author: EUGENE A. WRIGHT, Circuit Judge:

text:
    CITY OF KETCHIKAN, a municipal corporation, d/b/a Ketchikan Public Utilities, Plaintiff-Appellant, v. CAPE FOX CORPORATION, an Alaska corporation, Defendant-Appellee.
    No. 94-35316.
    United States Court of Appeals, Ninth Circuit.
    Argued and Submitted April 10, 1995.
    Opinion Filed Sept. 6, 1995.
    Opinion Withdrawn Jan. 23, 1996.
    Resubmitted April 25, 1996.
    Decided May 23, 1996.

      H. Clay Keene, Keene & Currall, Ketchikan, Alaska, for plaintiff-appellant.
    James D. Nelson, Betts, Patterson & Mines, Seattle, Washington, for defendantappellee.
    Before: WRIGHT, POOLE and WIGGINS, Circuit Judges.
   EUGENE A. WRIGHT, Circuit Judge:

This case involves interpretation of the land reconveyance provision of the Alaska Native Claims Settlement Act (ANCSA), 43 U.S.C. § 1613(c). The City of Ketchikan seeks conveyance from the Cape Fox Corporation of surface title to 38 acres upon which its Beaver Falls hydroelectric powerhouse is located. The City appeals the district court’s grant of summary judgment to Cape Fox. Upon de novo review, Jesinger v. Nevada Fed. Credit Union, 24 F.3d 1127, 1130 (9th Cir.1994), we affirm.

BACKGROUND

Congress enacted ANCSA in 1971. The Act is a legislative compromise, written in response to conflicts among the federal government, the state of Alaska, Alaska Natives and non-Native settlers over ownership of Alaskan lands. It awarded Alaska Natives $962.5 million and approximately 40 million acres of public land, in exchange for extinguishment of their aboriginal title claims. See 43 U.S.C. §§ 1603,1605(a), 1611.

The Act divides Alaska into 12 geographic regions, each with a Native Regional Corporation. 43 U.S.C. § 1606(a). Within the Regional Corporations are approximately 200 Village Corporations. 43 U.S.C. § 1607. Subject to certain restrictions, the Village and Regional Corporations were allowed to select land in “contiguous and ... reasonably compact tracts” from the available public lands in Alaska. 43 U.S.C. § 1611(e)(2). The Village Corporations received title to the surface estate, and the Regional Corporations received the subsurface estate. 43 U.S.C. § 1613(f). The Village Corporations are required to reconvey, without consideration, the surface title to Native or nonNative “occupants” who meet certain conditions. 43 U.S.C. § 1613(c). Those legal occupants who do not meet the conditions may continue their occupancy, but do not receive title. 43 U.S.C. § 1613(g).

The City of Ketchikan operates electric, water and telecommunications utilities under the name Ketchikan Public Utilities (KPU). As part of its electric utility, it runs the Beaver Falls hydroelectric powerhouse, which is located six and a half miles from Ketchikan. The City constructed the facility in 1945 on public lands within the Tongass National Forest and has since operated it pursuant to a 50-year license from the Federal Power Commission. The lease and license expired at the end of 1995. The City has obtained a new 30-year license subject to its ability to secure the right to use the land. See Ketchikan Public Utilities, 69 Fed. Energy Reg. Comm’n ¶ 62,113 (1994), as modified by, 74 Fed. Energy Reg. Comm’n ¶ 61,051 (1996). The City has never owned the land.

In 1984, Cape Fox, a Native Village Corporation, acquired surface title to 428 acres of federal land pursuant to ANCSA. The Beaver Falls powerhouse is situated upon approximately 38 acres of that land. The City of Ketchikan seeks surface title pursuant to two ANCSA conveyance subsections. It argues that the Beaver Falls site is a primary place of its electric utility business pursuant to subsection 1613(c)(1), and that the City is entitled to the land as a nonprofit organization under subsection (c)(2). The district court granted Cape Fox’s motion for summary judgment, finding neither conveyance provision applicable. The City appealed.

DISCUSSION

I. “Primary Place of Business”: § 1613(c)(1)

The City first argues that it is entitled to title to the disputed site under subsection 1613(c)(1), which provides:

the Village Corporation shall first convey to any Native or non-Native occupant, without consideration, title to the surface estate in the tract occupied as of December 18, 1971 ... as a primary place of residence, or as a primary place of business, or as a subsistence campsite, or as headquarters for reindeer husbandry____

(emphasis added).

The City’s argument depends on whether the power plant could be considered “a primary place of business” on December 18, 1971. Congress has not used this exact term in any other statute, and the legislative history provides no guidance as to its definition. Only one opinion has considered its meaning. See Hakala v. Atxam Corp., 753 P.2d 1144 (Alaska 1988). Thus we look to the statute’s plain language. In re Hanna, 72 F.3d 114, 115 (9th Cir.1995).

The City argues that by using the article “a” rather than “the,” Congress indicated that a business can have more than one primary place. We disagree. Despite the use of “a,” the word “primary” connotes a single leading location. See Black’s Law Dictionary 1071 (5th ed.1979) (primary means “First; principal; chief; leading. First in order of time, or development, or intention.”); Webster’s New World Dictionary 1129 (2d ed.1974) (primary means “first in time or order of development; primitive; original; earliest ... first in importance; chief; principal; main”). Because we believe that the focus of the phrase is the word “primary,” we hold that a business may have only one “primary place.” To read the statute otherwise would change the meaning of “primary” to merely “significant.”

Although a business may have only one primary location, a person or corporation may have more than one business. Accord Hakala, 753 P.2d at 1148 (‘We find that for each business in which a person engages, there can only be one primary place of business.”) (emphasis added). The City argues that KPU encompasses three distinct businesses: an electric utility, a telecommunications utility and a water utility. For purposes of this opinion only, we agree that these utilities should be considered separate businesses and that each may have its own primary place of business. Thus we must decide whether the electric utility’s primary place of business is the Beaver Falls plant or its downtown Ketchikan office.

In defining “primary place of business,” Cape Fox urges us to look to the definition of the “principal place of business” used in personal jurisdiction analyses. See 28 U.S.C. § 1332(c)(1) (“[A] corporation shall be deemed to be a citizen ... of the State where it has its principal place of business”); Danjaq, S.A. v. Pathe Communications Corp., 979 F.2d 772, 776 (9th Cir.1992) (“[T]he bulk of corporate activity, as evidenced by the location of daily operating and management activities, governs the choice of a principal place of business.”). The City concedes that under that analysis the power-plant is not its primary place of business.

Although the jurisdiction cases provide some guidance, we do not believe that that analysis is determinative. In ANCSA, Congress chose to use language similar to section 1332(c), but not identical. See BFP v. Resolution Trust Corp., — U.S. -, -, 114 S.Ct. 1757, 1761, 128 L.Ed.2d 556 (1994) (holding that the neologism “reasonably equivalent value” does not necessarily carry the same meaning as traditional “fair market value”). Moreover, the policy concerns behind the jurisdictional definition are inapt in the ANCSA context. The underlying purpose of diversity jurisdiction is to protect out-of-state corporations from local prejudices. See Danjaq, 979 F.2d at 774; S.Rep. No. 1830, 85th Cong., 2d Sess. 4 (1958). This reasoning bears no relation to Alaskan land selection.

The Alaska Supreme Court’s decision in Hakala, although not binding on this court, provides a better analysis. That court recognized that Congress wanted to protect existing businesses, as well as to help Native Alaskans. With that in mind, the court “adopt[ed] an interpretation of the phrase ‘a primary place of business’ which effectuate[d] Congress’ intent to protect a wide array of existing legitimate businesses.” Id. Refusing to create “rigid and arbitrary requirements,” the court interpreted “primary place of business” as the “place which serves as the center of activity for that business.” Id. We adopt the Hakala court’s description of the test.

With this test in mind, we hold that the downtown office was the “nucleus” and “center” of KPU’s electric business activity in 1971. Although Beaver Falls generated 55% of KPU’s power, the location was but one of four electricity-generating facilities owned by the City. The management of KPU, including the management of its electric utility business, was conducted at an office in downtown Ketchikan. All customer interactions and general administrative functions were conducted at that office. Of the 30 employees who worked solely for the electric utility in 1971, only three worked at Beaver Falls. The utility also had a vast undertaking in electricity distribution and sales that did not take place at Beaver Falls. We conclude that the Beaver Falls plant was not the electric utility’s primary place of business.

II. “Nonprofit Organization”: § 1613(c)(2)

The City also argues that it is entitled to a reconveyance as a “nonprofit organization” based on the plain language of subsection 1613(e)(2). It provides:

[T]he Village Corporation shall then convey to the occupant ... title to the surface estate in any tract occupied as of December 18, 1971 by a nonprofit organization. (emphasis added).

The City argues that because KPU does not make a profit and is an organization, it is a “nonprofit organization” under subsection 1613(c)(2). We disagree.

When we construe statutory language we look first to its plain meaning, In re Hanna, 72 F.3d at 115, but our inquiry does not stop there. ‘When we look to the plain language of a statute in order to interpret its meaning, we do more than view words of subsections in isolation. We derive meaning from context, and this requires reading the relevant statutory provisions as a whole.” In re Rufener Constr., Inc., 53 F.3d 1064, 1067 (9th Cir.1995). We note that any ambiguity in a statute must be interpreted liberally in favor of the Native tribes. Montana v. Blackfeet Tribe of Indians, 471 U.S. 759, 766, 105 S.Ct. 2399, 2403, 85 L.Ed.2d 753 (1985); Tyonek Native Corp. v. Secretary of the Interior, 836 F.2d 1237, 1239 (9th Cir.1988).

The structure of section 1613(c) is important to our analysis. This section awards specific conveyances to a limited group of occupants. Subsection (a), discussed earlier, conveys land to four groups: occupants who have a primary residence, a primary place of business, a subsistence campsite or reindeer husbandry headquarters. Subsection (b) conveys land to nonprofit organizations. Subsections (e) and (d) involve conveyances to Native and nonNative municipal corporations. The City argues that it fits the definitions of both nonprofit organization and municipal corporation, and should receive the benefits of both conveyance provisions. There are several problems with its argument.

First, the City’s argument makes subsections (3) and (4) superfluous. Security Pacific Nat’l Bank v. Resolution Trust Corp., 63 F.3d 900, 904 (9th Cir.1995) (“We must avoid a construction which renders any language of the enactment superfluous.”). By the City’s reasoning, a municipal corporation, as a nonprofit organization, would receive a conveyance of all occupied lands pursuant to subsection 1613(e)(2). Thus, subsection (3), which requires conveyance to municipal corporations in Native villages of all improved land on which the village is located, would be unnecessary because under subsection (2) the municipal corporation would already have received the conveyance. Similarly, subsection (4), which awards the government any airstrips, airport sites and the like, would also be unnecessary.

Second, Congress did not define “nonprofit organization” in ANCSA but it did define “municipal corporation.” A municipal corporation is “any general unit of municipal government under the laws of the State of Alaska.” 43 U.S.C. § 1602(i). The City of Ketchikan, which operates KPU, is organized under Alaska law as a municipal corporation. See Alaska Stat. § 29.71.800(13) (defining it as “a political subdivision incorporated under the laws of [Alaska] that is a home rule or general law city, a home rule or general law borough, or a unified municipality.”). Neither the City nor the utility is organized under Alaska statutes for nonprofit organizations. See Alaska Stat. § 10.20. It seems logical that Congress would look to state law for both definitions. If so, the City is a municipal corporation and not a nonprofit organization. The City owns, runs and controls KPU. According to the City, it “owns” the Beaver Falls facility. It is the City that brought this action (see caption “City of Ketchikan, a municipal corporation, d/b/a Ketchikan Public Utilities”) and it is the City holding the license to run the Beaver Falls powerhouse. For purposes of ANCSA, the City (and thus KPU) is a municipal corporation, and not a “nonprofit organization.”

Third, even if the City were considered to be both a municipal corporation and a nonprofit organization, the municipal corporation’s more specific provisions must prevail. Security Pacific, 63 F.3d at 904. In this type of case, the more specific provisions (subsections (3) and (4), which grant limited conveyances to municipal corporations) become an exception to the general rule (subsection (2), which grants conveyance to nonprofits of all occupied lands). See id. (citing 2A Sutherland Stat. Constr. § 47.17).

We conclude that the City of Ketchikan, doing business as Ketchikan Public Utilities, does not qualify for a reconveyance as a nonprofit organization under ANCSA.

CONCLUSION

The City of Ketchikan ultimately fails in its effort to win surface title to the 38 acres upon which its Beaver Falls facility is located. This result is not inequitable. The City has been afforded many protections and benefits under ANCSA. Every Alaska city received a two-mile “buffer zone” around its boundary in which the Native villages could not select any land. 43 U.S.C. § 1621(Z). The City of Ketchikan was the only municipal corporation in all of Alaska to secure a six-mile buffer zone. Id. It is also protected by the reconveyance provisions of subsection 1613(c)(4), which ensures land for airstrips and the like. And the City’s license with the federal government was protected by subsection 1613(g), which allowed the City to continue operating its power plant unchanged for the past 10 years, even though the land’s ownership changed hands.

Finally, we note that the City has never owned this land but only leased it from the federal government. When its lease expired the City would have been forced to renegotiate with whoever then owned the land. There was no guarantee that the government would retain ownership in perpetuity. As the Federal Energy Regulatory Commission recently noted

Ketchikan will have to make the necessary arrangements with Cape Fox for the land use rights it needs for the [hydroelectric] project.... The financial interest in the land now rests with Cape Fox, not the United States. At the same time, Ketchikan will have access, permitting it to continue to operate its project, so long as it is prepared to reasonably compensate Cape Fox for the land involved.

Ketchikan Public Utilities, 74 FERC at 13, 15.

We AFFIRM the summary judgment in favor of Cape Fox.

      .Obviously if we were to consider the entire City of Ketchikan or even KPU as a whole, the City would easily fail the “primaiy place” test. It would be absurd to find that the remote power-plant was a primary place of business for all of Ketchikan or its utilities.

      . The City further argues that because its business "is to produce power,” we should not consider the electric utility's administrative and distribution activities. The City’s argument goes too far.

      . The City argues that "the inquiry [into the primaiy place of business] must determine which location (or locations) of a business that exist within village corporation land is its primary or most significant location. Since the City’s Beaver Falls hydroelectric site was the City’s only location within Cape Fox's ANCSA land, that location was the utility's primary place of business for purposes of section 1613(c)(1).” (emphasis added). We disagree. Nowhere in ANCSA or in Hakala is the “primary place of business" limited in such a way. Even if Hakala could be construed in such a manner, that reasoning would not be binding on this court. We further-note that the City did not adequately raise this argument before the district court.

      . As the district court noted, "if the City’s logic is used, the primary place of business of Wonder Bread would be the wheat fields of Kansas.” Similarly, the primary place of business of Shell Oil would be under the floor of the Pacific Ocean.

      . 43 U.S.C. § 1613(c):
      (3) the Village Corporation shall then convey to any Municipal Corporation in the Native village or to the State in trust for any Municipal Corporation established in the Native village in the future, title to the remaining surface estate of the improved land on which the Native village is located and as much additional land as is necessary for community expansion, and appropriate rights-of-way for public use, and other foreseeable community needs____
      (4) the Village Corporation shall convey to the Federal Government, State, or to the appropriate Municipal Corporation, title to the surface estate for airport sites, airway beacons, and other navigation aids as such existed on December 18, 1971, together with such additional acreage and/or easements as are necessary to provide related governmental services and to insure safe approaches to airport runways as such airport sites, runways, and other facilities existed as of December 18, 1971....


source: Caselaw Access Project

author: CANBY, Circuit Judge:

license: Public Domain

text:
    Michael Angelo MORALES, Petitioner-Appellant, v. Arthur CALDERON, Warden, Respondent-Appellee.
    No. 94-99010.
    United States Court of Appeals, Ninth Circuit.
    Argued and Submitted Sept. 26, 1995.
    Decided June 4, 1996.

      David A. Senior, Condon & Forsyth, Los Angeles, California, for petitioner-appellant.
    Keith H. Borjon, Deputy Attorney General, Los Angeles, California, for respondentappellee.
    Before: FARRIS, CANBY, and THOMPSON, Circuit Judges.
   CANBY, Circuit Judge:

Michael Angelo Morales, a California death-row inmate, appeals the federal district court’s dismissal of the majority of the claims he presented in his first habeas corpus petition in district court. The district court dismissed the claims because the California Supreme Court had denied them not only on the merits but also as untimely; they were therefore considered to be defaulted. This is an interlocutory appeal of the district court’s ruling. We have jurisdiction pursuant to 28 U.S.C. § 1292(b) and F.R.A.P. 5(a). We reverse the district court’s dismissal of the claims and remand for consideration of the merits because we find that the state court’s denial of the claims was not based on an adequate and independent state ground that bars federal habeas review.

BACKGROUND

In 1983, a California jury convicted Morales of first-degree murder, among other charges, and sentenced him to death. The California Supreme Court affirmed the convictions and sentence by opinion on April 6, 1989, amended June 1,1989. People v. Morales, 48 Cal.3d 527, 257 Cal.Rptr. 64, 770 P.2d 244 (Cal.), cert. denied, 493 U.S. 984, 110 S.Ct. 520, 107 L.Ed.2d 520 (1989). On June 6, 1989, the California Supreme Court adopted new policies regarding death penalty cases, including “Standards Governing Filing of Habeas Corpus Petitions and Compensation of Counsel in Relation to such Petitions.” See Supreme Court Policies Regarding Cases Arising from Judgments of Death, in California Rules of Court — State 745-46 (1990) (hereinafter “Standards”). These Standards, effective June 6, 1989, governed “all petitions for writs of habeas corpus arising from judgments of death, whether the appeals therefrom are pending or previously resolved.” Standards, Policy 3 at 745.

In November 1989, the United States Supreme Court denied certiorari in Morales’s ease. Thereafter, Morales obtained new counsel who filed a petition for writ of habeas corpus on July 20, 1992, in federal district court. Morales presented 52 claims. Twenty of these claims were exhausted in the automatic state appeal and raised issues from the trial record. The other claims involved issues that arose from facts outside the record and were discovered by Morales’s new counsel.

The district court dismissed the 32 extra-record claims without prejudice and ordered Morales to present those claims to the California Supreme Court. On December 16, 1992, approximately three and one-half years after his convictions were affirmed, Morales filed his first petition for writ of habeas corpus in the California Supreme Court. The petition raised the 32 extra-record claims and one additional, newly-discovered claim. Morales later filed a supplemental petition, which the court treated as a separate habeas corpus petition, raising three additional claims based on newly discovered facts, and presenting newly discovered facts supporting three of the claims raised in the December 16 petition.

The California Supreme Court denied all relief on both petitions, issuing two orders on July 28,1993, that both stated:

Petition for writ of habeas corpus DENIED on the merits and as untimely. (See Supreme Court Policies Regarding Cases Arising from Judgments of Death, Stds. 1-1.1 to 1-3; In re Stankewitz (1985) 40 Cal.3d 391, 396, fn. 1, 220 Cal.Rptr. 382, 708 P.2d 1260.)[.]

The order dismissing the December 16 petition also stated: Mosk, J. is of the opinion that an order to show cause should issue.

Morales then filed his first amended petition for writ of habeas corpus in federal district court, raising the. newly-exhausted claims and two more claims attacking the constitutionality of the California death penalty statute. Morales also re-alleged the 20 claims from the first petition, which the State had already answered and Morales had traversed.

In April 1994, the district court granted the State’s motion to dismiss. The district court dismissed the newly-exhausted claims on the ground that they were proeedurally defaulted for untimeliness in state court. The district court also dismissed the 20 claims already before it from the first petition, noting that these claims were already under consideration.

The district court found that “the California Supreme Court’s procedural bars specifically invoked in this case” were adequate and independent state grounds that supported the Supreme Court’s judgment. The district court further found that Morales had “failed to make any particularized showing of cause and prejudice or a fundamental miscarriage of justice to overcome the ‘presumption against federal habeas review of claims defaulted in state court.’” See Coleman v. Thompson, 501 U.S. 722, 747, 111 S.Ct. 2546, 2563, 115 L.Ed.2d 640 (1991). The court granted Morales’s request to make a more particularized showing of either cause and prejudice or a fundamental miscarriage of justice.

Morales moved for reconsideration in light of Siripongs v. Calderon, 35 F.3d 1308 (9th Cir.1994), cert. denied, — U.S. -, 115 S.Ct. 1175, 130 L.Ed.2d 1127 (1995), decided after the district court had entered its order of dismissal. The district court denied the motion.

The district court granted Morales’s motion to certify the dismissal of these claims for interlocutory appeal, and we granted permission to appeal pursuant to F.R.A.P. 5(a) and 28 U.S.C. § 1292(b). The district court’s certification order stayed further briefing of the questions whether, assuming a default, Morales had shown cause and prejudice or a fundamental miscarriage of justice; those issues consequently are not before us.

ISSUE

The issue for our decision is whether the California Supreme Court’s timeliness requirement serves as an adequate and independent state ground for its decision dismissing Morales’ petition. If it does, Morales has defaulted proeedurally on the affected claims and cannot raise them in federal court unless he shows cause and-prejudice or a fundamental miscarriage of justice. See Coleman, 501 U.S. at 750, 111 S.Ct. at 2565.

ANALYSIS

Morales argues that the state denial of his claims was not based on an adequate and independent ground barring federal review because (1) the California Supreme Court’s habeas corpus timeliness Standards are facially indeterminate, (2) the Supreme Court has applied the Standards with a lack of even-handedness, and (3) the Supreme Court’s orders of denial are ambiguous and dependent on federal claims. The State, on the other hand, insists that the Standards are adequate neutral rules of judicial administration that, as applied in this case, bar federal review.

There is usually no doubt that the decision of a state supreme court rests on an adequate and independent state ground when the court’s opinion clearly and expressly states that its decision is based on a state procedural rule. See Coleman, 501 U.S. at 735-36, 111 S.Ct. at 2557-58 (citing Harris v. Reed, 489 U.S. 255, 263, 109 S.Ct. 1038, 1043, 103 L.Ed.2d 308 (1989)). A state procedural rule does not bar federal review, however, if it is so unclear that it does not “provide[ ] the habeas petitioner with a fair opportunity to seek relief in state court.” Harmon v. Ryan, 959 F.2d 1457, 1462 (9th Cir.1992). Nor can a state preclude federal review by invoking procedural rules that the state does not apply consistently. See Hathorn v. Lovorn, 457 U.S. 255, 262-63, 102 S.Ct. 2421, 2426-27, 72 L.Ed.2d 824 (1982). We conclude that the California timeliness standard, as applied to Morales, suffers from both of these deficiencies.

I. Uncertainty of California’s Timeliness Standards

We find it difficult to articulate California’s timeliness requirements as they applied to Morales. The Standards make it clear enough that a petition for habeas corpus is presumed timely if filed within 60 (later 90) days of the final due date of the petitioner’s reply brief on direct appeal, Standards § 1-1.2, but Morales’s appeal had already been decided at the . time the Standards were announced. Neither the Standards themselves nor California cases construing those Standards create an unambiguous rule on timeliness beyond the 60 or 90 days. Further, because the California Supreme Court does not provide reasons for its denials of petitions of habeas corpus on timeliness grounds, it is equally difficult to discern what criteria the state court applies when ruling on the timeliness of a petition filed beyond the 60 or 90 day period.

The Standards, in pertinent part, state:

1. Timeliness standards
1-1. Appellate counsel in capital eases shall have a duty to investigate factual and legal grounds for the filing of a petition for a writ of habeas corpus. All petitions for writs of habeas corpus should be filed without substantial delay.
1-1.1. A petition for a writ of habeas corpus will be presumed to be filed without substantial delay if it is filed within 60 days after the final due date for the filing of appellant’s reply brief on the direct appeal.
1-1.2. A petition filed more than 60 days after the final due date for the filing of appellant’s reply brief on the direct appeal may establish absence of substantial delay if it alleges with specificity facts showing the petition was filed within a reasonable time after petitioner or counsel became aware of information indicating a factual basis for the claim and became aware, or should have become aware, of the legal basis for the claim.
1-1.3. Alternatively, a petition may establish absence of substantial delay if it alleges with specificity facts showing that although petitioner or counsel was aware of the factual and legal bases for the claim before January 16, 1986 (the date of finality of In re Stankewitz (1985) 40 Cal.3d 391, 396-397, fn. 1, 220 Cal.Rptr. 382, 708 P.2d 1260), the petition was filed within a reasonable time after that date.
1-2. If a petition is filed after substantial delay, the petitioner must demonstrate good cause for the delay. A petitioner may establish good cause by showing particular circumstances sufficient to justify substantial delay.
1-3. Any petition that fails to comply with these requirements may be denied as untimely.

Standards at 745-46 (emphasis added).

The first uncertainty in these Standards inheres in the requirement that petitions for habeas corpus should be filed “without substantial delay.” If the petition is filed after substantial delay, then the petitioner must demonstrate similarly uncertain “good cause” for the delay. The source of these requirements is, in part, a footnote in In re Stankewitz, 40 Cal.3d 391, 220 Cal.Rptr. 382, 708 P.2d 1260, 1262 n. 1 (1985) (explaining that petitioner “must point to particular circumstances sufficient to justify substantial delay”). In that case, the petitioner filed his first habeas corpus petition a year and a half after obtaining newly-discovered evidence, while direct review of his murder conviction and death sentence was still pending. Id. 220 Cal.Rptr. at 383, 384 n. 1, 708 P.2d at 1261, 1262 n. 1. The California Supreme Court held that petitioner had made a sufficient showing of justification for delay. Id. at 384 n. 1, 708 P.2d at 1262 n. 1. Neither the Standards nor Stankewitz, however, established what amount of delay the court would consider “substantial,” nor did either set out criteria for determining “good cause” to excuse such delay. They also did not prescribe whether and when untimeliness might be waived altogether, even though good cause had not been shown.

The vagueness of the Standards could have been cured by narrowing judicial construction in the years immediately following their issuance. We find no such cases, however. The California Supreme Court did attempt to explain at great length its requirements under the Standards in In re Clark, 5 Cal.4th 750, 21 Cal.Rptr.2d 509, 855 P.2d 729 (1993), but Clark was not decided until a few days after the California Supreme Court denied Morales’s petition.

Clark asserted that a petitioner whose conviction was affirmed before announcement of the Standards was nevertheless on notice of the delay rules per Stankewitz. Id. 21 Cal.Rptr.2d at 531, 855 P.2d at 750. Thus, “any substantial delay in the filing of a petition after the factual and legal bases for the claim are known or should have been known must be explained and justified.” Id. at 533, 855 P.2d at 752. Clark also stated, however, that “counsel’s obligation to investigate possible claims was created only by the [Standards],” and consequently claims discovered after investigation commencing after the date of publication of the Standards (June 6, 1989) and presented promptly thereafter are timely. Id.

Despite Clark’s emphasis on the duties of counsel that pre-existed the Standards (as well as the Clark opinion itself), Clark did acknowledge that “no clear guidelines [regarding departure from the habeas eorpus rules] have emerged in our past cases.” Id. 21 Cal.Rptr.2d at 517, 855 P.2d at 737. Clark was an attempt to clear up such uncertainties. We need express no opinion on whether the attempt succeeded, so that timeliness under the Standards invoked post-Clark would constitute an adequate and independent state ground of decision; Morales’s petition was denied before Clark.

We find so much variation in application of California’s timeliness requirements before Clark that we conclude that no discernible clear rule then existed for petitions filed more than 90 days after the due date of the reply brief on direct appeal. For example, Morales asserts that at the time his case was litigated in the district court, the California Supreme Court had denied 35 habeas petitions filed three years or more after affirmance on direct appeal, and more than half of those denials had not been on grounds of untimeliness. Only 6 cases had been denied on untimeliness alone. The State does not dispute these figures, but asserts that uneven enforcement of the timeliness requirement is simply a reflection of the fact that some discretion is involved in applying the rule. According to the State, the kinds of variation demonstrated by Morales do not call the rule into question unless there is a showing of deliberate manipulation to avoid federal review. The State relies upon Howlett v. Rose, 496 U.S. 356, 110 S.Ct. 2430, 110 L.Ed.2d 332 (1990), which stated that “States may apply their own neutral procedural rules to federal claims, unless those rules are pre-empted by federal law.” Id. at 372, 110 S.Ct. at 2441.

We cannot accept the State’s contention as it is put forth, nor do we find Howlett apposite. Howlett involved the question whether a state defense of sovereign immunity to a federal-law claim could be available in state court when it would not be so in federal court. The concern was that the state was discriminating against a federal cause of action, and the Court’s neutrality ruling was simply a response to that concern. The actual holding in Howlett was that the state immunity rule was substantive and preempted by federal law. Id. at 375-81, 110 S.Ct. at 2442-46.

Neutrality is not enough when a rule is applied or not applied wholly at random. We must emphasize that the issue here is not whether the State is allowed to invoke its rule irregularly for its own purposes. The question is whether invocation of a state rule that is applied only randomly may preclude a federal court from entertaining a petitioner’s federal claim on the merits. We conclude that the answer to that question is “no.” The Supreme Court has stated that “a state procedural ground is not ‘adequate’ unless the procedural rule is ‘strictly or regularly followed.’ ” Hathorn v. Lovorn, 457 U.S. 255, 262-63, 102 S.Ct. 2421, 2426-27, 72 L.Ed.2d 824 (1982) (quoting Barr v. City of Columbia, 378 U.S. 146, 149, 84 S.Ct. 1734, 1736, 12 L.Ed.2d 766 (1964)). The Court has added no requirement of a showing of manipulative intent on the part of the state court.

It is true, as the State argues, that procedural rules need not be utterly mechanical. That the application of a rule requires the exercise of judicial discretion does not render the rule inadequate to support a state decision. In fact, a bright-line rule for delay can operate more harshly than a discretionary rule. See, e.g., Coleman, 501 U.S. at 727-29, 111 S.Ct. at 2553-54 (affirming dismissal of claims barred in state court because petition filed three days late). But judicial discretion is the exercise of judgment according to standards that, at least over time, can become known and understood within reasonable operating limits. To bar federal review, a state procedural rule must be “consistently applied.” Wells v. Maass, 28 F.3d 1005, 1010 (9th Cir.1994).

It is theoretically possible, we suppose, to reconcile and explain all of the California Supreme Court decisions entertaining on the merits or rejecting as untimely petitions that are three or more years old. Those divergent decisions may indeed represent consistent exercises of discretion rather than random applications of or exceptions to the timeliness rule. But we have no way of knowing whether that is the case. The California Supreme Court’s denials of habeas petitions that Morales relies upon were accomplished by brief minute entries in what has been described as “post-card denial.” We can discern no apparent relationship between the time of delay and the findings concerning timeliness. Nor could Morales be expected to do so.

We faced a similar problem in Siripongs v. Calderon, 35 F.3d 1308, 1318 (9th Cir.1994), where we held that the district court’s dismissal of petitioner’s claims in a successive habeas petition on procedural grounds was error. We ruled that a state procedural rule that is discretionary and not applied consistently “cannot act as a bar to federal review.... [T]he federal courts should not insist upon a petitioner, as a procedural prerequisite to obtaining federal relief, complying with a rule the state itself does not consistently enforce.” Id.

In Siripongs, the California Supreme Court had not identified a particular procedural rule that it relied on for default, as it did in Morales’s case. We noted this deficiency, holding that a procedural default based on an ambiguous order that does not clearly rest on independent and adequate state grounds is not sufficient to preclude federal collateral review. Id. at 1317-18. We also relied, however, on the fact that, at the time the habeas petition was denied by the state court, the state procedural rules regarding filing of successive petitions were not consistently enforced. Id. at 1318. Indeed, we recognized that “the strict standards announced in [Clark ] did not guide the California courts in 1991, when Siripongs’ state petition was denied.” Id. We conclude that the latter rationale of Siripongs is fully applicable here. Here, as in Siripongs, we find that the state court’s procedural rule was not consistently enforced at the time Morales’s petitions were denied. Although the State and the district court distinguish Siripongs because it involved a successive petition for habeas review, that fact casts no doubt upon Siripongs’ general principle of consistent enforcement of a procedural bar. Nor is Siripongs our first endorsement of that principle: “In order to constitute adequate and independent grounds sufficient to support a finding of procedural default, a state rule must be clear, consistently applied, and well-established at the time of the petitioner’s purported default.” Wells, 28 F.3d at 1010.

We note that two district courts in this circuit have reached the same conclusion we do with regard to the particular rule at issue in this ease. In Karis v. Vasquez, 828 F.Supp. 1449, 1463 (E.D.Cal.1993), the petitioner had filed a successive habeas petition in the California Supreme Court and had failed to explain or justify his delay. The state court summarily dismissed his claims. The district court held that “California’s rule concerning delay as a bar to habeas is standardless both substantively and as to duration,” did not provide petitioner with adequate notice of when his claims would be barred, and consequently did not bar federal relief. Id. at 1464; cf. Odle v. Calderon, 884 F.Supp. 1404, 1413-14 (N.D.Cal.1995). The Karis court explained that discretion per se does not invalidate a state rule as an independent and adequate state ground, if the discretion is exercised according to clear and articulated standards. See Karis, 828 F.Supp. at 1463-64. On the other hand, if it is exercised in an “ ‘ad hoc rather than a principled basis,’” it does not bar federal review. Id. at 1463. (citation omitted).

We conclude that California’s rule on timeliness was not “clear, consistently applied, and well-established” at any time after Morales’s convictions were affirmed and before he filed his first state habeas petition. See Wells, 28 F.3d at 1010. It consequently cannot serve as an adequate and independent state ground sufficient to support a procedural default. See id.

II. Independence of the State Procedural Ground

Morales argues in the alternative that, even if all the claims were properly denied on procedural grounds, these grounds were not clearly independent of the rulings on the merits. Federal habeas review is not barred if the state decision “ ‘fairly appears to rest primarily on federal law, or to be interwoven with the federal law.’ ” Coleman, 501 U.S. at 735, 111 S.Ct. at 2557 (quoting Michigan v. Long, 463 U.S. 1032, 1041, 103 S.Ct. 3469, 3476, 77 L.Ed.2d 1201 (1983)). Morales argues that the California Supreme Court’s procedural rulings were interwoven with the federal claims because (1) the orders state that the claims are denied also on the merits and (2) the state court’s conclusions about timeliness entailed a consideration of the merits. Because we conclude that the timeliness Standards themselves as applied to Morales are not an adequate and independent ground barring federal review, we need not address these arguments.

CONCLUSION

We reverse the district court’s dismissal of Morales’s federal habeas corpus claims, which were denied by the California Supreme Court as untimely. We hold that the California Supreme Court’s timeliness rule, as applied to Morales and before its further elucidation in Clark, did not afford an adequate and independent state ground barring federal review of Morales’s claims. We express no opinion as to whether the California Supreme Court has sufficiently narrowed the timeliness standards or applied them consistently since Clark.

We remand this matter to the district court for consideration of Morales’s claims on the merits.

ORDER REVERSED; CASE REMANDED.

      . In July 1993, the California Supreme Court revised the Standards. See In re Clark, 5 Cal.4th 750, 21 Cal.Rptr.2d 509, 531 n. 18, 855 P.2d 729, 751 n. 18 (1993). The amended Standards were published as an appendix to Clark. Id. at 762-64.

      . The federal district court, in its April 29, 1994 Order dismissing Morales's first amended petition for writ of habeas corpus, incorrectly stated that Morales presented 53 rather than 52 claims.

      . The State has since filed in federal district court an answer to the remaining 20 claims that were exhausted in the direct appeal.

      . Both of the arguments challenging the constitutionality of the statute have since been rejected by the United States Supreme Court. See Tuilaepa v. California, - U.S. -, - - -, 114 S.Ct. 2630, 2636-39, 129 L.Ed.2d 750 (1994) (holding that California death penalty special circumstances were not unconstitutionally vague); Victor v. Nebraska, - U.S. -, -, 114 S.Ct. 1239, 1251, 127 L.Ed.2d 583 (1994) (holding that jury instructions defining "reasonable doubt” did not violate Due Process Clause).

      . The court also dismissed the two claims attacking the death penally statute, but Morales does not contest this ruling on appeal.

      . The district court's dismissal of the petition for writ of habeas corpus on the ground of state procedural default involves an issue of law that we review de novo. Hunter v. Aispuro, 982 F.2d 344, 346 (9th Cir.1992), cert. denied, - U.S. -, 114 S.Ct. 240, 126 L.Ed.2d 194 (1993).

      . Effective September 1990, this period of time was extended to 90 days. See California Rules of Court — State (1995) at 982.

      . The order at issue in Siripongs stated:
      Petition for writ of habeas corpus DENIED both for reasons of procedural default and on the merits. Petitioner's motion for "post trial discovery” is denied. (People v. Gonzalez (1990) 51 Cal.3d 1179, 1261, 275 Cal.Rptr. 729, 800 P.2d 1159).

        Siripongs, 35 F.3d at 1316.


author: ALARCON, Circuit Judge:

text:
    Jeffrey M. MASSON, Plaintiff-Appellant, v. The NEW YORKER MAGAZINE, INC.; Janet Malcolm; Alfred A. Knopf, Inc., Defendants-Appellees.
    No. 94-17147.
    United States Court of Appeals, Ninth Circuit.
    Argued and Submitted May 15, 1996.
    Decided June 5, 1996.

      Charles O. Morgan, Jr., San Francisco, California, for plaintiff-appellant.
    James M. Wagstaffe, Cooper, White, & Cooper, San Francisco, California, for defendant-appellee The New Yorker Magazine; Gary L. Bostwiek, Santa Monica, California, and Lee Levine, Ross, Dixon & Masback, Washington, DC, for defendant-appellee Janet Malcolm.
    Before ALARCON, BEEZER and RYMER, Circuit Judges.
   ALARCON, Circuit Judge:

In this libel action, Jeffrey M. Masson (“Masson”) appeals from the judgment in favor of The New Yorker Magazine (“The New Yorker”) and Janet Malcolm (“Malcolm”) following two jury trials arising from the publication of a two-part article written by Malcolm in The New Yorker on December 5, and December 12, 1983, entitled “Annals of Scholarship: Trouble in the Archives” (“the Masson article”). Masson contends that he was defamed by five quotations which were allegedly falsely attributed to him in the article. Masson has conceded for the purposes of this litigation that he is a public figure. Accordingly, to establish liability he must meet the actual malice standard of New York Times Co. v. Sullivan, 376 U.S. 254, 279-80, 84 S.Ct. 710, 725-26, 11 L.Ed.2d 686 (1964).

Masson contends that the district court erred in instructing the jury both that he was required to establish that Malcolm deliberately or recklessly altered his statements to prove falsity and that Malcolm had no duty to investigate contradictory information regarding the quotations. We conclude that the district court properly instructed the jury. Masson also asserts that he was prejudiced by the district court’s refusal to permit the introduction of additional excerpts from The Journalist and the Murderer, a book written by Malcolm after this action was filed. We disagree. We affirm the judgment in favor of The New Yorker because Masson is collaterally estopped from pursuing these claims against the magazine.

The district court had jurisdiction over this state created cause of action because the parties are diverse. We have jurisdiction over this timely appeal pursuant to 28 U.S.C. § 1291.

I

The original complaint in this matter was filed on November 29, 1984. The fourth amended complaint was filed on October 2, 1986. On August 17, 1987, summary judgment was granted in favor of the defendants. We affirmed the judgment on August 4, 1989. Masson v. New Yorker Magazine, Inc., 895 F.2d 1535, 1536 (9th Cir.1989). The Supreme Court granted certiorari and reversed the grant of summary judgment and remanded on June 20, 1991. Masson v. New Yorker Magazine, Inc., 501 U.S. 496, 525, 111 S.Ct. 2419, 2437, 115 L.Ed.2d 447 (1991). On April 6, 1992, this Court affirmed summary judgment as to Alfred A. Knopf, and remanded the case for trial as to Malcolm and The New Yorker. Masson v. New Yorker Magazine, Inc., 960 F.2d 896, 903 (9th Cir.1992).

The first trial in this matter commenced on May 10, 1993 (“Masson I”). The case was submitted to the jury on a special verdict. The jury found that The New Yorker was not liable. The jury also found that Malcolm had libelled Masson, but was unable to reach a verdict regarding the damages that should be awarded.

The district court granted judgment in favor of The New Yorker on September 9, 1993. The judgment was stayed “pending final resolution of the case between, Jeffrey Masson and Janet Malcolm.” Masson v. New Yorker Magazine, Inc., 832 F.Supp. 1350, 1378 (N.D.Cal.1993). The district court granted Malcolm’s motion for a new trial “on all issues.” Id.

The second trial commenced on October 3, 1994 (“Masson II ”). On November 2, 1994, the jury returned a special verdict in favor of Malcolm with respect to all five quotations. The jury found that Masson had not carried his burden of persuasion that the “Intellectual Gigolo,” “Greatest Analyst Who Ever Lived,” and “Sex, Women, Fun” quotations were false. It found that the “I Don’t Know Why I Put It In” quotation was not defamatory. Additionally, the jury found that Malcolm either did not “know that the [‘He Had The Wrong Man’] quotation was false, or she [did not] act with a reckless disregard as to the truth or falsity of [the quotation].” The district court entered a final judgment in favor of Malcolm and The New Yorker on November 4,1994.

II

Masson challenges the court’s jury instructions with respect to the “Sex, Women, Fun,” “Intellectual Gigolo,” and “Greatest Analyst Who Ever Lived” quotations. Masson contends that the court erred in instructing the jury that he “must prove both that he did not utter the words attributed to him, and that the quotations represented a deliberate and reckless alteration of words actually spoken by him.” Masson argues that this instruction was erroneous with respect to these three quotations because Malcolm claimed that these quotations were made “at a specific time and place, i.e., the New York breakfast meeting in May, 1983.” Masson asserts that “[i]f the jury found Masson did not speak those words on that occasion, there was no ... basis for requiring the jury to also find whether the quotations represented a material alteration of words which Masson never spoke on that or any other occasion.” Masson thus argues that “once the jury finds that defamatory statements were completely fabricated,” the jury should not have been required to make “further inquiry on the issue of falsity.”

‘We review challenges to the district court’s formulation of the jury instructions for an abuse of discretion by determining whether the instructions, considered as a whole, were inadequate or misleading.” Gizoni v. Southwest Marine Inc., 56 F.3d 1138, 1142 n. 5 (9th Cir.), cert. denied, — U.S. -, 116 S.Ct. 381, 133 L.Ed.2d 304 (1995). We review de novo whether the district court misstated the elements to be proved at trial.” Id. at 1142. “[A]n error in the jury instructions does not require reversal if it is more probable than not that the error was harmless.” Jenkins v. Union Pacific R. Co., 22 F.3d 206, 210 (9th Cir.1994).

The district court instructed the jury that:

Mr. Masson must prove by a preponderance of the evidence that one or more of the challenged quotations was false.
In order to prove any of the challenged quotations are false, plaintiff must prove two separate matters:
First, that he did not make the challenged statement; and second, he must prove any words you find he did speak were deliberately or recklessly altered in a way so as to effect a material change in meaning.

(emphasis added).

In Masson v. New Yorker Magazine, Inc., Masson argued that “excepting correction of grammar or syntax, publication of a quotation with knowledge that it does not contain the words the public figure used demonstrates actual malice.” 501 U.S. at 514, 111 S.Ct. at 2431. In declining to accept this proposition, the Court stated:

We reject the idea that any alteration beyond correction of grammar or syntax by itself proves falsity in the sense relevant to determining actual malice under the First Amendment. An interviewer who writes from notes often will engage in the task of attempting a reconstruction of the speaker’s statement. That author would, we may assume, act with knowledge that at times she has attributed to her subject words other than those actually used. Under [Masson’s] proposed standard, an author in this situation would lack First Amendment protection if she reported as quotations the substance of a subject’s derogatory statements about himself.

Id. at 514-15, 111 S.Ct. at 2432. Based on the above reasoning, the Supreme Court concluded that “a deliberate alteration of the words uttered by a plaintiff does not equate with knowledge of falsity for purposes of New York Times Co. v. Sullivan, 376 U.S. at 279-280, 84 S.Ct. at 725-26, and Gertz v. Robert Welch, Inc., supra, [418 U.S. 323] at 342 [94 S.Ct. 2997 at 3008, 41 L.Ed.2d 789], unless the alteration results in a material change in the meaning conveyed by the statement.” Id. at 517, 111 S.Ct. at 2433. Contrary to Masson’s contention, the court’s instruction did not require him to prove that words he did not speak were materially altered. The jury was admonished that if it found that Masson made a statement, it was required to determine whether Malcolm recklessly or deliberately altered his words so as to effect a material change in their meaning.

The district court’s instruction faithfully tracks the rule announced by the Court that must be applied in cases involving an allegation that the plaintiffs words have not been quoted accurately or verbatim. The district court did not misstate the law in the challenged instruction.

Ill

Masson next contends that it “was reversible error [for the district court] to instruct that [Malcolm] had no duty to investigate contradictory information.” Masson asserts that as part of the constitutional malice inquiry, “under the rule of Masson [v. New Yorker Magazine, Inc., 960 F.2d at 901], Malcolm was under an affirmative duty to investigate and to resolve the contradictory information before she published quotations attributed to Masson which contained one version of the contradictory facts.”

During closing argument, Masson’s counsel argued:

I have got one more. It’s “The Greatest Analyst.” Now, on this one, in addition to all the other evidence we have been talking about, we’ve got tape upon tape that you’ve heard, and we showed it to you during the course of the trial, where he said just the opposite of this.
Now, if a uniter knows that there are contradictory statements, if there were even contradictory statements, then the writer has some duty to at least find out what is the right statement.
Now, again, this is the one where [Malcolm] says it’s a telephone conversation. And yet she says, “I have no record, no notes of it.”
But he said the same thing, the exact words in May, but I’m putting it as a telephone conversation.
Again, as you can see, it just doesn’t make any sense.

(emphasis added).

Outside of the presence of the jury, Malcolm’s counsel objected to the reference to “duty” as an incorrect statement of the law and requested a curative instruction. The court granted the motion and instructed the jury as follows:

In determining reckless disregard of the truth, among the things you may consider is whether when the defendant published any of the five challenged quotations, she had information that contradicted those quotations. However, the defendant is under no legal duty to check any contradictory information.

(emphasis added).

We need not decide whether this instruction correctly reflects existing law because Masson has failed to demonstrate that the admonition was harmful. The jury found the “Greatest Analyst Who Ever Lived” quotation was not false. Accordingly, the jury did not reach the question whether Malcolm acted with malice in attributing that statement to Masson. Whether Malcolm had a duty to investigate contradictory information regarding the “Greatest Analyst Who Ever Lived” quotation became a moot issue when the jury determined that the statement was not false.

IV

Masson argues that it was error in Masson II for the district court to prohibit the introduction of additional excerpts from Malcolm’s book The Journalist and the Murderer. Masson maintains that he was prejudiced by the court’s refusal because “Malcolm makes several sweeping statements about journalists, about her own journalistic practices and about this case itself.” The proffered passages, Masson contends, are “admissions of wrongdoing by Malcolm in connection with the articles at issue, and are relevant to her state of mind and attitude towards ‘quotations.’” ‘We review district court decisions on the admissibility of evidence only for abuse of discretion.” Thurman Industries, Inc. v. Pay ‘N Pak Stores, Inc., 875 F.2d 1369, 1378 (9th Cir.1989).

Prior to the commencement of trial in Masson II, Malcolm’s counsel made a motion in limine to exclude excerpts from The Journalist and the Murderer on the ground that the proffered evidence was not relevant, or if relevant, its admission would be time consuming and confusing to the jury, and might result in unfair prejudice to Malcolm. The court granted the motion except for six excerpts which it found to be relevant.

The district court permitted Masson to introduce excerpts which either expressly referred to Masson, revealed Malcolm’s state of mind at the time of the publication of the Masson article, or disclosed her theory about quoting a person she interviews.

In explaining its reasons for excluding the remainder of the excerpts, the court commented as follows:

My clerk has read [The Journalist and the Murderer ], too. It’s very dense. It’s very — it has a lot of stuff in it. And when we’re talking about a philosophy of quotes, then I went along with it. When we get into more, I’m concerned it’s being taken out of context.
Hold on for just a second. The second concern I have is I would then have to have the jury read the whole book.
And then third, one of the big problems is [Malcolm’s attorney] himself is a character — or a subject in the book, I should say, one of the people discussed. And I haven’t read the book. I don’t know favorably or unfavorably.
So if we get too far into the book, I have a problem that the jury would then have to read it to get a full understanding so that they could see that things are not taken out of context.

Rule 403 of the Federal Rules of Evidence authorizes a trial judge to exclude relevant evidence if “its probative value is substantially outweighed by the danger of ... confusion of the issues, or misleading the jury, or by considerations of undue delay, waste of time or needless presentation of cumulative evidence.”

The district court gave careful consideration to Masson’s request that the excerpts should be admitted. It ruled in his favor regarding those excerpts it found to be relevant. The court refused to admit those excerpts that might be taken out of context by the jury. It also concluded that the jury would have to read the entire book to understand the author’s message. The court determined that the excluded excerpts would be time consuming and might mislead or confuse the jury.

Masson has faded to demonstrate that the district court abused its discretion in determining that the confusion and delay that the excerpts would cause substantially outweigh the probative value of the excluded excerpts.

Y

The New Yorker contends that the verdict in the second trial in favor of Malcolm on the question of liability compels an affirmance in its favor under the doctrine of defensive collateral estoppel. We agree.

“Collateral estoppel, like the related doctrine of res judicata, has the dual purpose of protecting litigants from the burden of relitigating an identical issue with the same party or his privy and of promoting judicial economy by preventing needless litigation.” Parklane Hosiery Co. v. Shore, 439 U.S. 322, 326, 99 S.Ct. 645, 649, 58 L.Ed.2d 552 (1979). Defensive collateral estoppel applies “when a defendant seeks to prevent a plaintiff from asserting a claim the plaintiff has previously litigated and lost against another defendant.” Parklane Hosiery Co., 439 U.S. at 326 n. 4, 99 S.Ct. at 649 n. 4. Findings made in one proceeding in which a party has had a full and fair opportunity to litigate may be used against that party in subsequent litigation. Blonder-Tongue Laboratories, Inc. v. University of Illinois Foundation, 402 U.S. 313, 329, 91 S.Ct. 1434, 1443, 28 L.Ed.2d 788 (1971).

Masson received a full and fair opportunity to litigate his claims in Masson II. Because the jury in the second trial found that Malcolm was not liable on any claim, The New Yorker cannot be held independently or vicariously liable based on the statements in the Masson article. The preclusive effect of the findings in Masson II requires an affirmance of the judgment entered in favor of The New Yorker. Masson is barred from relitigating these issues against The New Yorker in a subsequent trial.

The district court’s judgment is AFFIRMED.

      . The five contested quotations in the context in which they appear in the article are:

        (1) "Intellectual Gigolo.” “ 'Then I met a rather attractive older graduate student and I had an affair with her. One day, she took me to some art event, and she was sorry afterward. She said, "Well, it is very nice sleeping with you in your room, but you're the kind of person who should never leave the room— you're just a social embarrassment anywhere else, though you do fine in your own room.” And, you know, in their way, if not in so many words, Eissler and Anna Freud told me the same thing. They liked me well enough “in my own room.” They loved to hear from me what creeps and dolts analysts are. I was like an intellectual gigolo — you get your pleasure from him, but you don't take him out in public ....' ” (emphasis added).
      (2) "Sex, Women, Fun.” " ‘It was a beautiful house, but it was dark and sombre and dead. Nothing ever went on there. I was the only person who ever came. I would have renovated it, opened it up, brought it to life. Mares-field Gardens would have been a center of scholarship, but it would also have been a place of sex, women, fun. It would have been like the change in The Wizard of Oz, from black- and-white into color.’ " (emphasis added).
      (3) "I Don't Know Why I Put It In.” "I asked him what had happened between the time of the lecture and the present to change him from a Freudian psychoanalyst with somewhat outre views into the bitter and belligerent anti-Freudian he had become.”
      "Masson sidestepped my question. ‘You're right, there was nothing disrespectful of analysis in that paper,' he said. ‘That remark about the sterility of psychoanalysis was something I tacked on at the last minute, and it was totally gratuitous. / don't know why I put it in.' " (emphasis added).
      (4) "Greatest Analyst Who Ever Lived." “A few days after my return to New York, Masson, in a state of elation, telephoned me to say that Farrar, Straus & Giroux has taken The Assault on Truth [Masson's book]. 'Wait till it reaches the best-seller list, and watch how the analysts will crawl,' he crowed. 'They move whichever way the wind blows. They will want me back, they will say that Masson is a great scholar, a major analyst — after Freud, he’s the greatest analyst who ever lived. Suddenly they'll be calling, begging, cajoling: "Please take back what you’ve said about our profession; our patients are quitting.” They’ll try a short smear campaign, then they'll try to buy me, and ultimately they’ll have to shut up. Judgment will be passed by history. There is no possible refutation of this book. It's going to cause a revolution in psychoanalysis. Analysis stands or falls with me now.’ ” (emphasis added).
      (5) "He Had The Wrong Man.” " '[Eissler] was always putting moral pressure on me. "Do you want to poison Anna Freud's last days? Have you no heart? You're going to kill the poor old woman.” I said to him, “What have I done? You're doing it. You’re firing me. What am I supposed to do — be grateful to you?” "You could be silent about it. You could swallow it. I know it is painful for you. But you could just live with it in silence.” “Why should I do that?” "Because it is the honorable thing to do." Well, he had the wrong man.’ " (emphasis added).

        Masson v. New Yorker Magazine, Inc., 501 U.S. 496, 502-508, 111 S.Ct. 2419, 2428, 115 L.Ed.2d 447 (1991).

      . The Court further stated:
      Minor inaccuracies do not amount to falsity so long as "the substance, the gist, the sting, of the libelous charge be justified." Heuer v. Kee, 15 Cal.App.2d 710, 714, 59 P.2d 1063, 1064 (1936); see also Alioto v. Cowles Communications, Inc., 623 F.2d 616, 619 (C.A.9 1980); Maheu v. Hughes Tool Co., 569 F.2d 459, 465-466 (C.A.9 1978). Put another way, the statement is not considered false unless it “would have a different effect on the mind of the reader from that which the pleaded truth would have produced.” R. Sack, Libel, Slander, and Related Problems 138 (1980).

        Id.


text:
    In re Alan J. STERNBERG, Debtor. Amy R. FRIEDKIN, formerly, Amy R. Sternberg, Plaintiff-Appellee, v. Alan J. STERNBERG, Defendant-Appellant.
    No. 95-15414.
    United States Court of Appeals, Ninth Circuit.
    Argued and Submitted May 16, 1996.
    Decided June 5, 1996.

      Joel K. Belway, San Rafael, California, for defendant-appellant.
    Howard D. Neal, Neal & Associates, Oakland, California, for plaintiff-appellee.
    Before: ALARCON, BEEZER, and RYMER, Circuit Judges.
   ALARCON, Circuit Judge:

Alan J. Sternberg (“Sternberg”) is a debt- or in Chapter 11 bankruptcy. Amy R. Fried-kin (“Friedkin”), Sternberg’s former spouse, filed a complaint in Sternberg’s Chapter 11 case which sought a determination that certain monthly sums owed to her by Sternberg were spousal support payments and thus nondischargeable under 11 U.S.C. § 523(a)(5). The bankruptcy court determined that the monthly payments were intended to be spousal support and entered judgment in favor of Friedkin. The district court affirmed the judgment of the bankruptcy court. In his appeal before this court, Sternberg contends that the bankruptcy court erred by: (1) concluding that the monthly obligations were for spousal support instead of payments on a division of marital property; (2) failing to award prejudgment interest on Sternberg’s setoff claim; and (3) excluding evidence of Friedkin’s current financial circumstances. Because we conclude that the bankruptcy court did not abuse its discretion, we affirm the order of the district court.

I

Friedkin and Sternberg were married on January 1, 1968. After the Sternberg’s second child was born in 1971, Friedkin did not work outside the home except for a two-month period of employment at the Jewish Federation. Friedkin and Sternberg separated in 1985 and Friedkin filed for a divorce in the Superior Court of California in Contra Costa County. Pending resolution of the divorce proceeding, the state court entered an order on April 15, 1996 which awarded Friedkin temporary spousal support in the amount of $8,640 per month and temporary child support in the amount of $5,360 per month.

After they separated, Friedkin and Stern-berg began negotiating a “Marital Settlement Agreement” (the “Settlement Agreement”). At the time of these negotiations, Friedkin had no independent source of income. Friedkin testified at the bankruptcy trial that when she did not receive the support payments, she had to borrow money from family and friends. In contrast, Stern-berg testified that in 1986 he earned a salary of approximately $100,000 a year and derived additional income from various real estate investment partnerships. While neither party clearly sets forth the extent of Sternberg’s investment income, Sternberg testified that he had assets worth between seven and eight million dollars and that the cash flow from the real estate partnerships allowed the Sternbergs to spend approximately $400,000 on home renovations in 1985.

After approximately a year of negotiations, Friedkin and Sternberg entered into the Settlement Agreement on September 11, 1986. Both parties initialed each of the 38 pages of the Settlement Agreement. The Settlement Agreement contains a section entitled “SPOUSAL SUPPORT” and a section entitled “DIVISION OF PROPERTY.”

The DIVISION OF PROPERTY section stated that it was the “general intention of the parties” that Sternberg “receive all of the marital estate ... excepting therefrom only the real property and family residence ... together with the sum of $2,000,000____” The Settlement Agreement provided that Sternberg was to pay Friedkin $2,000,000 on or before March 1, 1987. The Settlement Agreement also provided for Friedkin to transfer all of her interest in the couple’s real estate partnerships/investments to Stern-berg. Similarly, Sternberg was required to transfer his interest in the couple’s residence and an adjacent lot to Friedkin. Sternberg had a seven-year right of first refusal to purchase the residence and lot if Friedkin elected to sell these properties.

The SPOUSAL SUPPORT portion of the Settlement Agreement provided for Stern-berg to pay Friedkin “interim spousal support payments” of $8,000 per month from June 1986 until January 1987. If Sternberg made the $2,000,000 payment on or before March 1,1987, Sternberg’s monthly payment obligations would cease. Sternberg’s $2,000,-000 obligation would be reduced by each of the $8,000 monthly payments he had made to Friedkin. If Sternberg failed to make the $2,000,000 payment by March 1,1987, however, he would not receive any credit for payments made. In this event, the Settlement Agreement provided that Sternberg would commence “additional interim spousal support payments [in the] sum of $12,000 per month ... until the $2,000,000 payment is made____” The $12,000 monthly payments were not deductible against the $2,000,000 payment. The $12,000 monthly payments were to survive FriedMn’s remarriage and were not to be taxable to Friedkin. Once Sternberg paid the $2,000,000, Friedkin’s right to spousal support would “be forever extinguished.” The Settlement Agreement was incorporated into the judgment for dissolution by the state court on October 22,1986.

Sternberg did not pay Friedkin the $2,000,000 on or before March 1, 1987. Friedkin testified that Sternberg made the required monthly payments only “sporadically.” In March or April of 1989, Friedkin sold the residence and adjacent lot for a total of $1,570,000. She did not give Sternberg notice of her intention to sell. Under the Settlement Agreement, Sternberg had the right to purchase the property for $1,000,000. On May 4,1989, Sternberg and Friedkin entered into a stipulation to resolve the pending disputes over alleged defaults of the Settlement Agreement. The stipulation provided for Sternberg to pay Friedkin $255,000 immediately and $125,000 on May 4,1990. If Stern-berg faded to make the $125,000 payment on May 4, 1990, the parties agreed that “all of the terms and conditions of the [Settlement Agreement] shall be reinstated....” The stipulation also provided that “[u]nder no circumstances whatsoever shall [Sternberg]’s right of first refusal ... be reinstated in any fashion.” Sternberg failed to make the $125,000 payment on or before May 4, 1990.

In 1992, Sternberg filed a petition for relief under Chapter 11 of the Bankruptcy Code. On January 21,1993, Friedkin filed a complaint in Sternberg’s Chapter 11 bankruptcy case in which she sought a determination that Sternberg’s monthly obligations under the Settlement Agreement were for spousal support and thus nondischargeable under 11 U.S.C. § 523(a)(5).

On October 12, 1993, after conducting a trial, the bankruptcy court held that the $8,000 monthly payments were property settlement payments. The bankruptcy court also ruled, however, that the $12,000 monthly payments were for spousal support and were thus nondischargeable. The bankruptcy court further held that Stembérg was entitled to an offset for Friedkin’s breach of Sternberg’s right of first refusal.

On May 9, 1993, the bankruptcy court entered an “Amended Judgment After Trial of Adversary Proceeding” which stated that Sternberg’s support obligations were nondisehargeable. The. bankruptcy court found that Sternberg was entitled to an offset of $570,000 and awarded Friedkin a net judgment in the amount of $230,198.07 plus costs and reasonable attorney’s fees. Except for an award of interest from April 6, 1989 to May 4, 1989 (the interim period between Friedkin’s breach of the Settlement Agreement and the parties’ execution of the stipulation) Sternberg was not awarded prejudgment interest. Sternberg appealed from the entry of this judgment to the district court. The district court entered an order affirming the judgment of the bankruptcy court. Sternberg timely appeals to this court.

II

We independently review the bankruptcy court’s decision without deference to the district court’s conclusions. In re Weisman, 5 F.3d 417, 419 (9th Cir.1993). This court thus applies the same standard of review employed by the district court. In re Siragusa, 27 F.3d 406, 407 (9th Cir.1994).

The right to a discharge is generally left to the sound discretion of the bankruptcy court. In re Cox, 904 F.2d 1399, 1401 (9th Cir.1990) (citing Shaver v. Shaver, 736 F.2d 1314, 1316 (9th Cir.1984)). A bankruptcy court’s determination of nondischargeability is thus reviewed on appeal for “gross abuse of discretion.” Id. (quoting Shaver, 736 F.2d at 1316). A trial court’s decision whether to award prejudgment interest is reviewed for abuse of discretion. In re Acequia, Inc., 34 F.3d 800, 818 (9th Cir.1994).

A trial court may abuse its discretion in several ways. A trial court abuses its discretion if it fails to apply the correct law or if it bases its decision on a clearly erroneous finding of a material fact. Cox, 904 F.2d at 1401; Engleson v. Burlington N. R.R. Co., 972 F.2d 1038, 1043 (9th Cir.1992). A trial court also abuses its discretion if it applies the correct law to facts which are not clearly erroneous but rules in an irrational manner. Id., 972 F.2d at 1043.

Ill

A

Section 523(a)(5) of the Bankruptcy Code provides that a debt owed “to a spouse, former spouse, or child of the debtor, for alimony to, maintenance for, or support of such spouse or child, in connection with a separation agreement” is not dischargeable. 11 U.S.C. § 523(a)(5). This section represents a departure from the general policy of giving a debtor a “fresh start” following his or her bankruptcy and instead “enforces an overriding public policy favoring the enforcement of familial obligations.” Shaver, 736 F.2d at 1315-16. In contrast, until section 523 was amended in 1994, property settlement payments were dischargeable in bankruptcy. In re Pederson, 875 F.2d 781, 784 (9th Cir.1989). “Because of the federal interests reflected in the Bankruptcy Act, the courts look to federal law to determine whether an obligation is ‘actually in the nature of ... support.’ ” Shaver, 736 F.2d at 1316 (citation omitted).

In determining whether a debtor’s obligation is in the nature of support, the intent of the parties at the time the settlement agreement is executed is dispositive. See In re Sampson, 997 F.2d 717, 723 (10th Cir.1993) (“the critical inquiry is the shared intent of the parties at the time the obligation arose”); In re Combs, 101 B.R. 609, 615 (9th Cir. BAP 1989) (“the court must ascertain the intention of the parties at the time they entered in their stipulation agreement”); see also Shaver, 736 F.2d at 1317 (concurring with district court that “the intent of the parties in entering into the settlement agreement was to provide support to [the spouse]”). The intent of the parties is a factual finding reviewed for clear error. United States v. City of Twin Falls, 806 F.2d 862, 869 (9th Cir.1986), cert. denied, 482 U.S. 914, 107 S.Ct. 3185, 96 L.Ed.2d 674 (1987); In re Robb, 23 F.3d 895, 898 (4th Cir.1994).

A trial court should consider several factors in determining how the parties intended to characterize the obligation. Shaver, 736 F.2d at 1316. Foremost, the trial court should consider whether the recipient spouse actually needed spousal support at the time of the divorce. Id. In determining whether spousal support was necessary, the trial court should examine if there was an “imbalance in the relative income of the parties” at the time of the divorce decree. Id. The trial court should also consider whether the obligation terminates upon the death or remarriage of the recipient spouse and whether the payments are “made directly to the recipient spouse and are paid in installments over a substantial period of time.” Id. at 1316-17. Finally, the labels given to the payments by the parties may be looked at as evidence of the parties’ intent. Combs, 101 B.R. at 616; Sampson, 997 F.2d at 723.

In the present case, the bankruptcy court explained that the relevant test was “the intent of the parties [ ] at the time the agreement was made....” The bankruptcy court found that the language of the Settlement Agreement, Friedkin’s need for spousal support, and the disparity between Fried-kin’s and Sternberg’s income and assets at the time the Settlement Agreement was executed, weighed in favor of finding an intent to provide spousal support. The bankruptcy court also considered other factors, such as the survival of the payments past FriedMn’s remarriage and the tax treatment of the payments, but determined that these factors were not dispositive of the parties’ intent.

The bankruptcy court’s finding that Fried-kin and Sternberg intended to create a spousal support obligation is not clearly erroneous. It is undisputed that, at the time the parties entered into the Settlement Agreement, Friedkin was unemployed and had not been permanently employed since 1971. It is also undisputed that, at the time of the divorce, Friedkin had no source of income and, aside from the residence, no assets. In contrast, Sternberg testified that, at the time of the divorce, he had a salary of approximately $100,000 and assets worth between seven and eight million dollars. A rational fact-finder could infer from this evidence that Friedkin needed spousal support and that there was a large imbalance in the relative incomes of Friedkin and Sternberg. These facts strongly support a finding that Friedkin and Sternberg intended to create a spousal support obligation. See Shaver 736 F.2d at 1317 (upholding spousal support finding where recipient spouse “was unemployed and possessed no special job-related skills”); Combs, 101 B.R. at 617 (upholding spousal support finding where recipient spouse was an unemployed legal secretary and payor spouse was employed attorney); In re Brody, 3 F.3d 35, 37-38 (2d Cir.1993) (upholding spousal support finding where recipient spouse testified that a $1,000,000 payment labeled “Distributive Award” was intended to generate yearly income to be used “for her own support”). As the district court noted in its order, “[i]f these provisions were not intended to be support, then it appears that Friedkin would have received no support at all from Stern-berg and only the house and lot as property at the time of the dissolution, a seemingly anomalous result.”

Friedkin’s and Sternberg’s intent to create a spousal support obligation is also evidenced by the express language of the Settlement Agreement which refers to the $12,000 monthly payments as “spousal support” and the $2,000,000 sum as “division of property.” There is no evidence that Sternberg, a practicing attorney for 20 years, used these terms loosely. See Sampson 997 F.2d at 723 (stating that an obligation entitled “Maintenance (Spousal Support)” was persuasive evidence of the parties’ intent to create a spousal support obligation). Finally, although not discussed by the bankruptcy court, the fact that the sums were paid in monthly increments over an extended period of time is indicative of support. See Shaver, 736 F.2d at 1317 (upholding bankruptcy court’s finding of spousal support where decree “provided for installment payments over a substantial period of time”).

1

Sternberg argues that because the Settlement Agreement provided that the $12,000 payments were not taxable to Fried-kin and were to survive Friedkin’s remarriage, the bankruptcy court clearly erred in finding an intent to create spousal support. We disagree. “Those courts which have looked to the tax treatment of the obligation ... have usually done so as part of an overall analysis involving many other factors, and have rarely found the tax treatment of a debt dispositive on dischargeability.” Sommer, McGarity & King, Collier Family Law and the Bankruptcy Code, § 6.04[10] at p. 6-48 (1995); see also In re Kritt, 190 B.R. 382, 388-89 (9th Cir. BAP 1995) (holding that a spouse’s failure to report payments as taxable income did not preclude a finding that the parties intended the payments as spousal support). Similarly, survival of the debt upon a spouse’s remarriage is not viewed as a dispositive factor. See Shaver 736 F.2d at 1316 (“if an obligation terminates on the death or remarriage of the recipient spouse, a court may be inclined to classify the agreement as one for support”) (emphasis added). Moreover, as the bankruptcy court noted, California allows divorcing parties to agree to extend spousal support payments beyond the recipient spouse’s remarriage. See Cal.Civ. Code § 4801(b) (recodified in Cal.Fam.Code § 4337). Friedkin’s and Sternberg’s election to extend the support payments beyond remarriage is therefore not in conflict with an intent to provide spousal support under California law.

2

Sternberg also argues that the bankruptcy court’s nondischargeability determination should be reversed because the bankruptcy court erred in concluding that the Settlement Agreement contained “a modifiability provision” and “that the $12,000 monthly payment provisions of the [Settlement Agreement] are modifiable.” Stern-berg’s argument overstates the bankruptcy court’s holding. In its tentative oral ruling on October 12, 1993, the bankruptcy court commented, “[o]n the issue of jurisdiction, if I thought that the [state] court could not modify this obligation, based on changed circumstances, I would find it to be dischargeable.” At a subsequent hearing, however, the bankruptcy court modified its observation. Sternberg’s counsel requested that the bankruptcy court include a statement in the judgment that “the state court judgment is modifiable.” The bankruptcy court responded that in its earlier reference to modification, it meant only that “the state court had the jurisdiction to modify [the payments], if it chose, and that’s all.” (emphasis added). The bankruptcy court explained that its nondischargeability determination did not depend on whether the state court actually determined that the payments were modifiable. The bankruptcy court stated, “I don’t think what I intended to say in this, in this ruling, was that I would reverse myself if a state court refused to modify it____ That’s not what I meant at all.”

The bankruptcy court did not err in failing to determine if the payments were modifiable. Whether the monthly payments are modifiable under state law is not a dis-positive factor in determining whether the parties intended to create a spousal support obligation for purposes of 11 U.S.C. § 523(a)(5). See In re Williams, 703 F.2d 1055, 1057 (8th Cir.1983) (upholding bankruptcy court’s finding of spousal support notwithstanding the fact that the decree expressly labeled the obligation as a “property settlement” in order to prevent modification of the payments by the state court); cf. Sommer, McGarity & King, Collier Family Law and the Bankruptcy Code, § 6.04[9] at p. 6.46 (1995) (“modifiability by itself is rarely sufficient”); see also Matter of Albin, 591 F.2d 94, 97 (9th Cir.1979) (interpreting Virginia law and upholding district court’s finding of spousal support “notwithstanding the fact that appellant’s obligations were not subject to modification”). Whether the Settlement Agreement’s provisions, and the subsequent conduct of the parties, would support a change in the award of spousal support is a matter that is appropriately left to California state courts. See In re Siragusa, 27 F.3d 406, 408 (9th Cir.1994) (bankruptcy court should impinge on state domestic relations issues “in the most limited manner possible.” (quoting In re Harrell, 754 F.2d 902 (11th Cir.1985)); see also Cal.Fam.Code § 4336(a).

In sum, the bankruptcy court’s finding that the parties intended to create a spousal support obligation is plausible in light of the evidence that Friedkin needed spousal support and that the parties labeled the obligation as “spousal support.” While other evidence arguably supports an inference that the parties intended the obligation to be a property settlement, it is not the province of the appellate court to reweigh the evidence and choose between competing inferences. See Anderson v. Bessemer City, 470 U.S. 564, 573-74, 105 S.Ct. 1504, 1511, 84 L.Ed.2d 518 (1985) (“[i]f the [trial] court’s account of the evidence is plausible in light of the record viewed in its entirety, the court of appeals may not reverse it even though convinced that had it been sitting as the trier of fact, it would have weighed the evidence differently”). Because the bankruptcy court applied the proper legal standard and did not clearly err in determining that the parties intended to create a spousal support obligation, the bankruptcy court did not abuse its discretion in concluding that the $12,000 monthly payments were nondischargeable.

B

Sternberg next challenges the bankruptcy court’s denial of his request for prejudgment interest on his offset award. Sternberg argues that “interest should run from the date of Friedkin’s breach of the [Settlement Agreement],” in order to compensate him for “the loss of use of the money.” We disagree.

“[T]he award of prejudgment interest in a case under federal law is a matter left to the sound discretion of the trial court. Awards of prejudgment interest are governed by considerations of fairness and are awarded when it is necessary to make the wronged party whole.” In re Acequia, Inc., 34 F.3d 800, 818-19 (9th Cir.1994) (citation omitted). Bankruptcy courts traditionally award prejudgment interest from the time the claimant makes a demand on his or her claim or initiates an adversary proceeding. Id. (citing Turner v. Davis, Gillenwater & Lynch (In re Investment Bankers, Inc.), 4 F.3d 1556, 1566 (10th Cir.1993)), cert. denied, — U.S. -, 114 S.Ct. 1061, 127 L.Ed.2d 381 (1994).

Here, the bankruptcy court found that Sternberg did not assert a revival of his right to first refusal claim until Friedkin’s adversary proceeding was tried on October 12, 1993. Because the trial date represents the date of Sternberg’s demand for his setoff claim, the bankruptcy court did not abuse its discretion in holding that interest could not accrue prior to that time.

C

Finally, Sternberg asserts that “the Bankruptcy Court should have considered the [financial] circumstances of Fried-kin, relative to Sternberg, at the trial of this matter.” Evidentiary rulings are reviewed for an abuse of discretion and should not be reversed absent a showing of prejudice. City of Long Beach v. Standard Oil Co., 46 F.3d 929, 936 (9th Cir.1995).

As a preliminary matter, Sternberg does not explain why this information is relevant to a determination of whether the obligation is nondischargeable or how the bankruptcy court’s exclusion of the evidence prejudiced him. Matters not sufficiently raised and argued should not be considered by this court. Officers for Justice v. Civil Service Comm’n, 979 F.2d 721, 726 (9th Cir.1992), cert. denied, 507 U.S. 1004, 113 S.Ct. 1645, 123 L.Ed.2d 267 (1993).

Assuming that Sternberg intended to argue that Friedkin’s present financial circumstances are relevant to a determination of whether the parties intended to create a spousal support obligation, the bankruptcy court did not abuse its discretion in excluding the evidence. As is discussed, swpra, the relevant inquiry is the intent of the parties at the time the divorce decree or settlement agreement was executed. See Combs, 101 B.R. at 615 (“the court must ascertain the intention of the parties at the time they entered in their stipulation agreement [citation omitted] and not the current circumstance of the parties”).

IV

The district court’s order upholding the judgment of the bankruptcy court is AFFIRMED.

      . At the time Sternberg filed his bankruptcy petition, a properly settlement debt was dischargeable in bankruptcy. In 1994, the Bankruptcy Code was amended. All debts arising out of a marital dissolution agreement are now generally nondischargeable. See 11 U.S.C. § 523(a)(15) (applicable to bankruptcy proceedings filed on or after October 22, 1994).

      . Friedkin does not appeal from the bankruptcy court's ruling that the $8,000 monthly payments were property settlement obligations, or the bankruptcy court’s finding of a setoff claim.

      . The difference, if any, between an "abuse of discretion" and a "gross abuse of discretion" is unclear. Cox, 904 F.2d at 1401. Because we conclude that the bankruptcy court did not abuse its discretion, we do not reach the question of whether the bankruptcy court grossly abused its discretion.

      . When questioned by the district court during oral argument, Sternberg’s counsel represented that the parties used the term "spousal support” to protect the payments in the event of bankruptcy. We agree with the district court that Stern-berg’s stated intent to create a nondischargeable debt supports a finding that the parties intended to create a nondischargeable support obligation.

      . It is unclear whether Sternberg contests the bankruptcy court’s finding that the state court retained jurisdiction to consider whether the spousal support obligations could be modified. To the extent he does, we conclude that the bankruptcy court did not err. The bankruptcy court based its conclusion on III.G of the Settlement Agreement which provided that if Stern-berg “substantially defaults upon his obligation to pay [Friedkin] the sum of $2,000,000 ..., the [state] Court shall retain jurisdiction to make an Order for spousal support in favor of either party but that such award of spousal support as well as the Court’s jurisdiction to make such award of spousal support shall be forever extinguished ... at such time as [Sternberg] pays the sum of $2,000,000.” (emphasis added). We review contractual interpretation de novo. Kemmis v. McGoldrick, 767 F.2d 594, 597 (9th Cir.1985). We agree with the bankruptcy court that section III.G of the Settlement Agreement sets forth a clear expression of the parties’ intent that the state court retain jurisdiction to enter a new order for spousal support in the event that Stern-berg "substantially defaults on his obligation to pay [Friedkin] the sum of $2,000,000.”