Court Opinion

ID: 820253
Source: CourtListenerOpinion
Date Created: 2013-02-11 19:18:05.638329+00
Date Added: 2024-06-11T12:39:58.553081
License: Public Domain

United States Court of Appeals
                     For the First Circuit

No. 12-1453

         NANCY CASIANO-MONTAÑEZ; MIGUEL A. REYES-VARGAS;
           JAVIER TORRES-GONZÁLEZ; RAQUEL VILLEGAS-ROSA;
          WILMA J. ROSA-MÉNDEZ; LETICIA SANTIAGO-REYES;
             GLORIA D. SOTO-MALDONADO; NEXAIDA CUSTODIO;
            JUANA TORRES-ESCRIBANO; ROSAURA REYES-RAMOS;
          MIGDALIA ESPINO-PITRE; FELICITA OTERO-BARBOSA,

                     Plaintiffs, Appellants,

                               v.

 STATE INSURANCE FUND CORPORATION ("SIFC"); ZOIME ÁLVAREZ-RUBIO;
       SAÚL RIVERA-RIVERA; CONJUGAL PARTNERSHIP RIVERA-DOE;
   JORGE GARCÍA-ORTIZ; CONJUGAL PARTNERSHIP GARCÍA-DOE; ERNESTO
        SANTIAGO-SAYAS; CONJUGAL PARTNERSHIP SANTIAGO-DOE,

                     Defendants, Appellees.

                      JOSÉ IGNACIO COBIÁN;
              CONJUGAL PARTNERSHIP COBIÁN-ÁLVAREZ,

                           Defendants.

          APPEAL FROM THE UNITED STATES DISTRICT COURT

                 FOR THE DISTRICT OF PUERTO RICO

         [Hon. Daniel R. Domínguez, U.S. District Judge]

                             Before

                       Lynch, Chief Judge,
                Selya and Howard, Circuit Judges.

     Celina Romany, with whom Celina Romany Law Offices was on
brief, for appellants.
     Susana I. Peñagarícano-Brown, Assistant Solicitor General,
with whom Luis R. Román-Negrón, Solicitor General of Puerto Rico,
was on brief, for personal capacity appellees.
     Pedro A. Delgado Hernández, Yadhira M. Rodríguez Quiñones and
O'Neill & Borges LLC on brief for appellee SIFC and for official
capacity appellees.

                        February 7, 2013
              HOWARD, Circuit Judge.          Plaintiffs-appellants are twelve

dismissed     or    demoted       employees       of   the    State    Insurance    Fund

Corporation ("Corporation"), a public corporation in Puerto Rico

that administers the Commonwealth's workers' compensation program.

They sued the Corporation and several of its officers in the United

States District Court for the District of Puerto Rico, alleging

political discrimination and due process violations stemming from

adverse employment actions.               The district court dismissed the

claims based on Younger abstention.                     We reverse the order of

dismissal and remand to the district court with instructions to

stay further proceedings pending the resolution of a related case

awaiting decision before the Puerto Rico Supreme Court.

                                             I.

              Shortly after the 2008 Puerto Rico elections, Zoimé

Álvarez-Rubio,         the        newly-appointed           administrator      of    the

Corporation, initiated an audit of personnel appointments made at

the Corporation between 2001 and 2008. The audit revealed that 232

positions had been filled through internal hiring calls rather than

through   a    competitive         process    open     to    the   public.     Álvarez

concluded that the appointments were void because the procedure

contravened personnel regulations promulgated to implement the

"merit    principle"         of     the   Public       Service        Human   Resources

Administration Act of Puerto Pico, see P.R. Laws Ann. tit. 3, §§

1462-1462h.        In January 2010, Álvarez informed the plaintiffs and

                                          -3-
other     affected    employees      of     her   intent    to     nullify     their

appointments, resulting in dismissals or demotions from their

career positions at the Corporation.

             Before the adverse employment actions took effect, the

plaintiffs requested informal administrative hearings before the

Corporation.     The Corporation affirmed Álvarez's decision, and the

dismissals and demotions became final.             The plaintiffs then filed

administrative appeals before the Corporation's Board of Appeals

("Board").     The Board has yet to act on the appeals.

             Meanwhile, the plaintiffs filed suit in federal court,

alleging that they were dismissed or demoted because of their

political affiliation, in violation of their rights under the First

Amendment and the Equal Protection Clause, and without due process

of law.      Because the plaintiffs "voluntarily engage[d] the wheels

of an administrative procedure before filing an action in federal

court," the district court abstained under Younger v. Harris, 401

U.S.    37     (1971),     and     dismissed      the   plaintiffs'          claims.

Casiano-Montañez v. State Ins. Fund Corp., 852 F. Supp. 2d 177, 182

(D.P.R. 2012).

             The Corporation's decision to nullify the appointments

made pursuant to internal hiring calls has spawned numerous other

lawsuits in both Puerto Rico and federal courts.                    One case has

progressed     far   in   the    Commonwealth     courts.        After   the   Board

affirmed the Corporation's decision to void the appointments of

                                          -4-
twenty employees, that group sought judicial review before the

Puerto Rico Court of Appeals.     See González Segarra v. State Ins.

Fund Corp., No. KLRA201100611, slip op. (P.R. Cir. Sept. 30, 2011)

(certified translation).    Like the plaintiffs in the instant case,

the González Segarra plaintiffs argued that internal hiring calls

were legal, that their due process rights were violated, and that

political discrimination motivated their dismissals or demotions.

The Court of Appeals held that the appointments were valid but

affirmed the Board's conclusions that the petitioners failed to

establish either a due process violation or a prima facie case of

political discrimination.      Id.      The Puerto Rico Supreme Court

subsequently   granted   the   Corporation's   petition   for   writ    of

certiorari.    The case (No. CC-2011-01051) has been briefed and is

awaiting decision.

                                  II.

           The plaintiffs contend that the district court erred in

dismissing their federal claims based on Younger abstention.            We

review de novo the district court's decision to abstain under

Younger.   Rio Grande Cmty. Health Ctr., Inc. v. Rullan, 397 F.3d

56, 68 (1st Cir. 2005).

           Younger   abstention   is     appropriate   only   "when    the

requested relief would interfere (1) with an ongoing state judicial

proceeding; (2) that implicates an important state interest; and

(3) that provides an adequate opportunity for the federal plaintiff

                                  -5-
to advance his federal constitutional challenge."      Rossi v. Gemma,

489 F.3d 26, 34-35 (1st Cir. 2007).      To satisfy the first prong in

the context of a state administrative proceeding, the proceeding

"must be coercive, and in most-cases, state-initiated, in order to

warrant abstention."       Guillemard-Ginorio v. Contreras-Gómez, 585

F.3d   508,   522   (1st    Cir.   2009);   see   Kercado-Melendez   v.

Aponte-Roque, 829 F.2d 255, 259-61 (1st Cir. 1987). The plaintiffs

voluntarily initiated the administrative proceedings before the

Board to challenge the legality of a personnel decision.      Plainly,

those proceedings are remedial in nature and "not of the type to

which deference under Younger applies."       Guillemard-Ginorio, 585

F.3d at 522; see Mass. Delivery Ass'n v. Coakley, 671 F.3d 33, 41

(1st Cir. 2012) (delineating the types of proceedings that warrant

Younger abstention).       Accordingly, the district court erred in

abstaining based on Younger, and dismissal was not the remedy in

any event.    See Rossi, 489 F.3d at 38 ("When a court orders

abstention on a damages claim, it ordinarily may only stay the

action, rather than dismiss the action in its entirety.").

          That, alas, is the easy part of the case.           At oral

argument, the defendants asked us to stay further proceedings in

the district court pending the Puerto Rico Supreme Court's decision

in the González Segarra case.       The exceptional circumstances of

this case convince us to grant that request.

                                   -6-
           To begin, it is well settled that the pendency of an

action in state court is not a per se bar to related federal court

proceedings.     Exxon Mobil Corp. v. Saudi Basic Indus. Corp., 544

U.S. 280, 292 (2005).          Indeed, federal courts have a "virtually

unflagging obligation . . . to exercise the jurisdiction given

them."   Colo. River Water Conservation Dist. v. United States, 424

U.S. 800, 817 (1976).       This duty, however, is not absolute, and it

yields in certain "exceptional circumstances, where denying a

federal forum would clearly serve an important countervailing

interest."     Quackenbush v. Allstate Ins. Co., 517 U.S. 706, 716

(1996) (citation omitted) (internal quotation marks omitted).

           The    Supreme   Court   has    delineated   several abstention

doctrines,   see    id.   at    716-17,    which   "reflect    a   complex   of

considerations designed to soften the tensions inherent in a system

that contemplates parallel judicial processes."               Pennzoil Co. v.

Texaco, Inc., 481 U.S. 1, 11 n.9 (1987).           Although "the categories

do matter," Rio Grande Cmty. Health Ctr., Inc., 397 F.3d at 68,

"[t]he various types of abstention are not rigid pigeonholes into

which federal courts must try to fit cases."             Pennzoil Co., 481

U.S. at 11 n.9.    Here, both the Pullman abstention doctrine and the

principles of federalism, comity, and sound judicial administration

that ground the various abstention doctrines counsel a stay of the

federal court proceedings pending the Puerto Rico Supreme Court's

decision in the related Commonwealth court litigation.

                                     -7-
          Pullman abstention serves to "avoid federal-court error

in   deciding      state-law   questions   antecedent    to    federal

constitutional issues." Arizonans for Official English v. Arizona,

520 U.S. 43, 76 (1997); see R.R. Comm'n of Tex. v. Pullman Co., 312

U.S. 496, 501 (1941). Under Pullman, federal courts should abstain

when "(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).    "[T]he fact that a state proceeding is actually

pending strengthens the case for [Pullman] abstention."        Rivera-

Feliciano v. Acevedo-Vilá, 438 F.3d 50, 61 (1st Cir. 2006); see

Harris Cnty. Comm'rs Court v. Moore, 420 U.S. 77, 83 (1975) ("Where

there is an action pending in state court that will likely resolve

the state-law questions underlying the federal claim, [the Supreme

court has] regularly ordered abstention.").

          Applying these principles to the plaintiffs' Fourteenth

Amendment due process claim, we conclude that a stay of the federal

proceedings is appropriate.      The Constitution affords procedural

due process protections to government employees who possess a

property interest in continued public employment.       See Cleveland

Bd. of Educ. v. Loudermill, 470 U.S. 532, 541 (1985).         Property

interests are creatures of state law, and under the laws of Puerto

Rico, public employees who lawfully hold career positions have a

                                  -8-
protected     property   interest    in   continued           employment   in   those

positions.      Costa-Urena v. Segarra, 590 F.3d 18, 27 (1st Cir.

2009).      Employees whose hiring contravened Commonwealth laws and

regulations, however, are not vested with a property interest in

their career positions.       Id.; González-de-Blasini v. Family Dep't,

377 F.3d 81, 86 (1st Cir. 2004); Kauffman v. P.R. Tel. Co., 841

F.2d 1169, 1173-74 (1st Cir. 1988).           "[T]heir career appointments

are null and void ab initio" and no due process protections attach.

Kauffman, 841 F.2d at 1173.

             Hence, whether the plaintiffs have a property interest in

their career positions at the Corporation hinges on the legality of

their appointments, the very issue that the Commonwealth's highest

court is poised to decide in González Segarra.                  As is evident from

the   divergent      legal   interpretations        of    the     agency   and    the

intermediate appellate court in that case, substantial uncertainty

surrounds the issue.         Determining whether internal hiring calls

violated the merit principle incorporated into public personnel

laws of Puerto Rico involves complex questions of statutory and

regulatory interpretation.         The questions concern the requirements

of    the    merit    principle,    the     power        of     the   Corporation'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 Commonwealth-wide fiscal

measures aimed at reducing public payroll costs.                      See González

                                      -9-
Segarra, No. KLRA201100611, slip op. at 29-53. 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."               Arizonans for Official English, 520

U.S. at 80.        The circumstances of this case suggest that it might

well fit within the Pullman rubric.

              Considerations of federalism, comity, and sound judicial

administration also sway us to direct a stay of the federal court

proceedings.        See Cruz v. Melecio, 204 F.3d 14, 22-25 (1st Cir.

2000)      (considering      the    same    in    ordering       a       stay    of     federal

proceedings        pending    the    outcome       of   a    related            state    court

litigation).       The Commonwealth case is pending before the highest

court of the jurisdiction.           "From the standpoint of federalism and

comity, there is something particularly offensive about hijacking

a   case    that    is   pending     on    the    docket    of       a    state's       highest

tribunal."     Id. at 24.      Yet another concern is that, absent a stay,

the district court could be forced to decide the complex state law

issue intertwined with the due process claim before the Puerto Rico

Supreme Court issues its decision.                  A contrary ruling from the

Commonwealth court would render the federal court's opinion "merely

advisory -- an outcome we seek to avoid in any case."                             Currie v.

                                           -10-
Grp. Ins. Comm'n, 290 F.3d 1, 11 (1st Cir. 2002); accord Rivera-

Feliciano, 438 F.3d at 62; see Pennzoil Co., 481 U.S. at 11 n.9

("In some cases, the probability that any federal adjudication

would be effectively advisory is so great that this concern alone

is   sufficient     to    justify   abstention[.]").       It   is    therefore

preferable     to   allow    the    Commonwealth   court   to     resolve     the

controlling issue of Puerto Rico law first.

           We recognize, of course, 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.         If that claim is not rendered moot

by the Puerto Rico Supreme Court's decision, the parties will have

their chance to argue it in federal court at a later date.                  We are

not surrendering federal court jurisdiction over either federal

claim,   but   simply     staying   the   proceedings   until     the      related

Commonwealth proceedings have run their course.

                                      III.

           For      the   foregoing    reasons,    we   reverse      the    order

dismissing the plaintiffs' action and remand the case to the

district court with instructions to stay proceedings pending the

Puerto Rico Supreme Court's decision in the González Segarra case.

           So ordered.

                                      -11-