Román-Oliveras v. Puerto Rico Electric Power Authority (PREPA)

United States Court of Appeals
For the First Circuit
No. 13-1991
HÉCTOR LUIS ROMÁN-OLIVERAS; SONIA MARÍA YAMA-RUIZ; FELICITA
OLIVERAS-LÓPEZ,
Plaintiffs, Appellants,
v.
PUERTO RICO ELECTRIC POWER AUTHORITY (PREPA); JAMES VÉLEZ;
JULIO RENTA,
Defendants, Appellees.
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF PUERTO RICO
[Hon. Gustavo A. Gelpí, Jr., U.S. District Judge]
Before
Thompson, Lipez, and Barron,
Circuit Judges.
Nicolás Nogueras-Cartagena and Nogueras Law & Associates on
brief for appellants.
Margarita Mercado-Echegaray, Solicitor General, and Rosa
Elena Pérez Acosta, Assistant Solicitor General, on brief for
appellees.
August 5, 2015
BARRON, Circuit Judge. This appeal arises from a suit
that Héctor Luis Román-Oliveras, along with his wife and mother,
brought against his former employer, the Puerto Rico Electric Power
Authority (PREPA), and two individual supervisors. The potential
obstacle that the plaintiffs must overcome to keep their suit alive
arises from the settlement negotiations that took place in the
summer of 2012. Because we agree with the District Court that
these talks produced a binding oral settlement agreement that the
District Court had jurisdiction to enforce, we agree with the
District Court that this suit cannot continue. We thus affirm the
judgment below that dismissed the suit on the basis of that
settlement agreement.
I.
Román worked for PREPA for over twenty years. In March
of 2006, however, he was suspended from his job, and in February
of 2007, he was then dismissed. Román along with his wife and
mother responded by filing this suit against PREPA, his supervisor,
and the plant superintendent under the Americans with Disabilities
Act (ADA), 42 U.S.C. §§ 12101 - 12213; Title VII of the Civil
Rights Act of 1964, 42 U.S.C. §§ 2000e - 2000e-17; 42 U.S.C.
§ 1983; and several Puerto Rico laws. The plaintiffs alleged that
the defendants had unlawfully targeted Román due to his medical
disability and his union activities.
- 2 -
The District Court initially dismissed the complaint in
its entirety. But on appeal, this Court partially reversed and
reinstated the plaintiffs' ADA claim against PREPA and their claims
under Puerto Rico law against all defendants. See Román-Oliveras
v. P.R. Elec. Power Auth., 655 F.3d 43, 47 (1st Cir. 2011). On
remand, the parties then held settlement negotiations. Those
negotiations took place in Judge Aida M. Delgado-Colón's chambers
in July of 2012.1 Judge Delgado-Colón later memorialized an
account of the discussions in a minute entry in December of 2012.
In that entry, Judge Delgado-Colón recounted that the parties had
reached a binding oral settlement agreement during the
negotiations, and that all that remained was the submission of a
final written settlement agreement. The parties, however, did not
ultimately submit a final written agreement.2
1 The reply brief raises for the first time the argument that
nothing in the record shows that Román's wife or mother joined in
settling the lawsuit. We deem this claim waived because of
appellants' failure to develop it in the opening brief. See Young
v. Wells Fargo Bank, N.A., 717 F.3d 224, 239-240 (1st Cir. 2013)
("We have repeatedly held, 'with a regularity bordering on the
monotonous,' that arguments not raised in an opening brief are
waived." (quoting Waste Mgmt. Holdings, Inc. v. Mowbray, 208 F.3d
288, 299 (1st Cir. 2000))).
2 The defendants, in the months following the July 2012
settlement talks, circulated several draft agreements to the
plaintiffs without receiving any response. Counsel for the
plaintiffs finally responded in October of 2012 and suggested
several changes to the written agreement. The parties informed
the District Court of their lack of progress in arriving at a
written agreement. The District Court urged the parties to
finalize what it viewed as an already completed settlement in
December of 2012 and dismissed the defendants' pending summary
- 3 -
In May of 2013, Judge Delgado-Colón recused herself from
the case, which was then transferred to Judge Gustavo Gelpí. Soon
thereafter, Judge Gelpí ordered the plaintiffs to show cause why
he could not enforce the oral settlement agreement that Judge
Delgado-Colón had found the parties had reached. The plaintiffs
responded to that order by arguing that "an agreement had never
been reached." The plaintiffs did not ask, however, for an
evidentiary hearing on the existence of such an agreement. The
plaintiffs also argued in response to the show cause order that,
assuming such a settlement had been reached, the District Court
lacked subject-matter jurisdiction to enforce it in light of
Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375 (1994).
Judge Gelpí rejected the plaintiffs' arguments and
dismissed the case with prejudice. He then ordered that PREPA
deposit the settlement amount with the District Court. This appeal
followed.
judgment motion as "[m]oot in light of Settlement" in January of
2013.
The court then ordered the parties to finalize their
settlement agreement by April 12, 2013. The plaintiffs, however,
declined to sign the instrument circulated by the defendants. The
District Court nevertheless found this unsigned instrument
"captured the terms and conditions" of the oral settlement
agreement.
- 4 -
II.
On appeal, the plaintiffs repeat the same arguments that
they made below. The plaintiffs argue first that even if there
was a binding settlement agreement, the District Court did not
have subject-matter jurisdiction to enforce it. The plaintiffs
rely on Kokkonen.
There, the district court dismissed a lawsuit after the
parties had executed a settlement agreement. Kokkonen, 511 U.S.
at 377. The district court did not mention the underlying
settlement agreement in the dismissal order. Id. Nor did the
district court state that it was retaining jurisdiction to enforce
the agreement. Id. Nevertheless, when one party later sought to
have the court enforce the settlement agreement, the district court
concluded that it had the inherent authority to provide a remedy
to safeguard its earlier order of dismissal. Id.The Supreme Court rejected that ruling. The Court held
that a post-dismissal suit to enforce a settlement agreement is
simply a separate breach-of-contract claim. Id. at 379. The Court
thus held that federal courts need an independent basis for federal
subject-matter jurisdiction to enforce that contract claim. Id.
at 381.
The plaintiffs argue from Kokkonen that the District
Court lacked subject-matter jurisdiction here. But they are wrong
to do so. The District Court indisputably had subject-matter
- 5 -
jurisdiction over the plaintiffs' suit and that suit had not yet
been dismissed when the defendants sought to enforce the settlement
agreement that they claimed had been reached. Thus, if the
District Court correctly concluded that the parties had reached a
final, oral settlement agreement, the District Court had subject-
matter jurisdiction to enforce it when it purported to do so.
Kokkonen does not block a district court from enforcing a
settlement agreement before the underlying suit has been
dismissed. See Malave v. Carney Hosp., 170 F.3d 217, 220 (1st
Cir. 1999) ("If . . . the settlement collapses before the original
suit is dismissed, the party who seeks to keep the settlement
intact may file a motion for enforcement."); see also Fid. & Guar.
Ins. Co. v. Star Equip. Corp., 541 F.3d 1, 4-5 (1st Cir. 2008)
(same); Bandera v. City of Quincy, 344 F.3d 47, 51-52 (1st Cir.
2003) (concluding district court erred by failing to hold an
evidentiary hearing to enforce an alleged settlement agreement
before proceeding to trial).
That brings us to the second of the plaintiffs' arguments
on appeal -- that the District Court erred in finding that there
was a settlement agreement to enforce. Federal law governs our
answer to that question because the underlying cause of action
arises under federal law.3 See Malave, 170 F.3d at 220. And our
3 The complaint included claims under both federal and Puerto
Rico law, but no party disputes the applicability of federal law.
- 6 -
review of the facts that the District Court found about whether
the parties did in fact enter into such an agreement is only for
clear error. See Kinan v. Cohen, 268 F.3d 27, 32 (1st Cir. 2001).
The record is clear that Judge Delgado-Colón found that
the parties had entered into a final and binding oral settlement
agreement as of July 2012. She clearly recorded that finding in
a minute entry before she recused herself from the case. And
because that finding was based on Judge Delgado-Colón's "personal
knowledge through . . . a settlement conference," Malave, 170 F.3d
at 221, we lend her finding particular weight. See F.A.C., Inc.
v. Cooperativa de Seguros de Vida de Puerto Rico, 449 F.3d 185,
192 (1st Cir. 2006). Moreover, at the time Judge Delgado-Colón
entered the finding, the parties did not object. Nor did the
parties object when Judge Delgado-Colón dismissed a pending
summary judgment motion as "[m]oot in light of Settlement." Thus,
the parties' conduct -- after Judge Delgado-Colón found that a
binding, oral settlement had been reached -- also reasonably
suggested that "the existence of the settlement had . . . been
conceded previously by both parties." Malave, 170 F.3d at 221.
Since Puerto Rico law would apparently reach the same result, see
Lopez Morales v. Hosp. Hermanos Melendez Inc., 447 F. Supp. 2d
137, 142 (D.P.R. 2006), we will accept the parties' "implicit
concession" that federal law applies, Mathewson Corp. v. Allied
Marine Indus., Inc., 827 F.2d 850, 857 n.3 (1st Cir. 1987).
- 7 -
Judge Delgado-Colón did recuse herself after determining
that a binding, oral settlement had been reached. But we find no
basis for concluding that Judge Gelpí, after assuming the case
from Judge Delgado-Colón, erred in relying on the well-documented
conclusion that Judge Delgado-Colón had already reached. Judge
Gelpí, after all, issued a show cause order as to why the purported
settlement agreement could not be enforced. But the plaintiffs
proffered no evidence in response that might cast doubt on the
existing factual record before Judge Gelpí. Nor did the plaintiffs
ask Judge Gelpí for an evidentiary hearing to determine whether
there actually had been an oral settlement agreement. Instead,
the plaintiffs left the determination of whether there was a
settlement agreement to Judge Gelpí to make on the basis of the
record as it then existed. Though the plaintiffs did contend that
there was no settlement agreement for Judge Gelpí to enforce, that
bare assertion does not suffice to show Judge Gelpí clearly erred
in finding otherwise.
The judgment of the District Court is affirmed.
- 8 -