Laborde-Garcia v. Puerto

UNITED STATES COURT OF APPEALS
FOR THE FIRST CIRCUIT
No. 92-2287
MYRIAM E. LABORDE-GARCIA,
Plaintiff, Appellee,
v.
PUERTO RICO TELEPHONE CO., ET AL.,
Defendants, Appellants.
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF PUERTO RICO
[Hon. Carmen C. Cerezo, U.S. District Judge]
Before
Breyer, Chief Judge,
Selya and Cyr, Circuit Judges.
Jacqueline D. Novas with whom Jose J. Santiago, Jose L.
Verdiales and Fiddler, Gonzalez & Rodriguez were on brief for
appellants.
Guillermo Ramos Luina with whom Harry Anduze Montano was on
brief for appellee.
May 18, 1993
BREYER, Chief Judge. Myriam Laborde-Garcia claims
that Puerto Rico's Telephone Company, and several of its
officials, deprived her of her government job without
providing her with the procedural protections that the
Federal Constitution requires. Cleveland Bd. of Educ. v.
Loudermill, 470 U.S. 532 (1985). The district court entered
an injunction ordering the Company to reinstate her, and it
denied the individual defendants' claims of "qualified
immunity." The defendants appeal these orders. 28 U.S.C.
1291; Mitchell v. Forsyth, 472 U.S. 511 (1985). We affirm.
I
Background
Ms. Laborde is a career employee of the
Commonwealth-owned Telephone Company, where she has worked
since 1975. On July 7, 1986, she was injured in a work-
related auto accident. She received treatment at the State
Insurance Fund. One year later, on July 6, 1987, she
returned to work. Fourteen months after that, on September
7, 1988, Ms. Laborde went back to the Fund for treatment.
In early October (the following month) the Company wrote to
Ms. Laborde to tell her that it was dismissing her because
of absences related to her "prolonged illness."
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Ms. Laborde, almost immediately thereafter, told
Company officials that they had made a mistake. Her latest
treatment at the Fund (in September) was not related to a
"prolonged illness." Rather, she said, the treatment (and
her absence from work) resulted from a new work-related
accident, involving moving boxes. That accident had occurred
in August 1988, only two months before her current
treatment.
This "mistake" seemed important, for Puerto Rico's
workers' compensation law requires an employer to "reserve"
the job of an injured employee undergoing treatment at the
Fund, and to "reinstate" the employee in that job, but only
if, inter alia, at the time the worker seeks reinstatement,
no more than "twelve months" have "lapse[d] . . . from the
date of the accident." P.R. Laws Ann., tit. 11, 7. (See
Appendix for complete text of statutory provision). More
than "twelve months" had "lapse[d]" from Ms. Laborde's first
accident; but only two months had "lapse[d]" from the time
of the second.
The Company, either because it did not believe Ms.
Laborde, or because it thought her factual claim made no
difference, neither changed its mind about dismissal nor
granted Ms. Laborde a hearing at which she could dispute the
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basis for her dismissal. Ms. Laborde subsequently brought
this lawsuit. She claimed that the Company, in effect, by
depriving her of her job without any kind of prior hearing,
violated the Fourteenth Amendment's Due Process Clause. The
district court held that Ms. Laborde was correct. We agree.
II
The Law
Like the district court, we find the law clear and
in Ms. Laborde's favor. The Fourteenth Amendment says that
the Commonwealth may not deprive a person of "property
without due process of law." The Supreme Court has made
clear that "property" includes the job of a government
employee who (under local law) cannot be dismissed except
for "good cause." Loudermill, 470 U.S. at 538-39; see also
Kercado-Melendez v. Aponte-Roque, 829 F.2d 255, 262 (1st
Cir. 1987), cert. denied, 486 U.S. 1044 (1988). The Supreme
Court has also made clear that the process "due" such an
employee normally includes "'some kind of hearing' prior to
. . . discharge." Loudermill, 470 U.S. at 542. The parties
here agree that the Puerto Rico Telephone Company is a
government employer, Kauffman v. Puerto Rico Tel. Co., 841
F.2d 1169, 1173 (1st Cir. 1987), and that it can dismiss Ms.
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Laborde, a permanent employee, only for cause. P.R. Laws
Ann., tit. 3, 1336(4). The Company, through its
officials, has told Ms. Laborde that she cannot return to
work. They did not, and have not yet, provided her with any
significant opportunity for a hearing. Hence, they have
deprived her of "property" without the "process" that the
Federal Constitution requires. Loudermill, 470 U.S at 546.
The defendants make three arguments to the
contrary. First, they say that, under Puerto Rico's law,
Ms. Laborde lost her job when she did not appear at work;
the workmen's compensation statute provides only a right to
"reinstatement" (after an absence caused by a job-related
injury). The Federal Constitution, they add, does not
protect rights to "reinstatement" because such 'rights' are
only expectations of employment, which may or may not be
fulfilled. See Board of Regents v. Roth, 408 U.S. 564, 576
(1972) (due process clause "is a safeguard of the security
of interests that person has already acquired in specific
benefits"); cf. Kauffman, 841 F.2d at 1173 (where employee
is illegally hired, property right in employment is never
created).
As a matter of Commonwealth law, however, this
argument seems wrong, for the statute itself does not
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separate "discharge" from "reinstatement;" rather, it speaks
both of "reserv[ing]" the job of an employee under treatment
and "reinstat[ing]" that employee (under specified
conditions) on request. See P.R. Laws Ann., tit. 11, 7;
Carron-Lamoutte v. Tourism Co. of Puerto Rico, 92 J.T.S 97
(1992); In Re Hotel Da Vinci, Inc., 797 F.2d 33, 35 (1st
Cir. 1986), citing Rojas v. Mendez & Co., 84 J.T.S. 3 (1984)
(employer cannot validly discharge employee missing work due
to medical treatment during twelve-month period following
disability); but see Union Tronquistas de Puerto Rico, Local
901 v. Emery Air Freight Corp., 596 F.Supp. 829, 833 (D.P.R.
1984) (referring to separate steps of "discharge" and
"reinstatement").
Regardless, as a matter of federal law, the
argument is wrong because the workmen's compensation statute
so narrows the government's discretion to refuse to
reinstate Ms. Laborde (during the relevant twelve months)
that it provides her with a "legitimate claim of
entitlement" to that continued employment. That is to say,
local law's narrowing of the employer's discretion to decide
not to reinstate means that Ms. Laborde could reasonably
have believed, and relied upon her belief, that local law
would likely permit her to remain employed. Based on this
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reasonable expectation created by local law, Ms. Laborde had
a federally protected "property" interest in continued
employment. See Roth, 408 U.S. at 577 (to "have a property
interest in a benefit," a person must "have a legitimate
claim of entitlement to it"); id. at 578 (implying existence
of "property" in renewal of employment if employer's
discretion to choose not to renew had been narrowed); Bishop
v. Wood, 426 U.S. 341, 344-45 (1976); cf. Kentucky Dept. of
Corrections v. Thompson, 490 U.S. 454, 463-65 (1989)
(liberty interest created if prison inmate could reasonably
expect that visit would be allowed absent occurrence of
listed conditions). Thus, whether one views the Company's
actions as taking away Ms. Laborde's present job, as
refusing to reinstate her, or (realistically) as doing both
at the same time, the Company deprived Ms. Laborde of the
sort of "property" that the Constitution protects.
Second, the defendants argue that they need not
have given Ms. Laborde any further hearing because a hearing
could not have helped her. Cf. Carey v. Piphus, 435 U.S.
247, 266-67 (1978) (recovery limited to nominal damages in
cases where employer refuses hearing but dismissal still
clearly justified). They point to a recent Commonwealth
Supreme Court case, Santiago v. Kodak, 92 J.T.S. 11 (1992),
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which held that the Workmen's Compensation Act does not
protect a person who concededly did not report the relevant
accident until after the employer dismissed him. They claim
that, like the plaintiff in Santiago, Ms. Laborde did not
report her accident until after her dismissal.
Santiago, however, does not obviate the need for a
hearing in this case. Unlike the plaintiff in Santiago, Ms.
Laborde does not concede that she did not report the
accident until after she was dismissed. Instead, Ms.
Laborde says that she reported her second accident when she
sought treatment at the Fund on September 7, 1988, before
her employer dismissed her. She adds that the Fund
initially mixed up its paperwork, but later amended that
paperwork to reflect the occurrence of her second accident.
These facts, if proven, might well bring her case outside
the scope of Santiago's holding. Santiago, by emphasizing
the need to determine the facts, does not avoid, but,
rather, reinforces the need for a hearing.
Third, the individual defendants say they are
entitled to "qualified immunity," because, at the time of
the relevant events, their federal legal obligations were
unclear. See Anderson v. Creighton, 483 U.S. 635, 638-41
(1987) (state actors have qualified immunity unless
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precedent would have alerted reasonable person that action
would infringe "clearly established" constitutional
principle); Harlow v. Fitzgerald, 457 U.S. 800 (1981). They
correctly point out that the Supreme Court of Puerto Rico
did not decide until 1992 (after the events here in issue)
that Commonwealth employees have a right to a pre-
termination hearing where accident-related, time-limit
issues are in dispute. Carron-Lamoutte, 92 J.T.S 97.
Carron-Lamoutte, however, simply applied pre-existing
federal constitutional requirements. In 1985, Loudermill
made clear that permanent government employees possessed the
federal right to a pre-discharge hearing. In 1987, in
Kauffman, this circuit applied Loudermill to Puerto Rico's
Telephone Company, making clear that the company must give
its career employees pre-discharge hearings (unless illegal
hiring meant they had never become career employees in the
first place). See Kauffman, 841 F.2d at 1173. Thus, in
1988, the basic law governing Ms. Laborde's claims was clear
and in her favor.
We concede that defendants, in an effort to show
that Ms. Laborde did not possess constitutionally-protected
property, have succeeded in creating an argument (based on
their interpretation of the workmen's compensation statute)
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that is complicated, counterintuitive, and ultimately wrong.
We also concede that one who understood that argument, but
had not yet worked out the proper legal response, might
doubt whether or not the Constitution protected Ms. Laborde.
Yet, we do not believe that the potential existence of an
unusual, sophisticated, and ultimately wrong legal argument,
is sufficient, legally speaking, to muddy what, for immunity
purposes, would otherwise amount to clear legal waters.
Were that not so, given the ingenuity of the bar, "qualified
immunity" would become absolute in that it would become
available in virtually any case argued by a creative lawyer.
We conclude that the Company's legal obligation to provide
Ms. Laborde with an appropriate hearing before depriving her
of her job was clear in 1988. And, the district court's
denial of the defendants' claims of qualified immunity was
legally correct.
The Telephone Company itself makes one further
argument. It says that it is a special kind of government
entity, namely a "municipal corporation." It points out
that a "municipal corporation" cannot be ordered to pay a
Section 1983 damage award based on the actions of its
officials unless those actions are alleged to have been
taken pursuant to an official policy or custom of the
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corporation. See Monell v. Dep't of Soc. Servs. of the City
of New York, 436 U.S. 658, 690-91 (1978). It contends that
the court's order directing it to reinstate Ms. Laborde with
back pay constitutes a "damage award." And, it claims that
Ms. Laborde's complaint is deficient in that it fails to
allege the existence of an official policy, pattern, or
practice which would justify this damage award, as Monell
requires.
Assuming much in defendant's favor for the sake of
argument, we find a short, conclusive answer to this claim
in the fact that the complaint does properly allege that the
Company itself (whether or not a municipal corporation) is
responsible for the violation of the Constitution. It
claims that all of the individual defendants "were duly
appointed officials and/or employees of [the Company];" that
each of the individual defendants was "charged with the
administration" of the Company's employment regulations; and
that each of the individual defendants acted, at all times,
"within the scope of their employment as agents and/or
employees of [the Company]." These allegations amount to an
assertion that the actions of the individual defendants
represented Company policy, for which the Company is
responsible. We do not read the complaint's conclusory
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statement that plaintiff's "dismissal" violated "applicable
laws . . . and . . . regulations" as alleging the contrary.
Moreover, the record before us contains considerable
evidence that the employees' actions represent official
Company policy; and it contains no evidence to the contrary.
See Monell, 436 U.S. at 690 ("Local governing bodies . . .
can be sued directly under 1983 for monetary, declaratory,
or injunctive relief where . . . the action that is alleged
to be unconstitutional implements or executes [an official]
policy statement . . . or decision . . . .")
Finally, we note that the district court has not
yet calculated back pay or other damages. We realize that
the way in which Puerto Rico law applies to the facts as
eventually determined (whether or not it permits dismissal
on such facts) may affect such calculations. See, e.g.,
Carey v. Piphus, 435 U.S. at 260 & n. 15 ; Hernandez-Del
Valle v. Santa-Aponte, 575 F.2d 321, 324 (1st Cir. 1978);
Brewer v. Chauvin, 938 F.2d 860, 862 & n.2, 864 & n.4 (8th
Cir. 1991); City of Chicago v. Dep't of Labor, 737 F.2d
1466, 1471-73 (7th Cir. 1984). We express no opinion as to
the proper outcome of the question of Puerto Rico law nor
can we do so before the facts are finally determined. We
here hold only that federal law clearly required the Company
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to provide Ms. Laborde with fair pre-termination procedures
-- procedures that would have given her a reasonable
opportunity to present facts, and make arguments, showing
that she was entitled to keep her job. The district court
held the same, and its determinations are therefore
Affirmed.
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Appendix
"In the case of working disability according to
the provisions of this chapter, the employer shall be under
obligation to reserve the job filled by the laborer or
employee at the time the accident occurred, and to reinstate
him therein, subject to the following conditions: (1) that
the laborer or employee demand reinstatement from his
employer in his job within the period of fifteen (15) days
counted from the date the laborer or employee is discharged
from treatment, provided such demand is not made after the
lapse of twelve months from the date of the accident; (2)
that the laborer or employee be mentally and physically fit
to fill said job at the time he demands reinstatement from
his employer; and (3) that said job still exists at the time
laborer or employee demands reinstatement. (The job shall
be understood to exist when the same is vacant or is being
filled by another laborer or employee....)"
P.R. Laws Ann., tit. 11, 7 (Article 5-A of the Puerto Rico
Workers' Accident Compensation Act).
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