United States Court of Appeals
For the First Circuit
No. 06-2026
RAFAEL DIAZ-RAMOS,
Plaintiff, Appellant,
v.
HYUNDAI MOTOR COMPANY and
HYUNDAI AMERICAN TECHNICAL CENTER, INC.
Defendants, Appellees.
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF PUERTO RICO
[Hon. Jay A. Garcia-Gregory, U.S. District Judge]
Before
Lipez, Circuit Judge,
Selya, Senior Circuit Judge,
and DiClerico,* District Judge.
Jorge M. Torrez-Gómez, with whom Vicente Santori-Coll and
Torres-Gómez Law Office were on brief, for appellant.
Gene C. Schaerr, with whom Peter K. Dykema, Geoffrey P. Eaton,
Brian P. Brosby, Robert Scumaci, Winston & Strawn, LLP, and Gibson,
McAskill, & Crosby, LLP were on brief, for appellees.
August 30, 2007
*
Of the District of New Hampshire, sitting by designation.
LIPEZ, Circuit Judge. The claim that appellant Rafael
Diaz-Ramos ("Diaz") brings against Hyundai Motor Company (“HMC”) is
predicated on the notion that section 259 of the Puerto Rico
Antitrust Act, P.R. Laws Ann. tit. 10, § 259 (“Antitrust Act”), in
conjunction with the Consumer Class Action Act, P.R. Laws Ann. tit.
32, §§ 3341-3344 (“CCAA”), affords a private right of action to an
individual who seeks to represent a class of injured parties. In
light of the explicit statutory language, longstanding precedent
regarding class actions, legislative history, and established
principles of statutory interpretation, we hold on these facts that
no such private right of action exists and affirm the district
court’s decision to dismiss Diaz’s complaint.
I.
The relevant facts are undisputed. In 1998 and 2002, HMC
launched recall campaigns for 1995 through 1997 Hyundai Accents to
remedy suspension problems that could result from corrosion caused
by road salt. The recalls took place in the states within a “salt
belt” region designated by the National Highway Traffic Safety
Administration.
Diaz owns a 1995 Hyundai Accent and is a citizen and
resident of Puerto Rico. His car was not included in the recalls
because Puerto Rico is not within the designated region. Believing
that the “marine salt environment” of Puerto Rico could induce
severe corrosion damage (similar to that caused by road salt) to
-2-
Hyundai Accents in Puerto Rico, and that his car thus should have
been included in the recall, Diaz filed a proposed consumer class
action suit in 2005 against HMC and Hyundai American Technical
Center, Inc. ("HATCI") pursuant to section 259 of the Antitrust
Act; section 3342 of the CCAA; the Puerto Rico Motor Vehicle Act,
P.R. Laws Ann. tit. 10, §§ 2060, 2064; and Puerto Rico’s general
tort statute, P.R. Laws Ann. tit. 31, § 5141.
HMC moved to dismiss Diaz's action for failure to state
a claim pursuant to Federal Rule of Civil Procedure 12(b)(6), and
HATCI moved to dismiss for lack of in personam jurisdiction
pursuant to Federal Rule of Civil Procedure 12(b)(2) and for
improper venue pursuant to Federal Rule of Civil Procedure
12(b)(3). The district court granted both motions to dismiss.
With respect to HMC's motion, it explained that “[a] cause of
action under the Antitrust laws . . . generally requires the
plaintiff to show that the defendant engaged in conduct that has a
negative impact upon the free flow of trade and commerce and not
merely that the defendant may have put a defective product on the
market and refuses to correct it,” and concluded that Diaz had not
alleged that his exclusion from the recalls adversely affected
trade and commerce. The court also held that Diaz had not stated
a claim under Puerto Rico’s Motor Vehicle Act or the general tort
statute because he had not alleged that he suffered any actual
injury from his exclusion from the recalls. Then, with respect to
-3-
HATCI, the court concluded that "Diaz cannot show that HATCI has in
any way purposely entered the Puerto Rico market," and,
consequently, it lacked personal jurisdiction over HATCI.
On appeal, Diaz presses only his claim pursuant to
section 259 of the Antitrust Act.1
II.
We exercise de novo review over a dismissal pursuant to
Rule 12(b)(6), “assuming the truth of all well-pleaded facts . . .
and indulging all reasonable inferences in the plaintiff’s favor.”
Nisselson v. Lernout, 469 F.3d 143, 150 (1st Cir. 2006). Thus, a
complaint should be dismissed for failure to state a claim "only if
the facts lend themselves to no viable theories of recovery." Luc
v. Wyndham Mgmt. Corp., ___ F.3d ___, 2007 WL 2253527, at *2 (1st
Cir. Aug. 7, 2007).
The district court dismissed Diaz’s complaint because he
failed "to show that the defendant engaged in conduct that has a
negative impact upon the free flow of trade and commerce," as
required by section 259(a) of the Antitrust Act.2 We conclude,
however, that a more fundamental problem undermines Diaz’s
1
On appeal, Diaz does not challenge the district court's
conclusion that it lacked personal jurisdiction over HATCI. Thus,
as far as we can discern from the record now before us, HATCI
remains in the appeal only nominally.
2
In pertinent part, section 259(a) of the Antitrust Act
states: "Unfair methods of competition, and unfair or deceptive
acts or practices in trade or commerce are hereby declared
unlawful." P.R. Laws Ann. tit. 10, § 259(a).
-4-
complaint. The Antitrust Act explicitly states that there is no
private right of action for a violation of section 259(a), and
Diaz's attempt to find such a right of action in the CCAA is
unavailing.
Section 268 of the Antitrust Act states that “[a]ny
person who shall be injured in his business or property by any
other person, by reason of acts or intended acts, forbidden or
declared to be unlawful by the provisions of this chapter, except
§§ 259 and 261 of this title, may sue therefor[] in the Court of
First Instance.” P.R. Laws Ann. tit. 10, § 268(a)(emphasis added).
This plain language is reinforced by San Juan Star Co. v. Casiano
Commc'ns, Inc., 85 F. Supp. 2d 89, 93 & n.3 (D.P.R. 2000), in which
the court dismissed with prejudice a private action after reaching
the “inescapable conclusion” that the Antitrust Act “do[es] not
provide a private right of action” under section 259.
Not so easily rebuffed, Diaz insists that the CCAA
provides the private right of action that the Antitrust Act
explicitly denies. The relevant provision of the CCAA
“recognize[s] the right . . . to consumers of goods and services
. . . to file a class suit on behalf of said . . . consumers,”
including “a class suit . . . based on the Antitrust Act of the
Commonwealth, §§ 257-274 of Title 10.” P.R. Laws Ann. tit. 32, §
3342. He argues that, because the Antitrust Act and the CCAA deal
with the same subject, courts must apply them together, bearing in
-5-
mind the fundamental objectives of both statutes. The CCAA was
enacted to protect consumers against the “deceitful, improper,
false or fraudulent practices” by “the suppliers of goods and
services.” Act of June 25, 1971, No. 118 (Statement of Motives).
This purpose, Diaz explains, favors the interpretation that the
CCAA was intended to allow a private right of action for commission
of the unfair trade practices described in section 259 of the
Antitrust Act.
No authority supports Diaz’s claims. First, courts have
repeatedly held that the “predicate to [a plaintiff’s] right to
represent a class is his eligibility to sue in his own right. What
he may not achieve himself, he may not accomplish as a
representative of a class.” Kauffman v. Dreyfus Fund, Inc., 434
F.2d 727, 734 (3d Cir. 1970). Both state and federal class action
provisions have been construed to confer no substantive rights.
See, e.g., Kristian v. Comcast Corp., 446 F.3d 25, 54 (1st Cir.
2006) ("While Comcast is correct when it categorizes the class
action . . . as a procedure for redressing claims – and not a
substantive or statutory right in and of itself – we cannot ignore
the substantive implications of this procedural mechanism.");
Cummings v. Connell, 402 F.3d 936, 944 (9th Cir. 2005)("It is
axiomatic that Rule 23 cannot 'abridge, enlarge or modify any
substantive right' of any party to the litigation." (quoting 28
U.S.C. § 2072)); Blaz v. Belfer, 368 F.3d 501, 504 (5th Cir.
-6-
2004)(“A class action is merely a procedural device; it does not
create new substantive rights.” (quoting Frazar v. Gilbert, 300
F.3d 530, 545 (5th Cir. 2002)), rev’d on other grounds sub nom.,
Frew ex rel. Frew v. Hawkins, 540 U.S. 431 (2004)); Mace v. Van Ru
Credit Corp., 109 F.3d 338, 346 (7th Cir. 1997)(stating that “[t]he
application of Rule 23 does not abridge, enlarge or modify any
substantive right"); In re Baldwin-United Corp., 770 F.2d 328, 335
(2d Cir. 1985)(stating that the federal class-action procedure set
forth in Rule 23 “is a rule of procedure and creates no substantive
rights or remedies enforceable in federal court”); Southwestern
Refining Co. v. Bernal, 22 S.W.3d 425, 437 (Tex. 2000) (holding
that class action is procedural device which does not alter the
substantive requirements of the underlying substantive claim);
Winters v. Kan. Hosp. Serv. Ass’n, 562 P.2d 98, 101 (Kan. App.
1977)(stating that Kansas’ class-action statute “is a procedural
statute” that “creates no substantive rights”).
Thus, the courts that have considered the issue have held
that procedural class action provisions neither create substantive
rights nor give rise to an independent cause of action. We have
found no case contrary to this holding, and we have no basis for
concluding that Puerto Rico would deviate from this unanimous
authority. We also think that Diaz reads too much into the CCAA’s
explicit statement that it recognizes a right for consumers to file
a class action based on sections 257 through 274 of the Antitrust
-7-
Act. The specified sections encompass the entirety of the
Antitrust Act and offer no indication that the legislature intended
to override section 268's more specific statement that section 259
does not support a private right of action. In sum, the right to
file a class action cannot exist where — as with section 259 — the
Antitrust Act does not already afford an individual right.
Moreover, the legislative history of the CCAA offers no
indication that its drafters intended to create a right of action
for violations of section 259(a). No specific statement implies
such an intent. Indeed, the Statement of Motives accompanying the
CCAA explains that "[m]any persons acting together as consumers who
have been defrauded may enforce their individual rights by means of
a consumer class suit." Act of June 25, 1971, No. 118 (Statement
of Motives). Not surprisingly, this statement indicates that
rights must already exist at an individual level in order to
support a class action.
Finally, Diaz’s contention that the CCAA effectively
serves as an implied repeal of section 268 violates established
principles of statutory construction. As the Supreme Court of
Puerto Rico has stated: "The courts do not favor implied repeals.
A general law does not repeal a special law unless such repeal is
expressly stated or clearly arises from the legislative intent."
McCrillis v. Aut. Navieras de P.R., 23 P.R. Offic. Trans. 109 (P.R.
1989)(citation omitted). This authority is aligned with the
-8-
predominant understanding. The Supreme Court has explained that
"'when two statutes are capable of coexistence, it is the duty of
the courts, absent a clearly expressed congressional intention to
the contrary, to regard each as effective.'" J.E.M. Ag Supply,
Inc. v. Pioneer Hi-Bred Int'l, Inc., 534 U.S. 124, 143-44 (2001)
(quoting Morton v. Mancari, 417 U.S. 535, 551 (1974)). Moreover,
"absent a clearly expressed congressional intention, repeals by
implication are not favored. An implied repeal will only be found
where provisions in two statutes are in irreconcilable conflict, or
where the latter act covers the whole subject of the earlier one
and is clearly intended as a substitute." Branch v. Smith, 538
U.S. 254, 273 (2003)(plurality opinion)(internal quotation marks
and citations omitted); see also Morton, 417 U.S. at 550 ("[T]he
only permissible justification for a repeal by implication is when
the earlier and later statutes are irreconcilable."). Here,
section 268(a) is not irreconcilable with the CCAA; rather, the
statutes easily may be harmonized by interpreting the CCAA to leave
untouched section 268(a)’s statement that section 259 does not
support a private right of action. Similarly, the CCAA neither
covers the same subject as section 268(a) nor is clearly intended
as a substitute. The CCAA prescribes procedures for consumer class
actions, while the latter prescribes substantive standards
governing monopolies and restraint of trade. In the absence of any
evidence of legislative intent to repeal section 268(a), we find
-9-
that no such implied repeal took place here.
In the alternative, Diaz asks that we certify the issue
of whether a private right of action exists to the Puerto Rico
Supreme Court. However, we have held that certification is
“inappropriate” if “the course state courts would take is
reasonably clear.” Porter v. Nutter, 913 F.2d 37, 41 n.4 (1st Cir.
1990)(quoting Bi-Rite Enters., Inc. v. Bruce Miner Co., 757 F.2d
440, 443 n.3 (1st Cir. 1985)). Here, the clarity with which the
Puerto Rico legislature has spoken on this issue renders
certification unnecessary and inappropriate. And, because our
conclusion that no private right of action exists wholly disposes
of Diaz’s claim, we need not consider HMC’s defense that the
Antitrust Act is preempted by the National Traffic and Motor
Vehicle Safety Act, 49 U.S.C. §§ 30101-30169.
III.
We conclude that the district court correctly dismissed
Diaz's claims under the Antitrust Act and the CCAA. The Antitrust
Act expressly prohibits a private right of action for suits brought
under section 259(a), and nothing in the CCAA — a procedural class
action statute — provides any indication that the Puerto Rico
legislature intended to create a substantive right of action for
class action suits pursuant to section 259(a). Thus, the district
court was correct in granting HMC's motion to dismiss.
Affirmed.
-10-