Diaz-Baez v. Alicea-Vasallo ( 2021 )

United States Court of Appeals
For the First Circuit
No. 19-1474
MARÍA S. DÍAZ-BÁEZ; VÍCTOR A. BURGOS-TORRES; THELMA L. PÉREZ-
GUZMÁN; MARISOL DOMÍNGUEZ-RIVERA; HÉCTOR J. ALBELO-CARTAGENA;
MÓNICA MOLINA-SALAS; RAMÓN L. RIVERA-GASCOT; SYLVIA ALVARADO-
HERNÁNDEZ; PEDRO R. MARTÍNEZ-AGOSTO; CARMEN E. MEDINA-ADORNO;
PEDRO I. CARTAGENA-RODRÍGUEZ; EDUARDO BARREIRO-DIAZ; MELIXA
MARRERO-GONZÁLEZ; MERCEDES LAMBERTY-ROMÁN; CARLOS A. AQUINO-
VALENTÍN; DEBBIE A. CARDONA-CAPRE; DIANA I. SÁNCHEZ-PAGÁN; FÉLIX
MARRERO-VÁZQUEZ; GISSELLE PAGÁN-MELÉNDEZ; SHIERLY CARDONA-ORTIZ;
ROSA M. SOTO-GARCÍA; LIMARI MARTÍNEZ-RODRÍGUEZ; MARIEL TORRES-
LÓPEZ; ANTONIO J. COLLADO-RIVERA; VIVIAN M. BRACERO-ROSA; LUIS
COSS-VARGAS; BRAULIO E. FIGUEROA-DÍAZ; ROSA M. SANTOS-CARBALLO;
KAROLIE GÓMEZ-RIVERA; OMAR RIVERA-PÉREZ; CLARIBEL ROSADO-
FERNÁNDEZ; IVÁN E. GONZÁLEZ-GARCÍA; JOSÉ GRAU-ORTIZ; BRENDA
MARTÍNEZ-FIGUEROA; CIRILO TIRADO-RIVERA; BETZAIDA ROSARIO-FÉLIX;
VIRGILIO ESCOBAR-QUIÑONES; LUZ CRISTINA JIMÉNEZ-CORTÉS; HÉCTOR
M. BARRIOS-VELÁZQUEZ; MÓNICA RODRÍGUEZ-OCASIO; DANIEL RAMOS-
RAMOS; CARMEN HAYDEÉ RAMOS-LUNA; MELISA RIVERA-FUENTES; MARIELI
RÍOS-PÉREZ; EVELYN VELÁZQUEZ-ADORNO; JOSÉ W. ORTIZ-LÓPEZ; CÉSAR
E. DEIDA-TORRES; DAVID R. SHERMAN; REBECCA COTTO-OYOLA; DAVID
PONCE-MENA; NATIVIDAD CURBELLO-CONTRERAS; VIRGINIA ECHEVARRÍA;
PEDRO FÉLIX-TORRES; RUTH M. MELÉNDEZ-RODRÍGUEZ; ZUHER YOUSSIF-
YASSIN; ASTRID M. DELGADO-IRIZARRY; TIRSO RODRÍGUEZ-APONTE;
YANIRA RODRÍGUEZ-RIVERA; VIVIAN A. HERNÁNDEZ-ROBLES; ROBERTO
MIRANDA-SANTIAGO; ADA I. RIVERA-GARCÍA; JOSÉ E. FIGUEROA-NIEVES;
ALLAN WAINWRIGHT-ESTAPE; DAISY RODRÍGUEZ-ALEJANDRO; RADAMÉS
PÉREZ-RODRÍGUEZ; MARÍA I. DELANNOY-DE-JESÚS; MANUEL R. REYES
ALFONSO; AMARILIS RIVERO-QUILES; LUIS LAGARES-GARCÍA; ROCÍO
RIVERA-TORRES; JONATHAN R. ORTIZ-SERRANO; CONJUGAL PARTNERSHIP
ALBELO-HERNÁNDEZ; CONJUGAL PARTNERSHIP BARREIRO-ROSARIO;
CONJUGAL PARTNERSHIP BURGOS-DÍAZ; CONJUGAL PARTNERSHIP
CARTAGENA-MEDINA; CONJUGAL PARTNERSHIP COLLADO-TORRES; CONJUGAL
PARTNERSHIP COSS-BRACERO; CONJUGAL PARTNERSHIP FÉLIX-ECHEVARRÍA;
CONJUGAL PARTNERSHIP FIGUEROA-RIVERA; CONJUGAL PARTNERSHIP
FIGUEROA-SANTOS; CONJUGAL PARTNERSHIP GRAU-VÁZQUEZ; CONJUGAL
PARTNERSHIP MARRERO-PAGÁN; CONJUGAL PARTNERSHIP MARTÍNEZ-
ALVARADO; CONJUGAL PARTNERSHIP MIRANDA-HERNÁNDEZ; CONJUGAL
PARTNERSHIP MULER-VELÁZQUEZ; CONJUGAL PARTNERSHIP ORTIZ-ACEVEDO;
CONJUGAL PARTNRESHIP PONCE-COTTO; CONJUGAL PARTNERSHIP RAMOS-
RODRÍGUEZ; CONJUGAL PARTNERSHIP REYES-DELANNOY; CONJUGAL
PARTNERSHIP RODRÍGUEZ-RODRÍGUEZ; CONJUGAL PARTNERSHIP RIVERA-
ROSADO; CONJUGAL PARTNERSHIP TIRADO-MARTÍNEZ; CONJUGAL
PARTNERSHIP LAGARES-RIVERO,
Plaintiffs, Appellants,
JUANA M. CONTRERAS-CASTRO; LEILA A. HERNÁNDEZ-JIMÉNEZ; YELITZA
I. HERNÁNDEZ-HERNÁNDEZ; YALITZA ROSARIO-MENENDEZ; RAQUEL
CARDONA-SOTO; MARIBEL ALICEA-LUGO; HUMBERTO L. MULER-SANTIAGO;
MARIELA TORRES-MOLINI; CARMEN YOLANDA VÁZQUEZ-ORTIZ; LUIS A.
RODRÍGUEZ-TORO; NEREIDA RIVERA-BATISTA; BERNICE BERBERENA-
MALDONADO; RICARDO ROSARIO-SÁNCHEZ; AXEL FRESSE-ÁLVAREZ;
GLORIELY MIRANDA-OCASIO; LUIS A. MULER-SANTIAGO; GRETCHEN M.
ACEVEDO-RIVERA; DOMINGO MARIANI-MOLINI; REBECA M. NEGRÓN-
UMPIERRE; JORGE APARICIO-TORRES; CARMEN E. RODRIGUEZ-SANTIAGO;
LYNETTE YAMBÓ-MERCADO; MARIANNA RAMÍREZ-ÁLVAREZ; CONJUGAL
PARTNERSHIP FRESSE-MIRANDA; CONJUGAL PARTNERSHIP ROSARIO-
BERBERENA,
Plaintiffs,
v.
JULIO ALICEA-VASALLO, Executive Director of the AACA, in his
official and personal capacities; AUTOMOBILE ACCIDENT
COMPENSATION ADMINISTRATION,
Defendants, Appellees,
MARIBEL CONCEPCIÓN-CANTRES, former Personnel Director of the
AACA, in her official and personal capacities; ABC INSURANCE
COMPANY; ERNESTO RIVERA-NEGRÓN; RICHARD DOE; JANE ROE; JANE DOE;
JOHN DOE; X CORPORATION; Y CORPORATION; DEF INSURANCE COMPANY;
CONJUGAL PARTNERSHIP ALICEA-DOE; CONJGAL PARTNERSHIP DOE-
CONCEPCIÓN; CONJUGAL PARTNERSHIP RIVERA-ROE,
Defendants.
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF PUERTO RICO
[Hon. Camille L. Vélez-Rivé, U.S. Magistrate Judge]
Before
Lynch, Thompson, and Kayatta,
Circuit Judges.
José Enrico Valenzuela-Alvarado, with whom Valenzuela-
Alvarado, LLC, Frank Zorrilla Maldonado, Frank Zorrilla Law
Offices, Jesús Rabell Méndez, Rabell Méndez C.S.P., Manuel Porro-
Vizcarra, and Manuel Porro-Vizcarra Law Offices were on brief, for
appellants.
Adrián Sánchez-Pagán, with whom Sánchez-Betances, Sifre &
Muñoz-Noya, LLC was on brief, for appellee Automobile Accident
Compensation Administration.
Francisco J. Amundaray, with whom Amundaray, Villares &
Associates, PSC was on brief, for appellee Julio Alicea-Vasallo.
December 23, 2021
LYNCH, Circuit Judge. Certain former Automobile
Accident Compensation Administration ("AACA") employees appeal the
entry of summary judgment against their political discrimination
claims, in favor of the AACA and its former Executive Director,
Julio Alicea-Vasallo. The employees were laid off pursuant to an
agency-wide, facially neutral layoff plan (the "Layoff Plan")
based on seniority. They brought suit under 42 U.S.C. § 1983,
alleging violations of their federal First, Fifth, and Fourteenth
Amendment rights, along with violations of Puerto Rico law.
Holding it was bound by the Puerto Rico court decisions concluding
that it was the Board of Directors -- not the Executive Director
-- that was responsible for the Layoff Plan, the district court
correctly adopted the Puerto Rico court decisions, then entered
summary judgment for both AACA and Alicea-Vasallo. Diaz-Baez v.
Alicea Vasallo ("Diaz-Baez II"), No. 10-cv-1570, 2019 WL 8501708,
at *23–27 (D.P.R. Mar. 29, 2019). Appellants concede that if the
district court correctly adopted these issues decided by the Puerto
Rico courts, the case must be resolved against them. We affirm.
I.
A. Factual History
The AACA is a public instrumentality of Puerto Rico,
created pursuant to Law No. 138 of June 26, 1968, P.R. Laws Ann.
tit. 9, § 2051 et seq. Its purpose is to "administer[] Puerto
Rico's unique system of compensating automobile accident victims,
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irrespective of fault, for medical expenses, disability,
dismemberment, death, and funeral expenses." Bonilla v. Nazario,
843 F.2d 34, 36 (1st Cir. 1988). Appellants agree that the AACA
has an identity distinct and separate from the Commonwealth of
Puerto Rico and that it is a public entity that can "sue and be
sued in its own name, [] can contract with others and except for
its original funding, [] is [primarily] self-supporting . . . ."
Oppenheimer Mendez v. Acevedo, 388 F. Supp. 326, 330 (D.P.R. 1974),
aff'd, 512 F.2d 1373 (1st Cir. 1975).1
Between 2001 and 2008, the Popular Democratic Party
("PDP"), of which appellants assert they are members, was in power
in Puerto Rico. For decades, including that period, the AACA
operated at a loss and had mounting financial deficits. AACA's
June 30, 2006 Financial Statement stated that the agency's "premium
income" had been "insufficient to cover the operating expenses"
for the "past several years." This required the AACA frequently
to withdraw from its investment portfolio "to cover operating
funding needs." A separate report prepared by the AACA's then-
Director of Finance, William Jiménez, covering the 2005-2006
fiscal year contained an acknowledgment by the AACA's Board of
Directors that the agency had accrued a cumulative deficit totaling
more than $99 million between the fiscal years 1998-1999 and 2004-
1 In Spanish, the agency's name is the Administración de
Compensaciones por Accidentes de Automóviles ("ACAA").
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2005. This report also showed that the agency was operating at
about an $8.0 million deficit for the 2005-2006 fiscal year.
In 2007, the Board considered measures to reduce both
its costs and its operational deficit. Jiménez recommended to the
Board that the AACA reduce its workforce by more than 100 employees
and close four offices and two Departments, among other measures.
Jiménez proposed that additional personnel cuts be made during the
2007-2008 fiscal year to reduce the operational deficit.
The Board declined to adopt any of these measures to
address the deficit. Instead, the Board approved several
amendments to its Personnel Regulations, purporting to provide
additional protection for the AACA's managerial employees against
layoff. One such amendment required the AACA to consider employee
performance as a criterion when determining priority for layoff.
In November 2008, the New Progressive Party ("NPP") came
into power in Puerto Rico. This constituted a change in
administration from the PDP. The newly-elected Governor of Puerto
Rico issued Executive Order OE-2009-001 on January 8, 2009,
decreeing an economic and fiscal state of emergency in the
Commonwealth and ordering the elimination of nearly one third of
politically appointed positions. The legislature of Puerto Rico
enacted Act No. 7-2009 ("Law 7") in March 2009, P.R. Laws Ann.
tit. 3, § 8791 et seq., establishing seniority as the primary
criterion used to implement this layoff plan, id. § 8799(b)(3).
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Although the AACA was not covered by Law 7, the Board of
Directors simultaneously was evaluating the agency's fiscal state
and considering a similar plan. The Board discussed the Executive
Order at a January 16, 2009 Board meeting. At that Board meeting,
AACA's Deputy Director of Finance, Rebecca Cotto, also reported
that the AACA was operating at a $15 million deficit and was asked
about the measures the AACA was taking to remedy this. Similar
discussions continued through May 2009, when NPP member Alicea-
Vasallo was appointed Executive Director of the AACA. The AACA
continued operating at a deficit at that time, including a loss in
the category of insurance operations in the amount of more than
$63 million.
The AACA Board of Directors held another meeting to
discuss this fiscal state on October 15, 2009, at which the Board
discussed with Alicea-Vasallo the creation of the Layoff Plan.
During that meeting, the Board's president inquired of the
Executive Director concerning a layoff plan that would save the
AACA between $4.5 and $5 million. In response, Alicea-Vasallo
explained that the way to accomplish that degree of reduction, the
plan would be to lay off employees based on seniority (as did Law
7), covering a period from July 1, 2000 through June 30, 2009.
That is, employees with less than nine years of public service as
of June 30, 2009 (the "cut-off date") would be subject to the Plan.
Alicea-Vasallo represented that this would affect fewer managerial
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employees than the layoff plan recommended by Jiménez in 2007.
Plaintiffs allege that, because of the cut-off date, the plan
targeted employees who had been hired during the PDP
administration. The Board also passed Resolution No. 2009 Oct-
17A that day, amending the Personnel Regulations to eliminate the
consideration of employee performance -- a subjective criterion
-- for layoffs and to place seniority as the primary criterion.
Within two weeks, the Board also approved the Layoff
Plan recommended by the Executive Director via Resolution No. 2009
OCT 21A, which would lay off all managerial employees with less
than nine years of public service by the June 30, 2009 cut-off
date. The resolution stated, specifically, that:
Be it hereby Resolved by the Board of
Directors of the Automobile Accident
Compensation Administration to approve the
implementation of the Lay Off Decree Plan in
all aspects because they are found to be
adequate and serve the purposes of improving
the grave fiscal situation of the agency and
also to safeguard the rights of employees who
render services at [AACA].
Alicea-Vasallo gave notice of the Layoff Plan adopted by
the Board to all relevant employees between November 10, 2009 and
January 7, 2010 in accordance with the Plan. This notice informed
the employees of their right to request both an informal
administrative hearing within five days of the notification and a
review of their dismissal before an administrative judge within
thirty days, citing Article 18 of the Personnel Regulations.
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Article 18.3 of the Regulations further authorizes employees to
file a petition for review of the administrative judge's decision
with the Puerto Rico Circuit Court of Appeals. All of the
plaintiffs in this case had less than nine years in public service
by the selected cut-off date, although not necessarily by the date
their layoffs became effective. The layoffs became effective on
March 19, 2010.
The AACA's June 30, 2011 Financial Statement showed that
these cost reduction measures had in fact reduced both the amount
of the annual losses and the agency's net deficit. The statement
showed a loss in 2011 in the category of insurance operations in
the amount of approximately $1 million, i.e., a more than ninety
percent reduction in losses compared to the previous year. The
statement further reported a decrease in the agency's net deficit
by $20 million, and, between 2010 and 2011, "no withdrawals were
made from the investment portfolio to finance operating
activities."
B. Procedural History
The Layoff Plan has led to multiple administrative and
judicial proceedings which we briefly describe.
i. The Instant Case
It is uncontested that the dismissed AACA employees were
deemed career employees in public service with protected property
interests in their continued employment. Rodriguez-Sanchez v.
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Mun. of Santa Isabel, 658 F.3d 125, 129 (1st Cir. 2011). On June
22, 2010, sixty-two such former employees filed this § 1983 action,
claiming that they were dismissed illegally from their respective
positions following the election of the NPP in 2008 due to their
affiliation with the PDP. Plaintiffs charge defendants with
"conspir[ing] in order to design and implement a scheme to
wrongfully dismiss plaintiffs due exclusively to their political
affiliation," in violation of the AACA's Personnel Regulations and
federal and Puerto Rico law. They allege that Alicea-Vasallo
intentionally set the seniority requirement for the Layoff Plan at
nine years through only June 30, 2009 -- rather than plaintiffs'
formal date of layoff -- to target employees hired while the PDP
was in power. Plaintiffs seek reinstatement and damages.2
2 After the district court largely denied defendants'
motion to dismiss the complaint in March 2011, the plaintiffs filed
two amended complaints to name additional former AACA employees as
co-plaintiffs, and the parties consented to proceed before a
magistrate judge. Since then, plaintiffs Juana M. Contreras-
Castro, Leila A. Hernández-Jiménez, Yelitza I. Hernández-
Hernández, Yalitza Rosario-Menéndez, Raquel Cardona-Soto, Maribel
Alicea-Lugo, Humberto L. Muler-Santiago, Mariela Torres-Molini,
Carmen Yolanda Vázquez-Ortiz, Luis A. Rodríguez-Toro, Nereida
Rivera-Batista, Bernice Berberena-Maldonado, Ricardo Rosario-
Sanchez, Axel Fresse-Álvarez, Gloriely Miranda-Ocasio, Luis A.
Muler-Santiago, Gretchen M. Acevedo-Rivera, Domingo Mariani-
Molini, Rebeca M. Negrón-Umpierre, Jorge Aparicio-Torres, Carmen
E. Rodríguez-Santiago, Lynette Yambó-Mercado, Marianna Ramirez-
Álvarez, Conjugal Partnership Fresse-Miranda, and Conjugal
Partnership Rosario-Berberena have voluntarily dismissed their
claims and thus are not participating in this appeal. Further,
the only defendants participating in the appeal are the AACA and
Alicea-Vasallo.
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On May 2, 2012, plaintiffs moved for "partial" summary
judgment, requesting that the district court declare the Layoff
Plan discriminatory in purpose and implementation. The court
denied the motion, holding that plaintiffs "failed to adduce
evidence showing that defendants had knowledge of the identities
or political affiliations of the [plaintiff] workers in each
position" and that the political discrimination claims were
"speculative and unsupported." Diaz-Baez v. Alicea Vasallo
("Diaz-Baez I"), No. 10-cv-1570, 2012 WL 5566444, at *4 (D.P.R.
Nov. 15, 2012).
After the close of discovery, both parties filed summary
judgment motions. Diaz-Baez II, 2019 WL 8501708, at *9. In August
2015, the district court entered a stay based on Railroad
Commission of Texas v. Pullman Co., 312 U.S. 496 (1941), because
the Puerto Rico Supreme Court was considering the validity of
several dismissals under the Layoff Plan in Rodríguez-Ocasio v.
ACAA, 197 P.R. Dec. 852, 2017 WL 1449701 (P.R. 2017). The federal
proceedings were stayed "until such time as the Puerto Rico Supreme
Court resolves the pending issues before it."3
3 Plaintiffs had appealed the stay and, on appeal, we
questioned the parties as to whether the automatic stay under the
Puerto Rico Oversight, Management, and Economic Stability Act, 48
U.S.C. § 2161 et seq. ("PROMESA"), applied to this case. We
dismissed the appeal as moot before deciding the issue. It remains
unclear whether the PROMESA stay applies, but we need not reach
the question because it is not an issue of Article III
jurisdiction. See Moriarty v. Colvin, 806 F.3d 664, 668 (1st Cir.
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The Supreme Court promulgated its opinion in Rodríguez
Ocasio in April 2017, "reinstat[ing] the rulings issued by the
Administrative Judge of the [AACA]" which upheld the dismissals
pursuant to the Plan. 197 P.R. Dec. at 857. Thereafter, the
district court denied without prejudice the parties' pending
summary judgment motions. Amended summary judgment proceedings
ensued, and concluded with the district court granting defendants'
motions and denying plaintiffs' as moot. Diaz-Baez II, 2019 WL
8501708, at *35.
As we consider the preclusive effect of the Puerto Rico
courts' decisions dispositive as to the pending appeal, we do not
further describe the proceedings before the district court. We
instead turn to the relevant Puerto Rico court proceedings.
ii. Related Cases
Several judicial and administrative challenges to the
Layoff Plan also took place during the relevant time period. We
summarize only those cases necessary to our issue preclusion
analysis, starting with Humberto Muler v. ACAA, No. 2010-va-43,
KLRA 201001000, 2010 WL 5877970 (P.R. Cir. Nov. 24, 2010).
2015) (bypassing the statutory jurisdictional question because
"resolving this case on the merits by affirming the grant of
summary judgment has the same consequences as concluding that we
do not have jurisdiction" (citing Parella v. Ret. Bd. of R.I.
Emps.' Ret. Sys., 173 F.3d 46, 54 (1st Cir. 1999))); Royal Siam
Corp. v. Chertoff, 484 F.3d 139, 143–44 (1st Cir. 2007) (similar).
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After the layoffs became final, the dismissed employees
filed a formal administrative appeal before the AACA's Office of
Hearing Examiner (also titled the "Administrative Judge"). As
those proceedings were pending, the Puerto Rico Supreme Court
issued an opinion in Molini Gronau v. Corporación de Puerto Rico
para la Difusión Pública, 179 P.R. Dec. 674 (P.R. 2010), in which
the court held that an administrative judge lacked jurisdiction to
review the validity of a severance plan recommended by another
corporation's executive director and approved by its board of
directors. The Supreme Court explained that the Court of First
Instance had exclusive jurisdiction over that board's actions.
Thereafter, twenty-seven of the current plaintiffs
questioned whether the Administrative Judge had jurisdiction to
consider the merits of the Layoff Plan in this case. Humberto
Muler, 2010 WL 5877970, at *1. These plaintiffs argued by analogy
that the Administrative Judge lacked jurisdiction because, as in
Molini Gronau and contrary to their current position, it was the
Board of Directors -- not the Executive Director -- which approved
the Plan. Id. at *5. The Administrative Judge rejected this
argument, ruling that it retained jurisdiction over the challenges
to the Layoff Plan because it was the Executive Director who made
the final layoff decision. Id. at *6. The twenty-seven former
employees appealed that ruling to the Commonwealth's Circuit Court
of Appeals.
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The appellate court framed the question on appeal as:
"whether the layoffs announced in the [AACA] as a result of the
implementation of the Layoff Plan [a]pproved by the Board of
Directors were determined by the corporation's Executive Director
or by the Board of Directors." Id. at *11. The court concluded
that the ultimate responsibility for the Layoff Plan belonged to
the Board of Directors and not the Executive Director. Id. at
*15. Accordingly, it reversed the Administrative Judge's exercise
of jurisdiction over the Layoff Plan's validity and instructed the
agency that it could review only the calculation of seniority as
to the employees. Id. at *13–15. That decision was not appealed,
rendering it final.
The employees' claims were remanded back to the
Administrative Judge for the agency to evaluate the seniority
calculations. The Administrative Judge ruled that all of the
employees laid off had less than nine years of public service by
the cut-off date, and confirmed the layoffs. Ignoring the decision
in Humberto Muler just described, the Administrative Judge also
reviewed the legality of the Plan's cut-off date in the various
individual's cases on appeal. Analogizing to Law 7 of March 9,
2009, P.R. Laws Ann. tit. 3, § 8791 et seq., which was upheld by
the Puerto Rico Supreme Court in Sánchez Collazo v. Departmento de
la Vivienda, 184 P.R. Dec. 95 (P.R. 2011), the Administrative Judge
held that the Plan's use of a cut-off date was valid. Twelve
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former employees appealed this ruling on the ground that it was
error for the Administrative Judge to rely on Law 7 and Sánchez
Collazo.
The Puerto Rico Circuit Court of Appeals rendered
inconsistent decisions on appeal. Eight cases affirmed the
administrative decision, whereas four reversed based on the
Administrative Judge's reliance on Law 7. Without questioning the
Administrative Judge's jurisdiction to consider the validity of
the Layoff Plan, the courts reversing the decision held that Law
7 did not apply to the AACA and the uniform cut-off date utilized
in the Layoff Plan was invalid. The AACA petitioned the Puerto
Rico Supreme Court for review of those rulings.
The Supreme Court granted certiorari in three of the
reversals and consolidated the appeals in Rodríguez-Ocasio v.
AACA, 197 P.R. Dec. 852 (P.R. 2011). The Supreme Court reversed
the Circuit Court of Appeals, holding that the decision in Humberto
Muler that administrative judges lacked jurisdiction to consider
the validity of the Layoff Plan constituted "the law of the case."
Rodríguez-Ocasio, 197 P.R. Dec. at 863–66. Because the
Administrative Judge lacked such jurisdiction, it was error for
the Circuit Court of Appeals to review the agency's conclusion as
to the validity of the Layoff Plan. Id. at 867–68.
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II.
Plaintiffs' primary appellate argument is that the
district court erred by concluding that plaintiffs were either
precluded or estopped from arguing that it was the Executive
Director, not the Board of Directors, who was responsible for the
Layoff Plan. At oral argument, plaintiffs' counsel conceded that
this appeal turns entirely on the answer to this question of who
made the adverse employment decision. Counsel stated that if we
find, as we do, that the Board made the decision, there is nothing
left of the lawsuit.
Orders granting summary judgment are reviewed de novo,
"drawing all reasonable inferences in favor of the non-moving
party." Pac. Indem. Co. v. Deming, 828 F.3d 19, 23 (1st Cir. 2016)
(quotations and citation omitted). Our review of a district
court's res judicata determination is likewise reviewed de novo.
Grajales v. P.R. Ports Auth., 923 F.3d 40, 43 (1st Cir. 2019).
"[W]e apply Puerto Rico Law to determine the preclusive effect of
the judgment of the Court of First Instance." Id. A district
court's application of the doctrine of judicial estoppel is
reviewed for abuse of discretion. Alt. Sys. Concepts, Inc. v.
Synopsys, Inc., 374 F.3d 23, 30 (1st Cir. 2004).
A. Issue Preclusion
The district court was correct to conclude the twenty-
seven plaintiffs who were also party to Humberto Muler are
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precluded from relitigating the fact that it was AACA's Board of
Directors who approved the Layoff Plan. See Diaz-Baez II, 2019 WL
8501708, at *23-24. Puerto Rico's Civil Code provides that,
[i]n order that the presumption of res
adjudicata may be valid in another suit, it is
necessary that, between the case decided by
the sentence and that in which the same is
invoked, there be the most perfect identity
between the things, causes, and persons of the
litigants, and their capacity as such.
P.R. Laws Ann. tit. 31, § 3343. The statute covers both claim and
issue preclusion. Baez-Cruz v. Municipality of Comeiro, 140 F.3d
24, 29 (1st Cir. 1998).
Despite "the rather strict wording of Puerto Rico's
mutuality requirement," the inclusion of new parties in a case "is
not a bar to the application of [issue preclusion]." Sánchez-
Núñez v. P.R. Elec. Power Auth., 509 F. Supp. 2d 137, 146 (D.P.R.
2007) (citing Baez-Cruz, 140 F.3d at 29). Nor is perfect identity
of causes required "when the defense is one of issue preclusion,
rather than claim preclusion." Baez-Cruz, 140 F.3d at 30 (citing
A & P Gen. Contractors v. Asociación Caná Inc., 10 P.R. Offic.
Trans. 984, 996 (P.R. 1981)). Instead, issue preclusion
"forecloses relitigation in a[ny] subsequent action of a fact
essential for rendering a judgment in a prior action between
[primarily] the same parties, even when different causes of action
are involved." Cruz Berríos v. Gonzalez-Rosario, 630 F.3d 7, 12
(1st Cir. 2010) (quotations and citation omitted). Courts apply
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this doctrine to reduce litigation expenses, conserve judicial
resources, and cultivate reliance on judicial decisions by
avoiding inconsistent conclusions. Id. at 11.
The twenty-seven plaintiffs who were party to Humberto
Muler are precluded from questioning, for at least the second time,
who is responsible for the Layoff Plan. A material question in
both cases has been whether the Board of Directors or the Executive
Director was responsible for the Plan. Compare Diaz-Baez II, 2019
WL 8501708, at *23, with Humberto Muler, 2010 WL 5877970, at *11.
The plaintiffs were given a full and fair opportunity to litigate
the question of who approved the Plan in Humberto Muler, and the
Circuit Court of Appeals rendered a final judgment concluding that
it was the Board of Directors. 2010 WL 5877970, at *15 ("[I]n
this case it was the Board of Directors which made the decision to
layoff (1) the management employees, (2) and establish the
benchmark of having been employed 9 years or less . . . ."); see
also Kremer v. Chem. Const. Corp., 456 U.S. 461, 481 (1982)
(holding that "full and fair opportunity to litigate" is satisfied
by minimum procedural requirements of the Fourteenth Amendment).
Plaintiffs -- who failed to appeal the Humberto Muler decision --
are barred from taking a second bite of the apple in this
litigation. See also Rodríguez Ocasio, 197 P.R. Dec. at 853
(holding that Humberto Muler constitutes "law of the case" as to
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the issue of jurisdiction, which depends on who approved the Layoff
Plan).
Plaintiffs' arguments to the contrary lack merit. The
arguments misconstrue the doctrine of issue preclusion under
Puerto Rico law, which requires neither strict identity of parties
nor causes of action. See Baez-Cruz, 140 F.3d at 29 (reading
§ 3343 "as permitting issue preclusion to operate against a
plaintiff who[, as here,] adds defendants in the second action.");
id. at 30 ("The Supreme Court of Puerto Rico has [] stated that
identity of causes is unnecessary when the defense is one of issue
preclusion, rather than claim preclusion.").
B. Judicial Estoppel
The district court also held that the remaining sixteen
plaintiffs were judicially estopped from relitigating the question
of who approved the Layoff Plan. In 2010, these plaintiffs, among
others, moved to intervene in another case filed in the Court of
First Instance challenging the Layoff Plan, María Díaz-Báez v.
ACAA, No. K PE2009-4889. In this motion, the former employees
stated that:
[w]e observe that the Regulation does not
confer power on the Examining Officer to
review the decisions of the Board of
Directors. In this case, the approval of the
Cessation Plan becomes a product of the Board
of Directors that is neither subject to
revision by the Examining Officer nor by the
Executive Director. This intricate process
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renders the notification of a hearing as
completely defective.
Their motion was allowed. The plaintiffs having successfully taken
the position previously that it was the Board of Directors who
approved the Layoff Plan, the district court estopped these
plaintiffs from taking the opposite position in this litigation,
citing Alternative System Concepts Inc., 374 F.3d at 32-33 ("[T]he
doctrine of judicial estoppel prevents a litigant from pressing a
claim that is inconsistent with a position taken by that litigant
. . . in a prior legal proceeding . . . .").
The federal doctrine of judicial estoppel "prevents a
litigant from pressing a claim that is inconsistent with a position
taken by that litigant either in a prior legal proceeding or in an
earlier phase of the same legal proceeding." Bossé v. N.Y. Life
Ins. Co., 992 F.3d 20, 32 (1st Cir. 2021) (quoting InterGen N.V.
v. Grina, 344 F.3d 134, 144 (1st Cir. 2003)). It "is designed to
ensure that parties proceed in a fair and aboveboard manner,
without making improper use of the court system." Id. (quoting
InterGen N.V., 344 F.3d at 144).
In general, three conditions must be satisfied for the
doctrine of judicial estoppel to apply: "First, the estopping
position and the estopped position must be directly inconsistent,"
Alt. Sys., 374 F.3d at 33, "[s]econd, the responsible party must
have succeeded in persuading a court to accept its prior position,"
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id., and "[t]hird, the party seeking to assert the inconsistent
position must stand to derive an unfair advantage if the new
position is accepted by the court," Knowlton v. Shaw, 704 F.3d 1,
10 (1st Cir. 2013) (citation omitted).
These plaintiffs' appellate brief does not even attempt
to challenge the district court's application of the necessary
conditions.4 They have made no developed or cognizable argument
that there was an abuse of discretion by the district court in its
judicial estoppel finding.5 These plaintiffs waived the argument
that judicial estoppel does not apply by failing to develop it.
See United States v. Zannino, 895 F.2d 1, 17 (1st Cir. 1990)
("[I]ssues adverted to in a perfunctory manner, unaccompanied by
some effort at developed argumentation, are deemed waived.").
III.
Because appellants concede that this appeal turns on
whether the district court correctly concluded that they are barred
from arguing in this litigation that the Executive Director, and
4 We need not decide whether federal law or Puerto Rico
law governs the application of judicial estoppel because the
plaintiffs do not address the question and fail to develop any
argument under either jurisdiction's law. See Thorne v. Howe, 466
F.3d 173, 181 n.1 (1st Cir. 2006). The text above articulates the
familiar federal standard.
5 These plaintiffs at most cite one inapposite case in a
footnote, see A & P Gen. Contractors, 10 P.R. Offic. Trans. 984(analyzing the doctrine of res judicata, but not judicial
estoppel), and argue that judicial estoppel requires strict
mutuality of parties.
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not Board of Directors, is responsible for the Layoff Plan, the
judgment is affirmed.
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