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Garcia v. Island Program, 1st Cir. (1995)

The court affirmed the district court's ruling that the IRS's federal tax claims against an insolvent health organization were entitled to priority over the claims of unpaid healthcare providers. The district court had issued a well-reasoned opinion correctly applying the legal doctrines established by the Supreme Court regarding the interplay between federal and local law. The appellate court declined to reconsider the issues, as the appellant had not properly developed its arguments in the district court and its interpretation of the local statute was arbitrary and contrary to the statute.

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48 views11 pages

Garcia v. Island Program, 1st Cir. (1995)

The court affirmed the district court's ruling that the IRS's federal tax claims against an insolvent health organization were entitled to priority over the claims of unpaid healthcare providers. The district court had issued a well-reasoned opinion correctly applying the legal doctrines established by the Supreme Court regarding the interplay between federal and local law. The appellate court declined to reconsider the issues, as the appellant had not properly developed its arguments in the district court and its interpretation of the local statute was arbitrary and contrary to the statute.

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USCA1 Opinion

[NOT FOR PUBLICATION]


UNITED STATES COURT OF APPEALS
FOR THE FIRST CIRCUIT

_________________________

No. 95-1006

JUAN ANTONIO GARCIA,

INSURANCE COMMISSIONER, ETC.,

Plaintiff, Appellant,

v.

ISLAND PROGRAM DESIGNER, INC.,

Defendant, Appellee.

__________________________

UNITED STATES OF AMERICA,

Intervenor, Appellee.

_________________________

APPEAL FROM THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF PUERTO RICO

[Hon. Gilberto Gierbolini, Senior U.S. District Judge]


__________________________

_________________________

Before

Selya, Cyr and Stahl,

Circuit Judges.
______________

_________________________

Carlos J. Morales Bauza and Rossello-Rentas & Rabell-Mendez


________________________
_______________________________
on brief for appellant.
Loretta C. Argrett,
___________________

Assistant

Attorney

Allen, Bruce R. Ellisen, and Laurie Snyder,


_____ _________________
_____________

General, Gary R.
________

Tax Division, Dep't

of Justice, and Guillermo Gil, United States Attorney,


______________
for intervenor.

on brief

_________________________
August 9, 1995
_________________________

Per Curiam.
Per Curiam.
___________

This case

involves a

dispute over

the

relative priority to be accorded to federal tax claims against an

insolvent

opinion in

health maintenance

which we

organization.

held that the

After an

federal court

earlier

had exclusive

jurisdiction

to hear

and determine

the

competing claims,

see
___

Garcia v. Island Program Designer, Inc., 4 F.3d 57, 60 (1st


______
_____________________________

1993),

the

district

court

rejected

appellant, Puerto Rico's Insurance

the

tax claims

were entitled to

providers.

See
___

Supp. 940, 944

asserted by the

the

position

urged

Commissioner, and ruled

Internal Revenue

priority over the claims

Cir.

by

that

Service (IRS)

of unpaid health-care

Garcia v. Island Program Designer, Inc., 875 F.


______
______________________________

(D.P.R. 1994).

The Insurance Commissioner

then

prosecuted the instant appeal.

We

will not

careful,

well-reasoned

doctrines

articulated

dawdle.

opinion,

by

The court

below has

correctly

the Supreme

Court

written a

applying the

in

legal

Department of
_____________

Treasury
________

v.

exploring

U.S.C.

Fabe,
____

113

S.

the interplay among

Ct.

2202

and local law, particularly P.R. Laws

hesitate

to wax

resonate."

Ann. tit. 26,

work product, a reviewing

longiloquent

simply

to

hear

adequately

statute, 31

1012(b),

1914.

It

trial court has

tribunal should

its

own

words

In re San Juan Dupont Plaza Hotel Fire Litig., 989


_______________________________________________

F.2d 36, 38 (1st Cir. 1993).

here.

Act, 15 U.S.C.

practice that when, as now, "a

produced a first-rate

and

the federal priority

3713, the McCarran-Ferguson

is our preferred

(1993),

Accordingly, we affirm

That wise adage is fully applicable

the entry of summary

judgment in

the IRS's favor

for substantially the reasons

elucidated in the

opinion below.

Withal, we add

appellant

principle.

essayed only

one flourish.

In the district

fleeting

to

reference

the

court,

Chevron
_______

See Chevron U.S.A. Inc. v. Natural Resources Defense


___ ___________________
_________________________

Council, Inc., 467 U.S. 837


_____________

makes Chevron the centerpiece


_______

late and too little.

(1984).

On appeal, the Commissioner

of his argument.

This is both too

In the first

theories

not

place, it is our settled

developed

splendiforously unveiled on

in

the

appeal.

trial

rule that legal

court

cannot

be

See Teamsters, Chauffeurs,


___ _______________________

Warehousemen and Helpers Union, Local No. 59 v. Superline Transp.


____________________________________________
_________________

Co., 953 F.2d 17,


___

Chevron
_______

that

are

21 (1st Cir. 1992).

In

the second place, the

principle does not apply "to agency litigating positions

wholly

unsupported

administrative practice."

by

regulations,

rulings,

or

Bowen v. Georgetown Univ. Hosp., 488


_____
_______________________

U.S. 204, 212 (1988); accord United States v. 29 Cartons of * * *


______ _____________
___________________

An Article of Food,
____________________

Consequently, it would

987

F.2d

33, 38

n.6

(1st

be wholly inappropriate for

as appellant importunes, to what

Cir.

1993).

us to defer,

strikes us as nothing more than

a position of convenience.

In

an administrative agency's

statutory interpretation must "flow[]

rationally

from

all events, to win our allegiance

permissible construction

of

the

statute,"

Strickland v. Commissioner, Me. Dep't of Human Servs., 48


__________
_________________________________________

F.3d

12, 17 (1st Cir. 1995), and cannot be "`arbitrary, capricious, or

manifestly

contrary

to the

statute.'"

id. at
___

18

(citation

omitted).

Appellant's interpretation of

P.R. Laws Ann. tit. 26,

1914 fails this test.

We need

go no further.

court must be summarily affirmed.

Affirmed.
Affirmed.
________

The judgment of

the district

See 1st Cir. Loc. R. 27.1.


___

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