Pagan v. Calderon

Decision Date16 May 2006
Docket NumberNo. 05-1811.,05-1811.
Citation448 F.3d 16
PartiesDaniel PAGÁN et al., Plaintiffs, Appellees, v. Sila María CALDERÓN, In Her Individual Capacity, Defendant, Appellant.
CourtU.S. Court of Appeals — First Circuit

Susana I. Peñagaricano-Brown, Assistant Solicitor General, with whom Salvador J. Antonetti-Stutts, Solicitor General, Mariana Negrón-Vargas and Maite D. Oronoz-Rodríguez, Deputy Solicitors General, were on brief, for appellant.

Guillermo F. DeGuzmán, with whom DeGuzmán & Gierbolini Law Offices, P.S.C. was on brief, for appellees.

Before SELYA, Circuit Judge, HANSEN,* Senior Circuit Judge, and LYNCH, Circuit Judge.

SELYA, Circuit Judge.

This interlocutory appeal follows the entry of an order denying, in relevant part, a public official's motion to dismiss based on qualified immunity. See Pagán v. Calderón, No. 04-1296, slip op. at 7 (D.P.R. Mar. 30, 2005) (D.Ct.Op.). It raises significant questions concerning the doctrine of standing and the prosecution of claims of political discrimination.

The underlying action involves multiple plaintiffs and multiple defendants (although Sila María Calderón, in her individual capacity, is the only defendant before us). The plaintiffs' overarching claim is that Calderón, then the governor of Puerto Rico, improperly influenced the decision of a government lender to reject a loan sought by the main plaintiff, ARCAM Pharmaceutical Corporation. On the defendants' motions to dismiss, see Fed. R.Civ.P. 12(b)(6), the district court rendered a mixed decision. To the extent that Calderón's denied motion rested on the ground of qualified immunity, she appealed. See Mitchell v. Forsyth, 472 U.S. 511, 530, 105 S.Ct. 2806, 86 L.Ed.2d 411 (1985) (allowing interlocutory appeals of certain denials of qualified immunity). For the reasons that follow, we conclude that no plaintiff other than ARCAM has standing to pursue the appealed federal claims asserted against Calderón. Moreover, we conclude that, with respect to those claims, ARCAM has failed adequately to plead a violation of its constitutional rights. Accordingly, we reverse the challenged rulings, direct the district court to grant Calderón's motion for dismissal, and remand for further proceedings consistent with this opinion.

I. BACKGROUND

Because this is an interlocutory appeal from the denial of a Rule 12(b)(6) motion to dismiss grounded on qualified immunity, we — like the lower court — must accept as true the factual averments of the plaintiffs' complaint. See Limone v. Condon, 372 F.3d 39, 42 (1st Cir.2004).

ARCAM, a corporation chartered under the laws of Puerto Rico, was formed in 2000 for the purpose of engaging in the manufacture of pharmaceutical products. Its principal shareholder and chief executive officer is plaintiff Ernesto Vilanova Vélez (Vilanova). Plaintiffs Cristino Agosto Reyes, Martin Souto, and Christopher Molina (collectively, the guarantors) are minority shareholders. Vilanova and the guarantors have, from time to time, personally guaranteed certain of ARCAM's corporate debts.

Shortly after its formation, ARCAM paid $4,500,000 to acquire land and buildings in Hormigueros, Puerto Rico (the Property) as a site for manufacturing pharmaceutical products. To fund this transaction, finance improvements, and secure operating capital, ARCAM obtained a $10,000,000 loan from Westernbank. In exchange, it granted Westernbank a first mortgage on the Property. The complaint alleges that, despite the relatively modest purchase price, the Property actually was worth $24,000,000.

Early on, ARCAM retained plaintiff Daniel Pagán as a consultant. Pagán had occupied various high-ranking positions in the administration of Governor Pedro Rosselló. As a result, Pagán became known as a political insider and a strong supporter of the reigning New Progressive Party (NPP).

In the general elections of November 2000, the voters chose Calderón, running under the banner of the Popular Democratic Party (PDP), to succeed Rosselló. The upshot was that a PDP administration supplanted an NPP administration. The new regime launched a number of investigations into the performance of persons close to Rosselló. In the wake of one such probe, the Calderón administration filed criminal charges against Pagán, alleging bid-rigging. See P.R. Laws Ann. tit. 33, § 4353a. Although a local court eventually dismissed the charges, the plaintiffs envision this unwarranted prosecution as emblematic of the "political witch-hunt and persecution policy implemented by defendant Calderón and her administration against individuals politically affiliated [with] the NPP and/or . . . the administration of Governor Pedro Rosselló."

During the year 2002, Pagán assisted ARCAM in efforts to upgrade its plant, obtain manufacturing equipment, and secure federal Food and Drug Administration approval for its product line. In addition, Pagán represented ARCAM in third-party negotiations and before various administrative agencies. Through those endeavors, Pagán became publicly identified with ARCAM and top-echelon members of the PDP acquired knowledge of Pagán's ties to the company.

By mid-2002, ARCAM had secured two pharmaceutical manufacturing contracts and had developed a purified water production line. Launching these ventures required access to new capital. To that end, ARCAM requested a $5,000,000 commercial loan from Banco de Desarrollo Económico para Puerto Rico (BDE), a government-sponsored banking institution that had been created to promote the "development of the private sector of the economy of Puerto Rico" by making capital available to firms "whose economic activity has the effect (directly or indirectly) of substituting imports." P.R. Laws Ann. tit. 7, § 611a(a). To assist BDE in fulfilling that mandate, the Puerto Rico legislature gave it the power to "loan money, with or without collateral, to any person, firm, corporation or other private organization when such loans are to be used to promote the government's purpose of developing the economy of Puerto Rico." Id. § 611b(d). The legislature tasked BDE's board of directors with administering and exercising this power. Id. § 611d(a). Upon receiving ARCAM's loan proposal, BDE requested amplitudinous information about ARCAM's finances and operations. After analyzing that data, BDE conditioned its approval of the loan on ARCAM's ability to convince Westernbank to subordinate the first mortgage on the Property that collateralized its earlier $10,000,000 loan. ARCAM was unable to secure Westernbank's assent to this condition. BDE thereupon refused to make the loan despite ARCAM's assurance that it had obtained "equivalent" concessions from Westernbank. The complaint alleges that two BDE hierarchs, Vilma Pellot and Antonio Faría (both of whom were PDP stalwarts) played influential roles in bringing about the demise of the anticipated loan.

The complaint further alleges that, as a result of its failure to garner supplemental financing, ARCAM fell behind on its manufacturing obligations and was threatened with the loss of its pharmaceutical contracts. Out of desperation, it recast the $5,000,000 loan proposal and, in May of 2003, resubmitted it. BDE asked for more information, which ARCAM supplied. While Vilanova still could not convince Westernbank to subordinate its first mortgage, he volunteered that he would personally guarantee the new borrowing.

Throughout the deliberative process, ARCAM repeatedly reminded BDE that it was in immediate danger of losing its hard-won contracts without an infusion of new money. BDE's board of directors initially harkened to this entreaty and recommended approval of ARCAM's renewed application. But that was not the final word: Pellot and Faría, doing Calderón's bidding, twisted arms to bring about BDE's rejection of the renewed loan request. The complaint attributes this refusal to "the discriminatory policies, instructions and/or misguided strategies of defendant Calderón against individuals associated [with] the former NPP administration; in this particular case aimed against plaintiff Pagán."

ARCAM's failure to obtain financing rendered the company's business moribund. It has ceased operations, remains unsure if it can salvage its pharmaceutical contracts, and is uncertain whether it will be able to resume operations.

Left in these dire straits, the plaintiffs — ARCAM, Vilanova, Pagán, and the guarantors — filed suit in the United States District Court for the District of Puerto Rico.1 Their complaint, brought pursuant to 42 U.S.C. § 1983, alleges, inter alia, that numerous defendants (including BDE, Pellot, Faría, and Calderón) violated the free association guarantee of the First Amendment, the due process guarantee of the Fourteenth Amendment, and the equal protection guarantee of the Fourteenth Amendment in turning down ARCAM's loan application. The complaint also alleges that BDE took this action notwithstanding ARCAM's in-hand contracts and the offer of a personal guarantee, while in the same time frame it granted a loan to Pollos Picú, an entity that was experiencing extremely difficult financial conditions.

Calderón filed a motion to dismiss, contending that the complaint failed to state any cognizable federal claim against her and that, in any event, the doctrine of qualified immunity barred the relief sought against her (money damages). The plaintiffs opposed the motion.

On March 30, 2005, the district court granted Calderón's motion in part and denied it in part. See D. Ct. Op. at 8. Specifically, the court dismissed the First Amendment claims brought by ARCAM, Vilanova, and the guarantors — claims premised on the plaintiffs' right to associate with Pagán (an NPP kingpin). Id. at 3. The court also dismissed the plaintiffs' procedural due process claims. Id....

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