United States Court of Appeals
For the First Circuit
No. 08-2012
No. 08-2274
PUERTO RICO AMERICAN INSURANCE COMPANY ET AL.,
Plaintiffs, Appellees,
v.
RAFAEL RIVERA-VÁZQUEZ ET AL.,
Defendants, Appellants.
APPEALS FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF PUERTO RICO
[Hon. Salvador E. Casellas, U.S. District Judge]
Before
Lynch, Chief Judge,
Selya and Lipez, Circuit Judges.
María I. Santos Rivera, for appellants.
James W. McCartney, with whom Rafael Barreto-Solá and Cancio,
Nadal, Rivera & Díaz were on brief, for appellees.
May 5, 2010
SELYA, Circuit Judge. The defendants, Rafael Rivera-
Vázquez (Rivera) and Isabel Hurtado, husband and wife, appeal from
(i) the entry of summary judgment against them, (ii) the denial of
their cross-motion for summary judgment, and (iii) the denial of a
discovery-related motion.1 In the final analysis, the appeals turn
on the proper handling of cross-motions for summary judgment.
Concluding, as we do, that the district court abused its discretion
by applying materially different procedural requirements to the two
motions, we wipe the slate clean. On unrelated grounds, we vacate
the discovery-related order. The district court must revisit these
matters anew.
I. BACKGROUND
These appeals arise out of a massive civil action
commenced in Puerto Rico's federal district court by nine insurance
companies against hundreds of defendants under the Racketeer
Influenced and Corrupt Organizations Act (RICO), 18 U.S.C. §§ 1961-
1968. The complaint posited that the defendants had engaged in a
wide-ranging scheme to defraud the insurers by submitting false
automobile insurance claims in violation of both RICO and a Puerto
Rico anti-fraud statute, P.R. Laws Ann. tit. 31, § 5141. We limit
our discussion to the claims against the appellants: Rivera,
1
There are two appeals, one from the entry of a partial
judgment and the other from the entry of a final judgment (which
subsumes the partial judgment). For all practical purposes, the
two appeals have merged. See SEC v. SG Ltd., 265 F.3d 42, 44 (1st
Cir. 2001).
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Hurtado, and their conjugal partnership. The appellees are five of
the plaintiffs below, namely, Puerto Rico American Insurance
Company (PRAICO), National Insurance Company, Universal Insurance
Company, Caribbean Alliance Insurance Company (CAICO), and
Cooperativa de Seguros Múltiples de Puerto Rico.2
The operative pleading for present purposes is the second
amended complaint, which added Rivera, Hurtado, and their conjugal
partnership as defendants. The complaint alleged that Rivera
participated in a number of fraudulent claims, both as an attorney
representing claimants and as a claimant himself. The complaint
further alleged that Hurtado took part in the swindle as a
claimant.
The case proceeded through discovery. One discovery-
related ruling is pertinent to these appeals. We sketch the
circumstances relevant to this ruling.
During discovery, the appellants requested that the
insurers make certain admissions. See Fed. R. Civ. P. 36(a)(1).
Receiving no responses within the allotted time, the appellants
moved for an order deeming admitted the matters delineated in their
requests. The district court denied the motion and extended the
time for responding. The insurers served their responses within
2
Integrand Assurance Company is also listed on the
consolidated briefs as an appellee, but we are unable to ascertain
how Integrand is involved in these appeals. We leave it to the
district court, on remand, to resolve Integrand's status.
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this extended period. The appellants objected, asserting that the
matters set forth in the requests should be deemed admitted because
the responses did not comply with Rule 36.
The objection lay fallow for slightly more than three
years. At that point the district court, treating the objection as
a motion,3 denied it on the ground that the appellants had failed
to include the required certification. See D.P.R.R. 26(b)
(providing that a district court "shall not consider any discovery
motion that is not accompanied by a certification that the moving
party has made a reasonable and good-faith effort to reach an
agreement with opposing counsel on the matters set forth in the
motion").
During the protracted period in which the parties were
squabbling over the requests for admission, the summary judgment
issues were starting to crystallize. The district court had set a
deadline of February 17, 2006, for the filing of dispositive
motions. On February 16, the insurers filed a motion for partial
summary judgment.4 They supported their motion with a separate
statement of uncontested facts (SUF) and a series of affidavits.
3
Neither side challenges the district court's
characterization of the objection as a motion. We therefore take
no view of the accuracy of that taxonomy.
4
This motion targeted the appellants and two other
defendants. We restrict our discussion to the appellants.
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The motion sought to impose liability on the appellants under
sections 1962(c) and (d) of RICO.
One day later (and within the period prescribed by the
district court), the appellants filed a cross-motion for summary
judgment, supported by a separate SUF. This cross-motion sought
the dismissal of all claims against them. On March 30, 2006, the
insurers filed a timely opposition, but did not respond to the
appellants' SUF. In their opposition, the insurers mentioned that,
on February 21, 2006, Rivera had pleaded guilty to a criminal
information charging him with conspiring to devise a scheme to
defraud insurance companies in violation of 18 U.S.C. §§ 371, 1341.
The insurers attached the information and plea agreement to their
opposition.
On April 18, 2006, the appellants filed an opposition to
the insurers' summary judgment motion, supported by a separate
response to the insurers' SUF.
On June 12, 2008, the district court addressed the
insurers' motion for summary judgment. The court granted that
motion in part and denied it in part.5 In its opinion, the court
held that the insurers' SUF was proper in form, appropriately
supported by affidavits, and compliant in all other respects with
the requirements of the local rules. P.R. Am. Ins. Co. v. Burgos
5
The court denied relief to four of the insurance company
plaintiffs. Those rulings are not before us.
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(PRAICO I), No. 01-1186, slip op. at 3 (D.P.R. June 12, 2008)
(unpublished) (citing D.P.R.R. 56). The court also held that the
appellants' opposition failed to comply with the local rules and,
accordingly, deemed admitted the facts set out in the insurers'
SUF. Id. at 5 (citing D.P.R.R. 56(e)). Based on this ruling the
court concluded, as a matter of undisputed fact, that Rivera had
filed fraudulent insurance claims, both as an attorney representing
other claimants and to his own behoof, with PRAICO, Cooperativa,
National, CAICO, and Universal. Id. Similarly, the court
concluded, as a matter of undisputed fact, that Rivera and Hurtado
had jointly filed a false claim with National. Id. at 6. Moving
to damages, the court concluded, as a matter of undisputed fact,
that the insurers had paid these bogus claims, resulting in
specific monetary losses. Id. at 5-6. With these determinations
in place, the court held that the summary judgment record satisfied
the requirements for liability under RICO § 1962(c), id. at 10, and
proceeded to award treble damages in the insurers' favor. Id.
(citing 18 U.S.C. § 1964(c)). The court entered a partial judgment
against the appellants in these amounts.
In a separate opinion, issued more than a month later,
the district court granted in part and denied in part the
appellants' cross-motion for summary judgment. The court noted
that the appellants' SUF complied with the local rules and that the
insurers had neglected to file the separate response to the SUF
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required by those rules. P.R. Am. Ins. Co. v. Burgos (PRAICO II),
No. 01-1186, slip op. at 5 (D.P.R. July 29, 2008) (unpublished).
Based on this deficiency, the court deemed admitted some of the
facts limned in the appellants' SUF. Id. But the court stopped
short of deeming all the facts admitted; rather, it concluded that,
despite the insurers' failure to file a counter-statement, it would
not deem admitted any facts that contradicted the facts on which
its earlier partial judgment rested. Id.
This truncated view of the record led the district court
to deny the cross-motion with respect to the claims asserted
against the appellants by PRAICO, Cooperativa, National, CAICO, and
Universal. Id. The court exonerated the appellants with respect
to other claims. See id. at 7; see also supra note 5. This
included a determination that Hurtado had not submitted false
claims to PRAICO, Universal, or Cooperativa. PRAICO II, slip op.
at 8. The court thereupon entered another partial judgment.
On August 8, 2008, the district court entered a final
judgment.6 We have jurisdiction over the ensuing appeals pursuant
to 28 U.S.C. § 1291.
II. ANALYSIS
Before us, the appellants asseverate that the district
court abused its discretion in disregarding their opposition to the
6
The court did not hinge any portion of this judgment or any
of its underlying decisions on Rivera's guilty plea in the criminal
case.
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SUF that accompanied the insurers' motion for summary judgment;
that, in all events, the lower court treated them unfairly by
applying materially different standards to the adjudication of the
two motions for summary judgment; and that the court erred in its
final ruling concerning their requests for admission.7 We discuss
the first two assignments of error together and then move to the
third.
A. Summary Judgment Practice.
When passing upon a motion for summary judgment, a
district court must take the facts in the light most favorable to
the nonmoving party, drawing all reasonable inferences therefrom to
that party's behoof. Cabán Hernández v. Philip Morris USA, Inc.,
486 F.3d 1, 8 (1st Cir. 2007). This standard operates in
conjunction with a district court's local anti-ferret rule. When
the district court, acting in pursuance of an anti-ferret rule,
deems admitted facts contained in the movant's SUF, those facts are
considered not properly controverted, but the district court must
still apply the standard articulated in Federal Rule of Civil
Procedure 56. In such circumstances, we review the district
court's deeming order for abuse of discretion. CMI Capital Mkt.
Inv., LLC v. González-Toro, 520 F.3d 58, 63 (1st Cir. 2008). This
7
The appellants also claim that (i) the facts set forth in
the insurers' SUF should have been ignored because these facts were
supported only by inadmissable hearsay; and (ii) the record does
not support an award of treble damages against Hurtado. We have no
need to reach those claims today.
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entails "a special degree of deference . . . to [the] court's
interpretation of its own local rules." Crowley v. L.L. Bean,
Inc., 361 F.3d 22, 25 (1st Cir. 2004) (quoting In re Jarvis, 53
F.3d 416, 422 (1st Cir. 1995)). Apart from any judgment calls
concerning the application of the local rule, the ultimate decision
to grant summary judgment is reviewed de novo. Cabán Hernández,
486 F.3d at 8.
Local Rule 56 of the United States District Court for the
District of Puerto Rico is such an anti-ferret rule. It requires
a party moving for summary judgment to submit a "separate, short,
and concise statement of material facts, set forth in numbered
paragraphs, as to which the moving party contends there is no
genuine issue of material fact." D.P.R.R. 56(b). Each fact must
be supported by a citation to a specific paragraph or page of the
summary judgment record. D.P.R.R. 56(e).
A party opposing a motion for summary judgment must
submit a counter-statement, which "shall admit, deny or qualify the
facts by reference to each numbered paragraph of the moving party's
statement of material facts and unless a fact is admitted, shall
support each denial or qualification by a record citation."
D.P.R.R. 56(c). Properly supported facts contained in an SUF shall
be deemed admitted unless controverted in the manner prescribed by
the local rule. D.P.R.R. 56(e).
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In this case, the appellants' first line of argument is
that the district court should not have deemed admitted the facts
set forth in the insurers' SUF. The mainstay of this argument is
that their opposition to the SUF complied with Local Rule 56. In
this regard, they stress that their opposing statement addressed
all of the SUF's declared facts in the order in which they
appeared.
This argument is disingenuous. Even a cursory glance at
the opposition reveals that the appellants wholly failed to "admit,
deny or qualify the facts by reference to each numbered paragraph
of the moving party's statement of material facts." D.P.R.R.
56(c). This is starkly evident from a side-by-side comparison of
the SUF and the opposition. Although the SUF contains eighty-eight
numbered paragraphs of facts, the opposition nowhere matches up
with, or even references, these numbered paragraphs. Rather, it
comprises twenty-five numbered paragraphs, divided into five,
separately numbered sections, and repeatedly lumps responses to
several separately declared facts into a single sentence.
The appellants counter that any failure of compliance was
technical and, therefore, harmless. This ipse dixit overlooks the
root purpose of an "anti-ferret" rule. This type of rule is aimed
at enabling a district court to adjudicate a summary judgment
motion without endless rummaging through a plethoric record. See
CMI Capital Mkt. Inv., 520 F.3d at 62; Ríos-Jiménez v. Principi,
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520 F.3d 31, 38 (1st Cir. 2008); Mariani-Colón v. Dep't of Homeland
Sec., 511 F.3d 216, 219 (1st Cir. 2007). Given this root purpose,
we have held with a regularity bordering on the monotonous that
parties ignore the strictures of an "anti-ferret" rule at their
peril. See, e.g., Ruiz Rivera v. Riley, 209 F.3d 24, 28 (1st Cir.
2000).
We add, moreover, that it is primarily the role of the
district court to determine what departures from a local rule may
be tolerated. United States v. Diaz-Villafane, 874 F.2d 43, 46
(1st Cir. 1989). Here, the district court concluded that the
appellants' failure to comply with Local Rule 56 was material.
This conclusion makes sense: had the district court overlooked the
appellants' noncompliance, it would have had to comb through the
opposition in an effort to match the appellants' non-conforming
responses to the facts set forth in the insurers' SUF. Only then
could the court have determined which facts were genuinely
controverted and which were not. This is exactly the sort of
archeological dig that anti-ferret rules are designed to prevent.
The appellants have a fallback position. They contend
that because they incorporated by reference in their opposition to
the insurers' motion their own SUF (which was attached to their
cross-motion for summary judgment), they made clear their version
of the facts. They strive to persuade us that this incorporation
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by reference constituted substantial compliance with Local Rule 56.
We are not convinced.
As indicated above, Local Rule 56 serves the important
purpose of "prevent[ing] parties from shifting to the district
court the burden of sifting through the inevitable mountain of
information generated by discovery in search of relevant material."
Ríos-Jiménez, 520 F.3d at 38. The appellants' SUF did not address,
paragraph by paragraph or statement by statement, the insurers'
SUF. Even if the district court could have gleaned the parties'
positions by independent analysis of the two documents, that was
not the court's job. A party cannot circumvent the requirements
imposed by an anti-ferret rule simply by filing a cross-motion for
summary judgment and expecting the district court to do the party's
homework.
Nevertheless, the appellants' cross-motion is significant
in another respect. The district court determined that the
appellants' SUF, which accompanied the cross-motion, complied with
Local Rule 56. PRAICO II, slip op. at 5. The court also determined
that the insurers had failed to proffer the counter-statement
required by that rule. Id. The court acknowledged that, given this
noncompliance, it ought to deem admitted the facts contained in the
appellants' SUF. See id.; see also D.P.R.R. 56(e). But the court
nonetheless declined to deem admitted those facts that contradicted
the facts on which its earlier summary judgment order rested.
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PRAICO II, slip. op. at 5. That led the court to deny the
appellants' motion for summary judgment against the five insurers
in whose favor the earlier order ran (the appellees here).
The appellants argue that the court treated the two SUFs
differently. This is undeniably so. The appellants add that this
approach unfairly gave preference to the facts set forth in the
insurers' SUF merely because the court happened to decide the
insurers' motion first. This differential treatment, they say,
constituted an abuse of discretion. We agree.
To be sure, a district court has broad discretion in the
administration and enforcement of its own local rules. Diaz-
Villafane, 874 F.2d at 46. But this discretion is not unbridled.
Id. Rules must be administered evenhandedly and applied
consistently. To deviate from a local rule, the court "(1) must
have a sound reason for doing so, and (2) must ensure that no
party's substantial rights are unfairly jeopardized." Id.; accord
García-Goyco v. Law Envtl. Consultants, Inc., 428 F.3d 14, 19-20
(1st Cir. 2005). Fundamental fairness is the mainstay of this
paradigm. See Wight v. BankAmerica Corp., 219 F.3d 79, 85-86 (2d
Cir. 2000).
In the case at hand, the district court faced a dilemma
— but it was a dilemma of the court's own making.8 The court could
8
To be sure, the parties bear the lion's share of the
responsibility for the predicament in which the district court
found itself. Had each of the parties filed responses to the
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have considered both motions for summary judgment at the same time.
For some unexplained reason, it eschewed that course. Thus, at the
time it took up the appellants' motion, the court realized that
following the local rule and deeming admitted all the facts
contained in the appellants' SUF would require it to deem admitted
facts that were in open contradiction to the facts upon which the
earlier summary judgment rested. That, in turn, would result in the
entry of a judgment that directly conflicted with the earlier
judgment.
The prospect of this bizarre result sent up a red flag.
It counselled in favor of a careful review of the available options
and a balancing of the equities. Here, however, the court warded
off the potential conflict by giving one set of litigants (the
insurers) a largesse that it withheld from the other set of
litigants (the appellants). To be specific, the court, having
strictly enforced Local Rule 56 against the appellants in connection
with the insurers' summary judgment motion, excused the insurers
from compliance with that rule in connection with the appellants'
summary judgment motion.
Because the inconsistency is patent — the court held
opposing parties to materially different standards in the
application and enforcement of a local rule — the inquiry reduces
other's SUF in compliance with the local rule, this problem easily
could have been avoided.
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to whether the court had good cause to justify the differential
treatment. See Diaz-Villafane, 874 F.2d at 46. In mounting such
an inquiry, context is important. Here, the district court reasoned
that the appellants could not be allowed to cure defects in their
opposition to the insurers' summary judgment motion by filing their
own cross-motion. PRAICO II, slip op. at 5. This reasoning is
valid in the abstract, but the court's attempt to use it here does
not withstand scrutiny.
This is not a situation in which a party tried to rectify
its noncompliance with the local rule by filing a cross-motion for
summary judgment after the time had run for opposing a summary
judgment motion. By contrast, both sides in this case filed motions
for summary judgment within the same time frame — the motions were
filed a day apart, and both were filed within the period prescribed
by the district court for the service of dispositive motions. Thus,
the timing is a non-issue. On these facts, where neither side
properly contested the other's SUF in the manner prescribed by Local
Rule 56, strictly enforcing the local rule against one party while
excusing the other party's noncompliance cannot be countenanced.
Here, moreover, the appellants' rights were prejudiced by
the district court's inconsistent application of the local rule.
The court's decision to address the insurers' motion first led it,
in effect, to apply the insurers' version of the facts to both
motions. Based on that decision, the court granted the insurers'
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motion for summary judgment against the appellants and denied the
appellants' motion for summary judgment.
The arbitrariness of this approach is obvious: had the
district court opted to consider the appellants' motion first, the
shoe would have been on the other foot; the district court would
have applied the appellants' version of the facts across the board;
and, presumably, the appellants would have prevailed on both
motions. The outcome of litigation should not be permitted to turn
on so vagarious a choice.
It is settled law that each cross-motion for summary
judgment must be decided on its own merits. See, e.g., Blackie v.
Maine, 75 F.3d 716, 721 (1st Cir. 1996). That does not mean,
however, that each motion must be considered in a vacuum. Where,
as here, cross-motions for summary judgment are filed
simultaneously, or nearly so, the district court ordinarily should
consider the two motions at the same time. If the court opts to
consider them at different times, it must at the very least apply
the same standards to each.
To sum up, the two SUFs (each properly supported and
effectively uncontested) directly contradicted each other. Faced
with that situation, we think that the court should have denied both
motions without prejudice and directed the parties to refile. After
all, the first summary judgment order was merely an order for
partial summary judgment which did not dispose of all claims amongst
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all parties. Consequently, that order could be revisited by the
district court at any time up until the entry of final judgment.
See Fed. R. Civ. P. 54(b); see also Williamson v. UNUM Life Ins. Co.
of Am., 160 F.3d 1247, 1251 (9th Cir. 1998); Anixter v. Home-Stake
Prod. Co., 977 F.2d 1533, 1548 (10th Cir. 1992); 10 James Wm. Moore
et al., Moore's Federal Practice § 56.41[2][a], at 56-334 (3d ed.
2010). Instead, the court avoided the paradox of entering two
conflicting orders by applying Local Rule 56 inconsistently to the
parties' motions without good cause for doing so. Because this
differential treatment unfairly prejudiced the appellants, we hold
that the district court abused its discretion. It follows that both
orders (as between these parties) must be vacated.9
B. Requests for Admission.
There is one loose end. The appellants claim that the
district court abused its discretion in denying their motion to deem
admitted the matters limned in their requests for admission. The
appellants add that this bevue prejudiced them because, had the
matters in question been deemed admitted, that would have
strengthened their hand at summary judgment. Because the propriety
9
The insurers suggest that the district court's summary
judgment orders can be upheld on the basis of Rivera's guilty plea
in the criminal case. The district court did not address the
effect of the plea, and the issue is not clear-cut. Thus, even
though we have discretion to affirm a summary judgment order on
alternate grounds, the course of prudence in this case is to allow
the parties to raise the issue before the district court. See
Velazquez-Rivera v. Danzig, 234 F.3d 790, 795 n.2 (1st Cir. 2000).
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of summary judgment must be revisited, see supra Part II(A),
efficiency concerns prompt us to address this claim of error now.
"A party may serve on any other party a written request
to admit, for purposes of the pending action only, the truth of
[certain] matters." Fed. R. Civ. P. 36(a)(1). Under this rule,
"[a] matter is admitted unless, within 30 days after being served,
the party to whom the request is directed serves on the requesting
party a written answer or objection." Fed. R. Civ. P. 36(a)(3).
The appellants resorted to this procedure during
discovery. After some procedural skirmishing, not now relevant, the
insurers served responses to the requests for admission. The
appellants, thinking the responses evasive, asked the district court
to treat as admitted the matters delineated in the requests. The
district court denied this motion on the ground that the motion
lacked the requisite certification. See D.P.R.R. 26(b).
The appellants suggest that the district court simply
misread the record. A review of the court papers validates this
suggestion: the appellants did include the required certification
in their motion. Because the district court's error is obvious, the
order appealed from must be set aside. The district court, on
remand, should address the motion on the merits prior to considering
the motions for summary judgment.
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III. CONCLUSION
We need go no further. For the reasons elucidated above,
the order denying the appellants' Rule 36 motion is vacated; the
orders on the cross-motions for summary judgment are likewise
vacated; and the case is remanded to the district court for further
proceedings consistent with this opinion. All parties shall bear
their own costs.
So Ordered.
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