Opinion ID: 199490
Heading Depth: 3
Heading Rank: 2

Heading: City of Newport

Text: 29 Although we find that the district court failed to articulate a valid basis for its conclusion that Humacao could not be liable for the punitive damages judgment, we may still uphold the protective order if the court's decision to grant it can be justified on another ground having record support. E.g., Hodgens v. Gen. Dynamics Corp., 144 F.3d 151, 172 (1st Cir. 1998). On appeal, the defendants press the argument, offered in their motion for a protective order but not reached by the district court, that the court's decision may be justified as an application of the principles outlined by the Supreme Court in City of Newport. We now turn to this contention. 30 In City of Newport, the Court held that, as a general rule, municipalities are immune from punitive damages judgments when sued under §§ 1983. 453 U.S. at 271. In reaching this result, the Court employed a framework it has used on a number of occasions to determine whether immunities available at common law should be allowed as affirmative defenses in §§ 1983 actions. Id. at 258 & n. 18 (discussing Court's approach to incorporating common-law immunities and citing cases). Under this approach, the Court considered, first, whether incorporation of the immunity was consistent with the history of §§ 1983, and, second, whether the policies served by the immunity were compatible with the purposes of §§ 1983. Id. The Court concluded that incorporation of the common law immunity from punitive damages was justified under both prongs of the analysis. After an extensive review of contemporary cases and the available legislative history, the Court found that municipal immunity from punitive damages was not open to serious question when the statute was enacted, id. at 259, and that there was no evidence that Congress intended to disturb the settled common-law immunity, id. at 266. In addition, the Court concluded that such immunity was not inconsistent with the purposes of §§ 1983, reasoning that the imposition of punitive damages awards was likely to provide a windfall to plaintiffs -- at taxpayers' expense -- without significantly advancing the compensation or deterrence aims of the statute. Id. at 266-271. 31 It is undisputed that Humacao is a municipality that would, as an initial matter, be entitled to the immunity defense recognized by City of Newport. The question for us, then, is whether the defendants are correct that, as a matter of law, the plaintiffs cannot show a waiver of Humacao's City of Newport immunity, and, therefore, cannot establish Humacao's liability for the punitive damages. This question cannot be answered with certainty on the present record. However, we find that the plaintiffs have articulated plausible grounds supporting a possible waiver of immunity, and therefore conclude that the district court's order cannot be justified on the basis of City of Newport. 20 32 The plaintiffs' principal contention, both below and on appeal, is that certain documents relating to the extension of Law 9 benefits to Vega-Sosa and Vega-Sosa's acceptance of those benefits operate as a waiver of Humacao's immunity. The plaintiffs provide limited detail concerning the contents of these documents; however, they suggest that, among other things, the requested discovery will reveal one or more resolutions of Humacao's municipal council indicating a consent to pay the full judgment, including punitive damages. In response, the defendants offer a variety of arguments that, in their view, establish that the plaintiffs cannot succeed in proving waiver, no matter what the documents may say. We need consider only two of these arguments. 21 The first focuses on whether Vega-Sosa had authority to waive Humacao's immunity; the second challenges the plaintiffs' ability to make any waiver argument at this point in the proceedings, given the plaintiffs' failure to do so at trial. 33 The defendants' first argument is easily rejected. Although the plaintiffs do imply in their briefs that Vega-Sosa may be responsible for waiving Humacao's immunity, this is not their only theory for waiver. See Pl. Br. p. 16 (alleging the existence of a resolution by which[,] in accepting legal representation by the Justice Department [pursuant to Law 9,] the municipality accepted also to pay any judgment entered in the case) (emphasis added). The defendants do not appear to dispute that Humacao's municipal legislature could have executed a waiver of its City of Newport immunity, and precedent supports the view that such a waiver is possible. See, e.g., O'Neill v. Krzeminski, 839 F.2d 9, 13 (3d Cir. 1988) (holding that municipality's indemnification agreement with defendant constituted a waiver of its City of Newport immunity); Cornwell v. City of Riverside, 896 F.2d 398, 399-400 (9th Cir. 1990) (holding that City of Newport did not bar municipality from deciding to pay a punitive damages judgment for an official pursuant to a state statute that allowed, but did not require, municipalities to pay such damages); see also Bell, 746 F.2d at 1271-72 (holding that state indemnification statute waived municipality's immunity from punitive damages with respect to indemnified judgments). As a result, the defendants' argument, even if correct, would not preclude the possibility that the plaintiffs might prove a waiver of immunity. 34 The defendants' second contention fares no better, at least on the present record. In arguing that the plaintiffs were required to make their waiver-of-immunity arguments at trial, the defendants take it as a given that the immunity defense itself was properly raised below. This is far from clear. Our review of the record indicates that the defendants made only one bare, unexplained reference to non-liability for punitive damages in their answer, 22 and never said anything else that could be construed as raising the issue until long after the judgment became final. Furthermore, the language that appeared in the answer failed to mention either the word immunity or the City of Newport case, nor did it attempt to distinguish between the personal capacity suit and the official capacity suit. As a result, it was perhaps most logically read not as invoking any immunity, but as rejecting the plaintiffs' contention that the actions complained of could justify a punitive damages award. 35 Under the circumstances, we are skeptical that such a brief, ambiguous reference was sufficient to place the issue before the court, or to trigger any duty on the part of the plaintiffs to respond. See Violette v. Smith & Nephew Dyonics, Inc., 62 F.3d 8, 11 (1st Cir. 1995) (holding that defendants' mere mention of affirmative defense of preemption in answer, never developed or pressed before the court, was insufficient to meet requirement that party must actually present a claim or defense to the district court before arguing the matter on appeal); Williams v. Ashland Eng'g Co., 45 F.3d 588, 592 (1st Cir. 1995) (discussing the standard to be applied when determining if an affirmative defense is preserved by non-specific language in an answer and noting that a defendant who asserts [an affirmative defense] in a largely uninformative way[] acts at his peril); see also Sales v. Grant, 224 F.3d 293, 296 (4th Cir. 2000), cert. denied, ___ U.S. ___, 121 S. Ct. 1959 (2001) (holding that the inclusion of a single, cursory sentence on the defense of qualified immunity in the answer was insufficient to preserve the defense where it was never mentioned again and defendants sought to raise it for the first time on remand from an earlier appeal). If it was not, the plaintiffs have at least a plausible argument that it is the defendants, not they, whose arguments are barred on procedural grounds. See Barnett v. Housing Auth. of Atlanta, 707 F.2d 1571, 1580 (11th Cir. 1983) (finding City of Newport defense to be waived by defendants' failure, at trial, to challenge jury instruction regarding punitive damages); Black v. Stephens, 662 F.2d 181, 184 n.1 (3d Cir. 1981) (same). 23 36 In view of the foregoing, we conclude that, on the present record, the district court could not have found that Humacao's City of Newport immunity was non-waivable. While plaintiffs' assertions regarding alleged waivers of immunity were somewhat non-specific, 24 they included allegations that, if true, could constitute waivers of immunity under relevant precedent. As a result, the district court's grant of the protective order cannot be justified on this basis.