The Workforce Dev. Area of Nw. v. Puerto Rico

• Docket Number: Civ. 19-1621 (SCC)
• Decision Date: 12 November 2021
• Parties: The Workforce Development Area of Northwest, Plaintiff, v. Commonwealth of Puerto Rico et al., Defendants.
• Court: U.S. District Court — District of Puerto Rico

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The Workforce Development Area of Northwest, Plaintiff, v. Commonwealth of Puerto Rico et al., Defendants.

Civ. No. 19-1621 (SCC)

United States District Court, D. Puerto Rico

November 12, 2021

OPINION AND ORDER

SILVIA CARREÑO-COLL, UNITED STATES DISTRICT COURT JUDGE

Plaintiff Workforce Development Area of Northwest is an intermunicipal body formed under Puerto Rico law. See 21 P.R. LAWS ANN. tit. § 7013(p). It brings this lawsuit against defendants Commonwealth of Puerto Rico, Domingo Emmanuelli-Hernandez in his official capacity as the Secretary of Justice, Pedro R. Pierluisi in his official capacity as the Governor of Puerto Rico, Manuel Cidre-Miranda in his official capacity as the Secretary of the Department of Economic Development and Commerce, and Emilio Colon-Zabala in his official capacity as President of the State Workforce Development Board, claiming under 42 U.S.C. § 1983 that they have violated its due-process rights and the Workforce Innovation and Opportunity Act, 29 U.S.C §§ 3101-3344, by denying it funds that it is entitled to.

The Commonwealth defendants move the Court to dismiss Workforce Development Area's complaint under Federal Rules of Civil Procedure 12(b)(1) and 12(b)(6).

I. Background

The Workforce Innovation and Opportunity Act gives federal funding to states to provide education and training services to help people improve their employment prospects. DAVID H. BRADLEY, CONG. RESEARCH SERV., R44252, THE WORKFORCE INNOVATION AND OPPORTUNITY ACT AND THE ONE-STOP DELIVERY SYSTEM 15 (Jan. 2021). The state, in turn, allocates that funding to local areas, id. at 17, such as Workforce Development Area.

To provide education and training services, Workforce Development Area leased a building. Docket No. 1, pg. 7. Its lease includes an automatic-renewal clause. Id. at 8. Because they believe that this clause violates Puerto Rico law, the defendants withheld funding from it. Id. at 10-11.

Workforce Development Area filed suit, seeking (1) a declaration that the defendants have violated federal law by withholding its funding, (2) a preliminary and permanent injunction ordering the defendants to disburse its funding, and (3) a declaration that the defendants' threat to withhold future funding is a violation of their federal rights. Id. at 20.

II. Motion to Dismiss

The Commonwealth defendants move the Court to dismiss Workforce Development Area's complaint under Federal Rules of Civil Procedure 12(b)(1) and 12(b)(6). Docket No. 39. They argue that sovereign immunity shields them from suit, Workforce Development Area lacks standing to bring a § 1983 action, their challenged conduct is proper under Puerto Rico law, and Workforce Development Area has failed to exhaust its administrative remedies.

We evaluate a Rule 12(b)(1) motion raising a legal question and a Rule 12(b)(6) motion under the same framework: We “accept the well-pleaded facts alleged in the complaint as true, ” drawing “all inferences in the pleader's favor, ” then ask whether the pleader has shown that we have subject-matter jurisdiction (Rule 12(b)(1)) and stated a plausible claim for relief (Rule 12(b)(6)).^[1] Cebollero-Bertran v. P.R. Aqueduct & Sewer Auth., 4 F.4th 63, 69 (1st Cir. 2021).

A. Eleventh Amendment Sovereign Immunity

Because it touches on our subject-matter jurisdiction, we begin with whether sovereign immunity bars this suit. The only argument Workforce Development Area raises in opposition is that the Commonwealth defendants have waived their sovereign immunity by failing to invoke it in their first motion to dismiss. Docket No. 42, pgs. 15-16. While there are some arguments that are waived if not raised in a party's first pre-answer motion, see FED. R. CIV. P. 12(h)(1), sovereign immunity is not one of them. And although it may be waived through “affirmative conduct in litigation” that is “unambiguous” and “evince[s] a clear choice to submit [the state's] rights for adjudication by the federal court, ” Ramos-Pinero v. Puerto Rico, 453 F.3d 48, 52 (1st Cir. 2006) (first quoting New Hampshire v. Ramsey, 366 F.3d 1, 5 (1st Cir. 2004); and then quoting Maysonet-Robles v. Cabrero, 323 F.3d 42, 52 (1st Cir. 2003)), there has been no such conduct here.

We turn now to the merits. The Eleventh Amendment shields states^[2] and their officials from suit in federal court when sued by their own citizens. Grajales v. P.R. Ports Auth., 831 F.3d 11, 15 (1st Cir. 2016). But there is an exception. Ex parte Young, 209 U.S. 123 (1908), allows federal courts to “grant prospective injunctive relief to prevent a continuing violation of federal law.” Doe v. Shibinette, No. 21-1058, 2021 WL 4958249, at *6 (1st Cir. Oct. 26, 2021). To determine whether Ex parte Young applies, we evaluate whether the complaint “alleges an ongoing violation of federal law and seeks relief properly characterized as prospective.” Id. (quoting Verizon Md., Inc. v. Pub. Serv. Comm'n of Md., 535 U.S. 635, 645 (2002)). Workforce Development Area satisfies the first part of this inquiry: It alleges that the Commonwealth defendants are violating the Due Process Clause and the Workforce Innovation and Opportunity Act by withholding funds that it is entitled to. Docket No. 1, pg. 18.

But we take pause at the second part. Prospective relief is a remedy “designed to end a continuing violation of law.” Green v. Mansour, 474 U.S. 64, 68 (1985). Retrospective relief, in contrast, is “compensatory or deterrent” in nature. Id. So, as a general matter, an “Ex parte Young action cannot be used to obtain an injunction requiring the payment of funds from the State's treasury.” Va. Off. for Prot. & Advoc. v. Stewart, 563 U.S. 247, 256 (2011).

There are, however, some situations where an Ex parte Young action is available even though the prospective relief will have a “direct and substantial impact on the state treasury.” Milliken v. Bradley, 433 U.S. 267, 290 (1977). This is allowed so long as those fiscal consequences “are the necessary result of compliance with decrees which by their terms [are] prospective in nature.” Edelman v. Jordan, 415 U.S. 651, 667-68 (1974). In Coalition for Basic Human Needs v. King, 654 F.2d 838 (1st Cir. 1981), for example, the U.S. Court of Appeals for the First Circuit held that the Eleventh Amendment did not bar an injunction requiring the state to “resume payment of [Aid to Families with Dependent Children] benefits prospectively.” Id. at 842. Similarly, in Edelman, the U.S. Supreme Court held that the Eleventh Amendment did not bar an injunction requiring Illinois to conform its future conduct in administering the Aid to the Aged, Blind, or Disabled program to federal regulations. Id. at 664. But it did bar an injunction requiring Illinois to make back payments on money wrongfully withheld because of Illinois's failure to comply with these regulations. Id. at 656, 664 (holding that the Eleventh Amendment barred an injunction ordering Illinois to “release and remit AABD benefits wrongfully withheld”).

Here, Workplace Development Area asks us to provide declaratory relief and “preliminarily and permanently enjoin [d]efendants to immediately make the illegally withheld [Workforce Innovation and Opportunity Act] [f]unds available” to it. Docket No. 1, pg. 20.

We begin with Workforce Development Area's request for injunctive relief. It is asking us to order the defendants to disburse wrongfully withheld funds: $27, 750.00, to be exact.^[3]Though the difference between a prospective injunction and retroactive monetary damages is not always clear, Edelman, 415 U.S. at 667, it is here. The Eleventh Amendment bars an injunction seeking benefits that have been wrongfully withheld-it permits only an injunction ordering compliance moving forward. Edelman, 415 U.S. at 664; see also Concilio de Salud Integral de Loza, Inc. v. Perez-Perdomo, 625 F.3d 15, 19 (1st Cir. 2010) (“[A] federal court cannot ordinarily order money payments by a state to make up for past violations of a federal statute.”). The Eleventh Amendment, thus, bars Workforce Development Area's request for an injunction ordering the defendants to “make the illegally withheld [Workforce Innovation and Opportunity Act] [f]unds available” to it.

We turn next to its request for declaratory relief. Workforce Development Area asks us first to declare that the defendants' refusal to release the wrongfully withheld funds “was a violation of a right under federal law.” Docket No. 1, pgs. 11, 20. But this declaratory relief would be retrospective in nature because it would address a past-rather than ongoing-violation of federal law. So the Eleventh Amendment bars this relief as well. See Green, 474 U.S. at 73 (explaining that a declaratory judgment is not available to evaluate the legality of past state conduct where the Eleventh Amendment would bar the court from awarding damages).

B. Ripeness

Workforce Development Area asks us next to declare that the defendants' “threat to withhold future funds” is a violation of their federal rights. Docket No. 1, pg. 20. Though this prospective relief does not offend the Eleventh Amendment, this claim is not ripe for review.^[4]

Article III of the Constitution limits our jurisdiction to cases or controversies. Penobscot Nation v. Frey, 3 F.4th 484, 508 (1st Cir. 2021). The ripeness doctrine stems from this limitation, id., and seeks to “prevent the adjudication of claims relating to ‘contingent future events that may not occur as anticipated, or indeed may not occur at all, '” Campamento Contra las Cenizas en Penuelas, Inc. v. Fin. Oversight & Mgmt Bd., 9 F.4th 1, 8 (1st Cir. 2021) (quoting Reddy v. Foster, 845 F.3d 493, 500 (1st Cir. 2017)). To determine whether a claim is ripe, we evaluate two factors: fitness and hardship. N.H....