Pagan v. Calderon, No. 07-1046 (1st Cir. 2007)

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United States Court of Appeals For the First Circuit No. 07-1046 ARCAM PHARMACEUTICAL CORPORATION, Plaintiff, Appellant, DANIEL PAGÃ N; INGRID LLORÃ NS-ORLANDI; CONJUGAL PARTNERSHIP PAGÃ NLLORÃ NS; ERNESTO VILANOVA-VÃ LEZ; MIRTA MORALES-MATOS; CONJUGAL PARTNERSHIP VILANOVA-MORALES; CRISTINO AGOSTO-REYES; IRIS HERNÃ NDEZ-GONZÃ LEZ; CONJUGAL PARTNERSHIP AGOSTO-HERNÃ NDEZ; MARTIN SOUTO; CARMEN DÃ AZ-RODRÃ GUEZ; CONJUGAL PARTNERSHIP SOUTO-DÃ AZ; CHRISTOPHER MOLINA; CARMEN VÃ ZQUEZ-BERMÃ DEZ; CONJUGAL PARTNERSHIP MOLINA-VÃ ZQUEZ, Plaintiffs, v. ANTONIO FARÃ A; VILMA PELLOT; BANCO DE DESARROLLO ECONÃ MICO PARA PUERTO RICO, Defendants, Appellees, SILA MARÃ A CALDERÃ N, in her official capacity as Governor of Puerto Rico; RAMÃ N CANTERO-FRAU; CONJUGAL PARTNERSHIP CANTEROCALDERON, Defendants. APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF PUERTO RICO [Hon. Daniel R. DomÃnguez, U.S. District Judge] Before Torruella and Howard, Circuit Judges, and Smith,* District Judge. * Of the District of Rhode Island, sitting by designation. _________________________ JosÃ© A. Ocasio-Robles and Ocasio-Robles Law Offices, P.S.C. on brief for appellant. Pedro Santiago-Rivera and Reichard & Escalera on brief for appellees. December 26, 2007 SMITH, District Judge. When this case was last before us, we stated unequivocally that the Complaint in this matter failed to state any viable constitutional CalderÃ³n, 448 F.3d 16, 37 (1st Cir. 2006). claims. PagÃ¡n v. Given the holding in PagÃ¡n, dismissal on remand by the District Court of appellant ARCAM Pharmaceutical Corporation s ( ARCAM ) claims was inevitable. Nevertheless, ARCAM now appeals the dismissal of its suit against appellees Antonio FarÃa and Vilma Pellot. ARCAM argues that the PagÃ¡n decision was not binding on its claims against FarÃa and Pellot, and that the District Court erred in extending PagÃ¡n to dismiss the claims against these Defendants. After reviewing ARCAM s arguments and the record, we affirm the District Court s dismissal of the suit. The facts giving rise to the Complaint fully were set forth by this Court in PagÃ¡n, and need not be repeated in detail here. See PagÃ¡n, 448 F.3d at 23-26. underlying action involves defendants . The . . To summarize, briefly, [t]he multiple plaintiffs plaintiffs overarching and claim multiple is that CalderÃ³n, then the governor of Puerto Rico, improperly influenced the decision of a government lender to reject a loan sought by the main plaintiff, ARCAM. Id. at 23. purposes of this appeal is as follows: All that is necessary for Appellees FarÃa and Pellot were President and a high ranking official, respectively, of the Banco de Desarrollo EconÃ³mico para Puerto Rico ( BDE ), the lender 3 which denied ARCAM its sought after commercial loan for $5,000,000. Plaintiffs alleged that FarÃa and Pellot were the vehicles through which CalderÃ³n exerted undue influence over BDE s directors in order to prevent BDE from granting ARCAM s loan request. After this Court s decision in PagÃ¡n, the remaining claims of the underlying Complaint, if alive at all, were on life support. In PagÃ¡n, we had before us CalderÃ³n s appeal of the District Court s denial of her motion to dismiss all claims against her on the grounds of qualified immunity. We first took up the issue of justiciability, and concluded that only ARCAM had standing to pursue its claims against Defendants. the claims of all other Plaintiffs. We therefore dismissed With all Plaintiffs except ARCAM out of the picture, and only ARCAM s equal protection and substantive due process claims remaining, we turned to CalderÃ³n s claim of qualified immunity. Id. at 23. Applying the usual qualified immunity rubric, see, e.g., Limone v. Condon, 372 F.3d 39, 44 (1st Cir. 2004), we conclusively found that ARCAM failed adequately to plead a violation of its constitutional rights, directed the District Court to grant CalderÃ³n s motion for dismissal of all claims against her, and remanded for further consistent proceedings.1 PagÃ¡n, 448 F.3d at 23. 1 Because only CalderÃ³n appealed the District Court s Order, this Court was compelled to return the case to the District Court for appropriate disposition of ARCAM s claims against Pellot and FarÃa. 4 On remand, the District Court quite predictably ordered the parties to show cause why the remaining claims should not be dismissed based on the holding of PagÃ¡n. After considering the parties submissions, the Court then incorporated in toto this Court s analysis in PagÃ¡n, and disposed of all further pending matters, including supplemental claims raised under Puerto Rican law.2 Now before us is ARCAM s last-gasp appeal of the District Court s dismissal of its remaining claims against Pellot and FarÃa. ARCAM stands on shaky ground when it claims that this Court s analysis in PagÃ¡n was little more than dicta as to Pellot and FarÃa. We have held that when a statement in a judicial decision is essential to the result reached in the case, it becomes part of the court s holding. Cir. 2004). Rossiter v. Potter, 357 F.3d 26, 31 (1st The result, along with those portions of the opinion necessary to the result, are binding, whereas dicta is not. Id. Dictum constitutes neither the law of the case nor the stuff of binding precedent, Dedham Water Co. v. Cumberland Farms Dairy, Inc., 972 F.2d 453, 459 (1st Cir. 1992); rather, it comprises observations in a judicial opinion or order that are not essential to the determination of the legal questions then before the court. Municipality of San Juan v. RullÃ¡n, 318 F.3d 26, 29 n.3 (1st Cir. 2003) (quoting Dedham Water Co., 972 F.2d at 459); 2 These claims, sounding solely in the law of Puerto Rico, were dismissed without prejudice. 5 see also Pierre N. Leval, Judging Under the Constitution: Dicta About Dicta, 81 N.Y.U. L. Rev. 1249, 1256 (2006) (Dictum is superfluous content - an assertion in a court s opinion of a proposition of law which does not explain why the court s judgment goes in favor of the winner ). Because CalderÃ³n was the sole appellant in PagÃ¡n, our reversal of the District Court s refusal to dismiss ARCAM s equal protection and substantive due process claims technically related only to those allegations aimed at CalderÃ³n. However, the holding was premised on the essential finding that ARCAM s allegations do not state viable constitutional claims, a determination that was by no means uniquely applicable to CalderÃ³n, but instead spoke broadly to the failings of the Complaint as a whole. PagÃ¡n, 448 F.3d at 37. As to ARCAM s specific allegation that CalderÃ³n transgressed its substantive due process rights when, through Pellot and FarÃa, she exerted undue influence over BDE s directors so that they would deny ARCAM s loan request, we concluded that the mere withholding of the loan, simplicitor, cannot support a constitutional claim. Id. at 33. This conclusion required dismissal of ARCAM s substantive due process claim, was not dicta, and applies with equal force to the identical claims alleged against Pellot and FarÃa. We were similarly forthright with regard to ARCAM s equal protection claim: . . . [the claim] 6 does not pass constitutional muster. Id. at 35. Here, the analysis was two-pronged: first, ARCAM failed to plead facts establishing that a similarly situated borrower was treated differently than it; and second, the Complaint offered no allegations indicating that the disparate treatment of which ARCAM complains resulted from a gross abuse of power, invidious discrimination, or fundamentally unfair procedures.3 These flaws doomed ARCAM s equal protection claims against all remaining Defendants, not just CalderÃ³n. Though our holding in PagÃ¡n was limited to CalderÃ³n s appeal, it cannot, as ARCAM urges, reasonably be read in isolation from the case as a whole. Rather, as set forth above, the core holding of PagÃ¡n that the Complaint in this matter fails to allege viable constitutional claims - extends with equal, if not more force to allegations aimed at Pellot and FarÃa. In sum, with our holding in PagÃ¡n, we sounded the death knell for ARCAM s remaining claims against Pellot and FarÃa, leaving the District Court no choice but to bring down the axe. The Order of the District Court dated November 27, 2006 is affirmed. 3 To the extent that ARCAM seeks to rely on its equal protection and due process claims against CalderÃ³n, Pellot, and FarÃa to redress what it alleges to have been unconstitutional political discrimination or retaliation, it cannot do so. PagÃ¡n v. CalderÃ³n, 448 F.3d 16, 34, 36-7 (1st Cir. 2006). Rather, the proper avenue for such assertions is a First Amendment claim, one which ARCAM brought, and which the District Court below dismissed as to all Defendants in its March 30, 2005 Opinion and Order. See id. at 36. 7

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