Otero-Merced et al

Filing 39

OPINION AND ORDER DENYING AS MOOT 18 MOTION to Dismiss/Lack of subject-matter Jurisdiction; GRANTING 14 MOTION to dismiss for failure to state a claim; DENYING AS PREMATURE 35 MOTION for abstention. We DISMISS Plaintiffs' claims against Munoz-Hernandez and Munoz-Firpi, without prejudice to litigation in Puerto Rico courts. Signed by Chief Judge Jose A Fuste on 1/26/10.(mrj)

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U N IT E D STATES DISTRICT COURT D IS T R IC T OF PUERTO RICO E N R IQ U E OTERO-MERCED, LYDIA D. P U E N T E -C O L Ó N , and their conjugal p a rt n e rs h ip , C i v il No. 09-1144 (JAF) Plaintiffs, v. P R E F E R R E D HEALTH INC., DAVID M U Ñ O Z -H E R N Á N D E Z , GWENDOLYN M U Ñ O Z -F I R P I , and their insurance u n d e rw ri te r, Defendants.

O P I N IO N AND ORDER P la in tif f s , Enrique Otero-Merced, Lydia D. Puente-Colón, and their conjugal partnership, b r in g this action against Defendants, Preferred Health Inc. ("PHI"); PHI Chief Executive O f f ic e r David Muñoz-Hernández; PHI President Gwendolyn Muñoz-Firpi; and an unnamed in s u ra n c e underwriter. (Docket No. 24.) Plaintiffs allege discrimination in violation of the Age D is c rim in a tio n in Employment Act ("ADEA"), 29 U.S.C. §§ 621-634; the Americans with D is a b ilitie s Act ("ADA"), 42 U.S.C. §§ 12101-12213; 1 L.P.R.A. §§ 501-511b (2008) ("Law 4 4 "); and 29 L.P.R.A §§ 146, 194 (2009) (respectively, "Law 100" and "Law 115"). (Id.) P la in tif f s also claim tort liability under 31 L.P.R.A. §§ 5141, 5142 (2009) (respectively, "Article 1 8 0 2 " and "Article 1803"). (Id.) M u ñ o z-H ern án d ez and Muñoz-Firpi ("Movants") jointly file three separate motions for o u r consideration: For dismissal given failure to state a claim, Fed. R. Civ. P. 12(b)(6) (Docket

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N o . 14); for dismissal given lack of subject-matter jurisdiction, Fed. R. Civ. P. 12(b)(1) (Docket N o . 18);1 and for abstention as to the Puerto Rico law claims against them (Docket No. 35). P la in tif f s oppose the first two motions (Docket Nos. 23; 30), but not the last. I. F a c tu a l and Procedural History W e derive the following facts from Plaintiff's amended complaint. (Docket No. 24 at 36 .) On September 15, 2003, Otero-Merced began working at PHI as supervisor for the claims d e p a rtm e n t ; the following year he was promoted. From January 2006 through June 2008, h o w e v e r, Otero-Merced experienced, inter alia, harassment, demotions, a suspension, and u ltim a te ly discharge. Plaintiffs allege that the described treatment was the result of

discrim in a tio n based on Otero-Merced's age and disability and that the discharge was retaliation f o r his having filed a charge against PHI before the U.S. Equal Employment Opportunity C o m m is s io n . O n February 17, 2009, Plaintiffs filed a complaint in this court (Docket No. 4); they a m e n d e d same on June 10, 2009 (Docket No. 24). Movants moved to dismiss on May 11 and J u n e 1, 2009, first for failure to state a claim and later for lack of subject-matter jurisdiction. (D o c k e t Nos. 14; 18.) On November 25, 2009, Movants also moved for our abstention from e x e rc isin g supplemental jurisdiction over the Puerto Rico law claims against them. (Docket N o . 35.) Plaintiffs respond to Movants' first motion to dismiss (Docket No. 23), and Movants

Because this motion does not actually raise a jurisdictional question, see infra note 2, we analyze the grounds raised therein under a Rule 12(b)(6) standard.

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r e p ly (Docket No. 26). Plaintiffs likewise respond to Movants' second motion to dismiss (D o c k e t No. 30), but not to Movants' motion for abstention. II. S t a n d a r d Under Rule 12(b)(6) A defendant may move to dismiss an action, based solely on the complaint, for the p la in tif f 's "failure to state a claim upon which relief can be granted." Fed. R. Civ. P. 12(b)(6). I n assessing such a motion, we "accept[] all well-pleaded facts as true, and we draw all re a so n a b le inferences in favor of the [plaintiff]." Wash. Legal Found. v. Mass. Bar Found., 993 F .2 d 962, 971 (1st Cir. 1993). Nevertheless, mere legal conclusions "are not entitled to the a s s u m p tio n of truth." Ashcroft v. Iqbal, 129 S. Ct. 1937, 1950 (2009). T h e complaint must demonstrate "a plausible entitlement to relief" by alleging facts that d ire c tly or inferentially support each material element of some legal claim. Gagliardi v. S u lliv a n , 513 F.3d 301, 305 (1st Cir. 2008) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 5 5 9 (2007)). "Specific facts are not necessary; the statement need only give the defendant fair n o tic e of what the . . . claim is and the grounds upon which it rests." Erickson v. Pardus, 551 U .S . 89, 93 (2007) (internal quotation marks omitted). III. A n a l y s is P la in tif f s allege discrimination in violation of both federal and Puerto Rico law. M o v a n ts contend that Plaintiffs fail to state a claim under either and, in addition, urge this court

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to abstain from deciding the Puerto Rico claims. We consider first the federal and then the P u e rto Rico claims. A. C la im s Arising Under Federal Law M o v a n ts move for dismissal of Plaintiffs' federal-law claims on two grounds: (1) the A D E A and ADA do not contemplate individual liability for employment discrimination (Docket N o . 14 at 6); and (2) Plaintiffs failed to exhaust their administrative remedies as to the ADEA a n d ADA claims against Movants (Docket No. 18).2 Plaintiffs concede both arguments. (D o c k e t Nos. 23 at 2; 30 at 2.) We find that First Circuit precedent supports, albeit indirectly, M o v a n ts' argument as to individual liability under the ADEA and ADA, and we, thus, accept P la in tif f s ' concession that Movants are not liable under these statutes. See Correa-Ruiz v. C a ld e ró n -S e rra , 411 F. Supp. 2d 41, 47 (D.P.R. 2005) (dismissing claim when plaintiff c o n c e d e d that there is no individual liability under the ADEA), aff'd sub nom., Correa-Ruiz v. F o r tu ñ o , 573 F.3d 1, 7-8 (1st Cir. 2009); Sifre v. Dep't of Health, 38 F. Supp. 2d 91, 105-06 (D .P .R . 1999) (finding no individual liability under the ADA given lack of persuasive argument fo r same), aff'd, 214 F.3d 23 (1st Cir. 2000). Finding here no federal claim, we do not consider w h e th e r the illusory claim was exhausted.

Movants fashion the second ground as a challenge to this court's subject-matter jurisdiction. (Docket No. 18.) But failure to exhaust administrative remedies, while dispositive, does not affect this court's jurisdiction. See Siaca v. Autoridad de Acueductos y Alcantarillados de P.R., 160 F. Supp. 2d 188, 194-95 (D.P.R. 2001) (citing Zipes v. Trans World Airlines, Inc., 455 U.S. 385, 393 (1982)).

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Movants move to dismiss Plaintiffs' Puerto Rico claims under two separate theories: (1 ) Plaintiffs fail to state a claim upon which relief can be granted (Docket No. 14 at 7-20); and (2 ) this court should abstain due to an alleged lack of federal-law claims (Docket No. 35 at 1-2, 6 ). As we find their abstention argument premature, we address it only briefly before moving o n to the substantive arguments. 1. A b s te n tio n

M o v a n ts argue that abstention is proper in this case because, by operation of law, there re m a in s no claim over which we have original jurisdiction. (Docket No. 35.) They demonstrate th a t PHI, the only other defendant against which Plaintiffs assert direct claims,3 has been d e c la re d insolvent and appointed a liquidator under a Puerto Rico statute. (Id. at 1-2.) They th e n cite a Puerto Rico jurisdiction-stripping statute that precludes suits against any entity to w h o m such a liquidator has been appointed. (Id. at 2.) Relying on same, Movants surmise that th i s court has no jurisdiction over claims against PHI and that, therefore, the only claims re m a in in g before this court are the Puerto Rico claims against Movants. (Id.) Invoking a b ste n tio n principles, Movants urge this court to dismiss said claims to allow their resolution in Puerto Rico courts. (Id. at 3-9.)

Claims against the insurance underwriter are contingent upon the direct claims against PHI and its officers. (See Docket No. 24 at 2.)

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W e find Movants' argument premature. Neither PHI nor Plaintiffs have broached the to p ic of PHI's dismissal from this case,4 and Movants have no standing to do so. 2. F a ilu r e to State a Claim Under Puerto Rico Law

P la in tif f s allege violations of Laws 44, 100, and 115, Puerto Rico statutes proscribing, re sp e c tiv e ly, discrimination on the basis of disability, employment discrimination as a general m a tter, and retaliation for certain protected conduct. (Docket No. 24.) Plaintiffs also allege that D e f en d a n t s are liable in tort, both directly under Article 1802 and vicariously under Article 1 8 0 3 . (Id.) Movants attack these claims as follows: (1) Laws 44, 100, and 115, like federal a n tid is c rim in a tio n laws, do not contemplate individual liability for employment discrimination (D o ck et No. 14 at 7-16); (2) Plaintiffs fail to allege facts that would give rise to Movants' lia b i lity under Law 100 (Docket No. 14 at 14); and (3) for reasons described below, Plaintiffs c a n n o t sustain a claim under Articles 1802 and 1803 (Docket No. 14 at 16-20). Because we f in d that argument (1) raises complex and unsettled issues of Puerto Rico law and. therefore, d e c lin e supplemental jurisdiction over Plaintiffs' Puerto Rico antidiscrimination claims against M o v a n ts , we need not address argument (2) and need only briefly address argument (3). a. I n d i v id u a l Liability Under Laws 44, 100, and 115

T h e question of whether Puerto Rico antidiscrimination statutes contemplate individual lia b ility remains, for the most part, unsettled by the Puerto Rico Supreme Court. In Rosario

Presumably, this court will never see such a filing; one would argue in vain that the cited Puerto Rico statute, or any state statute, strips this court of original jurisdiction over a claim arising under federal law. See, e.g., MRCo, Inc. v. Juarbe-Jimenez, 521 F.3d 88, 95-96 (1st Cir. 2008) (rejecting this argument).

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T o le d o v. Distribuidora Kikuet, Inc., however, the Puerto Rico Supreme Court explicitly held th a t an individual may be sued in his individual capacity under Law 100. 151 P.R. Dec. 634 (2 0 0 0 ) (considering allegations of sexual harassment), reconsid. denied, 153 P.R. Dec. 125 (2 0 0 0 ). In so finding, the court interpreted the statutory text, in particular the definition of " e m p lo ye r," which varies among the several Puerto Rico antidiscrimination statutes. Id. The c o u rt found the definition of "employer" in Law 100 amenable to allowing individual liability; m o re o v e r, it found, individual liability furthers the public policy of eradicating discriminatory b e h a v io r by all means statutorily allowed. Id. This clear ruling has been recognized by the P u erto Rico Court of Appeals and this court alike. See, e.g., Torres-Santiago v. AlcarazE m m a n u e lli, 553 F. Supp. 2d 75, 86 (D.P.R. 2008); Vargas-Santiago v. Alvarez-Moore, N o . DPE-2004-0541, 2006 WL 3694659, at *5 (P.R. Cir. Nov. 29, 2006).5 N e v e rth e les s, the Puerto Rico Supreme Court has yet to rule on the question of individual liab ility under Law 44. Law 44, amended in response to the 1991 ADA amendments, is meant to be the Puerto Rico counterpart to the ADA and to mirror the ADA's provisions for relief. S e e Ríos-Jaimán v. Cidra Mfg. Operations of P.R., Inc., 145 P.R. Dec. 746, 749 (1998). The

Movants seek to cabin the Kikuet decision to only sexual harassment claims (Docket No. 14 at 11-16), but Kikuet does not support such a limited reading. See Kikuet, 151 D.P.R. at 644 (finding a liberal interpretation of the statutes designed to protect workers from sexual harassment and discriminatory acts "imperative" and deciding that the defendant in that case could be sued in his personal capacity under Law 100). Had the court wanted to so cabin Kikuet, it could have done so expressly. Movants make much of a line in the decision denying reconsideration of Kikuet, Rosario Toledo v. Distribuidora Kikuet, Inc. (Kikuet II), 153 P.R. Dec. 125 (2000), in a section of the court's opinion discussing this court's finding that there exists no individual liability under Law 100. (Docket No. 14 at 13.) The line Movants quote was merely a description of this court's determination, as evidenced by the fact that the citation following that line is to federal, rather than Puerto Rico, cases. See Kikuet II, 153 P.R. Dec. at 129 & n.11.

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P u e rto Rico Supreme Court has been silent on whether such mirroring precludes individual liab ility under Law 44. In 2006, however, the Puerto Rico Court of Appeals discussed, without o v e rtu rn in g , a lower court's dismissal of a Law 44 claim due to unavailability of individual liab ility under Law 44. See Sánchez-Barreto v. Swiss Just de P.R., Inc., No. IPE20020 2 6 3 (2 0 5 ), 2003 WL 23336311, at *1 (P.R. Cir. Nov. 6, 2003); see also Velez-Nieves v. M ic ro s o f t Caribbean, Inc., Nos. 05-1067, 05-1098, 2006 WL 1805689, at *6-10 (D.P.R. M a rc h . 15, 2006) (Vélez-Rivé, Mag. J.) (finding that, despite Kikuet, which supports the liberal c o n s tru c tio n of Puerto Rico discrimination statutes to favor employees, no individual liability lie s under Law 44). A s to Law 115, the question of individual liability likewise goes unanswered by the P u erto Rico Supreme Court, and this court has reached conflicting results. Compare RiveraM a ld o n a d o v. Hosp. Alejandro Otero Lopez, 614 F. Supp. 2d 181, 197 (D.P.R. 2009) (finding n o individual liability under Law 115, relying on findings by the Puerto Rico Court of Appeals), w it h Hernández v. Raytheon Serv. Co. P.R., No. 05-1937CCC, 2006 WL 1737167, at *2 (D .P .R . Apr. 27, 2006) (concluding the opposite, relying on Kikuet's liberal construction in f a v o r of employees in discrimination cases). In 2003 and in 2006, the Puerto Rico Court of A p p e a ls issued cogent, instructive decisions wherein it discussed the implications of Kikuet, c o m p a r in g the language and purpose of Law 100 with that of Law 115. See Vargas-Santiago v . Álvarez-Moore, No. DPE2004-0541, 2006 WL 3694659 (P.R. Cir. Nov. 29, 2006), cited with a p p ro v a l in Rivera-Maldonado, 614 F. Supp. 2d at 197; Sánchez-Barreto, 2003 WL 23336311.

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T h e court, in both, determined that no individual liability exists under Law 115. See VargasS a n tia g o , 2006 WL 3694659 at *5; Sánchez-Barreto, 2003 WL 23336311, at *4. G iv en the above, we find that the question of whether individual liability exists under P u e rto Rico antidiscrimination statutes is, as a general matter, a complex and unsettled issue of P u e rto Rico law. When combined with our dismissal of Plaintiffs' federal claims against M o v a n ts , see supra Part III.A, the centrality of the unsettled question compels us to decline s u p p le m e n ta l jurisdiction over Plaintiffs' Puerto Rico antidiscrimination claims. See 28 U.S.C. § 1367(c). b. R e lie f Under Articles 1802 and 1803

M o v a n ts argue that (1) an employee suing an employer for discrimination must do so u n d e r the specific statute enacted for that purpose and may not seek relief under Article 1802, the Puerto Rico general tort statute (Docket No. 14 at 16-19); and (2) to the extent that PuenteC o ló n and the conjugal partnership, as relatives of Otero-Merced, have a claim under Article 1 8 0 2 , said claim is contingent upon the success of Otero-Merced's discrimination claims (id. a t 19-20). Plaintiffs do not dispute the first argument, but rather respond that they seek relief u n d e r Articles 1802 and 1803 only for Puente-Colón and the conjugal partnership. (Docket N o . 23 at 4-5.) As Plaintiffs' response renders Movants' first argument moot, we need not ad d ress it. Movants' second argument, however, prevails and precludes Plaintiffs' claims under A rtic le s 1802 and 1803. See Maldonado v. Banco Central Corp., 138 P.R. Dec. 268, 269-70 (1 9 9 5 ) (finding an employee's relative's Article 1802 claim contingent upon the viability of the

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e m p lo ye e 's discrimination claim), construed in Berrios v. Bristol Myers Squibb P.R., Inc., 51 F . Supp. 2d 61, 65-66 (D.P.R. 1999). IV . C o n c lu s io n F o r the reasons stated herein, we hereby GRANT Movants' motion to dismiss for failure to state a claim (Docket No. 14); DENY AS MOOT Movants' motion to dismiss for lack of s u b je c t-m a tte r jurisdiction (Docket No. 18); and DENY AS PREMATURE Movants' motion f o r abstention (Docket No. 35). We DISMISS Plaintiffs' claims against Movants, without p re ju d ic e to litigation in Puerto Rico courts. I T IS SO ORDERED. S a n Juan, Puerto Rico, this 26 th day of January, 2010. s/ José Antonio Fusté JOSE ANTONIO FUSTE Chief U.S. District Judge