIÑONES,
and the conjugal partnership composed by them,
FERNANDO TOLEDO, JOAN POE,
and the conjugal partnership composed by them,
Defendants, Appellees.
APPEALS FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF PUERTO RICO
[Hon. Gustavo A. Gelpí, U.S. Magistrate Judge]
Before
Torruella, Circuit Judge,
Coffin, Senior Circuit Judge,
and Lipez, Circuit Judge.
Jennifer Odell, on brief, for appellants Víctor González-
Álvarez and Carmen Echevarría-Vélez.
Wigberto Lugo-Mender, on brief, for appellants Luis Alfonso-
Delgado and Lydia Mora-Delgado.
Joseph Frattallone-Martí, on brief, for appellees.
October 17, 2005
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TORRUELLA, Circuit Judge. This appeal requires us to
consider the claims of two dairy farmers, each convicted of milk
adulteration, who, along with their wives, now assert that the
relevant Puerto Rico regulatory agency's decision to cancel their
milk production quotas deprived them of valuable property in
violation of the Takings Clause of the U.S. Constitution. U.S.
Const. amend. V, XIV. We find no merit to these claims and affirm
the decision of the district court.
I. Facts
Víctor González-Álvarez ("González") and his wife Carmen
Echevarría-Vélez ("Echevarría") owned a dairy farm in Arecibo,
Puerto Rico licensed by the Milk Industry Regulation Office
("ORIL," in Spanish) through the Puerto Rico Department of
Agriculture, pursuant to P.R. Laws Ann. tit. 5, § 1101, et seq.
(2005). Luis Alfonso-Delgado ("Alfonso") and his wife Lydia Mora-
Delgado ("Mora") also owned a dairy farm in Hatillo, Puerto Rico
subject to the same licensing and regulatory regime. In separate
incidents, González and Alfonso were convicted of adulterating the
milk they sold in an attempt to increase the volume they produced.
After their convictions, appellants González and Alfonso
lost their licenses to produce milk after ORIL administrative
proceedings. They do not now contest this decision. However, ORIL
also cancelled appellants' milk quotas. Under Puerto Rico's
regulations of the dairy industry, dairy farmers' milk production
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is limited to the total quota which they have purchased from ORIL.
A quota is "the amount of milk quarts that the Administrator of the
Milk Industry Regulation Office assigns to be produced every
fourteen (14) days by cattlemen, in accordance to the market
needs." Milk Industry Quota Transaction Registry, Law Number 301
of Sept. 1, 2000, Art. 1(c) ("Law 301"). After years of purchasing
milk quotas through ORIL, by 2002 González and Echevarría had
accumulated quotas authorizing them to produce up to 25,000 liters
of milk every two weeks. Likewise, Alfonso and Mora had purchased
milk quotas from ORIL authorizing them to produce up to 18,600
liters of milk every two weeks. Appellants contend that these
quotas were their personal property and that they could not be
taken from them without just compensation.
Appellants assert that the milk quotas are currently sold
at a rate of at least $32.00 per liter. Therefore, appellants
González and Echevarría estimate that they are owed not less than
$800,000, which they claim to be the fair market value of their
quotas. Similarly, appellants Alfonso and Mora seek compensation
of not less than $595,000 for their cancelled quotas.
II. Analysis
The district court did not reach the merits of the
federal constitutional takings claims raised by either set of
appellants. In the case of Alfonso and his wife, it found that
their claims were time barred with regard to all defendants. In
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the case of González and his wife, the district court found that
the claims against certain defendants were barred by the statute of
limitations and that the remaining defendants were entitled to
qualified immunity. Thus, appellants now seek review of two main
issues: (1) whether the instant actions were filed within the
relevant statute of limitations; and (2) whether defendants are
entitled to qualified immunity. Because we agree with the district
court that the claims of both sets of plaintiffs-appellants are
precluded by the statute of limitations or qualified immunity, we
affirm the decisions of the district court.
A. Statute of Limitations
Both sets of appellants dispute the district court's
findings that some or all of their claims are time-barred.
Pursuant to 42 U.S.C. § 1983, we apply the forum state's statute of
limitations period for personal injury actions. See Rivera-
Muriente v. Agosto-Alicea, 959 F.2d 349, 352 (1st Cir. 1992).
There is no dispute that in Puerto Rico the statute of limitations
is one year, and that federal law is applied to determine when the
limitations period begins to accrue. See id. at 353. Rather, both
sets of appellants argue that the district court erred in its
determination of the date on which the statute of limitations began
to accrue. In addition, appellants argue that, under Puerto Rico
law, the wives involved in these cases also possessed a property
interest in the milk production quotas, and thus the statute of
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limitations could not begin to run until they were notified of the
cancellation of the quotas.
On April 7, 2000, appellant Alfonso was convicted of milk
adulteration to increase the volume of milk produced, and on
July 12, 2000, Carlos Cabán-Nieves ("Cabán"), then Administrator of
ORIL, issued an administrative ruling that revoked Alfonso's milk
production license and quotas. Alfonso did not appeal this ruling,
and on March 23, 2001, defendant Juan R. Pedró-Gordián ("Pedró"),
the new Administrator of ORIL, sent Alfonso a letter informing him
that the July 2000 ruling would be implemented March 29, 2001.
However, in the meantime, Alfonso had mistakenly been granted a new
license, and on May 30, 2001, he filed a case with ORIL alleging
that Pedró had no right to suspend his license, which ORIL denied
in October 2001. Alfonso also appealed this case to the Puerto
Rico Appeals Court, which upheld the ORIL decision. Alfonso
Delgado v. Pedró-Gordián, No. KLRA20020447 (T.C.A. Aug. 20, 2002).
Meanwhile, on May 14, 2002, Pedró mailed a letter to Alfonso
notifying him that the cancellation would become effective June 5,
2002. Alfonso and his wife Mora filed the complaint in the instant
case on July 7, 2003.
Appellant González was also convicted in 2000 of milk
adulteration to increase the volume of milk produced, and on
December 21, 2001, ORIL Administrator Pedró issued an
administrative ruling revoking González's milk production license
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and quotas. González appealed this ruling to the Puerto Rico Court
of Appeals, Milk Quality Program of the Milk Industry Regulation
Office v. González-Álvarez, No. KLRA0200084 (T.C.A. Apr. 26, 2002),
and then to the Puerto Rico Supreme Court. On September 27, 2002
his request for reconsideration by the Puerto Rico Supreme Court
was denied. Appellants González and Echevarría filed the complaint
commencing this action on November 5, 2003. Appellants González
and Echevarría argue that the statute of limitations did not begin
to run until November 6, 2002, the date on which the manufacturing
plant ceased picking up milk from their dairy farm.
In a § 1983 claim, the statute of limitations generally
begins to run "when the plaintiff 'knows or has reason to know of
the injury which is the basis for the claim.'" Rodríguez-García v.
Municipality of Caguas, 354 F.3d 91, 96-97 (1st Cir. 2004) (quoting
Rodríguez-Nárvaez v. Nazario, 895 F.2d 38, 41 n.5 (1st Cir 1990)).
Among the precedent established by the Supreme Court, we find no
indication that property must be physically seized or that actual
economic harm must have already been felt before a takings claim
accrues. In the context of regulatory takings, for instance, the
Supreme Court has held that such claims are ripe when the plaintiff
has received "a 'final decision regarding the application of the
[challenged] regulations to the property at issue' from 'the
government entity charged with implementing the regulations,'" and
the plaintiff has sought compensation through the procedure
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provided by the state. Suitum v. Tahoe Reg'l Planning Agency, 520
U.S. 725, 734 (1997) (quoting Williamson County Reg'l Planning
Comm'n v. Hamilton Bank of Johnson City, 473 U.S. 172, 186 (1985)).
Since in this case, the state has always clearly denied that any
compensation would be due and there is no state remedy available
for seeking compensation, the second hurdle falls away. See
Williamson County, 473 U.S. at 194-96.
Both sets of appellants argue that the statute of
limitations could not begin to run until the date on which the milk
manufacturing plant actually discontinued picking up appellants'
milk.1 However, after the quotas were cancelled by ORIL,
1
Appellants cite to a number of cases that miss the mark. In
support of their theory, plaintiffs cite to Lawson v. Shelby
County, 211 F.3d 331 (6th Cir. 2000), in which the plaintiffs
asserted a deprivation of their right to vote. The Sixth Circuit
held that plaintiffs "were not denied the right to vote when they
were notified that their registrations had been rejected, they were
denied the right to vote when they presented themselves at the
appropriate polling place and were denied access to the voting
booth." Id. at 336. In this case, by contrast, the deprivation at
issue occurred when the plaintiffs' milk quotas were cancelled
(i.e., when the alleged "taking" occurred), not when the milk
collection actually was suspended.
Ramos v. Román, 83 F. Supp. 2d 233 (D.P.R. 2000) is no more
helpful to plaintiffs. In Ramos, the issue was not whether the
statute of limitations began to run when the plaintiffs' license to
sell firearms was revoked or when the weapons were actually
confiscated (both of which were outside the statute of
limitations). Rather, the question was whether the limitations
period did not commence until much later, when the plaintiffs
learned that the license revocation and the confiscation were
motivated by political discrimination. The district court
concluded that "the Plaintiffs['] action accrued the day the police
effectuated the confiscation of plaintiffs' firearms and ammunition
pursuant to the Department of Treasury's revocation of the
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appellants were simply waiting for the decision to be enforced. In
this case, a quota is simply the right to sell a given amount of
milk. Assuming that that legal right is "property," when ORIL
issued its decision cancelling appellants' quotas, appellants were
already deprived of the property at issue, and the statute of
limitations began to run as of that date. Cf. Suitum, 520 U.S. at
736 n.10 (finding that facial challenges to regulation are
generally ripe the moment the challenged regulation is passed, so
long as the owners can demonstrate that the enactment deprived them
of any economically viable use of the property). Because we find
that Alfonso and his wife "[knew], or ha[d] reason to know of the
injury which is the basis for his claim," Rodríguez-García, 354
F.3d at 96-97, on July 12, 2000, when ORIL issued its
administrative decision revoking Alfonso's license, this action
Plaintiffs' license to sell firearms." Id. at 239. Immediately
after reaching this conclusion, the court cited a case in which the
First Circuit "assume[d] arguendo that [the plaintiff's] claim
accrued at the latest possible date." Id. at 239 n.6 (quoting
Benítez-Pons v. Commonwealth of P.R., 136 F.3d 54, 60 (1st Cir.
1998)). In short, the Ramos court did not hold that the claim
accrued when the weapons were confiscated, as opposed to when the
license was revoked; it held that the claim accrued at one of these
earlier dates (assuming arguendo that it was the latter of the
two), as opposed to two decades later, when the plaintiffs learned
the reason for the revocation. Ramos therefore does not stand for
the proposition that the plaintiffs' milk quotas were not "taken"
until milk collection was actually suspended.
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filed July 7, 2003 was commenced beyond the one-year statute of
limitations.2
For the same reasons, we find that the statute of
limitations began to run for the claims brought by González and his
wife on December 21, 2001, when ORIL issued its administrative
decision revoking González's license.3 This action filed
November 5, 2003 would then clearly be beyond the one-year statute
of limitations. However, in this case, the district court found --
and it is unchallenged by any party -- that the statute of
limitations was tolled as to defendant Pedró, in his personal
capacity, and his wife, Lizet Quiñones, by an action filed by
González in bankruptcy court in the interim.4 Thus, the instant
federal action was timely filed against them.
2
Appellants' later challenges to the cancellation of the quotas
do not toll the statute of limitations. Under Puerto Rico law, in
order for tolling to occur, the remedies sought in both suits must
be identical. See Torres v. Superintendent of Police, 893 F.2d
404, 407 (1st Cir. 1990). In this case, neither set of appellants
had previously sought damages, which they are seeking in their
current § 1983 claims.
3
In the bankruptcy complaint he filed on November 1, 2002,
González himself admits that in the December 21, 2001 resolution,
"ORIL stated that they were to cancel debtor's milk production
quota." The evidence indicates that upon receipt of the
December 21, 2001 ORIL resolution, González had reason to know, and
did in fact subjectively believe, that ORIL was cancelling his milk
quotas and that he would not be compensated for any portion of
their estimated $800,000 value.
4
The action in bankruptcy court tolled the statute of limitations
from the date of its filing on November 1, 2002, until it was
dismissed for lack of jurisdiction on November 5, 2003.
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Appellants argue that González's bankruptcy court
complaint should have also tolled the statute of limitations with
respect to Secretary of Agriculture Rivero Cubano and his wife. We
disagree. Appellants argue that because Rivero Cubano was included
in his official capacity as a defendant in the bankruptcy
complaint, the statute of limitations was tolled for actions
against him in his personal capacity as well. Whereas González and
his wife named appellee Pedró in his personal capacity, they chose
to name appellee Rivero Cubano only in his official capacity as
Secretary of Agriculture. Furthermore, the portion of the
complaint that alleges possible 42 U.S.C. § 1983 allegations refers
only to appellee Pedró. In general, "defendants sued only in their
official capacities in the original complaint cannot be expected to
be on notice of the very different issues raised by claims against
them in their personal capacities." Rodríguez-García, 354 F.3d at
100 (finding that defendants sued only in their official capacity
would not be on notice, but that, in this case, defendants waived
any objection to the statute of limitations on that basis). We
therefore affirm the district court's conclusion that the claims
against defendants Rivero Cubano and his wife are time barred.
Another argument implicit in appellants' claims is that,
although appellants were aware that the milk quotas were cancelled,
it was not until much later that they discovered that ORIL did not
plan to pay them just compensation. We find this argument entirely
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unconvincing. Although there may be cases in which a person could
reasonably be uncertain about whether they were going to receive
compensation for their taken property, this is not such a case.
Appellants were well aware that the cancellation of their milk
quotas was a direct result of their milk adulteration, and as such,
they could not have reasonably expected compensation, where no
mention of compensation was made. Had the government planned on
compensating appellants for their quotas, it would have said so.
See Hair v. United States, 350 F.3d 1253, 1261 (Fed. Cir. 2003)
(rejecting plaintiff's argument that the government must clearly
announce its intention not to pay compensation before the statute
of limitations can begin to run, and recognizing that it is
generally obvious when the government denies liability for its
action). To accept appellants' argument would allow the government
to prevent a cause of action from accruing simply by failing to
state explicitly that it does not plan to pay compensation. See
id. This cannot be the case.
Finally, both sets of appellants argue that even if the
statute of limitations began to run on the dates determined by the
district court with respect to the claims brought by Alfonso and
González, the same cannot be said of their wives' claims, because
they were not provided notice of the cancellation of their
husbands' licenses and the milk quotas. However, we find that,
under Puerto Rico law, separate notice is not required to both the
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husband and wife in a conjugal partnership. Cf. Blas v. Hospital
Guadalupe, 146 D.P.R. 267, 304 (1998) (finding that each spouse is
a co-administrator of the conjugal partnership, and as such, each
ordinarily has the capacity to represent it); Pauneto v. Núñez, 115
D.P.R. 591, 594 (1984) (recognizing that jurisdiction may be
acquired over the conjugal partnership by service of one of the co-
administrators). We, therefore, find that upon their husbands'
receipt of notice of the quota cancellation, the statute of
limitations began to run for actions brought by both the husbands
and their wives.5 Thus, as we concluded above, only González's and
Echevarría's claims against defendant Pedró and his wife were
timely filed.6
B. Qualified Immunity
Having already concluded that all other claims in this
consolidated appeal are time barred, we now consider appellants
González's and Echevarría's claims against defendants Pedró and his
wife, who assert the defense of qualified immunity.7 "For a
5
We note here that even if these claims were timely filed they
would still fail under the qualified immunity analysis described
below.
6
We also consider that it is not entirely clear whether the wives
can be said to have a property interest in the quotas. While
generally in Puerto Rico all marital property is owned by the
conjugal partnership, only individuals with a license can own milk
production quotas, and, in this case, only González and Alfonso
have such a license; their wives do not.
7
The claims against the wives in this case, including Pedró's
wife Lizet Quiñones, are derivative of the claims against their
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plaintiff to overcome a qualified immunity defense, he must show
[1] that his allegations, if true, establish a constitutional
violation; [2] that the right was clearly established; and [3] that
a reasonable official would have known that his actions violated
the constitutional right at issue." Mihos v. Swift, 358 F.3d 91,
98-99 (1st Cir. 2004).
In the opinion from which this appeal arises, the
district court essentially skipped over the first inquiry in order
to reach the subsequent queries, which it found decisive. The
court reasoned that "even assuming arguendo, that constitutional
rights were violated, . . . it was objecti[vely] reasonable for
Pedró to believe that his actions did not violate these clearly
established rights."8 González-Álvarez v. Rivero Cubano, No. 03-
2193, slip op. at 7 (D.P.R. July 23, 2004). Although we recognize
the logic of this approach, the court's election to forego deciding
husbands. The claim against Lizet Quiñones, therefore, cannot
survive once we determine that her husband, who committed the
alleged violation of appellants' rights, is entitled to qualified
immunity.
8
We note that the district court used the same approach to assert
qualified immunity in Alfonso-Delgado v. Rivero Cubano, No. 03-
1625, slip op. at 6 (D.P.R. Aug. 5, 2004). In that case, the court
also concluded that "even assuming arguendo, that constitutional
rights were violated, summary judgment should be granted on
qualified immunity grounds." Id. For the reasons we will explain
with regard to the district court's opinion in González-Álvarez,
No. 03-2193, slip op. at 7, we reject this approach. However, we
will not belabor the point, since none of the claims made by
Alfonso and his wife were brought within the statute of
limitations.
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whether the cancellation of the milk quotas constituted an
unconstitutional taking, and instead to dismiss the claims based on
the failure to demonstrate that whatever rights may have been
violated were "clearly established," runs contrary the analysis
required by the Supreme Court.
"A court required to rule upon the qualified immunity
issue must consider . . . this threshold question: Taken in the
light most favorable to the party asserting the injury, do the
facts alleged show the officer's conduct violated a constitutional
right? This must be the initial inquiry." Saucier v. Katz, 533
U.S. 194, 201 (2001). The Court explained the necessity of first
deciding whether the actions in question constituted a violation of
the plaintiff's constitutional rights:
In the course of determining whether a
constitutional right was violated on the
premises alleged, a court might find it
necessary to set forth principles which will
become the basis for a holding that a right is
clearly established. This is the process for
the law's elaboration from case to case, and
it is one reason for our insisting upon
turning to the existence or nonexistence of a
constitutional right as the first inquiry.
The law might be deprived of this explanation
were a court simply to skip ahead to the
question whether the law clearly established
that the officer's conduct was unlawful in the
circumstances of the case.
Id. The district court -- by "assuming arguendo" that a
constitutional violation had occurred -- was able to dismiss the
cases without deciding whether the cancellation of appellants' milk
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quotas did in fact constitute an unconstitutional taking of their
property. The problem with this methodology is that the law will
be no clearer when future similarly situated plaintiffs bring the
same claim. This unending state of ambiguity, which potentially
allows the bad man (in this context, a government official) to walk
the line time and time again, is precisely what the Supreme Court
instructs us to avoid.
Thus, we must now consider whether appellants'
allegations, if true, establish a constitutional violation. See
Mihos, 358 F.3d at 98. In this case, the essential facts are
undisputed, and we have no difficulty in concluding that the
cancellation of appellants' milk production quota did not
constitute a taking for which they would be entitled to
compensation. The quota cancellation was a sanction for González's
milk adulteration; it was not a taking of private property for
public use for which the federal Constitution requires compensation
to be made. See U.S. Const. amend. V ("nor shall private property
be taken for public use, without just compensation"). We fail to
see how the cancellation of appellants' quotas as a consequence of
their milk adulteration is different from any other fine or
forfeiture imposed under state law consequent to engaging in some
harmful activity.
Appellants' claim is perhaps more aptly described as a
claim that the Puerto Rican government deprived them of their
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personal property without due process of law. In this vein,
appellants argue that this sanction was not mandated, or even
permissible, under Puerto Rico law. Presumably, appellants have
avoided describing their argument in these terms because they have
already raised this argument in the Puerto Rico courts. They are
now collaterally estopped from relitigating these issues in federal
court.9 The Puerto Rico Court of Appeals rejected appellant
González's claim that ORIL lacked the authority to cancel his milk
quotas, and found no evidence that the cancellation was arbitrary,
illegal or an abuse of discretion. González-Álvarez, No.
KLRA0200084, Official Translation at 5.10 Thus, even if we were to
9
"The [Puerto Rico Supreme] Court has also found Article 1204 to
encompass the doctrine of collateral estoppel, holding that when a
fact essential to the prior judgment is actually litigated and
determined by a valid and final judgment, the determination is
conclusive in subsequent litigation among the parties." Félix
Davis v. Vieques Air Link, 892 F.2d 1122, 1124-25 (1st Cir. 1990)
(citing Pereira v. Hernández, 83 P.R.R. 156, 161 (1961)). The
district court found that collateral estoppel did not apply to
appellants' takings claims, because the issue of compensation was
never raised in the previous proceedings. González-Álvarez, No.
03-2193, slip op. at 4. See also Alfonso-Delgado, No. 03-1625,
slip op at 6. However, we find that the most logical reading of
the opinions of the Puerto Rico Court of Appeals is that they
decided those cases on the well-founded assumption that appellants
would never receive any compensation for the cancelled quotas. See
González-Álvarez, No. KLRA0200084; Alfonso Delgado, No.
KLRA20020447. Nor does the inclusion of González's wife prevent
collateral estoppel, as we have found that her interest was
adequately represented by her husband in the original Puerto Rico
court action.
10
The Puerto Rico Court of Appeals' decision in Alfonso Delgado,
No. KLRA20020447, reinforces our understanding of the court's
reasoning in González-Álvarez, No. KLRA0200084. After considering
appellant Alfonso's arguments, the Puerto Rico Court of Appeals
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construe appellants' arguments in these due process terms, the key
issues have already been litigated in the Puerto Rico courts, and
it has been determined that the appellants' milk quotas were
cancelled in accordance with Puerto Rico law.
For these reasons, we find that even assuming all
allegations by appellants are true, defendant Pedró did not violate
appellants' constitutional rights. Thus, Pedró is entitled to
qualified immunity, and the district court correctly dismissed
appellants' claims on that basis.
III. Conclusion
For the foregoing reasons, the decision of the district
court is affirmed.
Affirmed.
held that "[t]he cancellation of the quotas . . . is the direct and
unavoidable consequence of having permanently cancelled the license
of a cattleman." Alfonso Delgado, No. KLRA20020447, Certified
Translation at 9.
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