United States Court of Appeals
                      For the First Circuit


No. 11-2449

                   CÉSAR CALDERÓN-SERRA ET AL.,

                     Plaintiffs, Appellants,

                                v.

                   WILMINGTON TRUST CO. ET AL.,

                      Defendants, Appellees.


          APPEAL FROM THE UNITED STATES DISTRICT COURT

                 FOR THE DISTRICT OF PUERTO RICO

          [Hon. Gustavo A. Gelpí, U.S. District Judge]



                              Before

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



     Francis T. Pagán-Martínez, with whom Rafael González Vélez and
González Vélez Law Office were on brief, for appellants.
     Stephen E. Hudson, with whom Eduardo A. Zayas-Marxuach,
McConnell Valdés LLC, and Kilpatrick Townsend & Stockton LLP were
on brief, for appellee Wilmington Trust Co.
     Sara Lydia Vélez-Santiago, with whom Néstor M. Méndez-Gómez,
Margarita Mercado-Echegaray, and Pietrantoni Mendez & Alvarez LLC
were on brief, for appellee Banco Popular de Puerto Rico.



                          April 22, 2013
          SELYA, Circuit Judge.        Most people make investments in

the expectation (or at least the hope) of turning a profit.              But

investments   sometimes   go   sour.     That   happened   here,   and   the

appellants are trying to recoup their losses through a novel

interpretation of an exemption in the Trust Indenture Act of 1939

(TIA), 15 U.S.C. §§ 77aaa-77bbbb.1       Construing the exemption as a

matter of first impression, we conclude that the appellants'

interpretation fails. Their suit fails with it. Federal courts do

not have jurisdiction to redress every perceived wrong, and we

agree with the court below that this case falls outside the

encincture of federal subject matter jurisdiction.

          The appellants, César Calderón-Serra and Teresita Palerm-

Nevares, purchased and still own nonrecourse notes (the Notes) in

the face amount of approximately two million dollars, issued by the

Puerto Rico Conservation Trust Fund (PRCTF). The PRCTF operates as

a nonprofit organization, see 26 U.S.C. § 501(c)(3), with the

stated purpose of protecting and enhancing Puerto Rico's natural

resources.

          The proceeds from the sale of the Notes were used by the

PRCTF to acquire preferred securities and to pay the costs of

issuance of the Notes.     The Notes were not registered under the




     1
       Although this appeal was argued in conjunction with the
appeal in Nikitine v. Wilmington Trust Co., No. 12-1874, we have
opted to dispose of the cases by separate opinions.

                                   -2-
Securities Act, see 15 U.S.C. § 78l, based on an exemption from

registration.

           After the Notes went into default, the appellants sued

the appellees — Banco Popular de Puerto Rico (BPPR), trustee of the

Notes, and Wilmington Trust Company (WTC), indenture trustee of the

securities that the PRCTF purchased with Note proceeds — alleging

that "they were deceived into believing that the [N]otes were

backed by the government of Puerto Rico."2        They brought their suit

in the United States District Court for the District of Puerto Rico

on the basis of federal question jurisdiction.               See 28 U.S.C.

§ 1331.   After amending their complaint once as of right, see Fed.

R. Civ. P. 15(a)(1)(B), the appellants premised their assertion of

subject matter jurisdiction on both the Edge Act, 12 U.S.C. § 632,

and the TIA.3

           Each   appellee    moved     to   dismiss   the   first   amended

complaint for want of subject matter jurisdiction.           The appellants

opposed these motions.       Some five months after the first amended

complaint was filed (while the fully briefed motions to dismiss


     2
      A third defendant, UBS Financial Services, Inc., was dropped
from the case prior to the filing of the appellants' first amended
complaint.
     3
       In the jurisdictional section of their first amended
complaint, the appellants also refer to the Sarbanes-Oxley Act of
2002, 15 U.S.C. §§ 7201-7202, 7211-7220, 7231-7234, 7241-7246,
7261-7266, 78o-6, 78d-3; 18 U.S.C. §§ 1348-1350, 1514A, 1519-1520.
In the same pleading, however, they concede "that no right of
action under Sarbanes-Oxley exists." Thus, we do not ponder the
Sarbanes-Oxley Act as a source of subject matter jurisdiction.

                                      -3-
were under advisement), the appellants sought leave to file a

second amended complaint.    The district court denied that motion

and summarily rejected a motion for reconsideration.         Then, the

court, in a thoughtful opinion, granted the motions to dismiss.

See Calderón-Serra v. Wilmington Trust Co., No. 10-1905, 

, at *1 (D.P.R. Nov. 4, 2011). This timely appeal followed.

          We begin with bedrock.         "Federal courts, as courts of

limited jurisdiction, may not presume the existence of subject

matter jurisdiction, but, rather, must appraise their own authority

to hear and determine particular cases."         Cusumano v. Microsoft

Corp., 

, 712 (1st Cir. 1998).        "[T]he party invoking

the jurisdiction of a federal court carries the burden of proving

its existence."   Murphy v. United States, 

, 522 (1st

Cir. 1995) (internal quotation marks omitted).       Where, as here, a

district court grants a motion to dismiss for want of subject

matter jurisdiction on the pleadings, its order of dismissal

engenders de novo review.    See Fothergill v. United States, 

, 251 (1st Cir. 2009).     In performing this task, "we take

as true all well-pleaded facts in the plaintiffs' complaints,

scrutinize them in the light most hospitable to the plaintiffs'

theory of liability, and draw all reasonable inferences therefrom

in the plaintiffs' favor."   Id.

          In this venue, the appellants do not pursue their claim

that the Edge Act confers federal subject matter jurisdiction.


                                   -4-
This is a wise decision: in order for that statute to supply a

basis for federal subject matter jurisdiction, "one party to the

action [must] be an entity that owes its existence to the federal

sovereign."       Viqueira v. First Bank, 

, 19 (1st Cir.

1998); see 12 U.S.C. § 632.      Typically, that would be a nationally

chartered bank. Here, however, both defendants are state-chartered

banks (WTC is organized under the laws of Delaware and BPPR is

organized under the laws of Puerto Rico).        Hence, the Edge Act does

not afford a basis for subject matter jurisdiction here.

             The appellants propose that there is federal subject

matter jurisdiction under the TIA.          The district court rejected

this proposition, see Calderón-Serra, 

, at *3, and

so do we.

             Congress enacted the TIA in 1939 as a means of combating

unsavory practices related to the public offering of bonds, notes,

and debentures.      See 15 U.S.C. § 77bbb(b); see also SEC v. Capital

Gains Research Bureau, Inc., 

, 186 (1963).                      The

district courts have jurisdiction over all suits brought to enforce

any   duty   or   liability   arising   under   the   TIA,   subject   to    an

exception not relevant here.      See 15 U.S.C. § 77v(a).       But the TIA

does not have a limitless scope.        For example, it does not apply to

"any security exempted from the provisions of the Securities Act of




                                    -5-
1933," by, among other provisions, paragraphs 2 through 8 of 15

U.S.C. § 77c(a).4    Id. § 77ddd(a)(4)(A).

           Pertinently, paragraph 4 exempts charitable organizations

from the reach of the Securities Act, see id. § 77c(a)(4), and thus

from the reach of the TIA.5        That provision reads:

           [T]he provisions of this subchapter shall not
           apply to . . . [a]ny security issued by a
           person organized and operated exclusively for
           religious, educational, benevolent, fraternal,
           charitable, or reformatory purposes and not
           for pecuniary profit, and no part of the net
           earnings of which inures to the benefit of any
           person, private stockholder, or individual
           . . . .

Id.   This, in effect, comprises a two-part test.

           In this case, the Notes were issued by the PRCTF, which

the   appellants     concede      is   a     section     501(c)(3)   nonprofit

organization.   Consequently, the Notes come within the first part

of the charitable organization exemption to the Securities Act.

           In an effort to soften the bite of this reasoning, the

appellants   posit   that   the    Notes     have   an   "individual   profit-

generating   effect"    that     places      them   outside   the    charitable

organization exemption.        They insist that as long as note-holders


      4
       The appellants contend that section 77c does not apply to
the TIA. Since they have offered no developed argumentation for
this counter-intuitive proposition, we deem it waived. See United
States v. Zannino, 

, 17 (1st Cir. 1990).
      5
       For ease in exposition, we refer to this exemption as the
"charitable organization exemption." We recognize, however, that
organizations other than charities are also shielded by the terms
of the provision.

                                       -6-
have a noncharitable purpose in purchasing notes (say, a desire to

earn interest), the exemption is inapposite.           This construction of

the charitable organization exemption is antithetic to the plain

meaning of the unambiguous statutory language. We explain briefly.

          We think it is obvious that the purpose on which the

first part of the exemption hinges is the purpose for which the

note-issuing organization exists, not the parochial motivations of

particular note-holders.       See, e.g., SEC v. Children's Hosp., 

, 888-90 (D. Ariz. 1963).           The critical determinant

under the first part of the test, then, is whether the issuing

organization   is   structured        and   operated    as   a   charitable

organization and not for pecuniary profit. In this connection, the

"pecuniary profit" of which the charitable organization exemption

speaks relates to the organization's purpose, not the note-holders'

investment returns.      See SEC v. Universal Serv. Ass'n, 

, 237-38 (7th Cir. 1939).         The PRCTF unarguably satisfies this

eleemosynary requirement.

          There is, of course, a second requirement that must be

satisfied: if any part of the "net earnings" of the charitable

organization   "inures    to   the    benefit   of   any   person,   private

stockholder, or individual," the exemption does not apply.                15

U.S.C. § 77c(a)(4).      In our view, it is equally obvious that this

"net earnings . . . inures to the benefit" language does not refer

to interest payments made by a charitable organization on funds


                                      -7-
borrowed in the ordinary course of business from outside investors

and intended to allow the organization to fulfill its mission. See

Warfield v. Alaniz, 

, 1025 (9th Cir. 2009); SEC v. Am.

Found. for Advanced Educ. of Ark., 

, 831 (W.D. La.

1963).      Properly construed, this language does not encompass

interest    payments    to     outside    bond-holders,        note-holders,      or

debenture-holders.      Cf. SEC v. World Radio Mission, Inc., 

, 537 & n.1 (1st Cir. 1976) (discussing interest-bearing notes

issued by nonprofit religious organization).

            The appellants' contrary reading turns the charitable

organization    exemption      inside     out    and,   if   implemented,    would

unravel the fabric of the exemption.              There is no dispute that the

PRCTF disclosed its intention to use the Note capital to purchase

preferred stock and to use dividends from the preferred stock to

finance the Notes.          This investment approach is common practice

among charitable organizations.                The offering circular does not

suggest — let alone support — any basis for the appellants'

assertion    that a    "majority of        the    proceeds generated        by   the

[PRCTF's securities] transactions" would be directed to "private

stockholders."         We    therefore         disregard     that   assertion     as

implausible.

            Virtually every person who purchases a bond, a note, or

a debenture is motivated, at least in part, by the prospect of

earning interest; and basing the legal status of a nonprofit


                                         -8-
organization upon the motives of those who purchase its securities

defies common sense.   We cannot conceive that Congress intended so

bizarre a result.

            Resisting this conclusion, the appellants hurl an array

of doctrines as if they were frisbees.   These initiatives are of no

help.   We mention two of them to illustrate this point.

            First, the appellants suggest that the Howey test, see

SEC v. W.J. Howey Co., 

, 298-99, 301 (1946), tips the

jurisdictional scales in their favor.     But the Howey test is only

used to determine whether an instrument is an "investment contract"

for purposes of the Securities Act.    See, e.g., SEC v. Edwards, 

, 393 (2004).     There is no question that the Notes are

securities, so the Howey test has no bearing here.       Second, the

appellants say that the "step-transaction" doctrine leads to a

finding of subject matter jurisdiction. They are wrong. The step-

transaction doctrine is used to assess tax liability, see, e.g.,

Comm'r of Internal Revenue v. Clark, 

, 738 (1989);

Associated Wholesale Grocers, Inc. v. United States, 

,

1521-22 (10th Cir. 1991), and it is of no assistance in this non-

tax case.

            That ends this aspect of the matter.    We hold that, in

the circumstances of this case, the TIA is not a hook on which the

appellants may hang federal subject matter jurisdiction.     We also

hold that the appellants have failed to show any other cognizable


                                 -9-
predicate for such jurisdiction.        Their suit simply does not arise

under federal law.

            These   holdings   do not    complete    our   journey.     As a

fallback,    the    appellants   contend    that     the   district    court

arbitrarily denied them leave to file a second amended complaint.

A brief chronology suffices to put this claim of error into

perspective.

            The appellants filed their action (and thus their initial

complaint) on September 20, 2010.        They filed their first amended

complaint approximately six months later.           They did not move for

leave to file a second amended complaint until September 6, 2011.

The appellees opposed their motion.

            It is common ground that leave to amend should be "freely

give[n]" in circumstances in which "justice so requires."             Fed. R.

Civ. P. 15(a)(2). But the largesse that Rule 15(a)(2) contemplates

is not without limits.     The rule "does not mean . . . that a trial

court must mindlessly grant every request for leave to amend."

Aponte-Torres v. Univ. of P.R., 

, 58 (1st Cir. 2006).

A district court may deny leave to amend when the request is

characterized by "undue delay, bad faith, futility, [or] the

absence of due diligence on the movant's part." Palmer v. Champion

Mortg., 

, 30 (1st Cir. 2006).            So, too, the court may

deny the request if the proposed amendment "would serve no useful

purpose."    Aponte-Torres, 445 F.3d at 58.


                                  -10-
          We review a district court's refusal to grant leave to

amend for abuse of discretion.      See Palmer, 465 F.3d at 30; Hatch

v. Dep't for Children, Youth & Their Families, 

, 19 (1st

Cir. 2001).      In the course of such review, we "defer to the

district court's hands-on judgment so long as the record evinces an

adequate reason for the denial."         Aponte-Torres, 445 F.3d at 58.

          In    this   instance,   the     district    court   rejected   the

appellants' motion because of undue delay.               It noted that the

appellants    previously   had   amended    their     complaint.    It    then

emphasized that the motion for permission to file a second amended

complaint was not filed until nearly a year after the commencement

of the action and many months after the fully briefed motions to

dismiss had been taken under advisement.

          We discern no abuse of discretion.             Appreciable delay

alone, in the absence of good reason for it, is enough to justify

denying a motion for leave to amend.         See, e.g., Kay v. N.H. Dem.

Party, 

, 34 (1st Cir. 1987) (per curiam) (affirming a

finding of undue delay when three months had elapsed).

          The appellants strive to persuade us that they had good

reason for the delay.      To this end, they point to the fact that

this case was twice passed from judge to judge and vaguely assert

that these reassignments justified their laggardly pace.             We are

not convinced.




                                   -11-
           The record reflects that, when filed, the case was

originally assigned at random to a district judge who immediately

recused himself.     The case was redrawn that same day to Judge

Domínguez.   On May 13, 2011, Judge Domínguez withdrew and the case

was reassigned during the same month to Judge Gelpí.             Judge Gelpí

did not undo any of Judge Domínguez's earlier orders and there is

no indication that the transition was unwieldy.

           The appellants have given no coherent explanation as to

how these reassignments caused delay.           The first reassignment was

so immediate that it hardly is worth mentioning.                  The second

reassignment — from Judge Domínguez to Judge Gelpí — resulted in

what appears to have been a seamless transition.             We cannot infer

any good reason for the appellants' delay from that scenario.

           The   appellants   touched     upon   other     grounds   below   in

support of their motion to amend.         Specifically, they adverted to

the "very special interest to the public trust"; difficulty in

understanding the case; and an alleged public loss of over $600

million.     These   arguments    were    not    renewed    on   appeal   and,

therefore, are deemed abandoned. See United States v. Zannino, 

, 17 (1st Cir. 1990).      In all events, they do not come close

to suggesting an abuse of discretion.

           Relatedly, the appellants assign error to the district

court's summary denial of their motion for reconsideration of the

order denying leave to file a second amended complaint.              We review


                                   -12-
the denial of a motion to reconsider for abuse of discretion.           See

Mulero-Abreu v. P.R. Police Dep't, 

, 94 (1st Cir. 2012).

"For such a motion to succeed, the movant must demonstrate either

that newly discovered evidence (not previously available) has come

to light or that the rendering court committed a manifest error of

law."   Id. (internal quotation marks omitted).       The appellants do

not identify any newly discovered evidence, and the court below

committed no discernable errors of law.        Accordingly, we find no

abuse of discretion in the denial of reconsideration.

            There is one loose end.         The appellants invite us,

without   meaningful   elaboration,    to   remand   the   case   for   an

assessment of federal question jurisdiction under yet another

statute: the Investment Company Act of 1940, 15 U.S.C. §§ 80a-1 to

80a-64.     They are grasping at straws and, inasmuch as they have

offered no developed argumentation on the point, we decline their

invitation.    See Zannino, 895 F.2d at 17.

            We need go no further. For the reasons elucidated above,

we affirm the judgment of the district court.        This order operates

without prejudice to the right of the appellants to pursue their

claims against the appellees in a local court.



Affirmed.




                                -13-