Mercado-berrios v. Cancel-alegrÍa

• Decision Date: 30 June 2010
• Docket Number: No. 08-1098.,08-1098.
• Citation: 611 F.3d 18
• Parties: Teresita MERCADO-BERRIOS, Plaintiff, Appellee,v.María CANCEL-ALEGRÍA, Defendant, Appellant.
• Court: U.S. Court of Appeals — First Circuit

611 F.3d 18

Teresita MERCADO-BERRIOS, Plaintiff, Appellee,v.María CANCEL-ALEGRÍA, Defendant, Appellant.

No. 08-1098.

United States Court of Appeals First Circuit.

Heard Nov. 5, 2009.

Decided June 30, 2010.

COPYRIGHT MATERIAL OMITTED

Laura Maldonado-Rodríguez, with whom Saul Roman Santiago was on brief, for appellee.

Susana I. Peñagarícano-Brown, Assistant Solicitor General, with whom Irene S. Soroeta-Kodesh, Solicitor General, Leticia Casalduc-Rabell, Deputy Solicitor General, and Zaira Z. Girón-Anadón, Deputy Solicitor General, were on brief, for appellant.

Before LIPEZ, BALDOCK,^* and HOWARD, Circuit Judges.

LIPEZ, Circuit Judge.

This case involves claims for political discrimination and speech retaliation in violation of the First Amendment. Plaintiff Teresita Mercado-Berrios worked as a transitory government employee in Puerto Rico. Toward the end of her term of employment, she applied for, and was denied, a permanent position. She subsequently filed suit under the Civil Rights Act of 1871, 42 U.S.C. § 1983, alleging that defendant María Cancel-Alegría, who was responsible for the hiring decision, violated the First Amendment by considering her political affiliation and protected speech activity in the hiring decision. After a six-day trial, the jury returned a verdict for Mercado-Berrios on both theories, awarding her $213,000 in compensatory damages and $1,000,000 in punitive damages.

Cancel-Alegría now challenges both the imposition of liability and the amount of damages. Considering the arguments that Cancel-Alegría has made, and disregarding others that might have been made but were not, we affirm the judgment as to the speech retaliation claim and compensatory damages, reverse as to the political discrimination claim, vacate the punitive damages award, and remand to the district court for a new trial on punitive damages unless Mercado-Berrios consents to a reduction of her award from $1,000,000 to $500,000.

I.

We draw the facts from the trial record, reciting them in the light most favorable to the verdict. Marcano Rivera v. Turabo Medical Ctr. P'ship, 415 F.3d 162, 165 (1st Cir.2005).

The basic factual outline is not in dispute. Plaintiff Teresita Mercado-Berrios' former employer, the Puerto Rico Tourism Company (“the Tourism Company” or “the Company”), is a public corporation of the Commonwealth of Puerto Rico. P.R. Laws Ann. tit. 23, § 671a. Mercado-Berrios began work as a transitory employee within the Company's Tourism Transportation Division on June 9, 2003. By contract, her term of employment was set to last for six months. Defendant María Cancel-Alegría was the Company's Director of Tourism Transportation at the time.

The Tourism Transportation Division was a new addition to the Tourism Company when Mercado-Berrios began work. In 2002, the Legislative Assembly of Puerto Rico assigned the Company responsibility for “[r]egulating, investigating, overseeing, intervening and imposing sanctions to those juridical persons or entities engaged in rendering tourist ground transportation services in the Commonwealth of Puerto Rico.” P.R. Laws Ann. tit. 23, § 671e(12). The Tourism Transportation Division was created to perform those new duties. Cancel-Alegría began working in March of 2003 as the only employee within the new division. Because she had only three months to bring the new division to full operational capacity, she initially hired many employees on a transitory basis. She explained that transitory appointments have “a birth date and an ending” and are exempt from the ordinary public notice and competitive entrance requirements for civil service positions.

Mercado-Berrios was one such transitory employee. She left her former job to work for six months as a Tourism Transportation Officer within the Overseeing Division of the Tourism Transportation Division.¹ She claims that she was promised that she would be hired on a permanent basis at the end of her transitory appointment. The Tourism Transportation Officers worked in the operational arm of the Tourism Transportation Division, which was known as the Overseeing Division. Their duty stations were primarily at ports and airports. Mercado-Berrios worked at Luis Muñoz Marín International Airport, where her basic responsibilities were to inspect luxury vehicles and taxis for compliance with Commonwealth safety regulations; to check those vehicles' documentation; to orient tourists regarding ground transportation services; to handle transportation-related complaints; and to submit daily reports on the work she performed. Several layers of management separated Mercado-Berrios from Cancel-Alegía, and the two women had little contact with one another. Cancel-Alegría described the Overseeing Division as “the most delicate area” under her supervision because of the constant interaction between her employees and the tourists, drivers, and airport personnel.

By all accounts, Mercado-Berrios was a conscientious employee who vigorously enforced the safety regulations within her purview. Her supervisors' reviews were consistently glowing. The luxury vehicle and taxi drivers received her efforts with less enthusiasm, however. On several occasions, drivers became angry with Mercado-Berrios for performing inspections in what they perceived to be an overly aggressive manner. The luxury vehicle drivers, in particular, were not accustomed to close scrutiny, and they pressured the Tourism Company to rein in Mercado-Berrios and the other Tourism Transportation Officers.

In December of 2003, two supervisors instructed the Tourism Transportation Officers to “hold your horses” and stop issuing citations to luxury vehicles that were not in compliance with the safety regulations. The officers understood the instruction to have come from Cancel-Alegría. Mercado-Berrios complained to William Ríos-Vázquez, a shift supervisor, that she was “uncomfortable” with the new policy because she thought it reflected “a lack of respect” for the work she and her co-workers were performing, and because the lax enforcement would put “the tourist, who is the person that is paying for service, his life was at risk.” She made similar complaints to two other employees: Cesar Ramos, a shift supervisor, and Julia Palacios, an attorney.

Around the same time, Mercado-Berrios and a number of her transitory co-workers applied for permanent positions as Tourism Transportation Officers. There was testimony that all the transitory employees expected to be appointed to permanent positions as long as their performance was satisfactory. However, on January 16, 2004, one day after the transitory appointments expired, Mercado-Berrios was told that she would not be appointed to a permanent position and should turn in her identification to the Human Resources Office. Cancel-Alegría later testified that she decided not to recommend Mercado-Berrios for a permanent position because

there were so many complaints that had been received in the way that she performed the interventions, that we really couldn't afford the luxury of-well, the clientele that we deal with in transportation, I always say that it is like a minefield. Well, in this case that would happen could certainly, as we Puerto Ricans say, could set off the beehive. So I didn't need personnel that would add more of a situation-I didn't need more personnel to add more situations to the ones that they already had.

The following year, Mercado-Berrios commenced an action in the District of Puerto Rico under 42 U.S.C. § 1983, naming Cancel-Alegría and others as defendants.² Mercado-Berrios alleged that Cancel-Alegría chose not to appoint her to a permanent position because of her political views and in retaliation for complaining about the “hold your horses” instruction, all in violation of the First Amendment. After a six-day trial, the jury returned a verdict for Mercado-Berrios on both claims. The jury awarded Mercado-Berrios $113,000 for lost income and benefits,³ $100,000 for pain and suffering, and $1,000,000 in punitive damages. The district court denied Cancel-Alegría's motions for judgment as a matter of law and her motion for a new trial and/or remittitur. This appeal followed.

II.

We review the district court's denial of a motion for judgment as a matter of law de novo. Mass. Eye and Ear Infirmary v. QLT Phototherapeutics, Inc., 552 F.3d 47, 57 (1st Cir.2009). A Rule 50 motion is properly granted when “ ‘the facts and inferences viewed in the light most favorable to the verdict point so strongly and overwhelmingly in favor of the movant that a reasonable jury could not have returned the verdict.’ ” Id. (quoting Borges Colón v. Román-Abreu, 438 F.3d 1, 14 (1st Cir.2006)).

As framed in the district court's instructions and the verdict form, the question before the jury was whether Cancel-Alegría's decision not to hire Mercado-Berrios to a permanent position was motivated by impermissible considerations. The jury found that two such considerations entered into the hiring decision. First, it found that Cancel-Alegría discriminated against Mercado-Berrios based on Mercado-Berrios' “political beliefs or ideas.” Second, it found that Cancel-Alegría retaliated against Mercado-Berrios because of Mercado-Berrios' “speech activity.”

Each of these findings implicates a distinct line of First Amendment cases. Under the first line of cases, government officials are forbidden from taking adverse action against public employees on the basis of political affiliation or belief, unless political loyalty is an appropriate requirement of the position in question. See Welch v. Ciampa, 542 F.3d 927, 938-39 (1st Cir.2008). The second line of cases “call[s] for a different, though related, inquiry” when a public employee's speech, rather than her political affiliation or belief, is at issue. O'Hare Truck Serv., Inc. v. City of Northlake, 518 U.S. 712, 719, 116 S.Ct. 2353, 135 L.Ed.2d 874 (1996). The basic rule in such cases is that government officials may not...