Acevedo-Garcia v. Vera-Monroig

• Decision Date: 19 May 2004
• Docket Number: No. 03-2103.,No. 03-2292.,03-2103.,03-2292.
• Citation: 368 F.3d 49
• Parties: Luis A. ACEVEDO-GARCIA et al., Plaintiffs, Appellees, v. Roberto VERA-MONROIG, Individually and as Mayor of Adjuntas; Municipality of Adjuntas; Irma M. Gonzalez-Delgado, Individually and as Personnel Director of Adjuntas, Defendants, Appellants.
• Court: U.S. Court of Appeals — First Circuit

Page 49

368 F.3d 49

Luis A. ACEVEDO-GARCIA et al., Plaintiffs, Appellees, v. Roberto VERA-MONROIG, Individually and as Mayor of Adjuntas; Municipality of Adjuntas; Irma M. Gonzalez-Delgado, Individually and as Personnel Director of Adjuntas, Defendants, Appellants.

No. 03-2103.

No. 03-2292.

United States Court of Appeals, First Circuit.

Heard May 5, 2004.

Decided May 19, 2004.

Jorge Martinez Luciano, with whom Johanna Emmanuelli and Law Offices of Pedro Ortiz Álvaraz, P.S.C. were on brief, for the Municipality of Adjuntas and the individual appellants in their official capacities.

Luis Villares Sarmiento, with whom Sanchez-Betances & Sifre, P.S.C. was on brief, for the individual appellants in their personal capacities.

Gael Mahony, with whom Pamela O'Brien, Holland & Knight LLP and Israel Roldan-Gonzalez were on brief, for appellees.

Before SELYA, Circuit Judge; COFFIN, Senior Circuit Judge; and LYNCH, Circuit Judge.

LYNCH, Circuit Judge.

In these appeals, we address the willful and longstanding efforts of a Puerto Rico municipality, its mayor, and its personnel director to obstruct and delay the payment of a $6.9 million jury award in a civil rights case. This is the fourth time this case has come before this court.¹

In November 2001, a jury awarded verdicts totaling $6,956,400 against the Municipality of Adjuntas in Puerto Rico (the Town), its mayor, Roberto Vera-Monroig (Vera), and its personnel director, Irma Gonzalez-Delgado (Gonzalez). The jury found that the defendants had engaged in political discrimination in violation of the First Amendment when, after Vera won the 1996 mayoral election, they systematically laid off municipal employees who were members of the opposing political party. Cf. Branti v. Finkel, 445 U.S. 507, 517, 100 S.Ct. 1287, 63 L.Ed.2d 574 (1980) (dismissal of a public employee based solely on political allegiance violates the First Amendment). The verdicts won by the twenty plaintiffs in this case — a subset of the 82 employees who sued the defendants after being terminated from career positions with the Town — included punitive damages awards of $300,000 against each of the two individual defendants in their personal capacities. This court upheld the verdicts in December 2003. Acevedo-Garcia v. Vera-Monroig (Acevedo-Garcia III), 351 F.3d 547, 577 (1st Cir.2003) (rehearing and rehearing en banc denied Feb. 17, 2004).

These appeals arise more than two years after the plaintiffs' first attempt to collect the judgment, which remains unpaid. Two questions are presented: (1) whether the district court erred when it required the Town to include a sum sufficient to satisfy the judgment in its 2003-2004 budget, and (2) whether the court improperly required the reinstatement of the twenty plaintiffs as a contempt sanction for the Town's failure to comply with that order. We affirm the district court's decision to issue the budget-inclusion order but vacate and remand for recalculation of the amount. As to the contempt sanction, we affirm the finding of contempt but vacate the reinstatement order and remand for consideration of alternative sanctions.

I.

The jury returned verdicts for the plaintiffs on November 23, 2001, and the district court entered judgment accordingly on December 3, 2001. On December 20, the court awarded the plaintiffs an additional $96,300 in attorneys' fees and costs. A few months later, in March 2002, the court denied the plaintiffs' motion for reinstatement. The defendants did not file a motion to stay the judgment under Fed.R.Civ.P. 62.

On April 29, 2002, the plaintiffs made their first effort to execute on the judgment. From Vera and Gonzalez in their personal capacities, the plaintiffs sought immediate payment of the punitive damages awards; from the Town,² they sought an order requiring the remaining judgment sum and attorneys' fees and costs to be included in the municipality's 2002-2003 budget. The plaintiffs' motion relied on 21 P.R. Laws Ann. § 4303(c), which requires municipalities in Puerto Rico to include outstanding court judgments in their annual budgets, and on Fed.R.Civ.P. 69, which provides that federal judgments shall be executed in accordance with local law. The defendants opposed the motion, arguing that they should be entitled to a stay of execution pending appeal without posting a bond or providing other security because, in light of the Town's recurring budget cycle, there was no risk that the plaintiffs would be unable to collect.

On May 16, 2002, the district court granted the plaintiffs' motion. Citing § 4303(c), it ordered the Town to include in its budget for the 2002-2003 fiscal year the sum of $6,956,400, plus the $96,300 fees and costs award, plus appropriate post-judgment interest. In addition, the court required Vera and Gonzalez to pay the punitive damages award immediately, but it permitted them to stay execution pending appeal by posting a $600,000 supersedeas bond. The Town sought an emergency stay of execution from this court. We granted only a temporary ten-day stay to allow the Town to post an appropriate bond or present its arguments for a longer stay to the district court.³ Acevedo-Garcia v. Vera-Monroig (Acevedo-Garcia II), 296 F.3d 13, 18 (1st Cir.2002) (per curiam).

The defendants returned to the district court, which generously allowed the Town extra time to develop its arguments. The Town urged the court to grant it a stay of execution pending appeal without any requirement for a supersedeas bond or other judgment security. It represented:

Due to the recurring nature of the Municipality's budget and its ability to obtain large scale financing from the Government Development Bank, it has the financial ability to pay the outstanding monetary judgment, shall the same be affirmed.

In response, the plaintiffs agreed to drop their objection to a stay of execution if the Town could provide proof that the Government Development Bank was prepared to loan the Town sufficient funds to cover the judgment.

On August 26, 2002, the district court accepted the defendants' argument, subject to the condition recommended by the plaintiffs. The court informed the Town that it would stay execution of the judgment if, by October 3, 2002, the Town could produce a certified letter of intent from the Government Development Bank guaranteeing Adjuntas a loan large enough to satisfy the judgment in the event the judgment were affirmed by this court.⁴ The court specified that the amount of the guaranteed loan had to be at least $6,356,400 (i.e., the full judgment amount minus the punitive damages awards). The court warned: "No extensions of time will be granted. Failure to abide by this order shall result in severe sanctions, including execution of judgment."

For whatever reason, the Town did not live up to its representations. The Government Development Bank turned down the Town's request for a loan, and the court was so informed on October 3, 2002. The Town offered no other security, though Vera and Gonzalez in their personal capacities complied with the court's order and posted a supersedeas bond to secure the punitive damages awards. One week later, plaintiffs petitioned for a writ of execution as to the Town. The Town did not respond, however, and the district court did not rule on the motion. And there matters sat.

Nearly four months later, on February 4, 2003, the plaintiffs renewed their motion with the district court. They asked the court to order the Town to include the judgment sum in its 2003-2004 budget, pointing out that although nearly nine months had passed since the court's first budget-inclusion order, Adjuntas had neither included the judgment in its 2002-2003 budget nor obtained the promised loan guarantee from the Government Development Bank. Again, there was no response from the Town.

On February 13, 2003, the district court granted the plaintiffs' motion. The court ordered the Town to include in its budget for fiscal year 2003-2004 the entire amount of the judgment ($6,956,400), plus the fees and costs award ($96,300), plus post-judgment interest.

The Town did not appeal this order. Nor did it comply. Nor, indeed, did it inform the district court of its failure to comply. It was the plaintiffs who finally brought the Town's noncompliance to the court's attention in a July 3, 2003 motion. The plaintiffs appended to their motion a "certification" issued by the Town's Director of Finance stating that the Town had not assigned "any entry of expenditure" to satisfy the judgment. They asked that the court order Vera, as mayor, to show cause why he should not be held in contempt of court.

The Town filed an opposition to the show cause order on July 11. It said that Vera had tried to include the judgment in the Town's 2003-2004 budget but was precluded from doing so under Article 19.013 of the Puerto Rico Autonomous Municipalities Act, 21 P.R. Laws Ann. § 4912, pursuant to which (according the Town) the municipality would be "automatically fined" for submitting a grossly unbalanced budget. The judgment sum, the Town said, exceeded the Town's entire expected income for the fiscal year. The Town attached a letter from Barbara M. Sanfiorenzo Zaragoza, Esq., the Puerto Rico Commissioner of Municipal Affairs, who stated that a sum as large as the judgment in this case could not be budgeted within a single fiscal year. The Town offered no alternative security.

Understandably unhappy with the defendants' noncompliance, the district court entered an order on July 18, 2003 holding the Town in contempt. As a sanction, the court ordered the Town to reinstate, on a staggered basis before the end of 2003, the twenty plaintiffs whose dismissals had been the basis for the original political discrimination suit. Defendants immediately appealed, and this court issued an unpublished order staying the reinstatement sanction.

On August 13, 2003, the defendants filed a motion in the district court to vacate not only the...