Díaz-Báez v. Alicea-Vasallo
| Decision Date | 23 December 2021 |
| Docket Number | No. 19-1474,19-1474 |
| Citation | 22 F.4th 11 |
| Parties | María S. DÍAZ-BÁEZ; Víctor A. Burgos-Torres; Thelma L. Pérez-Guzmán; Marisol Domínguez-Rivera; Héctor J. Albelo-Cartagena; Mónica Molina-Salas; Ramón L. Rivera-Gascot; Sylvia Alvarado-Hernández; Pedro R. Martínez-Agosto; Carmen E. Medina-Adorno; Pedro I. Cartagena-Rodríguez; Eduardo Barreiro-Diaz; Melixa Marrero-González; Mercedes Lamberty-Román; Carlos A. Aquino-Valentín; Debbie A. Cardona-Capre; Diana I. Sánchez-Pagán; Félix Marrero-Vázquez; Gisselle Pagán-Meléndez; Shierly Cardona-Ortiz; Rosa M. Soto-García ; Limari Martínez-Rodríguez; Mariel Torres-López; Antonio J. Collado-Rivera; Vivian M. Bracero-Rosa; Luis Coss-Vargas; Braulio E. Figueroa-Díaz; Rosa M. Santos-Carballo; Karolie Gómez-Rivera; Omar Rivera-Pérez; Claribel Rosado-Fernández; Iván E. González-García; José Grau-Ortiz; Brenda Martínez-Figueroa; Cirilo Tirado-Rivera; Betzaida Rosario-Félix; Virgilio Escobar-Quiñones; Luz Cristina Jiménez-Cortés; Héctor M. Barrios-Velázquez; Mónica Rodríguez-Ocasio; Daniel Ramos-Ramos; Carmen Haydeé Ramos-Luna; Melisa Rivera-Fuentes; Marieli Ríos-Pérez; Evelyn Velázquez-Adorno; José W. Ortiz-López; César E. Deida-Torres; David R. Sherman; Rebecca Cotto-Oyola; David Ponce-Mena; Natividad Curbello-Contreras; Virginia Echevarría; Pedro Félix-Torres; Ruth M. Meléndez-Rodríguez; Zuher Youssif-Yassin; Astrid M. Delgado-Irizarry; Tirso Rodríguez-Aponte; Yanira Rodríguez-Rivera; Vivian A. Hernández-Robles; Roberto Miranda-Santiago; Ada I. Rivera-García; José E. Figueroa-Nieves; Allan Wainwright-Estape; Daisy Rodríguez-Alejandro; Radamés Pérez-Rodríguez; María I. Delannoy-De-Jesús; Manuel R. Reyes Alfonso; Amarilis Rivero-Quiles; Luis Lagares-García; Rocío Rivera-Torres; Jonathan R. Ortiz-Serrano; Conjugal Partnership Albelo-Hernández; Conjugal Partnership Barreiro-Rosario; Conjugal Partnership Burgos-Díaz; Conjugal Partnership Cartagena-Medina; Conjugal Partnership Collado-Torres; Conjugal Partnership Coss-Bracero; Conjugal Partnership Félix-Echevarría; Conjugal Partnership Figueroa-Rivera; Conjugal Partnership Figueroa-Santos; Conjugal Partnership Grau-Vázquez; Conjugal Partnership Marrero-Pagán; Conjugal Partnership Martínez-Alvarado; Conjugal Partnership Miranda-Hernández; Conjugal Partnership Muler-Velázquez; Conjugal Partnership Ortiz-Acevedo; Conjugal Partnership Ponce-Cotto; Conjugal Partnership Ramos-Rodríguez; Conjugal Partnership Reyes-Delannoy; Conjugal Partnership Rodríguez-Rodríguez; Conjugal Partnership Rivera-Rosado; Conjugal Partnership Tirado-Martínez; Conjugal Partnership Lagares-Rivero, Plaintiffs, Appellants, Juana M. Contreras-Castro; Leila A. Hernández-Jiménez; Yelitza I. Hernández-Hernández; Yalitza Rosario-Menendez; Raquel Cardona-Soto; Maribel Alicea-Lugo; Humberto L. Muler-Santiago; Mariela Torres-Molini; Carmen Yolanda Vázquez-Ortiz; Luis A. Rodríguez-Toro; Nereida Rivera-Batista; Bernice Berberena-Maldonado; Ricardo Rosario-Sánchez; Axel Fresse-Álvarez; Gloriely Miranda-Ocasio; Luis A. Muler-Santiago; Gretchen M. Acevedo-Rivera; Domingo Mariani-Molini; Rebeca M. Negrón-Umpierre; Jorge Aparicio-Torres; Carmen E. Rodriguez-Santiago; Lynette Yambó-Mercado; Marianna Ramírez-Álvarez; Conjugal Partnership Fresse-Miranda; Conjugal Partnership Rosario-Berberena, Plaintiffs, v. Julio ALICEA-VASALLO, Executive Director of the AACA, in his official and personal capacities; Automobile Accident Compensation Administration, Defendants, Appellees, Maribel Concepción-Cantres, former Personnel Director of the AACA, in her official and personal capacities; ABC Insurance Company; Ernesto Rivera-Negrón; Richard Doe; Jane Roe; Jane Doe; John Doe; X Corporation; Y Corporation; DEF Insurance Company; Conjugal Partnership Alicea-Doe; Conjugal Partnership Doe-Concepción; Conjugal Partnership Rivera-Roe, Defendants. |
| Court | U.S. Court of Appeals — First Circuit |
José Enrico Valenzuela-Alvarado, with whom Valenzuela-Alvarado, LLC, Frank Zorrilla Maldonado, Frank Zorrilla Law Offices, Jesús Rabell Méndez, Rabell Méndez C.S.P., Manuel Porro-Vizcarra, and Manuel Porro-Vizcarra Law Offices were on brief, for appellants.
Adrián Sánchez-Pagán, with whom Sánchez-Betances, Sifre & Muñoz-Noya, LLC was on brief, for appellee Automobile Accident Compensation Administration.
Francisco J. Amundaray, with whom Amundaray, Villares & Associates, PSC was on brief, for appellee Julio Alicea-Vasallo.
Before Lynch, Thompson, and Kayatta, Circuit Judges.
Certain former Automobile Accident Compensation Administration ("AACA") employees appeal the entry of summary judgment against their political discrimination claims, in favor of the AACA and its former Executive Director, Julio Alicea-Vasallo. The employees were laid off pursuant to an agency-wide, facially neutral layoff plan (the "Layoff Plan") based on seniority. They brought suit under 42 U.S.C. § 1983, alleging violations of their federal First, Fifth, and Fourteenth Amendment rights, along with violations of Puerto Rico law. Holding it was bound by the Puerto Rico court decisions concluding that it was the Board of Directors -- not the Executive Director -- that was responsible for the Layoff Plan, the district court correctly adopted the Puerto Rico court decisions, then entered summary judgment for both AACA and Alicea-Vasallo. Diaz-Baez v. Alicea Vasallo ("Diaz-Baez II"), No. 10-cv-1570, 2019 WL 8501708, at *23–27 (D.P.R. Mar. 29, 2019). Appellants concede that if the district court correctly adopted these issues decided by the Puerto Rico courts, the case must be resolved against them. We affirm.
The AACA is a public instrumentality of Puerto Rico, created pursuant to Law No. 138 of June 26, 1968, P.R. Laws Ann. tit. 9, § 2051 et seq. Its purpose is to "administer[ ] Puerto Rico's unique system of compensating automobile accident victims, irrespective of fault, for medical expenses, disability, dismemberment, death, and funeral expenses." Bonilla v. Nazario, 843 F.2d 34, 36 (1st Cir. 1988). Appellants agree that the AACA has an identity distinct and separate from the Commonwealth of Puerto Rico and that it is a public entity that can "sue and be sued in its own name, [ ] can contract with others and except for its original funding, [ ] is [primarily] self-supporting ...." Oppenheimer Mendez v. Acevedo, 388 F. Supp. 326, 330 (D.P.R. 1974), aff'd, 512 F.2d 1373 (1st Cir. 1975).1
Between 2001 and 2008, the Popular Democratic Party ("PDP"), of which appellants assert they are members, was in power in Puerto Rico. For decades, including that period, the AACA operated at a loss and had mounting financial deficits. AACA's June 30, 2006 Financial Statement stated that the agency's "premium income" had been "insufficient to cover the operating expenses" for the "past several years." This required the AACA frequently to withdraw from its investment portfolio "to cover operating funding needs." A separate report prepared by the AACA's then-Director of Finance, William Jiménez, covering the 2005-2006 fiscal year contained an acknowledgment by the AACA's Board of Directors that the agency had accrued a cumulative deficit totaling more than $99 million between the fiscal years 1998-1999 and 2004-2005. This report also showed that the agency was operating at about an $8.0 million deficit for the 2005-2006 fiscal year.
In 2007, the Board considered measures to reduce both its costs and its operational deficit. Jiménez recommended to the Board that the AACA reduce its workforce by more than 100 employees and close four offices and two Departments, among other measures. Jiménez proposed that additional personnel cuts be made during the 2007-2008 fiscal year to reduce the operational deficit.
The Board declined to adopt any of these measures to address the deficit. Instead, the Board approved several amendments to its Personnel Regulations, purporting to provide additional protection for the AACA's managerial employees against layoff. One such amendment required the AACA to consider employee performance as a criterion when determining priority for layoff.
In November 2008, the New Progressive Party ("NPP") came into power in Puerto Rico. This constituted a change in administration from the PDP. The newly-elected Governor of Puerto Rico issued Executive Order OE-2009-001 on January 8, 2009, decreeing an economic and fiscal state of emergency in the Commonwealth and ordering the elimination of nearly one third of politically appointed positions. The legislature of Puerto Rico enacted Act No. 7-2009 ("Law 7") in March 2009, P.R. Laws Ann. tit. 3, § 8791 et seq., establishing seniority as the primary criterion used to implement this layoff plan, id. § 8799(b)(3).
Although the AACA was not covered by Law 7, the Board of Directors simultaneously was evaluating the agency's fiscal state and considering a similar plan. The Board discussed the Executive Order at a January 16, 2009 Board meeting. At that Board meeting, AACA's Deputy Director of Finance, Rebecca Cotto, also reported that the AACA was operating at a $15 million deficit and was asked about the measures the AACA was taking to remedy this. Similar discussions continued through May 2009, when NPP member Alicea-Vasallo was appointed Executive Director of the AACA. The AACA continued operating at a deficit at that time, including a loss in the category of insurance operations in the amount of more than $63 million.
The AACA Board of Directors held another meeting to discuss this fiscal state on October 15, 2009, at which the Board discussed with Alicea-Vasallo the creation of the Layoff Plan. During that meeting, the Board's president inquired of the Executive Director concerning a layoff plan that would save the AACA between $4.5 and $5 million. In response, Alicea-Vasallo explained that the way to accomplish that degree of reduction, the plan would be to lay off employees based on seniority (as did Law 7), covering a period from July 1, 2000 through June 30, 2009. That is,...
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