          United States Court of Appeals
                      For the First Circuit

No. 11-1559

                      COORS BREWING COMPANY,

                       Plaintiff, Appellant,

                                v.

      JUAN CARLOS MÉNDEZ-TORRES, Secretary of the Treasury
         Department of the Commonwealth of Puerto Rico,

                       Defendant, Appellee.



          APPEAL FROM THE UNITED STATES DISTRICT COURT
                 FOR THE DISTRICT OF PUERTO RICO

         [Hon. Daniel R. Domínguez, U.S. District Judge]


                              Before

                        Lynch, Chief Judge,
               Torruella and Lipez, Circuit Judges.



           Helgi C. Walker, with whom William S. Consovoy, Claire J.
Evans, Brett A. Shumate, Wiley Rein LLP, Pedro Jiménez, and Adsuar
Muñiz Goyco Seda & Pérez-Ochoa, P.S.C. were on brief, for
appellant.
           Susana I. Peñagarícano-Brown, Assistant Solicitor
General, with whom Irene S. Soroeta-Kodesh, Solicitor General,
Leticia Casalduc-Rabell, Deputy Solicitor General, and Zaira Z.
Girón-Anadón, Deputy Solicitor General, were on brief, for
appellee.


                          April 27, 2012
            LYNCH, Chief Judge.         The question presented in this case

is whether the Supreme Court's decision in Levin v. Commerce

Energy, Inc., 130 S. Ct. 2323 (2010), requires the federal courts

to refrain from exercising jurisdiction over this case, a dormant

Commerce Clause attack on Puerto Rico's differential taxation of

categories of brewers.      We answer that question affirmatively and

affirm the district court's dismissal on comity grounds.

            Puerto Rico has classified Coors Brewing Co. ("Coors") as

a "large brewer" under its beer tax schedule and accordingly taxes

Coors at a higher rate than it taxes "small brewers," including

local Puerto Rico brewer Cervecería India.            In 2006, Coors brought

suit in federal district court against Juan Carlos Méndez–Torres,

Puerto     Rico's    Secretary     of     the    Treasury   Department      (the

"Secretary"), challenging this differential treatment under the

dormant Commerce Clause.         The district court originally dismissed

the case on comity grounds, but in 2009, this court reversed that

decision, interpreting the Supreme Court's decision in Hibbs v.

Winn, 542 U.S. 88 (2004), to conclude that neither comity nor any

federal statute barred Coors from seeking relief from the state

taxation    scheme    in   federal      court.      Coors   Brewing   Co.     v.

Méndez-Torres (Coors Brewing Co.), 562 F.3d 3 (1st Cir. 2009).

            On remand to the district court, the parties moved toward

a final resolution of the case, stipulating to resolve Coors's

motion for summary judgment before any other matter pending in the


                                        -2-
case.    As    it   turned   out,    the   Supreme   Court   interpreted

Hibbs differently than we predicted.       On June 1, 2010, the Supreme

Court decided Levin, which expressly abrogated this court's 2009

Coors Brewing Co. decision.

          On July 14, 2010, the Secretary moved the district court

to dismiss the case based on Levin. The district court then issued

an opinion in which it reached Coors's motion for summary judgment,

which it denied, before granting the Secretary's motion to dismiss

on grounds of comity.

          Coors has appealed both decisions, arguing primarily that

the Secretary consented to resolving this case in federal court,

and that, even if he had not, the Puerto Rico courts do not provide

the "plain, adequate, and complete" forum required under comity,

and that equity requires reversal here for other reasons.

          Because we find that the Secretary has not consented to

litigate this case in federal court, and because we have long found

the Puerto Rico courts to provide an "adequate state forum" for the

adjudication of federal constitutional claims, and no other grounds

justify retention of jurisdiction, we affirm the district court's

grant of the Secretary's motion to dismiss.          We also vacate the

district court's merits ruling denying Coors summary judgment; it

will have no effect on any later proceedings in the courts of

Puerto Rico.




                                    -3-
          We do not address the merits of Coors's challenge to the

beer tax regime and make no ruling as to the validity of that

regime under the dormant Commerce Clause.    Should Coors choose to

pursue its case in the Puerto Rico courts, it may press its federal

constitutional claims there and, should it receive an unfavorable

disposition, it may seek further review of any substantial federal

claims in the U.S. Supreme Court.    Pleasures of San Patricio, Inc.

v. Méndez-Torres, 596 F.3d 1, 7 (1st Cir. 2010).

                                I.

          Puerto Rico has a long history of differentiating in its

beer excise tax between "small" and "large" brewers, and the

"large" brewers have a long history of bringing challenges to this

differentiation.   In 1969, Puerto Rico first imposed a uniform

excise tax of $0.75 per gallon on all beer sold within the

Commonwealth.   P.R. Law 143 of June 30, 1969.        In 1978, the

legislature began differentiating within this tax between "large

brewers," those producing more than 31 million gallons annually,

and "small brewers," those producing less than that amount.    That

same year, the tax on large brewers was raised to $1.60 per gallon,

while the tax on small brewers was set at $1.05 per gallon.    P.R.

Law 37 of July 13, 1978. This $0.55 differential between large and

small brewers held steady until 2002, when the legislature amended

the law to increase the difference to $1.90 per gallon.   The large

brewer tax was raised to $4.05 per gallon; the small brewer tax to


                               -4-
$2.15 per gallon, and four intermediate gradations were added in

between.1   P.R. Laws. Ann. tit. 13, § 9521 (2002).     In 2004, the

legislature again amended the regime, this time, to permit small

brewers to pay the tax rates for each of the respective lower

gradations, so long as their total per annum production remained

below 31 million gallons.    P.R. Laws. Ann. tit. 13, § 9574 (2004).

A.   Early Litigation

            Since the 1978 amendments, Puerto Rico's beer tax has

undergone almost continuous litigation in state and federal court.

In 1978, the United States Brewers Association ("USBA") brought

initial challenges to the tax regime in both the federal district

and Puerto Rico courts.     Under the Butler Act, 48 U.S.C. § 872, a

close analogue to the Tax Injunction Act ("TIA"), 28 U.S.C.

§ 1341,2 the federal district court directed USBA to seek a


     1
            As of 2002, the gradations within the excise tax were as
follows:

     Gallons Produced            Tax Rate (/gal.)
     0 to 9 million              $2.15
     9 to 10 million             $2.36
     10 to 11 million            $2.57
     11 to 12 million            $2.78
     12 to 31 million            $2.99
     Over 31 million             $4.05

P.R. Laws Ann. tit. 13, § 9521 (2002).
     2
          Under the Butler Act, "No suit for the purpose of
restraining the assessment or collection of any tax imposed by the
laws of Puerto Rico shall be maintained in the United States
District Court for the District of Puerto Rico." 48 U.S.C. § 872.
The TIA, which is not applicable to Puerto Rico, reads: "The
district courts shall not enjoin, suspend or restrain the
assessment, levy or collection of any tax under State law where a

                                  -5-
decision in state court on the merits of the tax challenge, but

retained jurisdiction over the suit in the event the state courts

failed to provide a "plain, speedy and efficient remedy."                     U.S.

Brewers Ass'n v. Cesar Perez, 455 F. Supp. 1159, 1164 (D.P.R. 1978)

(internal quotation marks omitted).

           USBA accordingly brought its case in state court, where

it lost on the merits.         The Puerto Rico Superior Court rejected

USBA's various constitutional and other challenges to the tax and

dismissed the complaint, U.S. Brewers Ass'n v. Perez, Civ. No.

PE-78-1137 (Dec. 12, 1978), and the Puerto Rico Supreme Court

upheld the dismissal, U.S. Brewers Ass'n v. Sec'y of the Treasury

(U.S. Brewers P.R.), 109 P.R. Dec. 456, 9 P.R. Offic. Trans. 605

(1980).

           Meanwhile, USBA appealed the federal district court's

decision to this court, arguing that the Butler Act did not bar

federal jurisdiction over the action since USBA was not seeking to

reduce Puerto Rico's tax revenue.               This court rejected that

argument, holding that the action was barred by considerations

underlying      the   Butler   Act,    namely   "equity     practice,     .    .   .

principles of federalism . . . and the imperative need of a State

to administer its own fiscal operations," U.S. Brewers Ass'n v.

Perez   (U.S.    Brewers),     592    F.2d   1212,   1214   (1st   Cir.       1979)



plain, speedy and efficient remedy may be had in the courts of such
State." 28 U.S.C. § 1341.

                                       -6-
(omissions in original) (quoting Tully v. Griffin, 429 U.S. 68, 73

(1976)) (internal quotation marks omitted), and remanded to the

district court for dismissal, id. at 1215.

            Later, on the very same day the 2002 Amendments went into

effect increasing the tax differential between small and large

brewers to $1.90 per gallon, a new suit was filed attacking the new

law.    The Puerto Rico Association of Beer Importers ("PRABI"), of

which Coors was then a member, challenged the new law in Puerto

Rico Superior Court.     PRABI argued that the special exemption for

small brewers -- which favored local Puerto Rico brewer, Cervecería

India -- violated the dormant Commerce Clause.       The Superior Court

dismissed the case, and the Puerto Rico Supreme Court affirmed.

Puerto Rican Ass'n of Beer Imps. v. Puerto Rico (Beer Imps.), 171

P.R. Dec. 140 (2007), cert. denied, 552 U.S. 1257 (2008).

            About two weeks after PRABI filed suit in Puerto Rico

Superior Court, and before that court had ruled on the merits,

Coors withdrew its claims without prejudice.       Three days later, it

initiated its own suit in the U.S. District Court for the District

of     Columbia,   requesting   a   temporary   restraining   order   and

preliminary injunction against the enforcement of the new tax. The

district court dismissed the suit with prejudice on jurisdictional

grounds under the Butler Act.          Coors Brewing Co. v. Calderon

(Calderon), 225 F. Supp. 2d 22, 27 (D.D.C. 2002); see also id. at

26 ("Coors' argument that the Butler Act and [TIA] foreclose


                                    -7-
subject matter jurisdiction only in those instances where a party

seeks to enjoin the collection of taxes, thereby decreasing a

state's tax revenues, is similarly unconvincing as a thinly veiled

attempt to circumvent the clear will of Congress.").

            On   appeal,    Coors   settled   the   case,    agreeing     to   a

stipulation that the district court's judgment "determines with

finality the Court's lack of jurisdiction but is without prejudice

to the substantive claims that the Court lacked jurisdiction to

address."

B.   The Present Litigation over the 2004 Amendments

            In 2004, the Puerto Rico legislature again amended the

tax regime, this time to permit small brewers to take advantage of

all five lower tax gradations.        P.R. Laws. Ann. tit. 13, § 9574.

In response to these amendments, on November 17, 2006, Coors filed

suit in the U.S. District Court for the District of Puerto Rico.

It is in this suit that Coors's present appeal is taken.            The suit

attacked the tax differential, sought a declaration that the

"Special Exemption" for small brewers violated section three of the

Federal Relations Act, 48 U.S.C. § 741a, as well as the dormant

Commerce    Clause,   and     requested    additional       declaratory    and

injunctive relief under 42 U.S.C. § 1983.            See Complaint, Coors

Brewing Co. v. Méndez-Torres, No. 3:06-cv-02150 (Nov. 17, 2006).

The Secretary initially filed a motion to dismiss with prejudice on

grounds that the district court lacked subject matter jurisdiction


                                     -8-
under the Butler Act and TIA, on grounds of comity, and on grounds

of collateral estoppel based on the earlier decisions in U.S.

Brewers P.R., Beer Imps., and Calderon.                  The district court

dismissed    the    case    on   jurisdictional   and    collateral   estoppel

grounds.

            Coors made several arguments in its first appeal in this

case.      First,   it     challenged   the   district   court's   collateral

estoppel ruling, arguing that its suit challenged the new, 2004

Amendments to the tax, and thus presented circumstances unaddressed

in Calderon, Beer Imps. and U.S. Brewers P.R.            It also argued that

there had been an intervening change in the law since the district

court dismissed its 2002 suit.          In 2004, the Supreme Court decided

Hibbs v. Winn, which held that the TIA did not bar a challenge by

Arizona taxpayers to a tax credit for donations to school tuition

organizations which were then permitted under state law to award

tuition grants for religious schools. 542 U.S. at 92. The Supreme

Court reasoned that Congress had only intended the TIA to bar

federal jurisdiction in cases where state taxpayers sought to avoid

paying state taxes or sought to decrease state tax revenues

overall.    Id. at 107.      Extending this reasoning to the Butler Act,

Coors argued that because it did not seek to decrease its own tax

burden, but sought a higher tax rate on small brewers, neither

comity not the Butler Act barred its requested relief.




                                        -9-
             As said, this court ruled in favor of Coors in 2009,

holding that the suit was not precluded and that neither the Butler

Act nor principles of comity barred the exercise of federal

jurisdiction.     Coors Brewing Co., 562 F.3d at 3.              We briefly

summarize the reasoning set forth in that opinion.           First, we held

that because Calderon merely found the federal courts to be without

jurisdiction to address Coors's claims, and Hibbs altered the

applicable    legal   standard,    Calderon    did   not   foreclose   a   new

jurisdictional inquiry. 562 F.3d at 12. Under the logic of Hibbs,

we held that the Butler Act did not bar federal jurisdiction over

Coors's suit. 562 F.3d at 15-16. We also rejected the Secretary's

comity   argument,    finding   that   Hibbs   had   narrowed   the    comity

doctrine.3    562 F.3d at 18.     Thus overruling our previous decision

in U.S. Brewers, we reversed the district court's grant of the

Secretary's motion to dismiss and remanded for further consistent

proceedings.    562 F.3d at 22-23.



     3
          In a footnote, the Hibbs majority had dispensed with the
comity argument in that case by noting that traditionally, the
Court has relied on comity "to preclude original federal-court
jurisdiction only when plaintiffs have sought district-court aid in
order to arrest or countermand state tax collection." Hibbs v.
Winn, 542 U.S. 88, 107 n.9 (2004). This court joined several other
circuit courts of appeal in reading this footnote broadly, see
Commerce Energy, Inc. v. Levin, 554 F.3d 1094 (6th Cir. 2009),
rev'd, Levin v. Commerce Energy, Inc., 130 S. Ct. 2323 (2010); Levy
v. Pappas, 510 F.3d 755 (7th Cir. 2007); Wilbur v. Locke, 423 F.3d
1101 (9th Cir. 2005); but see DIRECTV, Inc. v. Tolson, 513 F.3d 119
(4th Cir. 2008) (construing Hibbs more narrowly), and as lifting
the bar on federal court review of state tax challenges so long as
the requested relief does not "arrest state revenue generation,"
Coors Brewing Co. v. Méndez-Torres, 562 F.3d 3, 18 (1st Cir. 2009).

                                    -10-
           At this point, the Secretary elected not to seek further

review of this court's adverse decision in the U.S. Supreme Court.

He requested two extensions of time to consider whether to seek

certiorari, noting that the case presented issues of "exceptional

importance"   and   that   he   must   "carefully    consider   the   issues

involved and fittingly set forth the public policy of the new

administration as well as the judicial ramifications." Ultimately,

he elected not to seek certiorari.

C.   Procedural History Since Our 2009 Opinion

           Soon after the mandate from this court issued in Coors

Brewing Co., Coors renewed its motion for summary judgment, which

it had initially filed on July 30, 2007.            On July 16, 2009, the

district court ordered the Secretary to show cause why the court

should not grant Coors's motion.          The Secretary responded in a

motion requesting leave to conduct discovery pursuant to Rule

56(f), and the parties agreed to meet to resolve these discovery

issues.

           On November 2, 2009, the U.S. Supreme Court granted

certiorari in Levin v. Commerce Energy, Inc., 130 S. Ct. 496, thus

raising the issue of whether comity precluded a challenge to an

allegedly discriminatory state taxation scheme even where the

challenger did not seek to reduce state tax revenue. That petition

had been filed on August 20, 2009, about three months after the

mandate had issued in Coors Brewing Co.             The Secretary did not


                                   -11-
bring this relevant development to the attention of the district

court at this juncture; indeed, he did not even mention the case

until he filed his motion to dismiss, more than one month after the

Supreme Court had decided Levin.

           On December 23, 2009, the parties submitted a Joint

Status Report in compliance with the district court's order, in

which they informed the court that (1) they had agreed to limited

discovery, (2) they would attempt to file a joint stipulation of

certain facts within three months, and (3) they had "agreed to hold

all other proceedings in abeyance until the Court rules on the

Motion for Summary Judgment."         After several additional discovery

motions were filed, which the district court did not act upon, the

parties filed their joint stipulation of facts in accordance with

their agreement on March 16, 2010.4

           On June 1, 2010, the Supreme Court decided Levin v.

Commerce Energy, Inc., 130 S. Ct. 2323, reversing the U.S. Court of

Appeals for the Sixth Circuit and abrogating this court's decision

in Coors Brewing Co.        On July 14, 2010, the Secretary filed a

motion to dismiss in light of Levin; however, he did not seek

relief   from   or   even   mention    in    this   motion   the   stipulation

agreement to hold all other matters in abeyance until a decision on

summary judgment. In its opposition, Coors argued that by entering


     4
          On that same day, the Secretary filed a motion requesting
relief from the agreement regarding discovery on other grounds not
at issue here.

                                      -12-
into the stipulation agreement on December 23, 2009, the Secretary

had "voluntarily submitted" to a merits determination in federal

court.    In addition, Coors argued that even if Levin applied,

comity did not justify dismissal in this case because the Puerto

Rico courts would not provide a "plain, adequate, and complete

remedy" for Coors's suit.

             On December 29, 2010, the district court referred all

pending motions in the case to a magistrate judge for a report and

recommendation.       On   February    10,   2011,   the   magistrate   judge

recommended that Coors's motion for summary judgment be denied and

the Secretary's motion to dismiss be granted.                As an initial

matter, the magistrate judge recommended that the district court

bind the Secretary to the parties' agreement to resolve the summary

judgment motion before any other matter, including the motion to

dismiss, noting that the Secretary had agreed to the stipulation,

and would not "suffer any manifest injustice from having the

summary judgment motion decided first."              Coors Brewing Co. v.

Mendez-Torres, 787 F. Supp. 2d 149, 186 (D.P.R. 2011).                      The

magistrate judge examined the merits of Coors's summary judgment

challenge to the excise tax first, and recommended the motion be

denied.   Id. at 194.      Then, turning to the motion to dismiss, the

magistrate    judge   applied   Levin    and   recommended     the   suit    be

dismissed.    Id. at 198.




                                      -13-
          On February 17, 2011, having lost both on its motion for

summary judgment and on the Secretary's motion to dismiss, Coors

filed its objections to the report and recommendation. On March 7,

2011, the Secretary filed a lengthy response to Coors's objections,

reasserting his comity claims under Levin and arguing that the

stipulation agreement "did not require or constitute[] a waiver of

the Secretary's arguments for dismissal on comity grounds" and

should not be construed as a voluntary submission to federal

jurisdiction.

          On March 30, 2011, the district court issued an opinion

and order adopting the magistrate's report and recommendation.

Coors Brewing Co. v. Mendez-Torres, 787 F. Supp. 2d at 177.      The

court found that the Secretary had failed to "set forth any showing

of good cause" as to why the stipulation agreement should be set

aside, and addressed and denied Coors's summary judgment motion.

Id. at 165, 173. It then granted the Secretary's motion to dismiss

on grounds of comity.   Id. at 177.     Coors has appealed from both

the dismissal and the denial of summary judgment.

                                 II.

           We review de novo the district court's grant of the

Secretary's motion to dismiss.     Fothergill v. United States, 566

F.3d 248, 251 (1st Cir. 2009).

          In Levin, the Supreme Court expressly abrogated this

court's decision in Coors Brewing Co.     The Court held that in the


                                 -14-
state taxation context, the comity doctrine is "[m]ore embracive

than" the TIA and "restrains federal courts from entertaining

claims for relief that risk disrupting state tax administration."

130 S. Ct. at 2328.   The Court explained that Hibbs had not changed

the basic principle that comity, a non-merits ground for dismissal,

"counsels lower federal courts to resist engagement in certain

cases falling within their jurisdiction."5     Id. at 2330.   Thus,

even if the TIA does not bar federal court jurisdiction in certain

classes of state tax challenges, comity may require dismissal

nonetheless.

          As a general matter, comity constrains the exercise of

federal jurisdiction in cases implicating a variety of important

state interests.   See Quackenbush v. Allstate Ins. Co., 517 U.S.

706, 716-17 (1996).   This includes cases that would interfere with

a state criminal proceeding, see, e.g., Younger v. Harris, 401 U.S.

37 (1971), or with certain types of state civil proceedings, see,

e.g., Huffman v. Pursue, Ltd., 420 U.S. 592 (1975); cf. Colo. River

Water Conservation Dist. v. United States, 424 U.S. 800 (1976);

cases in which a determination of the federal constitutional issue


     5
           In Hibbs, the Court held that neither the TIA nor comity
posed a hurdle to reaching the merits of the plaintiffs' tax
administration challenge in that case.       However, in Levin v.
Commerce Energy, Inc., the Court distinguished Hibbs on its facts,
noting in particular that Hibbs had involved an Establishment
Clause challenge. 130 S. Ct. 2323, 2335-36 (2010). Specifically,
the Levin Court stated that "[a] confluence of factors . . . ,
absent in Hibbs, leads us to conclude that the comity doctrine
controls [in the present case]." Id. at 2336.

                                -15-
might be made unnecessary by a state court interpretation of

ambiguous state law, see R.R. Comm'n of Tex. v. Pullman Co., 312

U.S.   496   (1941);        cases    in   which     federal    adjudication     could

interfere with a complex state administrative scheme, of which

state judicial review is an integral part, see Burford v. Sun Oil

Co., 319 U.S. 315 (1943); cases that implicate an important

"sovereign prerogative" and in which the state's law is unclear,

see La. Power & Light Co. v. City of Thibodaux, 360 U.S. 25 (1959);

and cases in which the federal courts might unduly interfere with

state tax administration, see Fair Assessment in Real Estate Ass'n

v. McNary, 454 U.S. 100 (1981).

             Levin    made     clear      that    the   rule   of    comity carries

"particular force" in this last context, where taxpayers file suit

in federal court under either dormant Commerce Clause or Equal

Protection theories, alleging that the state has singled them out

for discriminatory treatment by taxing them unevenly in comparison

to their competitors.               Levin, 130 S. Ct. at 2330.            There are

several reasons for this strict rule.                For one, "in taxation, even

more than in other fields, legislatures possess the greatest

freedom in classification."                Id.    at 2333 (quoting Madden          v.

Kentucky,    309     U.S.    83,     88   (1940))    (internal      quotation   marks

omitted).     Even "upon finding impermissible discrimination in a

State's allocation of benefits or burdens," it is the Supreme

Court's usual practice to remand the case to the state court,


                                          -16-
"leaving the remedial choice in the hands of state authorities."

Id. at 2333-34.     This "leaves the interim solution in state-court

hands, subject to subsequent definitive disposition by the State's

legislature."     Id. at 2334.

            By contrast, if the lower federal courts were to find a

state tax system unconstitutional, they "lack authority to remand

to the state court system [any] action initiated in federal court,"

and they are severely constrained in their choice of remedies. Id.

Further, federal judges are bound by the TIA and Butler Act, which

preclude the diminishment of state revenues, even if that relief is

the least disruptive of the state legislature's design.                 Id.

Finally, state courts have the ability to construe narrowly, where

necessary,      state   statutory     language       so   as   to   alleviate

constitutional concerns.       Id. at 2334 n.7.        "These limitations on

the remedial competence of lower federal courts counsel that they

refrain from taking up cases of this genre, so long as state courts

are equipped fairly to adjudicate them."             Id. at 2334.

            The Levin Court discussed three factors which led it to

conclude that comity required dismissal.             Id. at 2336.   First, it

held that "respondents seek federal-court review of commercial

matters over which [the state] enjoys wide regulatory latitude" and

that   "their   suit    does   not   involve   any    fundamental   right   or

classification" to which heightened judicial scrutiny would attach.

Id.    Second, the Court found that the plaintiffs sought to enlist


                                     -17-
the aid of the federal courts "to improve their competitive

position."       Id.   Finally, it held that state courts "are better

positioned than their federal counterparts" to fashion a suitable

remedy "because they are more familiar with state legislative

preferences and because the TIA does not constrain their remedial

options."       Id.; see also id. at 2334.         The Court held that while

individually any one of these considerations might not compel

dismissal, "in combination" they require it.                Id. at 2336.

             The Court emphasized that none of these factors were

present in Hibbs.         130 S. Ct. at 2336.          By contrast, all three

factors applied in Levin, and all three plainly apply here.

             First, Coors seeks review of regulatory matters over

which Puerto Rico enjoys wide regulatory latitude under the Butler

Act, 48 U.S.C. § 872.         The Supreme Court has recognized in Levin

and numerous other cases that states enjoy wide regulatory latitude

over the administration of their tax systems.                    See Levin, 130 S.

Ct. at 2330 n.2 ("The procedures for mass assessment and collection

of   state   taxes     and    for     administration       and    adjudication     of

taxpayers' disputes with tax officials are generally complex and

necessarily designed to operate according to established rules.

State     tax     agencies       are     organized     to        discharge      their

responsibilities in accordance with the state procedures.                         If

federal   declaratory        relief    were    available    to    test   state   tax

assessments,      state    tax   administration       might       be   thrown    into


                                        -18-
disarray,    and     taxpayers       might    escape      the    ordinary       procedural

requirements       imposed     by    state        law."   (citation           and    internal

quotation     marks       omitted)).         Further,         Coors's    suit       does   not

implicate    any     fundamental          right    or   classification          that    would

require heightened judicial scrutiny.                   See id. at 2336.

             Second,       Coors    is    explicitly      seeking        to    improve     its

competitive position with respect to Puerto Rico's local brewer,

Cervecería        India,    and     has    framed       its    arguments        around     the

competitive advantage that the tax differential bestows on that

company.     See id.

             Third, Puerto Rico's courts are better positioned than

are   the   federal        courts    to    address      and     remedy    any       potential

constitutional violations because they are more familiar with state

legislative preferences and less constrained in their remedial

options.     See id.

                                            III.

             Coors presents three arguments as to why comity does not

require dismissal here.              Two are derived directly from Levin.

First, Coors correctly notes that if a state "voluntarily chooses

to submit to a federal forum, principles of comity do not demand

that the federal court force the case back into the State's own

system."      Id. at 2336 (quoting Ohio Bureau of Emp't Servs. v.

Hodory,     431    U.S.    471,     480    (1977))      (internal       quotation        marks

omitted). Coors argues that the Secretary voluntarily consented to


                                            -19-
have this case adjudicated in federal court by his actions and

through a combination of waiver and sleeping on his rights.

           Second, Coors argues that since dismissal on comity

grounds is an equitable doctrine, even if the Secretary has not

consented to have the case adjudicated in federal court, the unique

history and circumstances of this case justify our exercise of

equitable discretion to resolve the case on its merits.

           Finally, Coors points to the condition underlying the

comity doctrine itself, recognized in Levin, that there exist "an

adequate state-court forum" competent "to hear and decide . . .

constitutional claims."    Id. at 2330.     Coors argues that Puerto

Rico does not meet this constitutional floor and will not, in this

case, provide an adequate forum for the full and fair resolution of

their constitutional claims. We reject each of these arguments for

the reasons laid out below.

A.   Voluntary Consent

           Coors's voluntary consent argument focuses on the actions

and inactions of the Secretary -- what it characterizes as a

pattern of failure by the Secretary to preserve and assert his

claims -- after this court's remand in Coors Brewing Co.      First,

Coors argues that the Secretary and Solicitor General of Puerto

Rico, at the highest level of tax and legal policymaking, abandoned

the comity argument by not seeking certiorari from this court's

2009 decision in Coors Brewing Co.     Further, Coors argues that the


                                -20-
Secretary should have been aware of and alerted the court to the

Supreme Court's November 2, 2009, grant of certiorari in the

parallel case of Levin.

              Coors notes that instead of reserving his rights in light

of   the   grant   in   Levin,    the    Secretary   filed   the    stipulation

agreement on December 23, 2009, in which he agreed to hold all

other pending matters in abeyance until the district court ruled on

the summary judgment motion. At no point did the Secretary mention

Levin or reserve the comity issue. Not until the Supreme Court had

decided the case half a year later did the Secretary finally raise

Levin with the district court.

              Furthermore, Coors stresses that once the magistrate

judge recommended that the district court hold the Secretary to the

stipulation agreement, and rule on the summary judgment motion

before the motion to dismiss, the Secretary did not file any

objections to the recommendation in district court and did not

cross-appeal the issue to this court.                Coors argues that as a

result, the Secretary has waived the right to contest the district

court's decision to enforce the stipulation agreement.                    Coors

relies on several decisions of this court discussing waiver in this

context.      See, e.g., Santiago v. Canon U.S.A., Inc., 138 F.3d 1, 4

(1st   Cir.    1998)    ("[A]    party's   failure    to   assert   a   specific

objection to a report and recommendation irretrievably waives any

right to review by the district court and the court of appeals.").


                                        -21-
           It    is   true     that     the     Secretary    could   have        sought

certiorari in Coors Brewing Co. and likely should have kept the

district court abreast of the developments in Levin even before the

Supreme Court decided that case.                However, the Supreme Court has

made it clear that the rule of consent is a strict one: a state

must   "expressly     urge    [the      federal    court]    to    proceed       to    an

adjudication of the constitutional merits."                   Ohio Civil Rights

Comm'n v. Dayton Christian Sch., Inc., 477 U.S. 619, 626 (1986).

           This rule precludes a finding of voluntary consent to

federal   jurisdiction       in   this    case.      While   we    have     found     no

"consent" case involving challenges to state tax laws, cases from

other contexts help provide guidance. In Dayton Christian Schools,

on facts similar to those here, the Court held that the district

court should have abstained, under Younger, from deciding the case.

Although the State had urged abstention in the district court and

on appeal, the plaintiff in that case argued that the state

nonetheless     had   waived      its    abstention    claim      because    it       had

stipulated to the district court's jurisdiction.                  Dayton Christian

Sch., 477 U.S. at 626. The Supreme Court rejected this argument as

"misconceiv[ing] the nature of Younger abstention," which "does not

arise from lack of jurisdiction in the District Court, but from

strong    policies     counseling        against      the    exercise       of    such

jurisdiction where particular kinds of state proceedings have

already been commenced."          Id.


                                         -22-
           The Dayton Christian Schools Court contrasted the facts

of that case with those in other earlier cases in which states had

expressly urged the federal courts to resolve their cases on the

merits.   Id.   For example, in Ohio Bureau of Employment Services,

the state did not request Younger abstention in the Supreme Court

and the Court considered the issue at the request of an amicus

curiae.   431 U.S. at 480.   The state had argued Younger abstention

to the district court, which had ruled against it, but at the

Supreme Court, the state opposed remand based on abstention.    Id.

The Court noted that where the state opposed abstention6 and

specifically asked for a decision on the merits, the Younger

doctrine did not require dismissal.     Id.   Here, by contrast, the

state has requested dismissal based on comity both in this court

and the district court.

           Similarly, in Brown v. Hotel & Restaurant Employees &

Bartenders International Union Local 54, 468 U.S. 491 (1984),

although the state had argued for Younger abstention below, it did

not press that claim at the Supreme Court but instead expressly

submitted to the jurisdiction of the Supreme Court "in order to

obtain a more expeditious and final resolution of the merits of the

constitutional issue," id. at 500 n.9.    And in Sosna v. Iowa, 419


     6
          The Court noted that one reason the state might have
chosen to forego abstention was to avoid the "prospect of lengthy
administrative appeals followed by equally protracted state
judicial proceedings." Ohio Bureau of Emp't Servs. v. Hodory, 431
U.S. 471, 480 (1977).

                                 -23-
U.S. 393 (1975), both parties addressed the question of Younger

abstention, and "urged that [the Court] reach the merits" of the

case, id. at 396 n.3.

               Here, the Secretary's mere stipulation to a priority

decision on summary judgment (and, implicitly, to the retention of

federal jurisdiction), does not constitute the "express urg[ing]"

necessary for voluntary consent.               While the Secretary did agree to

"hold all other proceedings in abeyance" until the district court

ruled     on   the     summary    judgment     motion,      he    entered    into    that

agreement only after this court specifically rejected his comity

argument.       And while it is true that the petition for certiorari

had   been     granted    in     Levin    at   the   time    he    entered    into    the

agreement, the case had not yet been decided.7

               Coors    also     argues    that      the    Secretary       waived    any

objections to the enforcement of the stipulation agreement by not

objecting to the report and recommendation in the proper time

frame.     But the Secretary had prevailed on the merits on both

issues: the magistrate judge recommended the denial of Coors's

motion for summary judgment and the grant of the motion to dismiss.




      7
          In addition, the Secretary's decision not to seek
certiorari in Coors Brewing Co. did not amount to consent to the
exercise of federal jurisdiction and certainly did not amount to
consent to forgo the benefit of a later Supreme Court decision
expressly abrogating Coors Brewing Co. The reality is that the
public law offices of state attorneys and solicitors general have
limited resources and must choose how best to deploy them.

                                          -24-
The Secretary wanted an affirmance, so he instead filed a lengthy

response to Coors's objections to the report and recommendation.

               That the Secretary did not consent to the exercise of

jurisdiction      was   made   plain    in    this   response,   in   which   he

reiterated that he did not consent to the federal forum and argued

that the stipulation agreement should not be construed as such.

Indeed, he argued, his compliance with court orders "while forced

to litigate against his will in [the federal] forum can hardly be

construed as a waiver of [his] prior request for dismissal, or as

a voluntary submission to the federal forum." He also argued, once

Levin       was decided, that the district court was obligated to

consider his motion to dismiss on comity grounds before considering

the merits of Coors's constitutional claims on summary judgment.

We agree.8

               From the outset of this litigation, the Secretary has

claimed the protection of comity. Once the Supreme Court abrogated

this court's decision in Coors Brewing Co., he notified the

district court within a month and sought immediate dismissal on

grounds of comity.       In summary, none of his actions in this case

        8
           Normally, of course, a court must address jurisdiction
before it addresses the merits of plaintiff's claims. See, e.g.,
Steel Co. v. Citizens for a Better Env't, 523 U.S. 83, 94-95
(1998). The question here is not one of Article III jurisdiction
but whether the federal court was required to refrain from
exercising jurisdiction.      Here, the Levin decision was an
intervening event which should have been given preference and
priority. The district court was incorrect, in light of Levin, to
address the merits of Coors's claims before dismissing on grounds
of comity.

                                       -25-
amounted to voluntary consent, as the Supreme Court has defined

that term, and, under the circumstances of the case, he has

preserved his comity claim.

B.   Equitable Conduct

          Coors argues that even so, the Secretary's conduct as

described above, combined with what Coors alleges to be a strategy

of "keep away," played by the Commonwealth these last thirty-five

years to forestall federal adjudication of the dormant Commerce

Clause question, justify setting aside comity in this instance. It

is far from clear that Levin permits us to retain jurisdiction over

this case on Coors's argument that it would be more equitable to do

so given the Commonwealth's conduct.             We need not decide this

abstract issue, however, because the argument fails on its own

terms.   We     have   already   addressed   and    rejected   most    of   the

substantive arguments advanced by Coors in support of our retaining

jurisdiction.     These "equitable conduct" arguments are the same

arguments raised under Coors's voluntary consent theory, and merely

relabeling the arguments does nothing to advance them.                 Coors's

remaining arguments do not support our retaining jurisdiction even

if we had the power to do so.

          Coors    argues   that    once   the     Secretary   had    "finally

agreed[]" to the resolution of the summary judgment motion, and

after Coors had "fully performed its obligations under [that]

agreement and acted in reliance upon it," the Secretary sought to


                                    -26-
renege on the agreement by requesting additional discovery "on

immaterial and irrelevant matters" and by reopening the comity

question.   At this late stage of the litigation, Coors argues that

forcing it to file a new suit in the courts of Puerto Rico would

"impose an 'unusual hardship'" on it and require "'an unnecessary

expenditure of time or energy.'"      (quoting Rosewell v. LaSalle

Nat'l Bank, 450 U.S. 503, 518 (1981)).     Coors notes that it first

filed this case in federal district court five years ago and has

"expended significant time and costs in" its prosecution.     Since

comity is an "equitable" doctrine, Fair Assessment in Real Estate

Ass'n, 454 U.S. at 116 n.8, Coors argues that the balance of

equitable considerations in this case justifies providing it with

a federal forum for resolution of its constitutional claims.

            Even if the equitable discretion described by Coors

existed in these types of cases, this would not be an instance

where we would retain jurisdiction.      The Secretary's conduct in

this case, including as to discovery and the stipulations, was not

inequitable and in any event carries little weight when compared to

the institutional rationales for comity here. Comity is a doctrine

of "equitable restraint," id. at 108 (emphasis added), and operates

to "stay [the] hand" of the federal courts when state-law remedies

are "plain, adequate, and complete," id.     The balance in favor of

restraint arises here in the state taxation context: "comity . . .

counsel[s] that [federal] courts should adopt a hands-off approach


                               -27-
with respect to state tax administration."           Nat'l Private Truck

Council, Inc. v. Okla. Tax Comm'n, 515 U.S. 582, 586 (1995); see

also Fair Assessment in Real Estate Ass'n, 454 U.S. at 108 ("The

reason for this guiding principle [of equitable restraint] is of

peculiar force in cases where the suit, like the present one, is

brought to enjoin the collection of a state tax in courts of a

different, though paramount sovereignty." (alteration in original)

(quoting Matthews v. Rodgers, 284 U.S. 521, 525 (1932))).              Whether

or not inequitable conduct by a party could ever overcome these

concerns, the equities in this case weigh more heavily on the side

of   "aversion     to   federal    interference        with      state     tax

administration."    Nat'l Private Truck Council, 515 U.S. at 586.

C.   Whether the Puerto Rico Courts Meet the Adequate State-Court
     Forum Test

          Coors's   final   argument     is   that   dismissal    on     comity

grounds would be improper because the Puerto Rico court system will

not provide "an adequate state-court forum" to hear and decide the

merits of the federal constitutional claims. In Fair Assessment in

Real Estate Ass'n, the Court explained that under the doctrine of

comity, federal courts must refrain from deciding state tax matters

"when remedies at law are plain, adequate, and complete," 454 U.S.

at 108, and "where [federal rights] could otherwise be preserved

unimpaired," id. at 109 (quoting Boise Artesian Hot & Cold Water

Co. v. Boise City, 213 U.S. 276, 282 (1909)) (internal quotation

marks omitted).

                                  -28-
               Coors argues the Puerto Rico forum is stacked against it:

the    courts     all   but   certainly     will   "woodenly"   reject    its

constitutional challenge to the tax.           Moreover, in the past, Coors

alleges, Puerto Rico's courts have exempted Puerto Rico from the

reach of the dormant Commerce Clause entirely and will continue to

do so here.       Finally, Coors contends that the Puerto Rico courts

impermissibly refuse to consider legislative history in determining

whether a law has a constitutionally discriminatory purpose and in

doing so here, will hinder Coors's ability to present its claims.

See, e.g., Family Winemakers of Cal. v. Jenkins, 592 F.3d 1, 13

(1st Cir. 2010) ("[W]hen a state statute is allegedly motivated by

an    intent     to   discriminate   against    interstate   commerce,"   to

determine legislative purpose, "we look to 'the statute as a

whole,' including statutory text, context, and legislative history,

. . . [as well as] whether the statute was 'closely tailored to

achieve the legislative purpose' the state asserted" (quoting

Alliance of Auto. Mfrs. v. Gwadosky, 430 F.3d 30, 37-38 (1st Cir.

2005))); see also id. at 13 n.15 (describing methodologies employed

by other courts of appeal).




                                     -29-
               As to legislative history,9 Coors attempts to rely on the

case of Chévere v. Levis, 150 P.R. Dec. 525 (2000).                  The Puerto

Rico       Supreme   Court     there,      however,    expressly   reviewed    the

legislative history of the law in question to determine legislative

intent and stated:

               [I]n the process of inquiry into the
               legislature's intent, it is necessary to
               examine the legislative history. If the law
               has a statement of purpose, it generally
               summarizes the purpose that inspired its
               creation. In cases in which the law lacks a
               statement of purpose or, even though it has
               one, the statement does not contain the
               legislative intent, it is useful to consult
               other documents such as the reports from the
               committees that studied the bill and the
               debates held when the measure was discussed on
               the floor of the legislative chamber, as
               appears in the Record of Proceedings.
               Likewise, the preliminary drafts and reports
               surrounding them, which are prepared outside
               the Legislative Assembly, may be used, when
               the Assembly had the same before it and
               substantially adopted the preliminary drafts.

Id. at 540-41 (translation available on Ct. App. Dkt. No. 11-1559).

                We reject Coors's contention that the Puerto Rico courts

will       impermissibly     refuse   to    consider   legislative   history    in


       9
          The Secretary argues that this is really a dispute about
which portions of the legislative history are to be given weight.
He cites to F. Vázquez, Inc. v. Sec'y of the Treasury, 103 P.R.
Dec. 388, 3 P.R. Offic. Trans. 539 (1975), in which the Puerto Rico
Supreme Court stated that, "statements of a lawmaker, on the floor
of the legislative body to which he belongs do not represent the
collective intent of the body enacting the statute." Id. at 390.
The Secretary argues that the Puerto Rico courts do review
legislative history and are capable of conducting a comprehensive,
"pithy" and "in-depth" review of the applicability of the dormant
Commerce Clause. (quoting Coors Brewing Co. v. Mendez-Torres, 787
F. Supp. 2d 149, 197 (D.P.R. 2011)).

                                           -30-
considering Coors's claims.        Nothing in Chévere suggests that the

courts, as a rule, will refuse to consider the legislative history

in ascertaining the purpose of the excise tax.

           Coors also argues that the Puerto Rico courts have

refused to hold that the dormant Commerce Clause applies to the

Commonwealth, pointing to the concurring opinion of a single

justice in a 2007 case.         See Puerto Rican Ass'n of Beer Imps. v.

Puerto Rico, 171 P.R. Dec. 140 (2007) (Fuster, J., concurring in

the judgment) (stating that the dormant aspect of the Commerce

Clause of the U.S. Constitution does not apply to Puerto Rico)

(translation available on Ct. App. Dkt. No. 11-1559).         However, in

a more recent opinion the Puerto Rico Supreme Court clearly held

that the "limitations inherent in the interstate Commerce Clause in

its dormant state apply to Puerto Rico ex proprio vigore."           Estado

Libre Asociado de P.R. v. Nw. Selecta, Inc., 2012 WL 1109131, 2012

TSPR 56, at *31 (P.R. Mar. 27, 2012). This opinion also reinforces

the rule articulated in Chévere as to when resort to legislative

history is appropriate.

            Finally, the fact that the Puerto Rico courts ruled

against large brewers in earlier cases simply does not meet the

test for inadequacy.           This court recently rejected a similar

inadequacy challenge brought by cigar manufacturers against a

Puerto   Rico   excise   tax    which   allegedly   discriminated   against

mainland cigar manufacturers.        Pleasures of San Patricio, 596 F.3d


                                    -31-
1.   We held that the cigar manufacturers could not demonstrate the

inadequacy of the Puerto Rico courts merely by predicting that they

would lose their case.    Id. at 9.    We reject Coors's inadequacy

argument.

            Should Coors receive an unfavorable merits ruling from

the Puerto Rico courts, it may seek further review of "[a]ny

substantial federal question" in the U.S. Supreme Court.     Levin,

130 S. Ct. at 2334 n.8 (citing McNeese v. Bd. of Educ. for Cmty.

Unit Sch. Dist. 187, 373 U.S. 668, 673 (1963)).       In addition,

should the Puerto Rico courts, as Coors fears, fail to follow

federal constitutional precedent or unconstitutionally constrain

their analyses, that, in and of itself, may constitute grounds for

a petition for certiorari in the U.S. Supreme Court.10




      10
          The Supreme Court has addressed similar challenges under
what is known as the "fair support rule."      Where a state court
engages in "an obvious subterfuge to evade consideration of a
federal issue," Radio Station WOW, Inc. v. Johnson, 326 U.S. 120,
129 (1945), the Supreme Court may look beyond an asserted state law
rationale to inquire whether the state court decision rests upon a
"fair or substantial basis," Broad River Power Co. v. South
Carolina ex rel. Daniel, 281 U.S. 537, 540 (1930); see, e.g.,
Howlett v. Rose, 496 U.S. 356, 366 (1990); Staub v. City of Baxley,
355 U.S. 313, 318-319 (1958). The Court has deployed this rule in
the context of dormant Commerce Clause challenges to state taxation
schemes, see, e.g., Union Pac. R.R. Co. v. Pub. Serv. Comm'n, 248
U.S. 67, 69-70 (1918); Gaar, Scott & Co. v. Shannon, 223 U.S. 468,
470 (1912), and where other state laws have been found to
unconstitutionally restrain interstate commerce, see, e.g., Davis
v. Wechsler, 263 U.S. 22, 24 (1923); Am. Ry. Express Co. v. Levee,
263 U.S. 19, 21 (1923); Sioux Remedy Co. v. Cope, 235 U.S. 197,
203-04 (1914); Vandalia R.R. Co. v. Indiana ex rel. City of South
Bend, 207 U.S. 359, 367 (1907).

                                -32-
                               IV.

          Because Levin applies and requires dismissal of this

federal case in favor of resolution of Coors's claims in the courts

of Puerto Rico, we affirm the district court's grant of the

Secretary's motion to dismiss and vacate the court's denial of

Coors's motion for summary judgment.

          So ordered.




                               -33-
