García-González v. Puig-Morales

• Citation: 761 F.3d 81
• Decision Date: 01 August 2014
• Docket Number: No. 12–2357.,12–2357.
• Parties: Manuel A. GARCÍA–GONZÁLEZ, Plaintiff, Appellant, v. Juan C. PUIG–MORALES, Defendant, Appellee. Ramón L. Cruz–Colón, Defendant.
• Court: United States Courts of Appeals. United States Court of Appeals (1st Circuit)

761 F.3d 81

Manuel A. GARCÍA–GONZÁLEZ, Plaintiff, Appellant,

v.Juan C. PUIG–MORALES, Defendant, Appellee.

Ramón L. Cruz–Colón, Defendant.

No. 12–2357.

United States Court of Appeals,First Circuit.

Aug. 1, 2014.

Jorge Martínez–Luciano, with whom Pedro E. Ortiz-Álvarez and Pedro E. Ortiz-Álvarez, LLC, were on brief for appellant.

Michelle Camacho–Nieves, Assistant Solicitor General, Department of Justice, with whom Margarita Mercado–Echegaray, Solicitor General, were on brief for appellee Puig–Morales.

Before TORRUELLA, LIPEZ, and KAYATTA, Circuit Judges.

TORRUELLA, Circuit Judge.

This case involves due process and political discrimination claims related to the procurement of public contracts by independent contractors. Plaintiff–Appellant Manuel A. García–González (“García”) alleges First and Fourteenth Amendment violations and seeks compensatory and punitive damages under 42 U.S.C. § 1983 over the rescission of a bid award for a potential, but unexecuted, insurance brokerage contract with the Puerto Rico government (the “Commonwealth” or the “government”). Defendant–Appellee Juan C. Puig–Morales (“Puig”) was Puerto Rico's Secretary of the Treasury at the time of these events.

The district court granted summary judgment in favor of Puig on García's Fourteenth Amendment claim, holding that García had no constitutionally protected property interest in the initial bid award. Subsequently, the district court also granted Puig's motion for summary judgment on García's First Amendment claim.

For the reasons set forth below, we affirm the district court's grant of summary judgment on García's Fourteenth Amendment due process claim, and we reverse the grant of summary judgment on his First Amendment claim for political discrimination. We remand that claim for further proceedings consistent with this opinion.

I. Background

A. Factual Background

Over an eight-year period, from April 28, 2001, through May 30, 2009, García, a licensed insurance broker, held annual contracts with the Puerto Rico Department of the Treasury (the “Treasury”) for the acquisition of insurance policies for various government agencies. García received sizable commissions for brokering these insurance contracts.

On October 1, 2008, García entered into a one-year professional services contract with the Treasury to acquire insurance policies for the Commonwealth's Public Buildings Authority, the Americas Port Authority, the Administration of General Services, and the “Portal del Futuro” Public Corporation. Pursuant to the agreement signed by García and the Treasury, the professional services contract could be terminated by either party upon thirty days' written notice.

García self-identifies as a member of the Popular Democratic Party (“PDP”). For all but the final five months of the eight-year period during which García held contracts with the Treasury, the executive branch of the Puerto Rico government was controlled by governors from the PDP.

On November 4, 2008, however, the incumbent PDP governor lost a general election to Luis Fortuño, a gubernatorial candidate from the opposing New Progressive Party (“NPP”). Governor Fortuño and his Treasury Secretary, Puig, were both sworn into their new offices on January 2, 2009.

Less than three months later, in a letter dated March 20, 2009, Puig notified García that his existing brokerage contract—which was scheduled to expire on September 30, 2009—would instead be terminated early, with an effective end date of May 30, 2009. The letter further announced that Puig's office would receive new proposals for insurance brokerage contracts between March 25, 2009, and April 17, 2009. On March 26, 2009, the Treasury published a Request for Proposals (“RFP”) regarding the provision of professional services for the acquisition of insurance policies. The RFP document contained the terms and conditions that were to govern the adjudication proceedings for selecting insurance brokers. The RFP provided, among other things, that:

(1) “[t]he Secretary [of the Treasury] fully reserves the right to revise this RFP, in part or whole”;

(2) the Treasury's Agency for Public Insurance (“API”) “reserves the absolute right to reject any or all proposals submitted and to limit selections to a determined number of all the best qualified Producer[s] deemed sufficient to handle the amount of work involved”; (3) “[a]s part of the process,” API “will evaluate prior perform[ance] of the Producer, if any, as well as their qualifications and experience reflected on their proposals”;

(4) the government “will not be liable in any way whatsoever for any costs or expenses incurred by any person in the preparation of proposals in response to this RFP, nor for the presentation of its proposal and/or participation in any discussions or negotiations”;

(5) the selection of contractors “shall be final, except for the right of the Secretary and API to terminate any designation for reasonable cause”;

(6) selected providers will be informed “about their selection and what next steps are to be taken in relation to such selection”;

(7) “[a]fter the evaluation takes place and the Secretary makes the corresponding decisions, the selected proposals will be subject to the normal Government's procedural approvals for professional services contracts”;

(8) “[t]he Producer will be compensated with commissions as stated on the Professional Services Contract”; and

(9) “API retains the right to terminate any contracted Producer at any time due to unacceptable performance.”

García submitted his proposal on April 15, 2009, within the deadline prescribed by the RFP. His proposal was received by API on April 17, 2009. On May 15, 2009, the Treasury issued an “Adjudication Notification” letter to García. The letter informed him that his proposal was “favorably considered” by the evaluating board to “continue the process of finalizing the contract,” before he could ultimately sign a professional services contract for the procurement of insurance policies. The accounts contemplated for García's putative contract were for the purchase of insurance policies for the following governmental instrumentalities: (a) the Corrections Administration, (b) the Administration of Juvenile Institutions, (c) the Department of Education, and (d) the Puerto Rico Technological Institute. These policies accounted for a total of $7,881,350 in estimated insurance premiums, and García asserts that the brokerage contract would have yielded him approximately $450,000 in commissions. The Adjudication Notification requested that García sign and return it; it further outlined the subsequent steps for the ultimate execution of a final professional services contract between the parties.

García proceeded to sign the Adjudication Notification, accepting all of the adjudicated accounts. On May 18, 2009, the Treasury received García's timely acceptance of the adjudication, along with the corresponding documents required prior to the execution of the brokerage contract, pursuant to the specifications of the Adjudication Notification. A final contract, however, was not executed by the parties.

On May 28, 2009, García received a Treasury letter rescinding the Adjudication Notification, explaining that “[t]he processes carried out produced countless errors in issuing [his] letter, as well as other letters that were also issued.” The letter also stated that García would soon receive a corrected adjudication letter, or that he would be notified of a new date for the distribution of corrected letters. No further details were provided regarding the nature of the “countless errors” or whether there were procedures available to contest the Treasury's determinations.

García never received a corrected adjudication letter. Instead, García was presented with a contract for accounts different from those that he had been originally awarded. These new accounts represented significantly lower insurance policy premiums, and correspondingly, much lower commissions. Under the proposed new contract, García's expected commissions were around $15,000—between approximately three and four percent of the expected commissions for the accounts in his original award. García refused to sign the contract.

B. Procedural History

On May 26, 2010, García filed a complaint against Treasury Secretary Puig and Ramón L. Cruz–Colón (“Cruz”), who was then serving as the Insurance Commissioner. The complaint sought declaratory and injunctive relief pursuant to 42 U.S.C. § 1983 for alleged political discrimination and due process violations. García also sought compensatory damages under Puerto Rico law.

On February 9, 2011, García filed a motion for partial summary judgment in connection with his due process claim, alleging that he had “a legitimate claim of entitlement to the signing of the relevant contracts” and that he “was entitled to a pre-deprivation proceeding before [Puig] materially changed the terms of the adjudication.”

Puig, in turn, opposed García's motion for partial summary judgment on April 1, 2011, claiming that government agencies may revoke the award of a contract at any time prior to its execution. Puig further claimed that García's expectations did not amount to a vested property interest in the signing of the brokerage contract, and that the Parratt–Hudson doctrine barred relief under the Due Process Clause because García could have availed himself of an adequate post-deprivation remedy, but failed to do so.¹ In his opposition to summary judgment, Puig requested the dismissal of García's due process claim.

On June 30, 2011, García filed a notice voluntarily dismissing all claims against Cruz and requesting that those claims be dismissed with prejudice.

On September 29, 2011, the district court denied García's Motion for Partial Summary Judgment and granted summary judgment in favor of Puig on García's Fourteenth Amendment claim. The district court further gave Puig sixty days to file a dispositive motion as...