Cabán Hernández v. Philip Morris Usa, Inc.

• Decision Date: 01 May 2007
• Docket Number: No. 06-1968.,06-1968.
• Citation: 486 F.3d 1
• Parties: Alejandro CABÁN HERNÁNDEZ et al., Plaintiffs, Appellants, v. PHILIP MORRIS USA, INC. et al., Defendants, Appellees.
• Court: U.S. Court of Appeals — First Circuit

486 F.3d 1

Alejandro CABÁN HERNÁNDEZ et al., Plaintiffs, Appellants, v. PHILIP MORRIS USA, INC. et al., Defendants, Appellees.

No. 06-1968.

United States Court of Appeals, First Circuit.

Heard March 8, 2007.

Decided May 1, 2007.

Iris Y. Valentín-Juarbe, with whom Nicolas Nogueras-Cartagena was on brief, for appellants.

Radamés A. Torruella, with whom Miguel A. Rivera-Arce and McConnell Valdés were on brief, for appellees.

Before LIPEZ, Circuit Judge, SELYA, Senior Circuit Judge, and DiCLERICO,^* District Judge.

SELYA, Senior Circuit Judge.

This is an employment discrimination case in which three ousted employees challenge the district court's entry of summary judgment in favor of their quondam employer. After close perscrutation of a substantial record, we conclude (i) that we have jurisdiction over this appeal; (ii) that the lower court permissibly refused to consider the employees' counter-statement of material facts; (iii) that the employees knowingly and voluntarily released their claims (under both federal and local law) coincident with the termination of their employment; (iv) that those releases were valid, enforceable, not the product of coercion, and dispositive of the claims asserted by the employees here; and (v) that, in the absence of viable claims on the part of the employees, the derivative claims mounted by their spouses cannot stand. Accordingly, we affirm the entry of summary judgment.

I. BACKGROUND

Prior to 2003, plaintiffs-appellants Alejandro Cabán Hernández (Cabán), Peter Villano Blas (Villano), and José Colón Luna (Colón) toiled in Puerto Rico for defendant-appellee Philip Morris USA, Inc. During that year, Philip Morris undertook a corporate restructuring, the aim of which was to align its Puerto Rico operations more closely with its operations in the continental United States. As part and parcel of this reorganization, Philip Morris notified Cabán, Villano, and Colón (collectively, the appellants), early in 2004, that their positions were to be eliminated.

Philip Morris afforded the appellants an opportunity to interview for jobs within the restructured enterprise. But there was a rub: Spanish was the appellants' native tongue — among them, only Villano was fluent in English — and the new posts required an ability to communicate effectively in English.

In May of 2004, all three appellants participated in an English-language interview process. Cabán and Colón were not offered new positions. Villano received an offer but for a job that he deemed unsuitable. The employment of all three men with Philip Morris ended shortly thereafter. They did, however, elect to receive special severance benefits (a subject to which we shortly shall return).

In March of 2005, the appellants brought a civil action in Puerto Rico's federal district court. In their complaint, they alleged that Philip Morris had discriminated against them on the basis of their national origin, in violation of 42 U.S.C. §§ 2000e to 2000e-17 (Title VII) and P.R. Laws Ann. tit. 29, § 146 (Law 100). They claimed, among other things, that Philip Morris had fostered a work environment that was discriminatory, hostile, and harassing as to Spanish-speaking employees; that they had been trimmed from the payroll as a direct result of this discriminatory animus; and that the company had imposed the English-speaking requirement for the revamped positions as a means of ensuring their departures.

The appellants' wives joined in the suit. They brought claims under Article 1802 of the Civil Code, P.R. Laws Ann. tit. 31, § 5141, averring that Philip Morris's discriminatory actions toward their husbands had caused them (the wives) mental anguish and emotional distress.

Philip Morris denied the material allegations of the complaint and pleaded an affirmative defense of release. See Fed. R.Civ.P. 8(c). At the conclusion of discovery, it moved for summary judgment. See Fed.R.Civ.P. 56(c). In connection with that motion it submitted, as required by the district court's local rules, a statement of material facts not in dispute, adorned with record citations. See D.P.R.R. 56(b). Although the appellants seasonably opposed the motion, the district court determined that the counter-statement of facts upon which their opposition relied was not in conformity with the local rules. See D.P.R.R. 56(c). Consequently, the court deemed Philip Morris's statement of facts admitted. See D.P.R.R. 56(e).

In due course, the district court granted the summary judgment motion, concluding that the appellants had executed valid releases when they left their employment and that those releases barred the prosecution of the claims asserted in the complaint. This timely appeal ensued.

II. APPELLATE JURISDICTION

The appellants suggest for the first time in their reply brief that we lack jurisdiction over their appeal because the district court's grant of summary judgment did not finally dispose of all claims against all parties. Ordinary raise-or-waive rules do not apply with respect to claims that a court lacks subject matter jurisdiction. See, e.g., Am. Fiber & Finishing, Inc. v. Tyco Healthcare Grp., 362 F.3d 136, 138-39 (1st Cir.2004); see also Espinal-Dominguez v. Puerto Rico, 352 F.3d 490, 495 (1st Cir.2003) (explaining that "[b]ecause federal courts are powerless to act in the absence of subject matter jurisdiction, [they] have an unflagging obligation to notice jurisdictional defects" whenever such defects come to their attention). Accordingly, we begin with the jurisdictional objection.

To put this objection into perspective, we must canvass the record. In their complaint, the appellants named what appeared to be two discrete corporations, Philip Morris USA, Inc. and Philip Morris-Puerto Rico, as defendants. Both were served but only the former answered the complaint and, later, moved for summary judgment.

Building on this foundation, the appellants posit that they are entitled to a default judgment against Philip Morris-Puerto Rico. See Fed.R.Civ.P. 55(a). They further posit that the existence of this loose end deprives us of appellate jurisdiction.¹ See 28 U.S.C. § 1291; Fed.R.Civ.P. 54(b); see also Alstom Caribe, Inc. v. Geo. P. Reintjes Co., 484 F.3d 106, 111 (1st Cir.2007) (explaining that to be "final" and, thus, immediately appealable, a decision must be one that "ends the litigation on the merits and leaves nothing for the court to do but execute the judgment") (quoting Catlin v. United States, 324 U.S. 229, 233, 65 S.Ct. 631, 89 L.Ed. 911 (1945)).

This nascent jurisdictional objection does not survive scrutiny. The record reflects that, shortly after suit was commenced, the district court scheduled its initial case-management conference. See Fed.R.Civ.P. 16(b). In preparing for that conference, the parties stipulated that Philip Morris USA maintained a branch office in Puerto Rico and did business in Puerto Rico under the name "Philip Morris-Puerto Rico." The clear import of this stipulation was that Philip Morris-Puerto Rico was not a separate corporate entity but, rather, a division of Philip Morris USA.

The district court accepted this stipulation and, in subsequent orders, referred to the employer as "Philip Morris USA." Consistent with this understanding, the court, in granting summary judgment, noted that Philip Morris's Puerto Rico branch had been merged into Philip Morris USA several years before the occurrence of the events giving rise to this suit. See Cabán Hernández v. Philip Morris USA, Inc., No. 05-1284, slip op. at 10 (D.P.R. Apr. 27, 2006) (unpublished).

The parties' stipulation resolves the jurisdictional objection. Stipulations "eliminate the need for proving essentially uncontested facts," thus husbanding scarce judicial resources. Gomez v. Rivera Rodríguez, 344 F.3d 103, 120 (1st Cir.2003). Since stipulations are important to the efficient and expeditious progress of litigation in the federal courts, parties are encouraged to stipulate as to factual matters. See TI Fed. Credit Union v. DelBonis, 72 F.3d 921, 928 (1st Cir.1995). Once a party has entered into a stipulation, however, that party is not at liberty to renege unilaterally on a stipulated fact without leave of court, which ordinarily will not be granted absent a showing of good cause. See Am. Honda Motor Co. v. Richard Lundgren, Inc., 314 F.3d 17, 21 (1st Cir.2002); TI Fed. Credit Union, 72 F.3d at 928.

Here, the trial court correctly read the stipulation to mean that there was only one defendant. Cf. Gomez, 344 F.3d at 121 ("Determining the meaning and effect of a stipulation presents a question of law. . . ."). The appellants have shown nothing that would constitute good cause or otherwise justify relief from the stipulation. Certainly, the mere mention of the appellation "Philip Morris-Puerto Rico" in the corporate disclosure statement does not afford a basis for undoing the stipulation. The use of the name on the brief cover is even less informative: for aught that appears, the brief cover merely replicated the caption of the case as set out in the appellants' complaint. In all events, that loose language cannot be used as a wedge to split an organization that the parties have agreed is a single corporation into two separate corporate entities.

To cinch matters, it is evident that Philip Morris relied on the stipulation and, thus, did not file an answer to the complaint on behalf of Philip Morris-Puerto Rico. Under the circumstances, that reliance was both reasonable and detrimental. A party's detrimental reliance, reasonably undertaken, weighs heavily in the balance when the adverse party attempts to revoke a factual stipulation. See Am. Honda, 314 F.3d at 21. That weight grows even more ponderous when, as in this case, the revocation attempt is not made until after judgment has entered and the case is on appeal.

Having completed our canvass of the record, we conclude, without serious question, that the stipulation must be accorded full force...