Reyes-Perez v. State Insurance Fund Corporati

United States Court of Appeals
For the First Circuit
No. 13-1375
ROBERTO REYES-PÉREZ,
Plaintiff, Appellant,
v.
STATE INSURANCE FUND CORPORATION; ZOIMÉ ÁLVAREZ-RUBIO,
SAÚL RIVERA-RIVERA, MAYRA DOMENECH, JORGE GARCÍA-ORTIZ,
in their individual capacities,
Defendants, Appellees.
APPEAL FROM UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF PUERTO RICO
[Hon. José A. Fusté, U.S. District Judge]
Before
Lynch, Chief Judge,
Thompson and Kayatta, Circuit Judges.
Celina Romany for appellant.
Damaris Ortiz González, with whom Ángel Muñoz-Noya and Sifre
& Muñoz-Noya PSC were on brief, for appellee State Insurance Fund
Corporation.
Susana I. Peñagarícano Brown, with whom Michelle Camacho-
Nieves, Assistance Solicitor General, and Margarita Mercado-
Echegaray, Solicitor General, Department of Justice, were on brief,
for individual capacity appellees.
June 19, 2014
LYNCH, Chief Judge. Plaintiff, attorney Roberto Reyes-
Pérez, who had been favored in his public employment with a trust
position at Puerto Rico's State Insurance Fund Corporation (SIFC)
during the period his political party, the Popular Democratic Party
(PDP), was in power, was moved into a career position at the SIFC
as it became clear the opposing party might win an upcoming
election. Had he remained in a trust position, the new
administration could have removed him without violating the First
Amendment.
He worked in his new, career position as Contracting
Director for about two years. During this time, audits were
performed by the new administration of a number of categories of
employees to see if their employment in fact conformed with Puerto
Rican law. Reyes-Pérez was among those employees whose appointment
did not meet the job requirements. His reclassification to a
career position was annulled, and because he had no right to
reinstatement, he was dismissed.
The district court found that the Mt. Healthy defense
required entry of summary judgment for defendants. We agree and so
affirm.
I.
On de novo review of the grant of a motion for summary
judgment, we recite the facts in the light most favorable to the
non-moving party, drawing all reasonable inferences in his favor.
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Jones v. Nationwide Life Ins. Co., 696 F.3d 78, 81-82 (1st Cir.
2012). However, we disregard "allegations of a merely speculative
or conclusory nature." Serra v. Quantum Servicing Corp., 747 F.3d
37, 39-40 (1st Cir. 2014). We also note that both we and the
district court have done our best to pull facts from the record
despite frequent violations of the rules and inadequate briefing by
Reyes-Pérez.
A. Background
There are two major political parties in Puerto Rico: the
PDP and the New Progressive Party (NPP). When control of the
government changes parties, "[e]ntirely too often, the political
party assuming office terminates the employment of public employees
who are affiliated with the party going out of power and then fills
those vacancies with its own members." Sanchez-Lopez v. Fuentes-
Pujols, 375 F.3d 121, 125 (1st Cir. 2004). Similarly, "the
outgoing party attempts to secure the continued tenure of its
members in public jobs through a variety of devices, such as
reclassifying policy-type appointments as career positions or
making appointments in violation of Puerto Rico law." Id.
Reyes-Pérez is a PDP activist, from a family of well-
known, former public figures in that party. Following his 2001
graduation from law school, he went to work as a legal advisor to
PDP member Sila Calderón, then-governor of Puerto Rico. In March
2005, immediately after working for Calderón, Reyes-Pérez accepted
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a trust position as the Contracting Director of the SIFC. This was
his first job with responsibilities in contracting for goods and
services.
In February 2008, as part of a larger restructuring of
the SIFC under a PDP administration and in advance of a November
election, Reyes-Pérez's position was reclassified from a trust to
a career position. Reyes-Pérez's position was one of three that
were reclassified from trust to career positions during this
reorganization.1
In the November 2008 elections, the NPP gained control of
the executive branch of government in Puerto Rico. In January
2009, Zoimé Álvarez-Rubio, an NPP activist, was appointed as the
new SIFC Administrator. On January 14, 2009, with the approval of
the SIFC's Board of Directors, Álvarez-Rubio undertook several
investigative audits to determine whether her predecessor's
reorganization conformed with the new administration's view of
local laws.2
Álvarez-Rubio ordered a comprehensive audit of all of the
SIFC's personnel transactions that took place during 2008. The
1
The other two positions were: "Associate Director of
Education and Development" and "Special Assistant I."
2
Plaintiff attempted to refute the fact of this
reorganization, in part by alleging that because plaintiff was not
formally informed of the organizational change, it did not take
place. We agree with the district court that this attempt to deny
the fact of the reorganization fails, and so we do not credit it.
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stated purpose of this investigation was to ensure that all of the
relevant personnel actions complied with applicable rules and
regulations. In particular, the investigation focused on
compliance with the "merit principle," which is mandated by Puerto
Rico law, P.R. Laws Ann. tit. 3, § 1461. The merit principle is
expressed in various forms in the SIFC Employee Manual, and is
intended to ensure open competition for positions at the SIFC.
Saúl Rivera-Rivera, then the Director of the Human
Resources Department, headed the investigation. After a review of
the 3,835 personnel files of SIFC employees, the investigation
concluded that 232 files chronicled personnel transactions that
violated Article 14.1 of the Employee Manual. Under Article 14.1,
which reflects the merit principle, the SIFC is required to fill
available positions through open competition that allows
individuals from outside the SIFC to compete for the jobs. The
SIFC's internal investigation found that these 232 cases violated
Article 14.1 because positions were filled via internal job
announcements rather than public postings.
Also in 2009, the SIFC undertook a second evaluation of
personnel actions, this time focusing on the three
reclassifications -- including plaintiff's -- from trust to career
positions.3 This type of reclassification is governed by Article
3
This investigation was undertaken in part because there had
been various complaints filed before the SIFC's Board of Appeals by
SIFC managerial employees protesting these reclassifications.
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9.5 of SIFC's Employee Manual, which states that in order to
preserve the merit principle, reclassification of a trust position
to a career position is only authorized when there is a change in
the position's functions or when there is a change in SIFC's
organizational structure. Further, if an occupied position is
reclassified, the current holder of that position must meet several
requirements, including (1) meeting the established qualification
requirements for the position's class; (2) receiving a
certification from the Administrator or his authorized
representative certifying that the employee's qualifications and
services are adequate; and (3) passing (or having passed) the exam
required for the position's class. As it is relevant here, the
career position of Director of Contracting requires, inter alia,
five years of experience in the contracting area.
This audit investigation, which was conducted by an
external human resources consultant, José Miguel Álvarez, concluded
that all three 2008 reclassifications from trust to career
positions, including plaintiff's, violated the merit principle for
failing to comply with any of the requirements of Article 9.5. As
to the experience requirement, plaintiff's only experience in
contracting was during his tenure at the SIFC, which began on March
1, 2005. At the time his position was reclassified in 2008, he
plainly did not have the five years of experience that the Employee
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Manual required.4 As to the other qualifications, Álvarez's Audit
Report found that plaintiff's personnel file contained no evidence
that he had received the required certification from the
Administrator,5 nor that he had taken or passed the required exam.
The Audit Report recommended annulling each of the three
reclassifications for failure to comply in any way with Article
9.5. Following Administrator Álvarez-Rubio's approval of the Audit
Report's recommendations, the SIFC's human resources department
began notifying those who would be affected. To this end, on March
26, 2010, plaintiff received a letter notifying him of Álvarez-
4
Plaintiff initially attempted to argue that he had
previously provided legal advice in matters relating to the
contracting of goods and services to Pediatrix Medical Group
following his graduation from law school in 2001. However, both
plaintiff and Pediatrix's representative ultimately admitted that
plaintiff was never officially employed in that capacity, and that
any legal advice provided was given in an unofficial capacity
during family reunions and other social events, since Pediatrix's
president was plaintiff's uncle.
5
Plaintiff relies heavily on an August 29, 2008 letter
signed by former Administrator Carlos Ruiz Nazario and former head
of human resources Louis A. Villahermosa that stated that plaintiff
met all the position requirements, in addition to complying with
Article 9.5 of the SIFC Employees Manual. This reliance is
misplaced. Even if we were to credit plaintiff's assertion that
this letter met the certification requirement of Article 9.5, the
letter cannot undermine defendants' showing that plaintiff in fact
did not possess the required five years of experience.
Plaintiff's argument that his substantive qualifications are
disputed issues of fact because there were certain documents
missing from his personnel file fails for largely the same reason.
As the district court correctly observed, "[t]he fact that a piece
of paper is missing from a file does not controvert Defendants'
statement that Plaintiff lacked the requisite experience for the
position." Reyes-Perez v. State Ins. Fund, No. 11-1070, 2012 WL
4863714, at *6 n.11 (D.P.R. Oct. 12, 2012).
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Rubio's intent to nullify the 2008 reclassification and to return
the Contracting Director role to a trust position. The letter
further explained that because plaintiff had held what was properly
characterized as a trust (rather than a career) position, he had no
right to reinstatement.
Plaintiff requested and received an administrative
hearing to contest this determination. In late April 2010, the
Official Examiner agreed with the SIFC's determination that the
2008 reclassification violated the merit principle, and accordingly
agreed that the nullification of that reclassification was proper.
Álvarez-Rubio adopted this finding, and notified Reyes-Pérez of
this conclusion in a letter dated April 30, 2010. Because he had
no right to reinstatement, plaintiff was dismissed from his
position.6 The letter from Álvarez-Rubio informed plaintiff of his
right to appeal this outcome to the SIFC Board of Appeals. He did
not appeal.
B. Procedural History
On January 21, 2011, Reyes-Pérez filed this suit in the
District of Puerto Rico against SIFC and several defendants in
their individual and official capacities, alleging that he was
6
Following the nullification, the position of Contract
Director was returned to its original classification as a trust
position.
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terminated from his position at SIFC because of his political
association in violation of the First and Fourteenth Amendments.7
The defendants moved for summary judgment, arguing that
there was no evidence in the record that supported a prima facie
case of political discrimination, and that even if plaintiff could
make a prima facie showing, his claim fails under the Mt. Healthy
doctrine. See Mt. Healthy City Sch. Dist. Bd. of Educ. v. Doyle,
429 U.S. 274 (1977).
The district court assumed arguendo that plaintiff made
a prima facie showing of political discrimination, but concluded
that defendants were entitled to summary judgment on the basis of
their Mt. Healthy defense in any event.8 Reyes-Perez v. State Ins.
Fund, No. 11-1070, 2012 WL 4863714, at *5 (D.P.R. Oct. 12, 2012).
Plaintiff then filed a motion for reconsideration, arguing that the
7
Reyes-Pérez also alleged a due process claim, along with
several pendent state law claims under Puerto Rico law. The
district court granted the defendants' summary judgment motion as
to those claims, and plaintiff does not renew them on appeal.
8
The district court repeatedly voiced its frustration with
plaintiff's "fail[ure] to comply with the applicable rules
governing summary judgment practice in this district." Reyes-
Perez, 2012 WL 4863714, at *1; see also id. at *1 n.1, *3 n.4, *4
n.10, *6 n.11. In several instances, the plaintiff's failure to
properly controvert defendants' factual assertions led the district
court to deem certain of defendants' supported statements admitted.
District courts have broad latitude to enforce local rules, and we
see no abuse of discretion in the court's actions here. See Air
Line Pilots Ass'n v. Precision Valley Aviation, Inc., 26 F.3d 220,
224 (1st Cir. 1994). Nor will we reward the plaintiff's failure to
comply with summary judgment rules in the district court by taking
the different view of the record plaintiff suggests here.
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district court had committed clear legal error. The district court
summarily denied that motion, Reyes-Perez v. State Ins. Fund, No.
11-1070, 2013 WL 607918 (D.P.R. Feb. 19, 2013), and plaintiff now
appeals.
II.
"It is axiomatic that 'the First Amendment protects non-
policymaking public employees from adverse employment actions based
on their political affiliation or opinion.'" Vélez-Rivera v.
Agosto-Alicea, 437 F.3d 145, 152 (1st Cir. 2006) (quoting González-
Piña v. Rodríguez, 407 F.3d 425, 431 (1st Cir. 2005)). We evaluate
political discrimination claims using a burden-shifting approach.
First, the plaintiff must show that his political
affiliation was a "substantial or motivating factor" in the adverse
employment decision. Padilla-García v. Guillermo Rodriquez, 212
F.3d 69, 74 (1st Cir. 2000). Once made, the defendant may then
rebut that showing with what is commonly referred to as the Mt.
Healthy defense: "by proving by a preponderance of the evidence
that the governmental agency would have taken the same action
against the employee even in the absence of the protected conduct."
Díaz-Bigio v. Santini, 652 F.3d 45, 52 (1st Cir. 2011) (quoting
Guilloty Perez v. Pierluisi, 339 F.3d 43, 51 (1st Cir. 2003))
(internal quotation marks omitted). The Mt. Healthy defense is
rooted in causation; even after plaintiff makes a prima facie case,
it is "insufficient to establish discrimination as a matter of law
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because the plaintiff's case at that point does not 'distinguish[]
between a result caused by a constitutional violation and one not
so caused.'" Sanchez-Lopez v. Fuentes-Pujols, 375 F.3d 121, 131
(1st Cir. 2004) (alteration in original) (quoting Mt. Healthy, 429
U.S. at 286).
We assume dubitante that plaintiff has set forth an
adequate prima facie case. We proceed to defendants' Mt. Healthy
defense, and conclude that they are entitled to summary judgment on
that basis.
First, plaintiff plainly lacked the required years of
experience in the contracting sector for the career position of
Contracting Director. His attempts to argue to the contrary fall
flat: at the time the reclassification of his position occurred,
the record is clear that he had not been employed there for five
years, and that was his first formal employment experience working
in contracting. Chats about contracting at family barbeques with
his uncle do not fill the gap. On that basis alone, plaintiff's
elevation to a career position was plainly in violation of Puerto
Rico's merit principle, as expressed in Article 9.5 of the Employee
Manual. Cf. Sanchez-Lopez, 375 F.3d at 132 (describing "illegality
of [an] appointment" as a "neutral basis" on which to base an
employment action).
We have said that "simply showing that an appointment was
illegal under local law does not suffice to meet defendants' Mt.
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Healthy burden," id. at 133, so our inquiry continues. Here,
defendants put forward sufficient other evidence to show that
regardless of plaintiff's political affiliation, they would have
reclassified his Contracting Director position and would have done
so for a legitimate reason. That is sufficient to establish a Mt.
Healthy defense. See Soto-Padró v. Pub. Bldgs. Auth., 675 F.3d 1,
6 (1st Cir. 2012).
The larger reversion of the SIFC's organizational
structure to its 2005 status was not spearheaded by Administrator
Álvarez-Rubio acting independently. Rather, it was approved by the
SIFC's Board of Directors. See id. (affirming grant of summary
judgment in favor of defendants in a political discrimination case
where a government entity's governing board had "greenlighted the
entity-wide restructuring plan").
Additionally, the accompanying audit of the SIFC was "not
one that was targeted exclusively at [plaintiff's] particular
corner" of the organization, id., but rather was an entity-wide
investigation that included the review of well over 3,000
employment files to ensure compliance with the merit principle.
There is no evidence that this entity-wide audit targeted
individuals from a particular party. See Sanchez-Lopez, 375 F.3d
at 132.
Both audits were geared toward "positions[,] not
persons." Soto-Padró, 675 F.3d at 6. The second investigation was
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targeted at all three of the positions that had been reclassified
from trust to career positions in 2008. At the close of his
investigation, Álvarez, the external consultant, provided the SIFC
Administrator with a detailed report as to each position's lack of
compliance with Article 9.5, and likewise recommended that all
three position reclassifications be annulled. Plaintiff has not
proffered any evidence from which an inference can be drawn that
the Audit Report's findings were based on political considerations,
or that there was differential treatment of the individuals that
held the other two improperly reclassified positions.
The record is quite clear that during 2009, the SIFC
underwent a comprehensive organizational restructuring, which
included the identification and correction of various employment-
related transactions that violated Puerto Rico's merit principle.
If the defendant succeeds in carrying its burden of
persuasion as to its Mt. Healthy defense, the plaintiff may then
"discredit the proffered nondiscriminatory reason, either
circumstantially or directly, by adducing evidence that
discrimination was more likely than not a motivating factor."
Padilla-García, 212 F.3d at 77. Here, plaintiff has failed to
produce any evidence that undermines defendants' proffered
nondiscriminatory reasons for his reclassification and later
termination. See Cepero-Rivera v. Fagundo, 414 F.3d 124, 133 (1st
Cir. 2005). Defendants' Mt. Healthy defense ends the matter.
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III.
The district court's grant of summary judgment in favor
of the defendants is affirmed.
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