Corcino-Rodriguez et al v. State Insurance Fund Corporation et al
Filing
170
OPINION AND ORDER staying the proceedings in this case. Signed by US Magistrate Judge Marcos E. Lopez on 2/27/2013. (GDR)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF PUERTO RICO
VIRGEN M. CORCINO-RODRÍGUEZ, et al.,
Plaintiffs,
v.
CIVIL NO.: 10-1405 (MEL)
STATE INSURANCE FUND CORPORATION,
et al.,
Defendants.
OPINION AND ORDER
I.
PROCEDURAL HISTORY
On May 14, 2010, plaintiffs Virgen M. Corcino-Rodríguez (“Corcino”) and Myriam
Burgos Ocaña (“Burgos”) (collectively, “plaintiffs”) filed a complaint under 42 U.S.C. § 1983
against, inter alios, defendants State Insurance Fund Corporation (“SIFC”), Zoimé ÁlvarezRubio (“Álvarez”), and Saúl Rivera-Rivera (“Rivera”) (collectively, “defendants”). (D.E. 1).
Plaintiffs allege claims under the First Amendment for political discrimination, the Due Process
Clause,1 and the Equal Protection Clause,2 as well as claims for violations of the Constitution
and laws of the Commonwealth of Puerto Rico.
Defendants filed a motion to dismiss on March 21, 2012, under the doctrine known as
Younger abstention. (D.E. 54). Defendants filed a supplemental motion on April 12, 2012, also
on the issue of abstention.3 (D.E. 58). In said motion, defendants brought to the attention of the
court a grant of certiorari by the Puerto Rico Supreme Court in González-Segarra, et al. v. State
1
Plaintiffs allege deprivations of procedural rather than substantive due process, as they claim that defendants
deprived plaintiffs of their “property rights without due process of law.” (D.E. 1, ¶ 1; see also D.E. 1, ¶¶ 94–103).
2
Plaintiffs’ equal protection claims have been dismissed with respect to all defendants. (D.E. 31).
3
Defendants filed said motion as an “informative motion,” but it was effectively a supplemental motion to the
motion to dismiss, also regarding the issue of abstention.
Insurance Fund Corporation, Civ. No. CC-2011-01051, KLRA 201100611. (D.E. 58, at 2).
Without explicitly referring to the doctrine of abstention established by Railroad Commission v.
Pullman Co., 312 U.S. 496 (1941), defendants argued that “[p]laintiffs’ claims in this case are
centered on this issue and the same set of facts of González-Segarra, and will depend on the
judgment issued by the Supreme Court.” Id. One of the issues that will be addressed by the
Puerto Rico Supreme Court, according to defendants, is “the validity of the nullification of the
appointments of twenty three (23) employees, who like Plaintiffs’, were appointed through a
[sic] ‘internal’ announcement procedure.” Id.
A court may choose to stay a case under the Pullman doctrine if the case meets a two-part
test: “(1) substantial uncertainty exists over the meaning of the state law in question, and (2)
settling the question of state law will or may well obviate the need to resolve a significant federal
constitutional question.” Batterman v. Leahy, 544 F.3d 370, 373 (1st Cir. 2008). On October
23, 2012, the court denied defendants’ motion to dismiss on the ground of Pullman abstention
because defendants failed to meet the first prong.4 (D.E. 154, at 7–8). Specifically, defendants
failed to identify which Puerto Rico provision or law was ambiguous or had a substantially
uncertain meaning, much less the nature of the ambiguity or uncertainty.
On February 7, 2013, the U.S. Court of Appeals for the First Circuit remanded a separate
case with instructions to stay proceedings pending the Puerto Rico Supreme Court’s decision in
González Segarra. Casiano-Montañez v. State Ins. Fund Corp., No. 12-1453, 2013 WL 494354
(1st Cir. Feb. 7, 2013). Defendants and plaintiffs have filed briefs on the issue of whether the
First Circuit’s decision is applicable in the instant case. (D.E. 164; 165; 166). Following the
4
Defendants’ motion was also denied on the ground of Younger abstention. (D.E. 154, at 1–5). As the First
Circuit’s reasoning in Casiano-Montañez v. State Ins. Fund Corp., No. 12-1453, 2013 WL 494354 (1st Cir. Feb. 7,
2013), regarding the Younger abstention doctrine is consistent with the opinion and order rendered by the
undersigned (D.E. 154), it is unnecessary to revisit this issue.
2
First Circuit’s decision in Casiano-Montañez, this court determines upon reconsideration of its
previous order (D.E. 154), for the reasons set forth below, that the proceedings of the instant case
shall be stayed pending the Puerto Rico Supreme Court’s decision in González Segarra.
II.
ANALYSIS
Casiano-Montañez and the instant case arise out of the same broad set of facts. 5 Álvarez
became the Administrator of the SIFC on January 2, 2009, shortly after elections in Puerto Rico.
Álvarez ordered an audit of personnel appointments made at the SIFC between 2001 and 2008.
This investigation revealed that 232 appointments had been made through internal job postings
rather than external announcements. On October 8, 2009, attorney José Roberto Feijoo drafted a
legal opinion at the behest of SIFC indicating that “‘internal job announcements’ permitted under
the SIFC’s Personnel Regulations first require an extensive written ‘marketing plan and audit of
positions’ by the Administrator of the SIFC.” (D.E. 1, ¶ 59; D.E. 1 in Civ. No. 11-1002 (DRD),
¶ 119). Plaintiffs in both Casiano-Montañez and the instant case were among those persons who
received notices of intent to dismiss as a result of this audit. Specifically, Álvarez sent a
memorandum dated January 8, 2010, to plaintiffs in both cases informing them of SIFC’s intent
to declare their appointments null and void because they had been conducted through internal job
announcements, rather than external ones, allegedly in violation of the “merit principle”
espoused in the Public Service Human Resources Administration Act, P.R. Laws Ann. tit. 3, §§
1461–1462h. (D.E. 1, ¶¶ 49, 62; D.E. 81-1, ¶ 38; D.E. 88-2, ¶ 38; D.E. 1 in Civ. No. 11-1002
(DRD), ¶¶ 115, 122); Casiano-Montañez, 2013 WL 494354, at *1.
5
For the purpose of determining that Casiano-Montañez and the instant case are sufficiently analogous such that the
First Circuit’s order to stay the proceedings in the former is relevant to the instant case, the factual background of
this case is taken from the complaint (D.E. 1) and uncontested material facts proposed by defendants and admitted
or not successfully controverted by plaintiffs (D.E. 81-1; 88-2).
3
The SIFC offered informal administrative hearings to plaintiffs in both cases. Each
plaintiff requested a hearing. After the hearings, the SIFC affirmed Álvarez’s decision with
respect to each plaintiff. All of the plaintiffs in both cases were terminated or demoted between
March and September of 2010. Each plaintiff, except for Corcino, filed administrative appeals
before the SIFC’s Board of Appeals. (D.E. 1, ¶¶ 67, 71; D.E. 81-1, ¶¶ 62, 65, 68–69; D.E. 88-2,
¶¶ 62, 65, 68–69; D.E. 1 in Civ. No. 11-1002 (DRD), ¶¶ 27–98, 126); Casiano-Montañez, 2013
WL 494354, at *1.
The causes of action in both cases, as alleged in the complaints, are substantially
identical.6 In both cases, plaintiffs allege that their adverse employment decisions constituted
political discrimination and procedural due process violations.
“In order to establish a
procedural due process claim under section 1983, a plaintiff ‘must allege first that it has a
property interest as defined by state law and, second, that the defendants, acting under color of
state law, deprived it of that property interest without constitutionally adequate process.’”
Marrero-Gutiérrez v. Molina, 491 F.3d 1, 8 (1st Cir. 2007) (quoting PFZ Props., Inc. v.
Rodríguez, 928 F.2d 28, 30 (1st Cir. 1991)). Thus, in support of their due process claims,
plaintiffs allege that they had property interests in their SIFC positions under Puerto Rico law,
and were not provided with constitutionally adequate process when they were deprived of said
positions. (D.E. 1, ¶¶ 94–103; D.E. 1 in Civ. No. 11-1002 (DRD), ¶¶ 151–59).
As the First Circuit noted, the SIFC’s “decision to nullify the appointments made
pursuant to internal hiring calls has spawned numerous other lawsuits in both Puerto Rico and
6
On March 29, 2011, this court dismissed all of plaintiffs’ claims under the Equal Protection Clause. (D.E. 31, at
14). There is no indication that the Casiano-Montañez plaintiffs’ equal protection claims have been dismissed. See
2013 WL 494354, at *1. Nevertheless, it is not readily apparent that this distinguishes the two cases in any material
way. As in Casiano-Montañez, it is plaintiffs’ procedural due process claim which relies on the settling of a
question of state law. If anything, the fact that there is one fewer federal claim independent of state law in the
instant case implies that the rationale for Pullman abstention is greater here than in Casiano-Montañez.
4
federal courts.” Casiano-Montañez, 2013 WL 494354, at *1. As here, the plaintiffs in one such
case, González Segarra, “argued that internal hiring calls were legal, that their due process rights
were violated, and that political discrimination motivated their dismissals or demotions.” Id.
The Puerto Rico Court of Appeals determined that the appointments were valid, but that the
petitioners had failed to establish a due process violation or a prima facie case of political
discrimination. Certiorari to the Puerto Rico Supreme Court has been granted in González
Segarra; the case has been fully briefed and awaits decision.
Ultimately, the First Circuit
concluded that a stay was appropriate due to the pending case before the Puerto Rico Supreme
Court.
As an initial matter, “it is well settled that the pendency of an action in state court is not a
per se bar to related federal court proceedings.” Id. Rather, “federal courts have a ‘virtually
unflagging obligation … to exercise the jurisdiction given them.’” Id. (quoting Colo. River
Water Conservation Dist. v. United States, 424 U.S. 800, 817 (1976)). Nevertheless, “[t]his duty
… is not absolute.” Id. In particular, under the doctrine of abstention set forth in Pullman, when
a “‘federal constitutional challenge turns on a state statute, the meaning of which is unclear under
state law’ … a federal court … ‘should stay its hand in order to provide the state court an
opportunity to settle the underlying state-law question and thus avoid the possibility of
unnecessarily deciding a constitutional question.’” Ford Motor Co. v. Meredith Motor Co., Inc.,
257 F.3d 67, 71 (1st Cir. 2001) (quoting Harris County Com’rs Court v. Moore, 420 U.S. 77, 84
(1975)). Pullman abstention is a discretionary doctrine. See Fideicomiso de la Tierra del Caño
Martín Peña v. Fortuño, 604 F.3d 7, 16 (1st Cir. 2010), cert. denied, 131 S. Ct. 1600, 179 L. Ed.
2d 499 (U.S. 2011); Currie v. Group Ins. Comm’n, 290 F.3d 1, 11 (1st Cir. 2002). This doctrine
“serves a dual purpose: it avoids the waste of a tentative decision as well as the friction of a
5
premature constitutional adjudication.” Ford Motor Co., 257 F.3d at 71 (internal quotations
omitted). As discussed above, two elements must be met for a court to choose to stay a case
under the Pullman doctrine: “(1) substantial uncertainty exists over the meaning of the state law
in question, and (2) settling the question of state law will or may well obviate the need to resolve
a significant federal constitutional question.” Batterman, 544 F.3d at 373.
The guarantee of procedural due process in the U.S. Constitution protects persons from
deprivations of property by the state without due process of law.
Nonetheless, “property
interests are not defined by the Constitution.” Lowe v. Scott, 959 F.2d 323, 334 (1st Cir. 1992).
“‘Rather, they are created and their dimensions are defined by existing rules or understandings
that stem from an independent source such as state law ….’” Id. (quoting Bd. of Regents of
State Colleges v. Roth, 408 U.S. 564, 577 (1972)). As such, “[i]n order for plaintiffs to have
procedural due process rights in their employment, each plaintiff must have had a reasonable
expectation, based on a statute, policy, rule, or contract, that he or she would continue to be
employed.”
Concepción Chaparro v. Ruiz-Hernández, 607 F.3d 261, 264 (1st Cir. 2010).
“Under Puerto Rico law, … [a]s a general rule, those who lawfully hold [‘career’] positions have
a protected property interest in continued employment in those positions.” Costa-Urena v.
Segarra, 590 F.3d 18, 27 (1st Cir. 2009). In contrast, “[e]mployees whose hiring contravened
Commonwealth laws and regulations … are not vested with a property interest in their career
positions.” Casiano-Montañez, 2013 WL 494354, at *3. Rather, the career appointments of
such employees “‘are null and void ab initio’ and no due process protections attach.” Id.
(quoting Kauffman v. Puerto Rico Tel. Co., 841 F.2d 1169, 1173 (1st Cir. 1988)).
Whether plaintiffs in this case “have a property interest in their career positions at the
[SIFC] hinges on the legality of their appointments, the very issue that the Commonwealth’s
6
highest court is poised to decide in González Segarra.” Id. Plaintiffs contend that the First
Circuit had “no grounds in support” of its “assert[ion] that the nullity issue regarding the
appointments and promotions involves complex questions of statutory and regulatory
interpretation.” (D.E. 166, ¶ 6). The First Circuit, however, clearly pointed to the fact of
“divergent legal interpretations of the agency and the intermediate appellate court” in support of
its conclusion that “substantial uncertainty surrounds the issue.” Casiano-Montañez, 2013 WL
494354, at *3. It also noted several “unsettled issues of Puerto Rico administrative and statutory
law,” including “questions concern[ing] the requirements of the merit principle, the power of the
[SIFC]’s administrator to limit competition for certain positions, the ability of a subsequent
administrator to countermand the decisions of the predecessor, and the role of Commonwealthwide fiscal measures aimed at reducing public payroll costs.” Id. As the First Circuit points out:
Resolution of these unsettled issues of Puerto Rico administrative and statutory
law may obviate the need to decide whether the plaintiffs received
constitutionally adequate process prior to losing their positions. At the very least,
once the Puerto Rico Supreme Court has spoken, adjudication of any remaining
constitutional questions may indeed become greatly simplified.
Id. (internal quotations and citations omitted). Given that Casiano-Montañez, González Segarra,
and the instant case arise from the same events at the SIFC and that all three sets of plaintiffs
have articulated a theory of procedural due process violations which depend on these “complex
questions of statutory and regulatory interpretation” arising from the question of whether the
SIFC’s internal job announcements violated the merit principle, id., it is clear that the First
Circuit’s rationale for ordering a stay in Casiano-Montañez applies with full force in this case.7
7
Plaintiffs argue that, because Corcino did not file an appeal before the SIFC’s Board of Appeals, this case is
“clearly distinguishable from Casiano.” (D.E. 166, ¶ 144). Plaintiffs, however, offer no reason why this distinction
is relevant. The issue to be addressed by the highest Commonwealth court concerns whether the procedures
underlying the appointments for the employees in González Segarra, Casiano-Montañez, and the instant case are
valid under Puerto Rico law. Whether one such employee, after termination, chose not to file an internal
administrative appeal seems not to have any bearing on whether the initial appointment was valid. As such,
7
Plaintiffs argue that defendants in Casiano-Montañez “failed to refute that the SIFC
internal appeals process’ [sic] lacked jurisdiction to entertain a political discrimination that,
consequently, removed this issue from the scope of review by the PR Supreme Court.” (D.E.
166, ¶ 5). It is unclear how this distinguishes Casiano-Montañez in a way favorable to plaintiffs.
Even if plaintiffs’ statement is assumed to be true, the First Circuit nonetheless determined that a
stay under Pullman was appropriate. As in the instant case, plaintiffs in Casiano-Montañez
alleged a claim of political discrimination under the First Amendment.
The First Circuit
“recognize[ed] … that the plaintiffs’ political discrimination claim is not synonymous with their
due process claim and, thus, will not necessarily be resolved by answering the unsettled state law
question.” Casiano-Montañez, 2013 WL 494354, at *4. A “claim that is not rendered moot by
the Puerto Rico Supreme Court’s decision,” however, can be addressed “in federal court at a
later date.”
Id.
Plaintiffs’ concern that their “day in court” will be “preempt[ed]” is
unwarranted. (D.E. 166, ¶ 8). A stay under Pullman does not constitute a “surrender[ of] federal
court jurisdiction over either federal claim, but simply [a] stay[ of] the proceedings until the
related Commonwealth proceedings have run their course.”
Casiano-Montañez, 2013 WL
494354, at *4. As such, plaintiffs may raise their claims pertaining to political discrimination in
this court after the Puerto Rico Supreme Court has ruled on the unresolved issue of state law.
The First Circuit also determined that considerations of federalism, comity, and sound
judicial administration point to the prudence of abstention in Casiano-Montañez.
There is
something “‘particularly offensive about hijacking a case that is pending on the docket of a
state’s highest tribunal.’” Id. (quoting Cruz v. Melecio, 204 F.3d 14, 24 (1st Cir. 2000)). Even
though the instant proceedings may be at a more advanced stage than the ones in Casiano-
plaintiffs fail to establish that this distinction should serve as a reason to reject the application of Casiano-Montañez
in the instant case.
8
Montañez, as plaintiffs argue, the reasoning of the First Circuit decision applies here nonetheless.
Absent a stay, a ruling from the Puerto Rico Supreme Court on this complex issue of state law
that is contrary to one made by this court “would render th[is] court’s opinion ‘merely
advisory—an outcome we seek to avoid in any case.’” Id. (quoting Currie v. Grp. Ins. Comm’n,
290 F.3d 1, 11 (1st Cir. 2002)). As such, both the policy considerations set forth in the Pullman
doctrine and a weighing of federalism, comity, and sound judicial administration counsel the
court to stay the proceedings in this case.
III.
CONCLUSION
Upon reconsideration of the court’s previous order (D.E. 154) and taking into account the
recent decision by the First Circuit in Casiano-Montañez, the proceedings in the instant case are
hereby STAYED pending the Puerto Rico Supreme Court’s disposition of the issue of the
validity of internal hiring calls in González Segarra. All pending motions in the instant case
(D.E. 80; 136; 137; 156) are hereby DENIED WITHOUT PREJUDICE. The pretrial and
settlement conference and the jury trial are VACATED sine die. Within fifteen days of the
Puerto Rico Supreme Court’s ruling on this matter, defendants—who originally moved this court
to abstain (D.E. 54; 58)—shall file an informative motion with a certified translation of its
decision. The parties are granted thirty days following the Puerto Rico Supreme Court’s ruling
to file dispositive motions in the instant case.
IT IS SO ORDERED.
In San Juan, Puerto Rico, this 27th day of February, 2013.
s/Marcos E. López
U.S. Magistrate Judge
9
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