author: BARRON, Circuit Judge.

text:
    UNITED STATES of America, Appellee, v. Dasean TAYLOR, Defendant, Appellant.
    No. 15-1775
    United States Court of Appeals, First Circuit.
    January 9, 2017
    Matthew A. Kamholtz, Boston, MA, on brief for appellant.
    Carmen M. Ortiz, United States Attorney, and Mark T. Quinlivan, Assistant U.S. Attorney, on brief for appellee.
    Before HOWARD, Chief Judge, KAYATTA and BARRON, Circuit Judges.
   BARRON, Circuit Judge.

Dasean Taylor was convicted of being a felon in possession of a firearm and ammunition, in violation of 18 U.S.C. § 922(g). He was sentenced to a term of 71 months’ imprisonment. He now challenges his sentence, arguing that the District Court erroneously applied a sentencing enhancement for trafficking in firearms under U.S.S.G. § 2K2.1(b)(5). We affirm.

I.

On March 9, 2015, Taylor pled guilty to the offense of being a felon in possession of a firearm, in violation of 18 U.S.C. § 922(g). Prior to the sentencing hearing, the government had submitted a motion requesting that the District Court apply the trafficking in firearms enhancement under § 2K2.1(b)(5) of the United States Sentencing Guidelines.

Application note 13 to U.S.S.G. § 2K2.1 states:

(A) In General. — Subsection (b)(5) applies ... if the defendant—
(i) transported, transferred, or otherwise disposed of two or more firearms to another individual, or received two or more firearms with the intent to transport, transfer, or otherwise dispose of firearms to another individual; and
(ii) knew or had reason to believe that such conduct would result in the transport, transfer, or disposal of a firearm to an individual—
(I) whose possession or receipt of the firearm would be unlawful; or
(II) who intended to use or dispose of the firearm unlawfully.
(B) Definitions. — For purposes of this subsection: “Individual whose possession or receipt of the firearm would be unlawful” means an individual who (i) has a prior conviction for a crime of violence, a controlled substance offense, or a misdemeanor crime of domestic violence; or (ii) at the time of the offense was under a criminal justice sentence, including probation, parole, supervised release, imprisonment, work release, or escape status.

The parties agree that the trafficking enhancement matters here. They agree that, without the enhancement, Taylor’s total offense level would be 19. That total offense level results from a base offense level of 20, under U.S.S.G. § 2K2.1(a)(4)(B), with a two point enhancement because the offense involved three or more firearms, under § 2K2.1(b)(l)(A), and a three point reduction for acceptance of responsibility, under § 3E1.1. The parties also agree that the trafficking enhancement adds four points to the total offense level, U.S.S.G. § 2K2.1(b)(5), so that, with that enhancement, Taylor’s total offense level would be 23. And, because the parties further agree that Taylor’s criminal history category is III, his sentencing range under the guidelines with the enhancement is for a term of imprisonment of 57-71 months, rather than for the range of 37-46 months that it would be without the trafficking enhancement.

A sentencing hearing was held on June 24, 2015. At that sentencing hearing, the District Court determined that on three separate occasions — September 17, 2013; October 1, 2013; and October 16, 2013— Taylor supplied firearms to a cooperating witness, CW-1. That finding, the District Court concluded, was sufficient to satisfy subpart (i) of the trafficking enhancement’s application note. The District Court then determined that the requirement of subpart (ii). was met because the District Court found that, during the September 17 transaction, CW-1 said to Taylor that CW-1 would remove the serial number from the firearm involved in that transaction. In addition, the District Court found that the requirement of subpart (ii) had been met because the District Court found that, during the October 16 transaction, the gun sold was a sawed-off shotgun, which is generally unlawful to possess except in limited circumstances, and the evidence in the record did not support the contention that Taylor might have believed that those limited circumstances applied to CW-1.

Having found that the trafficking enhancement applied, the District Court sentenced Taylor to a term of imprisonment of 71 months. Taylor now brings this timely appeal to the application of the trafficking enhancement.

II.

The government bears the burden of showing, by a preponderance of the evidence, that Taylor is subject to the trafficking enhancement. United States v. Marceau, 554 F.3d 24, 32 (1st Cir. 2009). Taylor contends that the District Court erred in imposing the trafficking enhancement because it erroneously found that, on the basis of the transactions on September 17 and October 16, the requirement in subpart (ii) of application note 13 had been met. But, because Taylor did not make this challenge below, our review is only for plain error. United States v. Figuereo, 404 F.3d 537, 540 (1st Cir. 2005). And, under the plain error standard, we will reverse “only if the defendant shows ‘(1) that an error occurred (2) which was clear or obvious and which not only (3) affected the defendant’s substantial rights, but also (4) seriously impaired the fairness, integrity, or public reputation of judicial proceedings.’ ” Id. (quoting United States v. Duarte, 246 F.3d 56, 60 (1st Cir. 2001)). We conclude that the District Court did not commit a clear or obvious error in finding that the government met its burden.

As to the September 17 transaction, the District Court found that “the cooperating witness [said] that he [was] going to take the serial number off’ and that therefore “Mr. Taylor as a supplier would know [that the transfer] involved some unlawful possession or the use or disposal of the firearm unlawfully.” Taylor contends that the District Court erred in finding that the government met its burden, given that the audio recording of the September 17 transaction shows only that CW-1 announced that he would remove the serial number, not that Taylor heard or acknowledged CW-l’s comment.

But, according to the uncontested characterization of the conversation in the presentence report, CW-1 announced to Taylor that he would remove the serial number, and then Taylor, without acknowledging the comment, showed CW-1 how to operate the firearm. In the course of showing CW-1 how to work the firearm, Taylor answered when CW-1 asked about the location of the weapon’s safety. In other words, Taylor and CW-1 were in close enough proximity that they could engage in conversation and Taylor could hear CW-l’s question. Given that characterization of what transpired during the transaction, the District Court support-ably found that Taylor heard the statement that CW-1 made during a conversation between the two of them about the firearm. And, if Taylor heard the statement, then the District Court committed no clear or obvious error — or, for that matter, any error at all — in concluding that Taylor knew or should have known that the removal of a serial number is indicative of “anticipation that the gun will be used in criminal activity,” and thus that Taylor knew or should have known that CW-1 intended to use or dispose of the firearm unlawfully. Marceau, 554 F.3d at 32 (quoting United States v. Ortiz, 64 F.3d 18, 22 (1st Cir. 1995)); see also United States v. Jenkins, 528 Fed.Appx. 483, 486 (6th Cir. 2013) (finding that a firearm’s lack of serial number supported the inference that the defendant knew or had reason to believe that the firearm would be used or disposed of unlawfully).

As for the District Court’s finding that the October 16 transaction supplies a basis for finding that the requirement in subpart (ii) of application note 13 had been met, here, too, we see no clear or obvious error. The District Court noted that, while it is “conceivable[ ] for someone to possess a sawed-off shotgun legally ... it would require, broadly stated, licensing that is not to be found in this record,” and concluded that Taylor knew or had reason to believe that CW-1 would use or dispose of the firearm unlawfully. And much evidence supports that conclusion.

The October sale took place in a private home, not a gun store. It also was made in cash. Moreover, Taylor was selling CW-1 a sawed-off shotgun, which is illegal to possess in all but the most unusual circumstances, and there were no facts to indicate that such circumstances were present here. In addition, Taylor was on notice that CW-1 planned to resell the weapons that he was purchasing from Taylor, and there was no indication that CW-1 would be the unusual firearms dealer who could legally own, much less legally resell, a sawed-off shotgun. Finally, Taylor was on notice that CW-1 had expressed during the September transaction an intention to remove the serial number from a firearm.

Combining all the facts together, we find that the District Court did not plainly err in concluding that Taylor “knew or had reason to believe” that CW-1 would “use or dispose of’ the sawed-off shotgun illegally. See Jenkins, 528 Fed.Appx. at 486. We therefore find that the District Court did not plainly err in finding that the requirement of subpart (ii) of application note 13 had been met and that the trafficking enhancement applied.

III.

We affirm the sentence set by the District Court.

      , Although Taylor did raise other objections to the application of the sentencing enhancement, an objection on one ground does not preserve objections on a different ground. Id. at 540 n.3.


source: Caselaw Access Project

author: DYK, Circuit Judge.

license: Public Domain

text:
    Francisco José MASSÓ-TORRELLAS; Conjugal Partnership Massó-Estévez; José Francisco Massó-Torrellas; Conjugal Partnership Massó-Maldonado; Ossam Construction, Inc., Plaintiffs, Appellants, v. MUNICIPALITY OF TOA ALTA; Clemente Agosto-Lugardo, in his official capacity as Mayor of the Municipality of Toa Alta and in his individual capacity; Yaritza Rosario-Soto; Conjugal Partnership Agosto-Rosario, Defendants, Appellees, Indetermined Number of Unnamed Municipal Police Officers; Indetermined Number of Jane Does; Conjugal Partnership; Richard Doe; John Doe; ABC Insurance Company, Defendants.
    No. 16-1319
    United States Court of Appeals, First Circuit.
    January 9, 2017

      Roberto Busó-Aboy, for appellants.
    Eduardo A. Vera Ramirez, with whom Landrón Vera, LLC., Eileen Landron Guardiola, and Luis A. Rodríguez Muñoz were on brief for appellees Municipality of Toa Alta and Clemente Agosto-Lugardo, in his official capacity as Mayor.
    Margarita Mercado-Echegaray, Solicitor General, with whom Susana I. Peñagaríca-no-Brown, Assistant Solicitor General, was on brief for appellee Clemente Agosto-Lugardo, in his individual capacity.
    Before HOWARD, Chief Judge, TORRUELLA and DYK, Circuit Judges.

       Of the Federal Circuit, sitting by designation.

   DYK, Circuit Judge.

Plaintiffs appeal from a district court order dismissing their 42 U.S.C. § 1983 claim for lack of subject matter jurisdiction, and declining to exercise supplemental jurisdiction over related state law claims. We affirm the district court’s dismissal. The district court found that it lacked subject matter jurisdiction because the parties had failed to comply with the mediation/arbitration clause in their contract. Although we conclude that the district court erred by holding that the mediation/arbitration clause applied to the § 1983 claim, we conclude that the § 1983 claim should be dismissed pursuant to Fed. R. Civ. P. 12(b)(6) for failure to state a claim. Accordingly, there is also no supplemental jurisdiction over the state law claims.

I.

This dispute relates to contracts for the construction of a municipal transportation terminal. On May 7, 2010, defendant, the Municipality of Toa Alta (“Municipality”), awarded a construction project to plaintiff, OSSAM Construction Inc. (“OSSAM”), to build the terminal on land owned by the Municipality. The parties contemplated that the construction project would be undertaken in two phases, with two separately executed contracts. The Phase I contract was executed on September 10, 2010, and the work was apparently completed without incident within the 120 days provided in the contract. The Phase II contract was executed on September 4, 2012. From September of 2014 and continuing through December of 2014, disputes arose regarding payments for the work performed in connection with the Phase II contract. On January 20, 2016, OSSAM issued a notice of default against the Municipality due to its alleged nonpayment for the completed construction work. On February 4, 2016, the Municipality notified OSSAM by letter that the contract between OSSAM and the Municipality was being terminated effective immediately “[d]ue to reasons of public policy in connection with the sound administration of [municipal] funds.” JA 122. This letter was signed by Mayor Clemente Agosto-Lugar-do (“Agosto”) on behalf of the Municipality. On the same day, municipal officials and police officers took control of the construction site, which was on municipal property.

After taking control of the site, the Municipality initially barred OSSAM from removing any property from the construction site. The Municipality alleges that this was necessary to fully inventory the on-site property and determine the correct ownership pursuant to the contract. On February 5th and 14th, OSSAM was permitted to retrieve some of its property from the site. And on February 18th, OSSAM was finally permitted access to the site to retrieve “most” of its property. Appellants allege that at the time of filing the Complaint, the Municipality still retained security barriers and fences belonging to OS-SAM.

On May 4, 2015, OSSAM, its president José Francisco Massó-Torrellas and his wife Sarina Maldonado-Alfandari, and OS-SAM’s vice-president Francisco José Mas-só-Torrellas and his wife Rosa Julia Esté-vez-Datiz, filed a complaint in the District Court of Puerto Rico, against the Municipality, Agosto in his official capacity as mayor, Agosto and his wife Yaritza Rosario-Soto in their personal capacities, an indeterminate number of unnamed Municipality police officers and officials in them official and personal capacities, along with their spouses, and any “insurance companies] that may be responsible to [the] Plaintiffs.” JA 12. The plaintiffs claimed that the defendants violated 42 U.S.C. § 1983 when the defendants acted under color of law to interfere with the plaintiffs’ Fourth, Fifth, and Fourteenth Amendment rights during the construction site takeover in February of 2014. The plaintiffs also claimed that these actions constituted a breach of contract and “a violation of the Constitution and laws of the Commonwealth of Puerto Rico.” JA 23.

The defendants moved to dismiss the § 1983 claim for failure to state a claim, and also argued that “OSSAM has not complied with the mandatory arbitration clause in the contract.” JA 41.

The Phase II construction contract between OSSAM and the Municipality included clause 35, which we refer to as the mediation/arbitration clause. It provided that

[i]n the event that any controversy arises from the interpretation or of any other class among the parties with respect to any matter related to this contract, it shall be previously be [sic] required that before resorting to a judicial forum for the adjudication of their rights, that the parties exhaust a mediation procedure. The ■ Municipality and [OSSAM] will at all times attempt to resolve their claims and disputes among themselves in [good] faith and if unable to arrive at an agreement^] they bind themselves to resolving the controversy or dispute through mediation.

JA 117-18 (emphases added). The Phase I contract included the same clause with an additional final sentence stating that “[t]he mediator’s decision will be final and firm.” Add. 2. This sentence was not included in the Phase II contract.

The usual meaning of arbitration is that the dispute resolution is binding and final. See Fit Tech, Inc, v. Bally Total Fitness Holding Corp., 374 F.3d 1, 7 (1st Cir. 2004). Conversely, the usual meaning of mediation is that the dispute resolution is non-binding. See In re Atlantic Pipe Corp., 304 F.3d 135, 141 (1st Cir. 2002). For purposes of resolving this case, we need not decide whether clause 35 provides for nonbinding mediation or binding arbitration.

Interpreting clause 35 as an arbitration clause, the district court held that “the parties must comply with the obligation to mediate their claims before pursuing claims in a judicial forum,” and “dismissed for lack of subject matter jurisdiction.” Add. 4, 6.

The plaintiffs appeal. We have jurisdiction under 28 U.S.C. § 1291. We review the district court’s dismissal for lack of subject matter jurisdiction de novo. Viqueira v. First Bank, 140 F.3d 12,16 (1st Cir. 1998). We review the district court’s decision not to exercise supplemental jurisdiction over state law claims for abuse of discretion. González-De-Blasini v. Family Dept., 377 F.3d 81, 89 (1st Cir. 2004).

II.

We first address whether the district court erred by holding that the plaintiffs’ § 1983 claims must be mediated or arbitrated before pursuing judicial action.

Here, the parties agree that the district court erred in concluding that the mediation/arbitration clause covers constitutional claims. This agreement is consistent with the plain text of the clause, which does not bring constitutional or § 1983 claims within its scope. Quite the opposite, the mediation/arbitration clause only encompasses “matter[s] related to this contract.” JA 117. “[A] court may order arbitration of a particular dispute only where the court is satisfied that the parties agreed to arbitrate that dispute.” Granite Rock Co. v. Int’l Bhd. of Teamsters, 561 U.S. 287, 297, 130 S.Ct. 2847, 177 L.Ed.2d 567 (2010) (emphasis in original). Here, there is no agreement between the parties to arbitrate/mediate the § 1983 claim. Therefore, the district court erred by holding that clause 35 of the construction contract applied to the appellants’ § 1983 claim.

III.

Even though the district court erred in dismissing for lack of jurisdiction because of the mediation/arbitration clause, “[w]e are not bound by the lower court’s rationale, but may [instead] affirm the grant of dismissal on any ground supported by the record.” Gonzalez-Cancel v. Partido Nuevo Progresista, 696 F.3d 115, 118-19 (1st Cir. 2012). We conclude that the § 1983 claim is without merit and should have been dismissed for failure to state a claim.

On appeal, the plaintiffs argue several different constitutional claims, alleging violations of the First, Fourth, Fifth, and Fourteenth Amendments. In none of these respects have the plaintiffs stated a viable claim.

First, there was no First Amendment claim pleaded in the Complaint. See JA 21. “Appellants cannot raise an argument on appeal that was not squarely and timely raised in the trial court. [LJitigants must spell out their legal theories face-up and squarely in the trial court.... [Otherwise,] that claim ordinarily is deemed un-preserved for purposes of appellate review.” Thomas v. Rhode Island, 542 F.3d 944, 949 (1st Cir. 2008) (internal citations and quotation marks omitted).

Second, there is no plausible constitutional claim for Fourth Amendment, Fifth Amendment, and Fourteenth Amendment seizure and takings with respect to the individual plaintiffs. The property allegedly seized or taken belonged to OSSAM, and not the individual plaintiffs. In their Complaint to the district court, the appellants alleged throughout that they “encountered a seizure of ... OS-SAM’s property, equipment and materials,” that the Municipality “ordered that OSSAM could not take any of its property, equipment or materials from” the site, that Municipality officers prevented access to “OSSAM’s property and equipment,” and that they were told “removal of OSSAM’s equipment and property was forbidden.” JA 15-16.

On appeal, the appellants repeat these allegations, claiming that “they encountered a police seizure of ... Ossam’s property, equipment and materials,” that “Municipality officials, under color of law and pursuant to official authority prevented Ossam personnel to remove most of its property, equipment and materials,” and that a sub-contractor’s equipment was permitted to be removed “but not Ossam’s property, equipment and materials.” Appellant Br. 9,11.

Therefore, with respect to the individual plaintiffs, there is no plausible Fourth Amendment, Fifth Amendment, and Fourteenth Amendment claim because no individual plaintiffs property was alleged to have been taken.

Third, with respect to OSSAM’s Fourth Amendment, Fifth Amendment, and Fourteenth Amendment property seizure and takings claims, we find that there is no plausible allegation in the complaint that the Municipality engaged in action which would implicate § 1983.

Insofar as OSSAM alleges a taking or seizure of its contract, or alleges that its contractual rights were violated by the termination of the contract or the detention of its property, these allegations do not state a constitutional claim. In Redondo-Borges v. U.S. Dep’t of Housing and Urban Dev., 421 F.3d 1 (1st Cir. 2005), this court noted that as a general matter, “[w]e have held with a regularity bordering on the echolalic that a simple breach of contract does not amount to an unconstitutional deprivation of property. ... To hold otherwise would run the risk of transmogrifying virtually every dispute involving an alleged breach of contract by a state or a state agency into a constitutional case.” Id. at 10. This principle is well-established in other circuits as well. These cases appear to rest on either of two distinct propositions. In the first category, some cases have held that not all contract rights constitute property protected by the Constitution. See, e.g., Linan-Faye Constr. Co. v. Hous. Auth, of Camden, 49 F.3d 915, 931— 32 (3d Cir. 1995); Unger, 928 F.2d at 1399; Yatvin, 840 F.2d at 417. Other cases recognize that contract rights can be property for constitutional purposes, and are protected against government actions taken in the government’s sovereign capacity, for example, by a statute eliminating certain contractual rights. See, e.g., Cienega Gardens v. United States, 331 F.3d 1319, 1353 (Fed. Cir. 2003) (holding that the enactment of ELIHPA and LIHPRHA, which eliminated some contractual rights, in the circumstances of that case “effect[ed] a compensable taking”).

A second category of cases holds that even if a private party’s contract rights constitute property, the exercise of contractual rights by a governmental contracting-party does not give rise to a constitutional claim. See, e.g., B & B Trucking, 406 F.3d at 769; Hughes Commc’ns, 271 F.3d at 1070.

Indeed, the Supreme Court has repeatedly recognized that governments act in different capacities — as sovereigns and as contracting parties — and that “[t]he two characters which the government possesses as a contractor and as a sovereign cannot be ... fused; nor can the [government] while sued in one character be made liable in damages for [its] acts done in the other.” Horowitz v. United States, 267 U.S. 458, 461, 45 S.Ct. 344, 69 L.Ed. 736 (1925) (quoting Jones v. United States, 1 Ct.Cl. 383, 384 (1865)). See also Perry v. United States, 294 U.S. 330, 352, 55 S.Ct. 432, 79 L.Ed. 912 (1935) (“When the [government] ... makes contracts, it has rights and incurs responsibilities similar to those of individuals who are parties to such instruments.”); United States v. Bostwick, 94 U.S. 53, 66, 24 L.Ed. 65 (1876) (“The United States, when they contract with their citizens, are controlled by the same laws that govern the citizen in that behalf”).

Here, we need not resolve the exact scope of constitutionally-protected contractual property rights, but may instead assume that OSSAM’s contract rights could constitute property. But when a municipality acts in a contractual or proprietary capacity, actions such as contract termination or detention of property under the contract that would constitute a simple breach of contract when a non-governmental entity is involved do not become a constitutional violation simply because the contracting party is a municipality.

In Monell v. Dep’t of Social Services, 436 U.S. 658, 690, 98 S.Ct. 2018, 56 L.Ed.2d 611 (1978), the Supreme Court taught that a “[l]ocal governing bod[y] ... can be sued directly under § 1983 ... [when it] unconstitutionally] implements or executes a policy statement, ordinance, regulation, or decision officially adopted and promulgated by that body’s officers.” However, the Court went on to hold that

the language of § 1983, read against the background of the ... legislative history, compels the conclusion that Congress did not intend municipalities to be held liable unless action pursuant to official municipal policy of some nature caused a constitutional tort.... [I]t is when execution of a government’s policy or custom, whether made by its lawmakers or by those whose edicts or acts may fairly be said to represent official policy, inflicts the injury that the government as an entity is responsible under § 1983.

Id. at 691-94, 98 S.Ct. 2018 (emphasis added). Here, the record does not contain any plausible allegations that the Municipality was acting in a sovereign capacity pursuant to any statute, ordinance, regulation, or custom when it terminated the contract and took over the construction site and temporarily detained OSSAM’s property.

There is no allegation in the Complaint that the Municipality acted pursuant to a statute, ordinance, or regulation. The complaint did state that the Municipality implemented “customs and policies” which caused the plaintiffs’ injuries. JA 21. There was no further development of this bare assertion in the Complaint regarding any specific Municipality actions undertaken pursuant to its customs and policies. In Rosaura Building Corp. v. Municipality of Mayaguez, 778 F.3d 55 (1st Cir. 2015), this court affirmed the district court’s dismissal of “claims against the municipal government under Monell, after it found that Rosaura failed to plead a scintilla of facts against that government entity ... [about the] execution of a government’s policy or custom.” Id. at 61-62, 69 (citation omitted). Here, given the record, we similarly conclude that there is no sufficient allegation that the Municipality acted under color of law.

In summary, for purposes of a motion to dismiss, we conclude that the source of the Municipality’s authority to secure the construction site stemmed from its proprietary capacity under the contract, and not its sovereign capacity. Because the Municipality is not alleged to have engaged in a sovereign act, there is no substantial constitutional claim that would support a cause of action pursuant to § 1983. Thus, here, the Municipality’s acts of terminating the construction contract and temporarily detaining OSSAM’s property do not give rise to constitutional claims cognizable under § 1983.

Finally, to the extent that OSSAM complains about its exclusion from the construction site, OSSAM had no constitutional right to access the Municipality’s construction site that would give rise to a § 1983 claim. The appellants do not dispute that the construction site is “on the property of the Municipality.” Appellee Off. Br. 3. There cannot be a plausible constitutional claim that the Municipality cannot secure its own property.

IV.

Because there is no substantial constitutional claim, we also conclude that there is no federal jurisdiction over the plaintiffs’ state law claims, as the remaining state law claims were only argued to “be allowed to proceed ... [under] supplemental jurisdiction.” Appellant Br. 33. “As a general matter, a court will decline supplemental jurisdiction if the underlying [federal] claims are dismissed before trial.” 13D Charles Alan Wright, Arthur R. Miller & Mary Kay Kane, Federal Practice and Procedure § 3567.3, at 429 (3d ed. 2007). Case law from this circuit supports this “general principle [that] the unfavorable disposition of a plaintiffs federal claims at the early stages of a suit ... will trigger the dismissal ... of any supplemental state-law claims.” González-De-Blasini, 377 F.3d at 89 (quoting Rodríguez v. Doral Mortgage Corp., 57 F.3d 1168, 1177 (1st Cir. 1995)). Specifically, in Camelio v. American Fed., 137 F.3d 666 (1st Cir. 1998), this court held that after the district court had dismissed a suit’s federal claims for failure to state a claim, it also “should have refrained from exercising supplemental jurisdiction over [the] state law claims and remanded them to state court.” Id. at 673.

We review a district court’s decision not to exercise supplemental jurisdiction for abuse of discretion. González-De-Blasini, 377 F.3d at 89. We conclude that the district court did not do so in dismissing the appellants’ supplemental state law claims.

AFFIRMED. Costs to appellees.

      . Although this final sentence was omitted in the original Spanish language contract, the certified translation of the Phase II contract erroneously contained this sentence, see JA 103, 118, when in fact, only the Phase I contract contains this sentence in the original Spanish version, see JA 55, 73. The district court correctly noted this error. Add. 2 n.4.

      . We need not decide in this case whether a contractual agreement to arbitrate § 1983 claims would be enforceable. See generally, Gilmer v. Interstate/Johnson Lane Corp., 500 U.S. 20, 35, 111 S.Ct. 1647, 114 L.Ed.2d 26 (1991); McDonald v. City of West Branch, Mich., 466 U.S. 284, 290, 104 S.Ct. 1799, 80 L.Ed.2d 302 (1984).

      . In determining the appellants’ claims here, we need not decide whether Puerto Rico is a state under the Fourteenth Amendment or a federal territory under the Fifth Amendment. See Examining Board of Eng'r, Architects & Surveyors v, Flores de Otero, 426 U.S. 572, 600-01, 96 S.Ct 2264, 49 L.Ed.2d 65 (1976).

      . In their brief, the plaintiffs also appear to complain that the defendants engaged in "illegal detention of Plaintiffs and their employees.” Appellant Br. 1, 4. However, the Complaint itself contains no allegations that the plaintiffs were actually detained. See JA 15.

      . B & B Trucking, Inc, v, U.S. Postal Serv., 406 F.3d 766, 769 (6th Cir. 2005) (en banc) (holding that if the USPS abridged the plaintiffs’ contract rights, "the proper recourse would be a breach-of-contract claim, not a takings claim”); Hughes Commc'ns Galaxy, Inc, v. United States, 271 F.3d 1060, 1070 (Fed. Cir. 2001) (holding that "[tjaking claims rarely arise under government contracts because the Government acts in its commercial or proprietary capacity in entering contracts, rather than in its sovereign capacity. Accordingly, remedies arise from the contracts themselves, rather than from the constitutional protection of private property rights.”); Unger v. Nat’l Residents Matching Program, 928 F.2d 1392, 1398 (3d Cir. 1991) (holding that "[i]t is neither workable nor within the intent of section 1983 to convert every breach of contract claim against a state into a federal claim.” (quoting San Bernardino Physician's Serv, Med. Grp, v. County of San Bernardino, 825 F.2d 1404, 1408 (9th Cir. 1987))); Yatvin v. Madison Metrop. Sch. Dist., 840 F.2d 412, 416 (7th Cir. 1988) (holding that "the Fifth and Fourteenth Amendments do not entitle a person to a federal remedy for every breach of contract by a state.... Thus, unless every breach of every public contract is to be actionable as a violation of constitutional rights, it is necessary to distinguish between mere contract rights” and constitutional property rights (internal citations and quotation marks omitted)); Monolith Portland Midwest Co. v. Reconstruction Fin. Corp., 282 F.2d 439, 447 (9th Cir, 1960) (holding that “[tjermination of the [government] contract ... frustrated [appellant] in obtaining anticipated profits and advantages therefrom. But, ... [Qrustration and appropriation are essentially different things. There was here no taking of [appellant’s] property which entitled the company to just compensation under the Fifth Amendment” (citation omitted)); Brasier v. United States, 223 F.2d 762, 766 (8th Cir. 1955) (holding that a termination of a government contract does not constitute "a taking of the plaintiff’s property without just compensation or without due process of law").

      . The enactment of a statute may, of course, sometimes lead to governmental liability for breach of contract. See United States v. Winstar Corn,, 518 U.S. 839, 897, 116 S.Ct. 2432, 135 L.Ed.2d 964 (1996) (holding that the enactment of FIRREA breached certain government contracts).

      . We do not suggest here that a municipality in enforcing a contract may not act under color of state law. For example, it is well-established that a municipality may be liable for employment discrimination under § 1983. See, e.g„ Rodriguez v. Municipality of San Juan, 659 F.3d 168, 181 (1st Cir. 2011) (holding that discrimination against a municipal employee could "trigger[] municipal liability under § 1983” through official policy or custom). However, in such instances, the municipal government is motivated by something other than contractual rights. We note that OSSAM alleges that the Municipality terminated the Phase II contract in retaliation for OSSAM's issuing a notice of default, but this is not an allegation of extra-contractual motivation.


text:
    IN RE: NEXIUM (ESOMEPRAZOLE) ANTITRUST LITIGATION American Sales Company, LLC, on behalf of itself and all others similarly situated; Value Drug Company; Burlington Drug Company Inc.; Rochester Drug Cooperative, Inc., on behalf of itself and others similarly situated; Meijer, Inc.; Meijer Distribution, Inc.; Allied Services Division Welfare Fund; Laborers International Union of North America Local 17 Health Care Fund; Laborers International Union of North America Local 35 Health Care Fund; A.F. of L.— A.G.C. Building Trades Welfare Plan; Fraternal Order of Police Miami Lodge 20 Insurance Trust Fund; New York Hotel Trades Council and Hotel Assoc, of New York City, Inc. Health Benefits Fund; United Food & Commercial Workers Unions and Employers Midwest Health Benefits Fund; Michigan Regional Council of Carpenters Employee Benefits Fund; International Union of Machinists and Aerospace Workers District No. 15 Health Fund; International Brotherhood of Electrical Workers Local 595 Health and Welfare Fund; Walgreen Co.; The Kroger Company; Safeway Incorporated; Supervalu, Inc.; HEB Grocery Co. LP; Giant Eagle, Inc.; Rite Aid Corporation; Rite Aid Headquarters Corporation; JCG (PJC) USA, LLC; Maxi Drug, Inc., d/b/a Brooks Pharmacy; Eckerd Corporation; CVS, Inc., Plaintiffs, Appellants, v. AstraZeneca LP; AstraZeneca AB; Aktiebolaget Hassle; Ranbaxy Pharmaceuticals Inc.; Ranbaxy Inc.; Ranbaxy Laboratories Ltd., Defendants, Appellees.
    Nos. 15-2005, 15-2006, 15-2007
    United States Court of Appeals, First Circuit.
    Entered: January 10, 2017

      Glen DeValerio, Nathaniel L. Orenstein, Berman DeValerio, Thomas G. Shapiro, Shapiro Haber & Urmy LLP, Kimberly A. Dougherty, Janet Jenner & Suggs LLC, Jonathan Shapiro, Stern Shapiro Weiss-berg & Garin LLP, Boston, MA, James R. Dugan, II, David Baylis Franco, Douglas Robert Plymale, Dugan Law Firm LLC, New Orleans, LA, Donna M. Evans, J. Douglas Richards, Sharon K. Robertson, George Farah, Christopher Lometti, Cohen Milstein Sellers & Toll PLLC, Bruce E. Gerstein, Garwin Gerstein & Fisher LLP, Donald A. Broggi, Joseph P. Gugliel-mo, Scott & Scott LLP, New York, NY, Anne K. Fornecker, Steve D. Shadowen, R. Bryce Duke, Robert C. Hilliard, Hilli-ard Shadowen LLP, Austin, TX, Daniel C. Girard, Christina C. Sharp, Girard Gibbs LLP, San Francisco, CA, Jayne A. Gold-stein, Shepherd Finkelman Miller & Shah, Ft. Lauderdale, FL, Matthew W.H. Wes-sler, Gupta Wessler PLLC, Washington, DC, Kenneth A. Wexler, Justin N. Boley, Bethany R. Turke, Edward A. Wallace, Wexler Wallace LLP, Chicago, IL, Natalie Finkelman Bennett, Shepherd Finkelman Miller & Shah LLP, Media, PA, John B. Martinez, Hilliard Munoz Gonzales LLP, Corpus Christi, TX, Brian Douglas Penny, Goldman Scarlato & Penny PC, Consho-hocken, PA, Kevin Peter Roddy, Wilentz, Goldman & Spitzer, Woodbridge, NJ, Aaron David Kaufmann, Leonard Carder LLP, Oakland, CA, Nicole M. Acchione, Trujillo Rodriguez & Richards, Haddon-field, NJ, Nicole M. Acchione, Lisa J. Rodriguez, Schnader, Harrison, Segal <& Lewis, Cherry Hill, NJ, Christopher M. Burke, Walter W. Noss, Scott & Scott LLP, San Diego, CA, for Plaintiffs-Appellants.
    Richard Alan Arnold, Anna Theresa Neill, Douglas H. Patton, Scott E. Perwin, Kenny Nachwalter PA, Miami, FL, Bruce E. Gerstein, Joseph Opper, Elena K. Chan, Ephraim R. Gerstein, Garwin Ger-stein & Fisher LLP, John D. Radice, Peter A. Barile, III, Bradley J. Demuth, Grant & Eisenhofer PA, Brian D. Brooks, Smith Segura & Raphael LLP, Linda P. Nussbaum, Nussbaum Law Group PC, Ar-chana Tamoshunas, Taus, Cebulash & Landau, LLP, Virginia E. Anello, Douglas & London, P.C., Michael Aaron Rose, Frank R. Schirripa, Hach Rose Schirripa & Cheverie LLP, New York, NY, Lauren C. Ravkind, Kenny Nachwalter PA, Austin, TX, Barry L. Refsin, Hangley Aron-chick Segal & Pudlin, Caitlin G. Coslett, Eric Cramer, Ellen T. Noteware, Daniel C. Simons, David F. Sorensen, Yechiel Michael Twersky, Nicholas Urban, Berger & Montague PC, David A. Schumacher, Buchanan Ingersoll & Rooney PC, Philadelphia, PA, Moira E. Cain-Mannix, Erin Gibson Allen, Brian C. Hill, Scott D. Livingston, Bernard D. Marcus, Jonathan D. Marcus, James F. Rosenberg, Marcus & Shapira LLP, Maureen S. Lawrence, Hangley Aronehick Segal & Pudlin, Pittsburgh, PA, Eric L. Bloom, Monica L. Re-buck, Hangley Aronehick Segal Pudlin & Schiller, Harrisburg, PA, Don Barrett, Barrett Law Group PA, Lexington, MS, Alyssa K. Chaplin, Kristen Johnson, David S. Nalven, Thomas M. Sobol, Andrew J. Vasicek, Hagens Berman Sobol Shapiro LLP, Cambridge, MA, Russell A. Cho-rush, Heim Payne & Chorush LLP, Houston, TX, Peter S. Pearlman, Cohn Lifland Pearlman Herrmann & Knopf, Saddle Brook, NJ, Susan C. Segura, Smith Segu-ra & Raphael LLP, Alexandria, LA, John P. Bjork, David P. Germaine, Vaneck Vickers & Masini PC, Chicago, IL, James E. Cecchi, Lindsey H. Taylor, Carella, Byrne, Bain, Gilfíllan etc., Roseland, NJ, Peter R. Kohn, Joseph T. Lukens, Farqui & Farqui LLP, Jenkintown, PA, Barbara J. Hart, Uriel Rabinovitz, Peter Dexter St. Phillip, Jr., Lowey Dannenberg Cohen & Hart PC, White Plains, NY, Gerald Lawrence, Lowey Dannenberg Cohen & Hart, PC, West Conshocken, PA, for Plaintiffs.
    Nicholas W. Allen, William A. Zucker, McCarter & English LLP, Laurence Adam Schoen, Mintz Levin Cohn Ferris Glovsky & Popeo PC, Boston, MA, James Douglas Baldridge, Lisa Jose Fales, Danielle R. Foley, Vincent E. Verrocchio, Venable LLP, Ashley E. Bass, Courtney R. Forrest, Jonathan Gimblett, Timothy C. Hester, Thomas A. Isaacson, Andrew D. Lazerow, Enrique D. Longton, Evie Spa-nos, Einar Stole, Covington & Burling LLP, Dane Butswinkas, Stanley E. Fisher, Paul B. Gaffney, Benjamin M. Greenblum, Heidi K. Hubbard, John E. Joiner, William Thomas Marks, Jonathan B. Pitt, Adam Joshua Podoll, John E. Schmidtlein, Kan-non K. Shanmugam, Adam R. Tarosky, James Harris Weingarten, Marcie R. Ziegler, Williams & Connolly LLP, Jonathan D. Janow, Kirkland & Ellis LLP, Washington, DC, Michael P. Kelly, McCarter & English LLP, Wilmington, DE, Amanda Elbogen, Jay P. Lefkowitz, Steven J. Me-nashi, Kirkland & Ellis LLP, New York, NY, Leslie F. Su, Gordon Law Firm LLP, Wellesley, MA, for Defendants-Appellees.
    Jonathan B. Berman, John M. Gore, Kevin D. McDonald, Stephanie L. Resnik, Jones Day, Andrew D. Lazerow, Coving-ton & Burling LLP, James Douglas Bal-dridge, Venable LLP, Thea Cohen, Christopher M. Jackson, Jonathan D. Janow, Katherine R. Katz, Karen Natalie Walker, Kirkland & Ellis LLP, Washington, DC, Ajay Kayal, Ellen T. Lowenthal, Andrew J. Miller, Alan H. Pollack, Budd Lamer, PC, Short Hills, NJ, Michael T. Marcucci, Jones Day, Laurence Adam Schoen, Adam L. Sisitsky, Mintz Levin Cohn Ferris Glov-sky & Popeo PC, Boston, MA, Jay P. Lefkowitz, Kirkland & Ellis LLP, New York, NY, Kevin T. Van Wart, Kirkland & Ellis LLP, Chicago, IL, for Defendants.
    Bradley S. Albert, Daniel W. Butrymow-icz, Deborah Feinstein, Mark S. Hegedus, Elizabeth R. Hilder, Joel R. Marcus, Mar-kus H. Meier, Jonathan E. Nuechterlein, US Federal Trade Commission, Washington, DC, for Amicus Curiae.
    Lawrence M. Kraus, Foley & Lardner LLP, Boston, MA, Nicholas S. Napolitan, Morrison & Foerster LLP, San Francisco, CA, Christopher Wirth, Christopher Donnelly, Jonathan Rich, SCI Benner, Bellefonte, PA, James Jared Thule, Toms River, NJ, Terry Lynn Nicholas, USP Florence, Florence, CO, Edward Breivik, Lawrence, NJ, Robert J. Tucker, Baker & Hostetler, Columbus, OH, Michael J. Rossi, Conn Kavanaugh Rosenthal Peisch & Ford LLP, Boston, MA, Timothy C. Hester, Covington & Burling LLP, Washington, DC, for Interested Parties.
    Before LYNCH, STAHL and THOMPSON, Circuit Judges.
   ORDER OF COURT

The various groups of plaintiffs have collectively filed three petitions for panel rehearing and two for rehearing en banc, raising various objections to the panel opinion. This order deals primarily with the petitions for panel rehearing. None of them has merit.

End-Payor Class’s Petition

The End-Payor Class, seeking only panel rehearing, argues that we must remand the case with regard to the permanent injunction issue because the panel rejected the sole ground on which the district court had denied the plaintiffs’ post-trial motion for permanent injunctive relief. This argument is meritless. The End-Payor Class petitioners have waived the issue of the denial of injunctive relief by failing to address it in their briefs on appeal. They admit that they did not brief the issue of whether the district court erred in denying their motion for a permanent injunction. They also do not offer any rationale for that failure. They do argue that their omission should be excused because the Federal Trade Commission (“FTC”) submitted an amicus brief, which argued that the district court had erroneously conflated the distinct concepts of antitrust violation and antitrust injury, and the panel then discussed that issue in the opinion.

From the fact that the panel agreed with the FTC, the End-Payor Class argues in its petition that the class did not waive the issue of injunctive relief by not raising that issue on appeal. But the FTC did not argue that the plaintiffs were entitled to any injunctive relief. In fact, the FTC explicitly stated that it was filing its brief “in support of no party.”

In addition, the cases that the petition cites do not explain why we should exercise our discretion to excuse waiver under these circumstances. We recognize that the Ninth Circuit once found that it would be “manifestly unjust” to deem waived a claim of inherently prejudicial procedural error, where the result would have been not to reverse a criminal defendant’s conviction while reversing his co-defendant’s conviction. See United States v. Olano, 934 F.2d 1425, 1439 (9th Cir. 1991), rev’d, 507 U.S. 725, 113 S.Ct. 1770, 123 L.Ed.2d 508 (1993). We also recognize that the Second Circuit once excused a litigant’s failure to invoke an issue “explicitly by name.” Rivkin v. Century 21 Teran Realty LLC, 494 F.3d 99, 104 n.11 (2d Cir. 2007). Those cases have no bearing on whether we should overlook the End-Payor Class’s failure to brief the injunctive-relief issue in this particular instance. Nor is this case like New England Surfaces v. E.I. du Pont de Nemours & Co., 546 F.3d 1 (1st Cir. 2008), clarified on denial of reh’g, 546 F.3d 11 (1st Cir. 2008), in which we chose not to address in the first instance an issue that the district court had not fully explored and that neither party had developed in them arguments on appeal. Id. at 10-11. In short, these cases confirm the inherent discretion that appellate panels have under Rule 2 of the Federal Rules of Appellate Procedure to suspend the rules for “good cause” or if a failure to review an issue would result in “manifest injustice.” Fed. R. App. P. 2 & advisory committee’s note to 1967 adoption. The cases do not persuade us that we should exercise that discretion under the circumstances of this petition.

Petitioners certainly have not shown good cause for the panel to suspend the rules. Nor have they come close to showing a need for injunctive relief, despite their utter failure to brief the question, in order to prevent a manifest injustice. There is no obvious threatened loss or damage ensuing from the defendants’ actions, and the plaintiffs have not presented a cogent argument for establishing such threatened harm. As we explained in In re New Motor Vehicles Canadian Export Antitrust Litigation, 522 F.3d 6 (1st Cir. 2008), “a plaintiff seeking relief under section 16 [of the Clayton Act] need not show actual antitrust damages but only a ‘threatened loss or damage.’” Id. at 12 (quoting 15 U.S.C. § 26). While the requirements for standing to pursue injunctive relief are thus “less stringent” than those for standing to pursue damages, id. at 13, plaintiffs seeking injunctive relief must still demonstrate that they “face a threat of injury that is both “‘real and immediate,” not “conjectural” or “hypothetical,”’” id. at 14 (quoting O’Shea v. Littleton, 414 U.S. 488, 494, 94 S.Ct. 669, 38 L.Ed.2d 674 (1974)). Critically, “[p]ast exposure to illegal conduct does not in itself show a present ease or controversy regarding injunctive relief ... if unaccompanied by any continuing, present adverse effects.” Id. (second alteration in original) (quoting O’Shea, 414 U.S. at 495-96, 94 S.Ct. 669).

Under the rules governing petitions for panel rehearing, the petitioners must point to something that they “believe[ ] the court has overlooked or misapprehended.” Fed. R. App. P. 40(a)(2). In light of the plaintiffs’ failure to brief the issue of the denial of their request for a permanent injunction, the panel neither overlooked nor misapprehended that issue. See Easley v. Reuss, 532 F.3d 592, 593-94 (7th Cir. 2008) (per curiam) (“It goes without saying that the panel cannot have ‘overlooked or misapprehended’ an issue that was not presented to it. Panel rehearing is not a vehicle for presenting new arguments, and, absent extraordinary circumstances, we shall not entertain arguments raised for the first time in a petition for rehearing.”); 16AA Wright & Miller, Federal Practice & Procedure § 3986.1 (4th ed. 2008) (“Issues that were not presented in the initial briefs and argument will seldom be considered when presented for the first time by petition for rehearing.”).

Direct-Purchaser Class’s and Individual Retailers’ Petitions

The Direct-Purchaser Class (joined by the End-Payor Class) and the Individual Retailers petition for both panel and en banc rehearing. We deny panel rehearing.

These petitions mischaracterize the panel opinion as having required the plaintiffs to have conclusively proved patent invalidity before being able to pursue an at-risk launch theory at trial. The panel decision did no such thing. The opinion observed merely that, under the circumstances of this case, “the district court ... did not err by requiring some evidence of the patents’ invalidity or noninfringement before allowing the plaintiffs to pursue an at-risk launch theory.” No per se rule was established. The panel made this observation, furthermore, while recognizing the distinction between evidence of absolute patent invalidity and evidence of the defendants’ subjective assessment of the risk to their patent monopoly.

The petitions erroneously assert that the panel opinion somehow created a circuit split and that it contravened the Supreme Court’s opinion in FTC v. Actavis, Inc., — U.S.-, 133 S.Ct. 2223, 186 L.Ed.2d 343 (2013). Again, the panel opinion did neither. Actavis, a case in which the FTC was the plaintiff, recognized that reverse payment settlements “can sometimes violate the antitrust laws,” id. at 2227, and noted that “it is normally not necessary to litigate patent validity to answer the antitrust question.... In a word, the size of the unexplained reverse payment can provide a workable surrogate for a patent’s weakness, all without forcing a court to conduct a detailed exploration of the validity of the patent itself,” id. at 2236-37. The panel’s opinion is faithful to this language from Actavis. All the panel’s holding did was recognize that, given the peculiarities of this case, the district court in no way forced a “detailed exploration” of patent validity within an antitrust case.

Likewise, all three circuit cases with which the petitions say the panel opinion is in conflict are not actually in conflict. Those three cases evaluated the merits of antitrust violation allegations at the Rule 12(b)(6) pleading stage. See King Drug Co. of Florence, Inc, v. Smithkline Beecham Corp., 791 F.3d 388, 410 (3d Cir. 2015) (“[A]t the pleading stage[,] plaintiffs have sufficiently alleged that any procompetitive aspects of the ... arrangement were outweighed by the anticompetitive harm from the no-AG agreement.”); In re Cardizem CD Antitrust Litig., 332 F.3d 896, 900 (6th Cir. 2003) (holding, in the context of a per se illegal restraint of trade, that “[t]he defendants’ claim that [the generic manufacturer’s] decision to stay off the market was motivated not by the [reverse payment], but by its fear of damages in the pending patent infringement litigation, merely raise[d] a disputed issue of fact that cannot be resolved on a motion to dismiss”); Andrx Pharms., Inc, v. Biovail Corp. Int’l, 256 F.3d 799, 808 (D.C. Cir. 2001) (holding that the district court erred in dismissing with prejudice a generic manufacturer’s complaint, which alleged that its competitors violated the antitrust laws after receiving a reverse payment from a brand manufacturer).

Contrary to the petitioners’ unsupported assertions, we cannot divorce the stage of the litigation, and the disparate evidentia-ry burdens that the nonmoving party faces at each stage, from the “legal” rule. See, e.g., Fleming v. Lind-Waldock & Co., 922 F.2d 20, 23 (1st Cir. 1990) (noting that because Rule 12(b)(6) and Rule 56 motions “place different burdens on the parties at different times in the course of litigation ... the correct characterization may have a substantive impact on review”).

The Direct-Purchaser Class’s next argument — that the district court’s summary judgment opinion precluded them from putting on evidence of patent invalidity at trial — is also unsupported. The district court stated at summary judgment that, at that stage, there was insufficient evidence to support the plaintiffs’ theory that Teva could have won its patent infringement litigation against AstraZeneca. In re Nexium (Esomeprazole) Antitrust Litig., 42 F.Supp.3d 231, 289-90 (D. Mass. 2014). Without enough evidence, that scenario was “sheer speculation, and the [c]ourt pa[id] it no mind.” Id. at 290. The district court’s statement at summary judgment was not a ruling that precluded the petitioners from entering patent invalidity evidence under any circumstance at trial. We will not grant rehearing so that the petitioners can assign their failure to put on evidence to a mischaracterized summary judgment statement.

Finally, the Direct-Purchaser Class challenges the exclusion of two pieces of evidence. We review the district court’s evidentiary rulings only for abuse of discretion. See Gen. Elec. Co. v. Joiner, 522 U.S. 136, 141-42, 118 S.Ct. 512, 139 L.Ed.2d 508 (1997); Correa v. Cruisers, a Div. of KCS Int’l, Inc., 298 F.3d 13, 25-26 (1st Cir. 2002). We may not substitute our intuition for that of the district court, absent a showing that it abused its discretion. The record before the panel did not, and still does not, reveal such abuse. That is the end of our inquiry.

The three petitions for panel rehearing are denied. Judges Lynch and Thompson also vote to deny both petitions for rehearing en banc.

      . Of course, the Supreme Court subsequently reversed the Ninth Circuit's substantive ruling that the presence of alternate jurors during jury deliberations constituted plain error. See United States v. Olano, 507 U.S. 725, 727, 113 S.Ct. 1770, 123 L.Ed.2d 508 (1993).


text:
    George J. VENDURA, Jr., Plaintiff, Appellant, v. Jonathan BOXER; Northrop Grumman Corporation; Northrop Grumman Space & Mission Systems Corp. Salaried Pension Plan; Ken Bedingfield; Michael Hardesty; Northrop Grumman Space & Mission Systems Corp. Salaried Pension Plan Administrative Committee; Northrop Grumman Aerospace Sector; Tiffany Mcconnell; Northrop Grumman Space & Mission Systems Corp.; Denise Peppard, Defendants, Appellees.
    No. 15-2387
    United States Court of Appeals, First Circuit.
    January 11, 2017

      Stephen D. Rosenberg, with whom Caroline Fiore and The Wagner Law Group were on brief, for appellant.
    Brian D. Netter, with whom Nancy G. Ross and Mayer Brown LLP were on brief, for appellees.
    Before TORRUELLA, LIPEZ, and BARRON, Circuit Judges.
   BARRON, Circuit Judge.

This appeal involves a suit for pension benefits that George Vendura brings against Northrop Grumman Corp. (“Northrop”) and a number of related entities and individuals. The key point of contention concerns the number of “years of benefit service” that should be credited to Vendura in calculating his pension benefits under his pension plan. We affirm the judgment below, which grants summary judgment to defendants.

I.

Vendura was hired by TRW Inc. (“TRW”) in 1993 and became a participant in the TRW Salaried Pension Plan (“TRW Plan”). After Vendura worked for TRW for seven years, he went on medical leave in June of 2000, in consequence of work-related injuries that he had suffered much earlier. During this leave, Vendura received Social Security and long-term disability benefits. Vendura also applied for and, he contends, received workers’ compensation benefits during this time.

In 2002, Northrop acquired TRW and renamed the company Northrup Grumman Space and Mission Systems Corp. (“NGSMSC”). Soon thereafter, NGSMSC attempted to terminate Vendura’s employment. Vendura, however, challenged the attempt to lay him off, and, in 2003, Ven-dura and NGSMSC signed a settlement agreement that kept Vendura on board at NGSMSC.

The settlement agreement provided that Vendura would remain an “employee” of NGSMSC and “receive all benefits and rights to which he is entitled pursuant to all benefit plans for which he is eligible.” The settlement agreement further provided that Vendura would cease to be a NGSMSC employee only when one of several specific conditions came to pass. One of those conditions was that “Vendura’s LTD [long-term disability] status ends.”

Because this case concerns a dispute over pension benefits rather than employment, however, the settlement agreement matters only insofar as it relates to Vendu-ra’s pension plan. And, the relevant pension plan is the NGSMSC Salaried Pension Plan (“NGSMSC Plan”), which, for former TRW employees like Vendura, incorporated the eligibility criteria set forth in the TRW Plan.

The TRW Plan provides that pension benefits for participants, like Vendura, are to be calculated on the basis of the participant’s “Years of Benefit Service.” Section 2.2 of the TRW Plan, in subsection (a), makes clear that such years include ones in which a participant receives compensation “for the performance of services.” But, in the subsequent subsections of Section 2.2, the TRW Plan allows participants to accrue years of benefit service even for periods of time in which the participant is absent from work, so long as that absence is for a reason that is specified in one of those follow-on subsections in Section 2.2.

Only two of the follow-on subsections are relevant here: subsections (b) and (c). Until 1999, these two subsections read as follows:

(b) absence without pay from work because of injury or occupational disease received in the course of his employment with the Controlled Group and for which he receives Workers’ Compensation disability benefits; provided, however, that service credit shall be limited to a maximum of twelve months unless the Participant has met the eligibility requirements for receiving long term disability benefits (whether or not he actually receives such benefits);
(c) absence without pay from work due to a disability and for which he is entitled to receive long-term disability benefits under any plan maintained by a member of the Controlled Group[.]

Effective January 1, 1999, however, the TRW Plan was amended by, among other things, changing subsection (c). Post-amendment, subsection (c) reads as follows:

(c) absence without pay from work due to a disability and for which he is entitled to receive long-term disability benefits under any plan maintained by a member of the Controlled Group, provided, however, with respect to an absence from work beginning on or after January 1, 2000 as a result of disability, (i) no more than sixty months of Benefit Service will be credited under this Section 2.2(c) for a Participant with five or more years of Vesting Service and (ii) no more than twelve months of Benefit Service will be credited under this Section 2.2(c) for a Participant with less than five years of Vesting Service at the time such absence from work commences.

(emphasis added to highlight the newly added language).

The proper interpretation of these subsections became a subject of controversy after Vendura’s long-term disability insurer informed Vendura — in October of 2012 — that his eligibility for long-term disability benefits would expire in February of 2013. Vendura did not dispute that his long-term disability benefits would expire at that time, or that, per the settlement agreement, his employment with NGSMSC would thus come to an end. For that reason, Vendura inquired about his pension benefits and received a “retirement kit” from the Northrop Grumman Benefits Center.

In April of 2013, Vendura filed a claim for pension benefits with the “Administrative Committee” for the NGSMSC Plan. Under the documents comprising the NGSMSC Plan, the Administrative Committee “is the ‘plan administrator’ under” the Employee Retirement Income Security Act of 1974 (“ERISA”), 29 U.S.C. § 1001 et seq., and possesses the “full and sole discretionary authority to interpret all plan documents and to make all interpretive and factual determinations as to whether any individual is entitled to receive any benefit and the amount of such benefit under the terms of the Plan.”

In making his pension benefits claim to the Administrative Committee, Vendura argued that he is entitled to twenty years of benefit service under the settlement agreement. Vendura also argued that, even independent of the settlement agreement, he is entitled to that same number of years of benefit service under the plain terms of subsection (b) of Section 2.2. Finally, Ven-dura argued that he is entitled to elect a lump-sum distribution of his pension.

The Administrative Committee rejected Vendura’s arguments in letters sent to him in May and June of 2013. The letters informed Vendura that he was eligible for a pension reflecting only twelve years of benefit service and not the twenty years of benefit service that Vendura contended that he had accrued. The letters also rejected Vendura’s contention that Vendura was entitled to elect a lump-sum distribution of his pension.

The Administrative Committee’s calculation of Vendura’s years of benefit service reflected the following determinations. The Administrative Committee concluded that the settlement agreement does not provide for accrual of benefit service beyond the right of accrual under the NGSMSC Plan itself. The Administrative Committee further found that, under the NGSMSC Plan, by virtue of Section 2.2 of the TRW Plan that it incorporates, Vendura was entitled only to five years of benefit service for the thirteen years in which he was both absent from work due to his disability and for which he was eligible for long-term disability benefits. The Administrative Committee based that determination on the amended version of subsection (c) of Section 2.2, which the Administrative Committee concluded barred a participant from accruing more than sixty months of benefit service based on the participant’s eligibility for long-term disability benefits. The Administrative Committee therefore credited Vendura with only twelve years of benefit service, based on the five years of benefit service that he accrued during his absence from work and the seven years of benefit service that he accrued under subsection (a) of Section 2.2 during his employment with TRW and before his disability-based absence began.

Vendura appealed the decision to the Administrative Committee, which issued its final decision denying Vendura’s appeal with respect to each of these issues on December 19, 2013. So, in 2014, Vendura filed an eight-count complaint in the United States District Court for the District of Massachusetts against the defendants.

The main issue on appeal arises under ERISA, which permits a pension plan participant to bring a civil action “to recover benefits due to him under the terms of his plan, to enforce his rights under the terms of the plan, or to clarify his rights to future benefits under the terms of the plan.” 29 U.S.C. § 1132(a)(1)(B). Vendura invokes this provision of ERISA in his complaint in requesting that the District Court compel defendants to fulfill their obligations under the NGSMSC Plan. Ven-dura also brings a separate state law claim, in which he argues that defendants are in breach of their obligations under the settlement agreement, given what he contends is the agreement’s relationship to his rights under his pension plan.

After the defendants moved for summary judgment, the District Court granted the motion. The District Court ruled that the settlement agreement alone did not provide Vendura any right to accrue years of benefit service beyond those to which he would otherwise have been entitled. The District Court also ruled that the Administrative Committee’s interpretation of the NGSMSC Plan, under which the sixty-month cap on the accrual of years of benefit service that subsection (c) sets forth applies to Vendura, was not arbitrary and capricious. And, on that basis, the District Court ruled that Vendura was not entitled to pension benefits calculated based on his having accrued twenty years of benefit service. Finally, the District Court ruled that, in light of its finding with respect to the number of years of benefit service to which Vendura was entitled, Vendura also was not entitled to elect a lump-sum distribution of his pension.

This timely appeal of the summary judgment order followed.

II.

We start with Vendura’s claim based on the settlement agreement. He argues that because the settlement agreement makes clear that Vendura remained an employee of NGSMSC until his eligibility for long-term disability benefits expired, it necessarily also entitled him to continue to accrue years of benefit service for pension purposes up until that point in time. And, for that reason, Vendura contends he is entitled to the full twenty years of benefit service under the settlement agreement.

The District Court, like the Administrative Committee, rejected this argument. We review the District Court’s interpretation of the settlement agreement de novo. See OfficeMax, Inc, v. Levesque, 658 F.3d 94, 97 (1st Cir. 2011) (“Contract interpretation ... is a ‘question of law’ that is reviewed de novo.”); see also Hannington v. Sun Life and Health Ins. Co., 711 F.3d 226, 230 (1st Cir. 2013) (“extra-plan material” is reviewed de novo). And, on de novo review, we conclude that Vendura’s interpretation of the settlement agreement is without merit.

Vendura is right that, under the settlement agreement, he remained an employee of NGSMSC until his eligibility for long-term disability benefits expired. And he is right that his eligibility for those benefits did not expire until February of 2013. But the settlement agreement merely provides that Vendura is entitled to “all benefits and rights to which he is entitled pursuant to all benefit plans for which he is eligible.” Thus, by its terms, the settlement agreement just provides that Vendura retains the status of an employee and is entitled to receive whatever pension benefits under the NGSMSC Plan that he would otherwise be entitled to by virtue of being an employee. For this reason, the settlement agreement does not help Vendura. It merely directs us to examine those provisions of the NGSMSC Plan, including those provisions of the TRW Plan that the NGSMSC Plan incorporates, which bear on Vendura’s right to accrue years of benefit service. And so we now turn to those provisions.

III.

As we have noted, the NGSMSC Plan vests the Administrative Committee with the authority to interpret and apply the relevant provisions. As a result, and in accord with the requirements of ERISA, we review the Administrative Committee’s interpretations under the deferential arbitrary and capricious standard, which is “functionally equivalent to the abuse of discretion standard.” Wright v. R.R. Donnelley & Sons Co. Grp. Benefits Plan, 402 F.3d 67, 74 n.3 (1st Cir. 2005). And, under that standard, we must defer to plan administrators when they “reasonably” construe ambiguous plan terms. See, e.g., Kolling v. Am. Power Conversion Corp., 347 F.3d 11,14 (1st Cir. 2003).

A.

In assessing the Administrative Committee’s interpretation, it helps first to understand Vendura’s proposed interpretation. Under subsection (a) of Section 2.2 of the TRW Plan, Vendura unquestionably accrued seven years of benefit service because he was compensated for his performance of services to TRW for seven years. But, he readily concedes, due to the disability that he suffered from on-the-job injuries and the extended absence from work that resulted, he was not in compliance with that condition thereafter.

Vendura contends, however, that he was in compliance with the condition for accruing years of benefit service set forth in the very next subsection of Section 2.2 — subsection (b) — because he contends that he received workers’ compensation benefits due to his disability after he was no longer able to work. He thus argues that he falls within the first half of subsection (b), which provides for the accrual of benefit service for those participants who are “ab-sen[t] without pay from work because of injury or occupational disease received in the course of [the participant’s] employment with the Controlled Group and for which [the participant] receives Workers’ Compensation disability benefits.”

But participants who meet the condition specified in the first half of subsection (b) are, the rest of subsection (b) makes clear, entitled to accrue only one year of benefit service on that basis. And, if that one year is added to the seven years for which Vendura provided active service to TRW and was compensated, for which subsection (a) entitled him to accrue seven years of benefit service, he would be entitled to only a total of eight years of benefit service.

Vendura nevertheless continues undeterred. He explains that the second half of subsection (b) shows that he is in fact entitled to the extra twelve years of benefit service that he also contends that he accrued. Vendura points out that the second half of subsection (b) provides that “service credit shall be limited to a maximum of twelve months unless the Participant has met the eligibility requirements for receiving long term disability benefits (whether or not he actually receives such benefits)” (emphasis added). He also points out that this highlighted language places no temporal limit on a participant’s right to accrue years of benefit service beyond the temporal limit on the participant’s eligibility for the long-term disability benefits themselves. Vendura therefore argues that the trailing language in the second half of subsection (b) sets forth a separate entitlement to accrue years of benefit service based on eligibility for long-term disability that is distinct from the entitlement to years of benefit service based on receipt of workers’ compensation that is set forth in the first half of subsection (b). And because his eligibility for long-term disability benefits did not expire until February of 2013, Vendura contends that subsection (b) entitles him to accrue years of benefit service for the whole of that time.

B.

The Administrative Committee counters Vendura by pointing out that subsection (b) is not the only subsection that addresses a participant’s right to accrue years of benefit service on the basis of eligibility for long-term disability benefits. In fact, the very next provision in Section 2.2— subsection (e) — does so as well. And the Administrative Committee points to that provision — and the sixty-month cap on the accrual of years of benefit service that it contains — in offering its competing interpretation of the trailing language in the second half of subsection (b) and how that language relates to subsection (c).

Specifically, in its June 2013 letter to Vendura, the Administrative Committee described its view of the relationship between subsections (b) and (c), and how they apply to a participant like Vendura, as follows:

[I]f a participant receives workers’ compensation and long-term disability benefits concurrently, his benefit service is based on the period during which he received long-term disability benefits (subject to the 60-month limit [in subsection (c) ] described above). In your case, you received long-term disability benefits once your leave of absence began in 2000. As a result, any workers’ compensation benefits that you received during the same period are disregarded under the Plan.

Accordingly, that letter explained, Vendu-ra was subject to the sixty-month cap on the accrual of years of benefit service in the amended subsection (c). And, in a later letter, the Administrative Committee elaborated further and noted that, historically, “[w]hen a participant received workers’ compensation and long-term disability benefits concurrently his benefit service was always based on the period during which he received long-term disability benefits.” In that letter, the Administrative Committee rejected Vendura’s contrary contention on the ground that subsection (b) did not create a “loophole” that would override the sixty-month cap imposed by subsection (c).

Thus, the Administrative Committee rejects Vendura’s view that the second half of subsection (b) confers a standalone right to accrue years of benefit service for as long as a participant is eligible for long-term disability benefits to a participant who satisfies the condition set forth in the first half of subsection (b). The Administrative Committee instead reads the second half of subsection (b) merely to set forth a proviso that preserves the right of a participant like Vendura — notwithstanding that he may satisfy the condition in the first half of subsection (b) — to accrue years of benefit service in accord with subsection (c). The Administrative Committee therefore concluded that the sixty-month cap applies to Vendura, and that he is entitled to five years of benefit service beyond the seven years that he accrued under subsection (a), with the result that he accrued a total of only 12 years of benefit service.

C.

The upshot of these dueling readings is that the parties agree that subsection (b)’s twelve-month cap does not apply to Vendura, but disagree as to whether subsection (c)’s sixty-month cap does. And so the decisive question on appeal: is the Administrative Committee’s competing interpretation of subsections (b) and (c), under which the sixty-month cap does apply to Vendura, a reasonable one?

“When interpreting the provisions of an ERISA benefit plan, we use federal substantive law including the ‘commonsense canons of contract interpretation.’ ” Rodriguez-Abreu v. Chase Manhattan Bank, N.A., 986 F.2d 580, 585 (1st Cir. 1993) (quoting Bellino v. Schlumberger Techs., Inc., 944 F.2d 26, 29 (1st Cir. 1991)). Here, because the NGSMSC Plan documents provide that its provisions are to be construed in accordance with California law, we also look to California’s principles of contract interpretation to guide our analysis. See Tetreault v. Reliance Standard Life Ins. Co., 769 F.3d 49, 54 (1st Cir. 2014).

Applying this interpretive approach, we must not view in isolation the trailing words in subsection (b) on which Vendu-ra’s argument hinges. And when we consider the text and structure of Section 2.2 as a whole, we find strong signals that favor the Administrative Committee’s reading. See Bowers Hydraulic Dredging Co. v. United States, 211 U.S. 176,188, 29 S.Ct. 77, 53 L.Ed. 136 (1908) (“To separate the words [of a phrase] from all the other provisions of the contract, in order to give them ... meaning, repugnant to their significance in the contract, would be to destroy, and not to sustain and enforce, the contract requirements.”); see also Hunt v. United Bank & Trust Co., 210 Cal. 108, 291 P. 184, 187 (1930) (“[Contracts must be construed as a whole ... and the intention of the parties is to be collected from the entire instrument and not detached portions thereof, it being necessary to consider all of the parts to determine the meaning of any particular part as well as of the whole.”).

First, subsection (b) addresses the accrual of years of benefit service based on eligibility for long-term disability benefits only in the course of setting forth an exception to a limitation on the wholly distinct entitlement that the subsection confers — namely, the right of a participant to accrue twelve months of benefit service based on the participant’s absence from work due to a job-related disability for which that participant received workers’ compensation benefits. But an exception to a limitation on that entitlement is hardly an obvious place to locate the wholly distinct entitlement to accrue years of benefit service based on eligibility for long-term disability benefits. Subsection (c), by contrast, is quite direct in providing the entitlement to accrue years of benefit service on that basis. It thus is quite a natural place for such a stand-alone entitlement to appear. - '

Second, no other provision in Section 2.2 sets forth an entitlement to accrue years of benefit service in the backhanded manner posited by Vendura’s reading of the last half of subsection (b). Rather, just like the first half of subsection (b) and subsection (c), every other provision in Section 2.2 sets out the criteria for the entitlement to accrue years of benefit service in the first sentence of the provision. See, e.g., Penncro Assocs., Inc. v. Sprint Spectrum, L.P., 499 F.3d 1151, 1155-56 (10th Cir. 2007) (“When a contract uses different language in proximate and similar provisions, we commonly understand the provisions to illuminate one another and assume that the parties’ use of different language was intended to convey different meanings.”); Taracorp, Inc, v. NL Indus., Inc., 73 F.3d 738, 744 (7th Cir. 1996) (“[W]hen parties to the same contract use such different language to address parallel issues ... it is reasonable to infer that they intend this language to mean different things.”).

Third, unlike the trailing language of the second half of subsection (b), subsection (c) sets forth the kind of precise and admin-istrable definition of an entitlement that one would expect a provision conferring an entitlement to provide. By contrast, the trailing language in the second half of subsection (b) does not specify the long-term disability benefits to which it refers. That lack of specificity is curious if the second half of subsection (b) is intended to set forth an entitlement to accrue years of benefit service on the basis of such benefits. By contrast, the lack of specificity is not surprising if the second half of subsection (b) merely clarifies that those participants entitled to accrue twelve months of benefit service based on their receipt of workman’s compensation for an on-the-job injury may also be able to claim sixty months of benefit service pursuant to the very next subsection. Thus, the fact that subsection (c) contains a specific reference to those “long-term disability benefits under any plan maintained by a member of the Controlled Group,” and that the trailing language in the second half of subsection (b) does not, supports the Administrative Committee’s conclusion.

Fourth, subsection (c), by its terms, does not purport to set forth an entitlement to accrue years of benefit service based on eligibility for long-term disability benefits that would not apply to Vendura. Instead, the terms of that subsection describe participants who may accrue years of benefit service based on their eligibility for long-term disability benefits without regard to whether the disability arose from a work-related injury and without regard to whether the participant received workers’ compensation in consequence of that injury.

Finally, in addition to these textual and structural reasons for finding the Administrative Committee’s reading to be a reasonable one, there is the pre-amendment history of Section 2.2. Prior to the amendment to subsection (c), there was no temporal cap under subsection (c). Thus, the following oddity would have arisen if the trailing language of the second half of subsection (b) set forth a stand-alone entitlement. Rather than merely having helpfully clarified the availability of the entitlement specifically provided for in subsection (c), that portion of subsection (b) also would have superfluously set forth that very same entitlement. The longstanding principle against reading plan terms to be superfluous, therefore, points against investing the last half of subsection (b) with the greater substance that Vendura contends must be attributed to it. Cf. Bouchard v. Crystal Coin Shop, Inc., 843 F.2d 10, 13-14 (1st Cir. 1988) (“Where the trustees of a plan ... by their interpretation render some provisions of the plan superfluous, their actions may well be found to be arbitrary and capricious.” (quoting Miles v. N.Y. State Teamsters Conference Pension & Ret. Fund Emp. Pension Benefit Plan, 698 F.2d 593, 599 (2d Cir. 1983))).

To be sure, there is now a temporal cap under subsection (c). But, in light of the text and structure of the two subsections that we have just reviewed, the Administrative Committee reasonably concluded that the imposition of the sixty-month cap in subsection (c) did not provide — for the first time — that those participants who are eligible for long-term disability benefits and who had previously been eligible for workers’ compensation would be entitled to accrue more years of benefit service than any other participants who were entitled to accrue years of benefits services based on their eligibility for long-term disability benefits. See, e.g., Diaz v. Seafarers Int’l Union, 13 F.3d 454, 457-58 (1st Cir. 1994) (considering the argument that a later version of a plan document shed light on whether an earlier version confei’red the power to interpret pension eligibility rules); Kammerer v. Motion Picture Indus. Pension Plan, 487 Fed.Appx. 597, 599 (2d Cir. 2012) (finding that when the current version of a plan did not define a relevant term, the plan administrator’s use of a particular rule was supported by that rule’s consistency with at least three earlier versions of the plan). And so while the relevant provisions of Section 2.2 certainly could have been clearer — say, by expressly cross-referencing subsection (c) in subsection (b) — we conclude that the Administrative Committee reasonably construed the provisions to subject Vendura to the sixty-month cap in subsection (c).

IV.

The final issue concerns whether Vendura is entitled to elect a lump-sum payment of his pension benefits. Under Section 5.5 of the TRW Plan, which the NGSMSC Plan incorporates for a participant like Vendura, a participant may elect a lump-sum payment so long as “he files a written application therefor while an Employee still accruing Service during the three calendar month period immediately preceding his Retirement Date.” Vendura requested a lump-sum distribution in 2013. As a result, the question of whether Ven-dura is entitled to a lump-sum distribution is fully answered by considering whether he was still accruing benefit service in 2013. Because we hold that the Administrative Committee reasonably determined that Vendura was not accruing years of benefit service under either the settlement agreement or the Plan in 2013, in consequence of the sixty-month cap in subsection (c) that the Administrative Committee reasonably construed to apply to him, the Administrative Committee also reasonably determined that Vendura was not entitled to elect a lump-sum distribution at that time.

V.

For these reasons, the judgment of the District Court is affirmed.

      . In particular, Vendura brought suit against ten corporate and individual defendants: Northrop Grumman Corp., Northrop Grumman Aerospace Sector, Northrop Grumman Space & Mission Systems Corp., Northrop Grumman Space & Mission Systems Corp. Salaried Pension Plan, Northrop Grumman Space & Mission Systems Corp. Salaried Pension Plan Administrative Committee, Jonathan Boxer, Ken Bedingfield, Michael Hardesty, Tiffany Mcconnell, and Denise Peppard.

      . More precisely, Vendura received two retirement kits: one that would have allowed him to elect a lump-sum distribution of his pension, and a second that did not grant him that option.

      . As defendants point out, the District Court made no finding on whether Vendura in fact received workers’ compensation benefits.

      . The one subsection that contains multiple independent entitlements, Section 2.2(f), sets them apart with Roman numerals. The lack of Roman numerals before the second half of subsection (b) thus provides further evidence that the second half of that subsection was not intended to confer an independent entitlement.