Court Opinion

ID: 4581560
Source: CourtListenerOpinion
Date Created: 2020-10-28 21:00:15.946961+00
Date Added: 2024-06-11T09:25:03.871795
License: Public Domain

United States Court of Appeals
                     For the First Circuit

No. 19-2028

  IN RE: THE FINANCIAL OVERSIGHT AND MANAGEMENT BOARD FOR PUERTO
RICO, AS REPRESENTATIVE FOR THE COMMONWEALTH OF PUERTO RICO; THE
   FINANCIAL OVERSIGHT AND MANAGEMENT BOARD FOR PUERTO RICO, AS
  REPRESENTATIVE FOR THE PUERTO RICO HIGHWAYS AND TRANSPORTATION
    AUTHORITY; THE FINANCIAL OVERSIGHT AND MANAGEMENT BOARD FOR
    PUERTO RICO, AS REPRESENTATIVE FOR THE PUERTO RICO ELECTRIC
 POWER AUTHORITY (PREPA); THE FINANCIAL OVERSIGHT AND MANAGEMENT
   BOARD FOR PUERTO RICO, AS REPRESENTATIVE FOR THE PUERTO RICO
   SALES TAX FINANCING CORPORATION, a/k/a Cofina; THE FINANCIAL
         OVERSIGHT AND MANAGEMENT BOARD FOR PUERTO RICO, AS
     REPRESENTATIVE FOR THE EMPLOYEES RETIREMENT SYSTEM OF THE
           GOVERNMENT OF THE COMMONWEALTH OF PUERTO RICO,

                            Debtors.
                    ________________________

  HERMANDAD DE EMPLEADOS DEL FONDO DEL SEGURO DEL ESTADO, INC.;
   UNIÓN DE MÉDICOS DE LA CORPORACIÓN DEL FONDO DEL SEGURO DEL
                      ESTADO CORP. (UMCFSE),

                     Plaintiffs, Appellants,

                               v.

FINANCIAL OVERSIGHT AND MANAGEMENT BOARD; COMMONWEALTH OF PUERTO
  RICO; STATE INSURANCE FUND CORPORATION; JAVIER RIVERA RÍOS, in
   his official capacity as Administrator of the State Insurance
    Fund Corporation; CHRISTIAN SOBRINO VEGA; JOSÉ IVÁN MARRERO
 ROSADO; TERESITA FUENTES; WANDA VÁZQUEZ GARCED, in her official
    capacity as Governor; OMAR J. MARRERO DÍAZ, in his official
capacity as Executive Director of AAFAF; FRANCISCO PARÉS ALICEA,
         in his official capacity as Secretary of Treasury,

                     Defendants, Appellees,

                       NATALIE A. JARESKO,

                           Defendant.
          APPEAL FROM THE UNITED STATES DISTRICT COURT
                 FOR THE DISTRICT OF PUERTO RICO

         [Hon. Laura Taylor Swain,* U.S. District Judge]

                              Before

                  Thompson, Kayatta, and Barron,
                          Circuit Judges.

     Jessica E. Méndez-Colberg, with whom Rolando Emmanuelli
Jiménez and Bufete Emmanuelli were on brief, for appellants.
     Mark D. Harris, with whom Timothy W. Mungovan, John E.
Roberts, Martin J. Bienenstock, Stephen L. Ratner, John E. Richman,
and Proskauer Rose LLP were on brief, for appellees.

                         October 28, 2020

     *  Of the   Southern   District   of   New   York,   sitting   by
designation.
           BARRON, Circuit Judge.          In response to a mounting fiscal

crisis, Puerto Rico enacted a series of laws that affect the

relationship between public employees in the Commonwealth and

their employers.        Two unions representing such employees filed

suit in federal district court in Puerto Rico in July 2018,

alleging   that    these   laws   impermissibly         interfere    with   their

collective bargaining rights.          We affirm the District Court's

dismissal of the complaint for failure to state a claim on which

relief may be granted.

                                      I.

           The Puerto Rico unions that bring this suit are Hermandad

de Empleados del Fondo del Seguro del Estado, Inc. and Unión de

Médicos de la Corporación del Fondo del Seguro del Estado Corp.

(collectively, the "unions").         Each represents workers at Puerto

Rico's   State    Insurance   Fund    Corporation        ("CFSE,"     after    the

organization's     Spanish-language        name),   a    Puerto     Rico    public

corporation that provides medical and related services to workers

in the Commonwealth who have suffered work-related injuries.

           As     the    exclusive    bargaining         representatives       for

approximately two thousand employees, these unions negotiate with

the CFSE over the terms of their members' employment.                Both unions

                                     - 3 -
have collective bargaining agreements with the CFSE that are in

effect.1

           To address Puerto Rico's fiscal crisis, the Puerto Rico

Legislative   Assembly   passed    the   four   laws    (collectively,    the

"challenged laws") affecting the rights and benefits of public

sector workers within the Commonwealth that are at issue here.

Set forth in the order of their enactment from earliest to latest,

these measures are:

           (1) Act 66-2014, the "Government of the Commonwealth of

Puerto Rico Special Fiscal and Operational Sustainability Act,"

which was passed on June 17, 2014;

           (2) Act 3-2017, the "Law to Address the Economic, Fiscal,

and Budgetary Crisis to Guarantee the Operation of the Government

of Puerto Rico," enacted on January 23, 2017;

           (3)   Act   8-2017,    the    "Law   for    the   Management   and

Transformation of Human Resources in the Government of Puerto

Rico," passed on February 4, 2017; and, finally,

           (4) Act 26-2017, the "Compliance with the Fiscal Plan

Act," which became law on April 29, 2017.

     1 Both of the contracts were apparently intended to only cover
periods that expired prior to the initiation of this lawsuit. Yet,
each has a provision automatically extending the contract so long
as the parties fail to come to terms on a new agreement.        The
unions contend that because no superseding contracts have been
agreed to, the old ones remain in effect. The defendants do not
contest this contention in their motion to dismiss.

                                   - 4 -
             The unions filed suit in the United States District Court

for the District of Puerto Rico on July 25, 2018. The unions'

complaint,     after    an   amendment,    asserted      claims    against    the

Commonwealth     of    Puerto    Rico,     the   Financial      Oversight     and

Management Board for Puerto Rico ("FOMB"), the CFSE, and various

Puerto Rico government officials based on the way these measures

allegedly    violated    the    Contract   Clause   of    the     United   States

Constitution, see U.S. Const. art. I., § 10, cl. 1, and the

Collective Bargaining Clause of the Puerto Rico Constitution, see

P.R. Const. art. II, § 17.            The unions requested both "full

compensatory and punitive damages" and declaratory relief.                   They

also requested "cost[s] and attorney fees."

             More specifically, the unions alleged in their complaint

that, through these four laws, Puerto Rico took away in whole or

in part benefits that the unions bargained for on behalf of their

members and that their members would otherwise be entitled to under

the collective bargaining agreements.            For instance, the unions

alleged that the collective bargaining agreements guarantee their

members a certain number of vacation days and give departing

workers the option to convert unused days into cash, but that Acts

66-2014 and 3-2017 eliminate the ability of workers to convert

unused days into cash, and that Act 26-2017 generally restricts

the maximum number of allowable vacation days to fifteen -- beneath

what the unions' contracts would otherwise guarantee. In addition,

                                    - 5 -
the    unions   alleged    that     the    collective       bargaining    agreements

provide for fringe benefits, including reimbursement for certain

travel and clothing expenses, but that Act 66-2014 and Act 3-2017

reduce or eliminate some of these benefits.

             Separately,      the    unions       alleged    that   the   collective

bargaining      agreements    establish       processes      that   the   CFSE   must

follow before hiring new employees.                But, the unions alleged, Act

8-2017 contains so-called "mobility" provisions that allow for the

transfer of employees from other government entities to the CFSE,

even when such transfers would bypass the hiring processes provided

for in the agreements.

             The    complaint       contended       that     the    District     Court

possessed federal question jurisdiction to consider the unions'

claims under 28 U.S.C. § 1331 because, according to the complaint,

"th[e] action arises under PROMESA and the U.S. Constitution."                     It

also    claimed     that     the     District       Court     had    subject-matter

jurisdiction under 48 U.S.C. § 2126(a), which gives the District

Court for the District of Puerto Rico jurisdiction over "action[s]

against the Oversight Board, and any action otherwise arising out

of [PROMESA]." Finally, it alleged that jurisdiction existed under

48 U.S.C. § 2166(a)(2), which gives the District Court of Puerto

Rico    "original    but   not      exclusive      jurisdiction      of   all    civil

proceedings arising under [Title III of PROMESA], or arising in or

related to cases under [Title III]."                In a filing below, the FOMB

                                          - 6 -
and one of the individual defendants -- Natalie Jaresko, the

executive director of the FOMB -- agreed that the District Court

had subject-matter jurisdiction under 48 U.S.C. § 2166(a).2

               On    the     defendants'     motions,        the    District      Court

determined that some aspects of the unions' claims for declaratory

relief had been rendered moot and dismissed those claims for lack

of jurisdiction.           See Fed. R. Civ. P. 12(b)(1).            It dismissed the

remainder of the plaintiffs' claims on the merits because it

concluded that they failed to state a claim on which relief could

be granted.         See id. 12(b)(6).      The unions then timely appealed.

                                           II.

               We    first     address     the      question       of   Article    III

jurisdiction.        The question arises primarily because, according to

the District Court, the fourth and most recent of the challenged

laws, Act No. 26-2017, superseded the three earlier enacted laws

that the plaintiffs challenge:              Act No. 66-2014, Act No. 3-2017,

and   Act     No.    8-2017.     The     District    Court     concluded   that,    in

consequence, the fourth measure mooted the plaintiffs' requests

for declaratory relief concerning the three earlier challenged

laws.       Moreover, the defendants contend that the enactment of even

more recent legislation, as well as the expiration of some of the

        2
       None of the defendants have argued that any of the unions'
claims are subject to the automatic stay provisions of PROMESA.
See 48 U.S.C. § 2161(a) (incorporating 11 U.S.C. § 362).

                                         - 7 -
provisions of the first three challenged measures, moot still other

aspects of the unions' claims for declaratory relief.             The unions

disagree on both counts, and so do we.

             All four challenged measures were enacted before the

plaintiffs filed suit, and none of the provisions in them are

asserted to have expired prior to that time.              This suggests that

insofar as there is an Article III issue for us to resolve, it has

to do with the plaintiffs' potential lack of Article III standing

to bring their claims for declaratory relief, rather than with the

fact that any post-suit developments rendered those claims moot.

See Friends of the Earth, Inc. v. Laidlaw Env't. Servs. (TOC),

Inc., 528 U.S. 167, 189-90 (2000).

             Moreover, the unions raise claims for damages based on

the   same   alleged   violations    of   the   federal    and   Puerto   Rico

constitutions that ground their declaratory judgment claims.              And,

as we will explain, for that reason, Article III does not bar us

from addressing whether the plaintiffs are entitled to declaratory

relief.

             To see why, it helps to understand that the plaintiffs

in their damages claim seek recompense only for the harm caused

during the period in which the challenged laws were in effect.

There is no doubt that the plaintiffs have standing to bring such

claims, and the defendants do not contend otherwise.              There also

is no basis for concluding that the fourth challenged law's

                                    - 8 -
passage --    or    any    other   development --     mooted       those    damages

claims.    That being so, though, there also is no Article III bar

to requesting a declaration that the challenged laws are "null,"

"void,"    and     "violat[ive]"     of    the   federal   and      Puerto       Rico

constitutions, because it is well established that claims for

declaratory relief can survive "as a predicate to a damages award"

based on the same alleged underlying legal violation.                      Wolff v.

McDonnell, 418 U.S. 539, 555 (1974); compare Adarand Constructors,

Inc. v. Pena, 515 U.S. 200, 210 (1995) (noting that while the

plaintiff contractor's "allegation that it has lost a contract in

the past" due to a certain type of contracting clause "of course

entitles it to seek damages for the loss of that contract," that

past harm alone cannot establish standing for "declaratory . . .

relief against any future use" of that type of clause (emphasis in

original)), with PETA v. Rasmussen, 298 F.3d 1198, 1202 n.2 (10th

Cir.      2002)     ("consider[ing]        declaratory     relief"          to     be

"retrospective to the extent that it is intertwined with a claim

for monetary damages that requires us to declare whether a past

constitutional violation occurred").

             Finally, nothing in the complaint expressly asks us to

pass on the validity of these laws in the hypothetical world in

which they are reinstated at some point in the future.                           Thus,

neither    mootness       nor   standing   concerns   pose     a    bar     to    our

consideration of the unions' claims for declaratory relief from

                                      - 9 -
these challenged measures, insofar as they are injured by them.

See Wolff, 418 U.S. at 555 (noting that a declaratory judgment may

be proper "as a predicate to a damages award"); Dyer v. Wells Fargo

Bank, N.A., 956 F.3d 62, 65 & n.2 (1st Cir. 2020) (allowing a claim

seeking a declaration regarding the legality of a foreclosure sale

to proceed in spite of the sale's completion because the plaintiff

also sought damages based on the same legal theory as the claim

for declaratory relief); Lippoldt v. Cole, 468 F.3d 1204, 1217

(10th Cir. 2006) (determining that neither standing nor mootness

precluded declaratory relief where "the district court had to

determine whether a past constitutional violation occurred" to

resolve the plaintiffs' damages claim); Crue v. Aiken, 370 F.3d

668, 677 (7th Cir. 2004) ("When a claim for injunctive relief is

barred but a claim for damages remains, a declaratory judgment as

a predicate to a damages award can survive.").

                               III.

          As to the merits, we begin with the plaintiffs' claims

under the Contract Clause of the United States Constitution, which

provides that "No state shall . . . pass any . . . Law impairing

the Obligation of Contracts . . . ."   U.S. Const. art. I., § 10,

cl. 1. The defendants do not contest that this prohibition applies

to Puerto Rico.   See Redondo Constr. Corp. v. Izquierdo, 662 F.3d

42, 48 n.3 (1st Cir. 2011).    We thus must evaluate these claims

with respect to each of the challenged laws by asking, first,

                              - 10 -
"whether    the . . .   law   has . . .   operated   as   a   substantial

impairment of a contractual relationship," UAW v. Fortuño, 633

F.3d 37, 41 (1st Cir. 2011) (quoting Energy Reserves Grp., Inc. v.

Kan. Power & Light Co., 459 U.S. 400, 411 (1983)), and, second,

whether any such impairment was "reasonable and necessary to serve

an important government purpose," id. (quoting U.S. Trust Co. v.

New Jersey, 431 U.S. 1, 25 (1977)).

            The burden is on the plaintiffs to prove that Puerto

Rico's action with respect to each challenged law's impact on the

collective bargaining agreements was not reasonable or necessary

to serve an important interest.      See id. at 41-42.        Because the

plaintiffs allege that Puerto Rico impaired a "public contract"

for its own "benefit," however, its otherwise "broad discretion to

determine whether an impairment of a private contract is reasonable

or necessary" is more constrained than it ordinarily would be.

Parella v. Ret. Bd. of R.I. Emps.' Ret. Sys., 173 F.3d 46, 59 (1st

Cir. 1999).

            Our review of the District Court's grant of a motion to

dismiss under Rule 12(b)(6) is de novo.       See Starr Surplus Lines

Ins. Co. v. Mountaire Farms Inc., 920 F.3d 111, 114 (1st Cir.

2019).     In conducting that review, we may "affirm the dismissal

only if, taking all the complaint's well-pled allegations as true

and viewing the other facts in the light most favorable to the

plaintiff, the complaint does not allege 'enough facts to state a

                                 - 11 -
claim to relief that is plausible on its face.'" Portugues-Santana

v. Rekomdiv Int'l Inc., 725 F.3d 17, 25 (1st Cir. 2013) (quoting

Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)).

          Notably, "[w]e may augment these facts and inferences

with data points gleaned from documents incorporated by reference

into the complaint, matters of public record, and facts susceptible

to judicial notice." Starr Surplus Lines, 920 F.3d at 114 (quoting

Haley v. City of Boston, 657 F.3d 39, 46 (1st Cir. 2011)).               That

means that we may consider the content of the four challenged laws

themselves,    as   well   as    translated     portions   of   the   unions'

collective bargaining agreements.

          Against     this      background,    the   plaintiffs   must   have

pleaded "sufficient facts to allow a court to draw a reasonable

inference that" each of the challenged laws is "unreasonable or

unnecessary to effectuate an important governmental purpose."

Fortuño, 633 F.3d at 45 (citing Ashcroft v. Iqbal, 556 U.S. 662,

678 (2009)).    To do so, a plaintiff "can, in the complaint, list

the state's articulated motive(s), and then plead facts that

undermine the credibility of . . . those stated motives or plead

facts that question the reasonableness or necessity of the action

in advancing the stated goals."               Id.    For example, we have

explained, "if a state purports to impair a contract to address a

budgetary crisis, a plaintiff could allege facts showing that the

impairment did not save the state much money, the budget issues

                                    - 12 -
were not as severe as alleged by the state, or that other cost-

cutting   or   revenue-increasing      measures   were   reasonable

alternatives to the contractual impairment at issue."    Id.

          At oral argument, the unions explained that they allege

that most of the challenged laws impaired the collective bargaining

agreements by reducing or eliminating financial benefits -- like

vacation or sick leave -- that would otherwise be owed to the

workers under those agreements.     We thus begin with this set of

alleged impairments.

          We may assume, as the District Court did, that each of

these alleged impairments constitutes a substantial impairment of

the unions' contracts with the CFSE.     For, even if we make that

assumption, we still conclude that the plaintiffs have not met

their burden to plausibly allege that they were not reasonable

ones.

          The unions do not dispute that resolving the fiscal

challenges of Puerto Rico's central government constitutes an

"important government purpose."   See Aurelius Inv., LLC v. Puerto

Rico, 915 F.3d 838, 843-44 (1st Cir. 2019) (summarizing Puerto

Rico's financial difficulties), rev'd and remanded sub nom. Fin.

Oversight & Mgmt. Bd. for P.R. v. Aurelius Inv., LLC, 140 S. Ct.

1649 (2020); Fortuño, 633 F.3d at 46-47 (rejecting the plaintiffs'

"conclusory statement" that addressing Puerto Rico's then-$3.2

billion deficit was "neither [a] significant nor [a] legitimate"

                              - 13 -
purpose); Buffalo Teachers Fed'n v. Tobe, 464 F.3d 362, 369 (2d

Cir. 2006) ("[C]ourts have often held that the legislative interest

in   addressing     a   fiscal    emergency    is     a    legitimate     public

interest.").     They also do not dispute that, at least as a general

matter, limiting the amount of benefits paid out to workers would

produce cost savings that could be useful in resolving a fiscal

crisis.3

           The    unions    nonetheless     contend       that    none   of    the

financial savings from the benefit cuts to CFSE employees imposed

by the challenged laws accrued to the benefit of the Commonwealth,

because the CFSE is an independent governmental entity that "is

fiscally   self-sufficient         and . . .      does      not     depend      on

appropriations     from    the   Commonwealth's     General       Fund   for   its

operations."      Indeed, the unions allege that the CFSE itself is

"solvent." Thus, they suggest, the government "could have tailored

the challenged legislation" to exempt CFSE workers from the benefit

cuts while still generating savings by imposing cuts on the public

workers who do affect the Commonwealth's bottom line.               Its failure

     3 The unions do appear to suggest that certain cuts to fringe
benefits at the CFSE were not designed to reduce spending but
instead were intended to produce "[e]quity in [f]ringe [b]enefits"
between employees at public corporations like the CFSE and other
public employees.   But, while the challenged laws do reflect a
concern about equity in this regard, context makes clear that in
seeking to "standardiz[e]" the benefits of public corporation
employees and other public employee, Puerto Rico was primarily
concerned with "reduc[ing] expenses" at public corporations and
saving money.

                                   - 14 -
to   do    so,    according    to   the    unions,    renders   these    alleged

substantial impairments unreasonable or unnecessary to secure an

important government objective.

             There is no basis, however, for the unions' contention

that the benefit cuts implemented by the challenged laws are

unrelated to Puerto Rico's interest in addressing the fiscal

challenges faced by its central government.                 In recent years,

Puerto Rico has passed a series of measures that enable its central

government to benefit from the fiscal savings generated at public

corporations.       Most significantly, Act No. 26-2017, as described

in   its    own    preamble,    "orders     the   public   corporations      and

instrumentalities of the Government of Puerto Rico," including the

CFSE, "to transfer to the Department of the Treasury the necessary

funds to guarantee the government's liquidity" and establishes a

process for determining the precise amount to be transferred.

             The unions separately ask us to conclude that they have

plausibly alleged that the imposition of the benefit cuts was

unreasonable      or   unnecessary    to    address    Puerto   Rico's    fiscal

problems     because     "other     cost-cutting      or   revenue-increasing

measures were reasonable alternatives" to the challenged laws.

Fortuño, 633 F.3d at 45.             But, the unions alleged only the

following bare bones "possible options" as having been available

to the Puerto Rico government:

                                     - 15 -
          a.   Increase in compliance and revenue
          collection   across  the  major  tax  lines
          (personal income tax, corporate income tax,
          and [Sales and Use Tax])

          b.   Reduction or elimination of useless tax
          credits or incentives.

          c.   Rightsizing    measures    within    the
          instrumentalities of the Commonwealth that do
          not   operate   as  private   businesses   or
          enterprises.

          d.   Planning, development and investment in
          economic growth projects to increase revenues
          and collections.

Those listed options -- which do not, for instance, identify any

specific "useless tax credits or incentives" or explain why the

savings generated by eliminating such tax breaks would rival the

savings generated by benefit cuts -- are not adequate to support

the plaintiffs' claims that the cutting of CFSE benefits caused by

the challenged laws were unreasonable or unnecessary.4    See SEC v.

Tambone, 597 F.3d 436, 442 (1st Cir. 2010) (en banc) ("If the

factual allegations in the complaint are too meager, vague, or

conclusory to remove the possibility of relief from the realm of

     4 The unions briefly suggest that the transfer of funds from
the CFSE to other governmental entities is itself an alternative
to the challenged laws. But, even setting aside the underdeveloped
nature of this argument and the resulting waiver problem, see
United States v. Zannino, 895 F.2d 1, 17 (1st Cir. 1990), here,
too, the unions failed to plead facts showing that this alternative
was an adequate one, see Fortuño, 633 F.3d at 45.        Indeed, as
explained above, Puerto Rico is already using savings generated by
the CFSE to address budgetary shortfalls elsewhere in the
government.

                              - 16 -
mere conjecture, the complaint is open to dismissal."); Fortuño,

633 F.3d at 47 (affirming a motion to dismiss a Contract Clause

claim where the plaintiffs did not "explain how" increased use of

federal aid could "alleviate a $3.2 billion deficit to such an

extent   as    to   render     [the    challenged]    contractual      impairments

unnecessary").

              There remains, then, only the unions' Contract Clause

challenge to the "mobility" provisions of the challenged laws.5

These provisions authorize the Government of Puerto Rico to move

employees between different units of the Puerto Rico government,

including to and from public corporations like CFSE.                      The unions

contend that these provisions impair their collective bargaining

agreements by, among other things, undermining provisions in those

agreements     that    govern    the    process     for    hiring   and    promoting

workers.

              Here, too, we may assume that the challenged measures

substantially         impair     the      unions'         collective      bargaining

     5 To the extent that any of the numerous provisions challenged
by the unions cannot fairly be classified as belonging to one of
the two categories of actions that we address and cannot be
justified by the same reasoning as the Commonwealth offered for
the other actions, the unions fail to identify those provisions or
explain why the justifications offered for their enactment were
legally inadequate.    See Fortuño, 633 F.3d at 45 (requiring a
plaintiff raising a Contract Clause claim to "list the state's
articulated motive(s)" for the action and "plead facts" that cast
doubt on the adequacy of those explanations); Zannino, 895 F.2d at
17 ("[I]ssues adverted to in a perfunctory manner, unaccompanied
by some effort at developed argumentation, are deemed waived.").

                                       - 17 -
agreements.6         For, even if we make that assumption, the unions have

not   plausibly        alleged    that    this       substantial      impairment     was

unreasonable or unnecessary to secure an important government

objective.

               In enacting the mobility provisions, the Puerto Rico

Legislative Assembly was mindful, given the Commonwealth's fiscal

state,    of    what    it   believed    to     be    a   need   to   "consolidate[]"

services, "delegate[]" them "to the private sector," and, in some

cases,     "eliminate[]"         ones    that     it      believed    to   be   wholly

unnecessary.         The mobility provisions were intended to facilitate

these service cuts while continuing to "guarantee[]" "the offer of

services to our citizens" "without involving the dismissal of

public employees."           The alternative to enacting the challenged

mobility       provisions     and   other       similar      flexibility     measures,

according       to    the    legislature,       was       heavy-handed     layoffs   of

"thousands of employees."

      6We do not, however, understand the challenged laws to have
wholly eliminated the collective bargaining rights of the unions
or the workers they represent. The parties, it is true, do not
clearly explain how the "mobility" provisions allowing for
employee transfers in and out of the CFSE affect the rights of the
transferred employees, their membership in the bargaining unit, or
their employer for bargaining purposes.       But, neither party
contends that the unions or their right to collectively bargain
have been eliminated by the challenged laws, and, indeed, the
challenged laws themselves appear to contemplate a continued role
for public sector unions in collectively bargaining on behalf of
their employees.

                                         - 18 -
             The unions do not dispute that Puerto Rico's goal of

resolving its budgetary crisis while minimizing service disruption

and layoffs was a legitimate one, see Buffalo Teachers Fed'n, 464

F.3d at 369, nor do they argue that the legislature's acknowledged

alternative       of   simply       terminating    large     numbers     of     public

employees      would    have    been     an    adequate     substitute        for   the

Commonwealth's chosen course of action. They likewise do not voice

any disagreement with the Commonwealth's apparent conclusion that

it was necessary to apply the mobility provisions to workers at

the   CFSE   to    achieve     this    goal.      Instead,    the    only      alleged

inadequacies that they identify with these provisions are the same

inadequacies that they identify with the Commonwealth's general

approach to addressing its fiscal problems.                  For the reasons we

have already stated, though, those cursory allegations do not

suffice   to    meet    the    plaintiffs'       pleading   burden      in    alleging

violations of the Contracts Clause.

                                         IV.

             We come, then, to the unions' claims under the Collective

Bargaining Clause of the Puerto Rico Constitution.                  That provision

guarantees     employees       of    "instrumentalities      of   the    government

operating as private businesses or enterprises . . . the right to

organize and to bargain collectively with their employers through

representatives of their own free choosing in order to promote

their welfare."        P.R. Const. art. II, § 17.

                                        - 19 -
            The District Court dismissed these claims as barred by

the applicable statute of limitations.          It relied on P.R. Laws

Ann. tit. 31, § 5298, which establishes a one-year statute of

limitations for "[a]ctions to recover or retain possession" and

"[a]ctions to demand civil liability for grave insults or calumny,

and   for   [certain]   obligations   arising    from . . .   fault   or

negligence . . . ."     See also Quality Cleaning Prod. R.C., Inc. v.

SCA Tissue N. Am., LLC, 794 F.3d 200, 204 (1st Cir. 2015) (noting

that state statute of limitations law applies to state law claims).

Our review is de novo.     See Santana-Castro v. Toledo-Dávila, 579

F.3d 109, 113 (1st Cir. 2009).

            We may quickly dispose of as waived the plaintiffs'

contention that § 5298 does not set forth the applicable statute

of limitations for these claims, due to its late-breaking and

underdeveloped nature.     See Rife v. One W. Bank, F.S.B., 873 F.3d

17, 19 (1st Cir. 2017); Zannino, 895 F.2d at 17.        The plaintiffs

first challenge the statute's application in their reply brief,

even though the District Court had applied § 5298 below and even

explained its holding.    We thus take up the plaintiffs' contention

that, under Puerto Rico law, § 5298 did not begin to run so long

as the "challenged [laws] [were] still valid and enforced," and

hence that there is no statute of limitations bar to their claims.

To support that contention, they assert that they are challenging

"tortious . . . act[s]" that are "of a continuing nature" and thus

                                - 20 -
that, under Puerto Rico law, the limitations period could only

have begun to run "when the last acts . . . [were] verified or the

definitive    result   [was]   produced,"    whichever    occurred     later.

Rivera-Ruiz    v.   Municipality   of    Ponce,   196   D.P.R.   410   (2016)

[Transl. at 14].

             Under Puerto Rico law, "continuing acts or omissions"

toll § 5298's limitations period.        Id. at 15.     But, we are dealing

here with harm resulting from the enactment of a statute, and the

plaintiffs point to no authority to support their assertion that

the alleged interference with their bargaining rights constitutes

such "continuous acts or omissions" when it results from the

passage of legislation alone.           Certainly Rivera-Ruiz, on which

they rely, did not deal with harms caused by a statutory enactment.

Moreover, we have previously held that "the continuing violation"

doctrine does not apply "to facial takings claims" under the

Takings Clause of the federal Constitution, see Asociación de

Suscripción Conjunta del Seguro de Responsabilidad Obligatorio v.

Juarbe-Jiménez, 659 F.3d 42, 51 (1st Cir. 2011), because such a

claim necessarily targets "the mere enactment of a statute," id.

at 48 (quoting Keystone Bituminous Coal Ass'n v. DeBenedictis, 480

U.S. 470, 494 (1987)), and so "accrues at the time the offending

statute . . . is enacted or becomes effective" even though "the

precise dollar amount that would be" lost over time is unknown,

id. at 50-52.

                                   - 21 -
             To   be   sure,   unlike        in   Asociación   de   Suscripción

Conjunta, Puerto Rico rather than federal law governs the accrual

date here.    See Quality Cleaning, 794 F.3d at 204.            But, we do not

see why we should presume that the Puerto Rico Supreme Court would

disagree with our reasoning in Asociación de Suscripción Conjunta,

which rejected the notion that a challenge to the "mere enactment"

of a statute takes aim at a "continuing violation," 659 F.3d at

51-52, especially given that the unions identify no contrary

authority from any court, whether in the Commonwealth or not.

                                        V.

             Accordingly, we affirm the dismissal of the unions'

claims.

                                   - 22 -