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Before Lipez, Leval, *fn1 and Thompson, Circuit Judges.

Plaintiff Redondo Construction Corporation (“Redondo”) appeals from the adverse judgment of the United States District Court for the District of Puerto Rico in its suit against the Puerto Rico Highway and Transportation Authority (the “Highway Authority”), the Puerto Rico Public Buildings Authority (the “Buildings Authority”) (collectively, the “Authorities”), and various officials of the Puerto Rican government. Redondo alleges that the defendants unlawfully applied a Puerto Rico statute retroactively to breach settlement agreements entered into by Redondo and the Authorities before the statute was enacted. Redondo claims that the defendants’ breach of the agreements impaired the obligation of those contracts in violation of the Contracts Clause of the federal Constitution and constituted breaches of contract under Puerto Rico law.

The district court granted the defendants’ motions for summary judgment on the Contracts Clause claim, accepting their argument that the obligation of the agreements had not been impaired because Redondo was not prevented from obtaining damages if it established breaches of the agreements. Having dismissed the sole federal claim on the merits, the district court declined to exercise supplemental jurisdiction over Redondo’s breach of contract claims under Puerto Rico law and dismissed them without prejudice.

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