Opinion ID: 202726
Heading Depth: 2
Heading Rank: 4

Heading: Law 100 Claims.

Text: 46 Because diversity jurisdiction is present here, see 28 U.S.C. § 1332(a), we also must consider the appellants' claims under Puerto Rico law. 4 The basic premise under which diversity jurisdiction operates is straightforward: a federal court sitting in diversity is bound to apply state substantive law. 5 See Erie R.R. Co. v. Tompkins, 304 U.S. 64, 78, 58 S.Ct. 817, 82 L.Ed. 1188 (1938); Alternative Sys. Concepts, Inc. v. Synopsys, Inc., 374 F.3d 23, 32 (1st Cir.2004). State contract law falls within this sphere. See, e.g., Pritzker v. Yari, 42 F.3d 53, 65 (1st Cir.1994). Consequently, the effect of the releases on the appellants' Law 100 claims must be evaluated under substantive principles of Puerto Rico law. 47 As a general rule, [r]ights granted by the laws [of Puerto Rico] may be renounced, provided such renunciation be not contrary to law, to public interest or public order, or prejudicial to the interest of a third person. P.R. Laws Ann. tit. 31, § 4; see Ponce Gas Serv. Corp. v. L.R.B., 4 P.R.R. 983, 987, 104 D.P.R. 698 (1976) (Save when expressly prohibited or restricted by law, rights may be waived and compromised.). The appellants have not identified any provision of Puerto Rico's Civil Code, or any specific tenet of Puerto Rico's case law, that invalidates the releases or undercuts their efficacy. 6 In point of fact, the Puerto Rico courts have explicitly given their imprimatur to releases of employment discrimination claims. See, e.g., Marte v. Pegasus Broad., No. KLAN0400915, 2005 WL 808310 (P.R. Cir. Feb. 15, 2005) (English translation unpublished). As a theoretical matter, then, a release of Law 100 claims is authorized under the law of Puerto Rico. 48 The fact that the appellants legally could have released their Law 100 claims does not mean that they did so here. The question reduces to whether the documents that they signed actually effected a release in accordance with Puerto Rico law. Interpreting Article 1709 of the Civil Code, P.R. Laws Ann. tit. 31, § 4821, the Puerto Rico Supreme Court has enumerated three requirements for the valid release or settlement of a claim: (i) an uncertain legal relationship, (ii) an intent to eliminate the uncertainty, and (iii) reciprocal concessions. See Citibank, N.A. v. Dependable Ins. Co., 21 P.R. Offic. Trans. 496, 506, 121 D.P.R. 503 (1988). The releases at issue here satisfy these requirements. 49 The ubiquity of litigation that surrounds the non-consensual termination of employment relationships bears powerful witness to the myriad uncertainties about legal rights and obligations incident to such terminations. The language of the releases signed by the appellants is unarguably intended to eliminate those uncertainties. And, finally, the parties made reciprocal concessions: each appellant agreed not to pursue any legal claims arising out of the failed employment relationship, while Philip Morris agreed to pay to each a substantial sum that it was not otherwise obligated to pay and to furnish ancillary services as well. Thus, the releases were valid settlements of the Law 100 claims. 50 To be sure, the appellants again argue that the releases are void because they were deceived and induced into signing through mistake, deception and duress. Appellants' Br. at 49. This argument, which we found wanting when the appellants dubbed it coercion and raised it in connection with their Title VII claims, see supra Part III(C), has no more traction in connection with their Law 100 claims. 51 We need not tarry. Although the appellants correctly point out that Article 1217 of the Civil Code, P.R. Laws Ann. tit. 31, § 3404, renders consent to a settlement void when given by error, . . . by intimidation, or deceit, Puerto Rico law presumes good faith in negotiations. See Citibank, 21 P.R. Offic. Trans. at 512, 121 D.P.R. 503. Wrongdoing or bad faith is never assumed but, rather, must be proved affirmatively by the party who challenges an agreement based on an absence of consent. See id. And when examining efforts to invalidate consent, Puerto Rico courts consider the education, social background, economic status, and business experience of the challenger. See Miranda Soto v. Mena Eró, 9 P.R. Offic. Trans. 628, 634, 109 D.P.R. 473 (1980). 52 In this instance, the appellants are reasonably well-educated, experienced individuals, all of whom have held responsible positions in the private sector. Tellingly, they have presented no significantly probative evidence of deception, duress, objectively reasonable error, or other circumstances sufficient to trigger Article 1217. Put bluntly, this record compels a finding that the appellants knowingly and voluntarily consented to releasing their employment-related claims (including their Law 100 claims).