Court Opinion

ID: 2655961
Source: CourtListenerOpinion
Date Created: 2014-03-07 21:05:05.589415+00
Date Added: 2024-06-11T09:18:05.717861
License: Public Domain

United States Court of Appeals
                     For the First Circuit

No. 12-1979

                         MICHELLE MALOY,

                      Plaintiff, Appellant,

                               v.

                  EDUARDO BALLORI-LAGE, ET AL,

                     Defendants, Appellees.

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

        [Hon. Juan M. Pérez-Giménez, U.S. District Judge]

                             Before

                 Thompson, Lipez, and Kayatta,
                         Circuit Judges.

          Jane Becker Whitaker for appellant.
          Rosa Elena Pérez-Agosto, with whom Margarita Mercado-
Echegary was on brief, for appellees.

                          March 7, 2014
          KAYATTA, Circuit Judge.         Michelle Maloy claims that the

Puerto Rico Real Estate Examining Board denied her a license in

retaliation   for   her    public   criticism   of   the    Board,     thereby

violating her rights under the First Amendment of the United States

Constitution.   The district court granted the Board's motion to

dismiss   Maloy's     complaint     under    Federal       Rule   of     Civil

Procedure 12(b)(6).       We vacate the judgment, because we find that

Maloy's allegations plausibly state a claim under 42 U.S.C. § 1983.

                               I. Background

          Because this appeal follows the dismissal of Maloy's

claim, we take as true the facts presented in her complaint and

draw all reasonable inferences in her favor.           A.G. ex rel. Maddox

v. Elsevier, Inc., 732 F.3d 77, 80 (1st Cir. 2013).          In addition to

the complaint, we consider three documents, which we would normally

not consider, see Waterson v. Page, 987 F.2d 1, 3 (1st Cir. 1993),

                                    -2-
that the parties without objection submitted in briefing the motion

to dismiss below.1

          Plaintiff-Appellant Maloy is a real estate broker in

Puerto Rico who has been a vocal critic of the Puerto Rico Real

Estate   Examining   Board,   a   government   body   responsible   for

regulating the real estate industry.     Defendant-Appellees include

the Board and several individuals associated with it.

          Since at least 2009, Maloy has sought to combat what she

perceives as corruption within the Board.         Maloy has publicly

accused the Board of mishandling millions of dollars and of

soliciting her participation in an illegal price-fixing scheme,

among other charges.    On August 4, 2009, Maloy denounced alleged

corruption during "public and executive hearings with various

members" of a division of the Puerto Rico Assembly.       After August

4, Maloy continued to meet with Puerto Rico legislators, as well as

     1
       These documents are a copy of a public notice and a letter
from the Board to Maloy, submitted by both Maloy and the Board in
connection with briefing on the Board's motion to dismiss, and an
affidavit submitted by Maloy in opposing that motion. No party
contested the authenticity of the public notice or the letter. The
Board, moreover, raised no objection to the district court's
consideration of the allegations made in Maloy's affidavit,
presumably because Maloy could have freely amended the complaint to
add such allegations, and possibly because the Board itself cited
a portion of the affidavit helpful to its argument. In any event,
in the absence of any preserved objection by either party, we, too,
will regard the affidavit, the public notice, and the letter "as
part of the pleadings." Waterson, 987 F.2d at 4. See Smith v.
Kmart Corp., 177 F.3d 19, 26 (1st Cir. 1999) (arguments not raised
below should be considered only where "the error was prejudicial"
and "review is needed to prevent a miscarriage of justice").

                                  -3-
the Puerto Rico Justice Department and the Federal Bureau of

Investigation, to discuss her criticisms of the Board.

           On February 26, 2010, between six and seven months after

her public and repeated castigations of the Board, Maloy visited

the Board's offices, where she spoke with a Board employee, María

Díaz Ogando.   Maloy told Díaz Ogando that she wanted to apply for

a license to establish a bilingual real estate school. Díaz Ogando

gave Maloy a copy of a previously posted public notice stating that

the deadline for such applications was that very day, February 26,

2010, and that a hearing regarding applications would be held on

March 25, 2010.     Díaz Ogando informed Maloy that she "could not

fill out an application as it also required a school proposal,

course, programs and licensing permits."

           Maloy returned to the Board's offices on March 23, 2010,

two days before the scheduled public hearing, with an application

meeting Díaz Ogando's specifications.         Maloy then attended the

hearing,   where   she   was   interviewed   by   Board   members   on   the

substance of her proposal.        Two months later, Maloy received a

letter denying her application on the grounds that it was not filed

by February 26, 2010.

           In September 2010, Maloy filed suit against the Board and

several individuals associated with it, seeking relief under 42

U.S.C. § 1983 for a violation of her First Amendment rights.2            The

     2
       Maloy also brought other claims that she does not defend on
appeal.

                                   -4-
district    court    dismissed    Maloy's    First    Amendment      claim    with

prejudice in July 2011, reasoning that the Board had a legitimate

non-discriminatory reason--the tardiness of her application--for

rejecting    the    application.      Maloy    then    filed    a    motion    for

reconsideration, which the court denied. This appeal followed. We

have jurisdiction over Maloy's appeal of the district court's

orders under 28 U.S.C. § 1291.

                           II. Standard of Review

            We review de novo the district court's dismissal of

Maloy's complaint. A.G. ex rel. Maddox v. Elsevier, Inc., 732 F.3d

77, 80 (1st Cir. 2013).          In deciding whether the district court

properly dismissed a claim, we ask whether the complaint "state[s]

a claim to relief that is plausible on its face," accepting the

plaintiff's      factual   allegations      and   drawing      all   reasonable

inferences in the plaintiff's favor.           Bell Atl. Corp. v. Twombly,

550 U.S. 544, 570 (2007). To cross the plausibility threshold, the

plaintiff must "plead[] factual content that allows the court to

draw the reasonable inference that the defendant is liable for the

misconduct alleged." Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009).

                                 III. Analysis

            To     hold    the   Board      liable    for   unconstitutional

retaliation, Maloy must show that "her conduct was constitutionally

protected" and that "this conduct was a substantial factor or a

motivating factor driving the allegedly retaliatory decision." Air

                                      -5-
Sunshine,   Inc.   v.   Carl,    663    F.3d    27,   35-36    (1st     Cir.   2011)

(internal citations and quotation marks omitted).                   To survive a

motion to dismiss, then, Maloy must have alleged facts sufficient

to allow the court to draw the reasonable inference that her

constitutionally protected activity was a substantial or motivating

factor in the Board's denial of her subsequent application.                     See

Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009).

            Indisputably,      Maloy's     allegations        are   adequate,    if

believed, to show that she engaged in constitutionally protected

activity.     Maloy     testified      publicly    about   alleged      government

corruption, a quintessential exercise of the rights to speak freely

and to petition the government. See Pickering v. Board of Ed., 391

U.S. 563, 573 (1968) (explaining that "the core value of the Free

Speech   Clause"   is    the    "public       interest   in    having    free   and

unhindered debate on matters of public importance").                       Maloy's

comments at meetings with government officials also qualify for

First Amendment protection.         See Borough of Duryea v. Guarnieri,

131 S. Ct. 2488, 2495 (2011) ("The right to petition allows

citizens to express their ideas, hopes, and concerns to their

government and their elected representatives . . . .").

            Maloy's complaint also permits a reasonable inference

that at least some of the Board's members and employees had become

aware of her accusations by the time she attempted to apply for a

license in the spring of 2010.             Maloy alleged that the Board's

                                        -6-
president publicly stated in June 2010 that Maloy had pressed false

accusations against the Board, supporting a plausible conclusion

that he and his colleagues were aware of those accusations several

months earlier. Moreover, in assessing the plausibility of Maloy's

claim, we must draw on our "judicial experience and common sense."

Iqbal, 556 U.S. 662 at 679. Here, because Maloy spoke publicly and

vehemently against the Board, common sense supports a reasonable

inference that at least some Board members and employees likely

learned of it.   Cf. García-Catalán v. United States, 734 F.3d 100,

103 (1st Cir. 2013) (relying on "common sense" to assess the

plausibility of the plaintiff's claim).

           This troika drawn by protected speech, plausible motive,

and a rejection of what the plaintiff alleges is an application

complying with all lawful requirements would normally be enough to

carry a complaint across the starting line in the face of a

Rule 12(b)(6) motion.       See Grajales v. P.R. Ports Auth., 682 F.3d

40, 49-50 (1st Cir. 2012) (reversing dismissal in a political

discrimination case where the plaintiff alleged that he was subject

to illegitimate employment actions by officials who knew he was a

member of an opposing party).        Indeed, because "smoking gun proof

[of unconstitutional retaliation] is rarely available, especially

at the pleading stage," we demand only "telltale clues . . . from

the   circumstances"   as    pled   in   the   complaint.   Id.   at   49.

Typically, too, an assessment of a plaintiff's complaint does not

                                     -7-
entail   consideration--much    less        require    rebuttal--of    the

defendant's explanation for its action, see, e.g., Garnier v.

Rodríquez, 506 F.3d 22, 27 (1st Cir. 2007), except in the unusual

case where the complaint itself points to another explanation that

is so obviously correct as to render the charge of improper

motivation implausible, see, e.g., Air Sunshine, Inc., 663 F.3d at

36-37.

          This   case,   however,    presents     us   with   the   unusual

situation in which Maloy has agreed that the court should consider

not only the allegations of her complaint but also the Board's

denial letter posing an alternative, non-actionable reason for the

denial of her application--a lack of timeliness--along with a

public notice that set the deadline of February 26 and thereby

supports the Board's explanation.         The district court assumed that

the denial letter was not merely an authentic copy of what the

Board sent to Maloy, but that it also accurately conveyed the true,

non-retaliatory reason that the Board denied Maloy's application.

In so assuming, the district court erred because the allegations

made by Maloy plausibly allow for the possibility that the Board's

claimed reason for denying her application was pretextual.

          Maloy specifically alleged that other applicants received

licenses despite not satisfying the February 26 deadline.              The

Board's letter to Maloy and the public notice contain no basis for

finding that the Board lacked discretion in applying that deadline.

                                    -8-
Cf. Travers v. Flight Servs. & Sys., Inc., 737 F.3d 144, 148 (1st

Cir.    2013)    (finding       that   a   reasonable     jury   could   doubt    an

employer's proffered reason for firing an employee in part because

company policy left "room for judgment and discretion").                    On the

contrary, the applicable regulations expressly anticipated the

filing of materials in support of an application even after the

hearing.        Moreover, if the reason for denial was a lack of

timeliness, that reason was readily apparent even before the Board

met.      Yet,    at    the     hearing,    the   Board    entertained      Maloy's

application and her appearance, as well as, she alleged, tardy

applications from others. The Board apparently did not provide any

indication that the deadline barred Maloy's application until two

months later, by which time it would have become apparent that, as

Maloy alleges, she had otherwise complied with the requirements of

the    statute    and     the   regulation.       For   pleading    purposes,     it

therefore       remains    plausible       that   retaliatory      animus   was   a

substantial or motivating factor in the Board's ultimate decision.

Whether the evidence will sustain this plausibility remains to be

seen.    For now we need only decide that Maloy has the right to

proceed beyond the pleading stage.

            In holding that Maloy may proceed with her claim that the

Board retaliated against her by denying her application, we do not

rule that Maloy may also proceed with two additional theories of

liability that she presses on appeal.               First, we reject Maloy's

                                           -9-
alternative   argument   that   the    complaint   plausibly   alleges

retaliation in the form of the Board's failure to give her personal

notice of the application deadline and hearing.     Simply put, there

is nothing in the rules or regulations that plausibly required the

Board to figure out who might want to apply and send them personal

notices, nor does the complaint allege that such notices were sent

to anyone else prior to when Maloy herself received notice of the

hearing on February 26, 2010.         We also reject Maloy's claim,

presented at oral argument, that Díaz Ogando retaliated against her

by telling her that the application required materials that Maloy

argues were not in fact required.        Maloy did not so argue in

opposing the motion to dismiss or in her brief on appeal.        See,

e.g., Ortiz v. Gaston Cnty. Dyeing Mach. Co., 277 F.3d 594, 598

(1st Cir. 2002) ("[F]ailure to brief an argument will result in

waiver for purposes of appeal.").

                          IV. Conclusion

          For the foregoing reasons, we vacate the district court's

dismissal of Maloy's complaint and remand to the district court for

further proceedings consistent with this opinion.      We award costs

to the plaintiff.

          So ordered.

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