United States Court of Appeals
For the First Circuit
No. 20-1332
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; THE FINANCIAL
OVERSIGHT AND MANAGEMENT BOARD FOR PUERTO RICO, AS
REPRESENTATIVE OF THE PUERTO RICO PUBLIC BUILDINGS AUTHORITY,
Debtors.
UNIÓN DE TRABAJADORES DE LA INDUSTRIA ELÉCTRICA Y RIEGO (UTIER),
Petitioner, Appellant,
v.
JOSÉ F. ORTIZ-VÁZQUEZ; THE FINANCIAL OVERSIGHT AND MANAGEMENT
BOARD, AS REPRESENTATIVE FOR THE PUERTO RICO ELECTRIC POWER
AUTHORITY (PREPA),
Respondents, Appellees.
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF PUERTO RICO
[Hon. Laura Taylor Swain, U.S. District Judge]
Before
Lynch, Kayatta, and Barron,
Circuit Judges.
Guillermo Ramos-Luiña on brief for appellant.
Timothy W. Mungovan, John E. Roberts, Martin J. Bienenstock,
Stephen L. Ratner, Jonathan E. Richman, Mark D. Harris, Shiloh
Rainwater, and Proskauer Rose LLP on brief for appellees.
January 15, 2021
LYNCH, Circuit Judge. In this appeal from the Puerto
Rico Oversight, Management, and Economic Stability Act ("PROMESA")
Title III court in Puerto Rico, the sole remaining question is
whether that court appropriately dismissed the petitioner's
mandamus petition for failure to state a claim. The petition
alleges that the Puerto Rico Electric Power Authority ("PREPA")
violated two provisions of a Puerto Rican statute when PREPA
announced that it would increase some medical co-pays while
decreasing others in order to comply with its certified fiscal
plan. The petitioner, Unión de Trabajadores de la Industria
Eléctrica y Riego ("UTIER"), which represents the employees of
PREPA, seeks to compel PREPA to comply with what it says are the
requirements of Act No. 26-2017, P.R. Laws Ann. tit. 3, §§ 9461 et
seq. The Title III court concluded that UTIER did not meet its
burden of showing that there were no adequate alternative remedies,
which is a precondition for mandamus relief. We agree and affirm.1
I.
In 2016, Congress enacted PROMESA, 48 U.S.C. §§ 2101 et
seq., which established the Financial Oversight and Management
Board ("FOMB") to help address the fiscal emergency in Puerto Rico.
Id. § 2121; see also id. § 2194(m); Municipality of San Juan v.
1 Because UTIER did not request oral argument and the
Financial Oversight and Management Board expressly requested that
the case not be orally argued, this case was taken as submitted on
the briefs.
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Puerto Rico, 919 F.3d 565, 568 (1st Cir. 2019); In re Fin.
Oversight & Mgmt. Bd. for P.R., 916 F.3d 98, 103-04 (1st Cir.
2019). The FOMB is authorized to review and certify all budgets
and long-term fiscal plans for the Commonwealth and its covered
instrumentalities, such as PREPA, to achieve fiscal responsibility
and access to capital markets. 48 U.S.C. §§ 2121(a), (d), 2141-
2142; see also In re Fin. Oversight & Mgmt. Bd. for P.R., 916 F.3d
at 104. The FOMB's decision to certify a budget or fiscal plan is
not subject to judicial review. 48 U.S.C. § 2126(e); see also In
re Fin. Oversight & Mgmt. Bd. for P.R., 916 F.3d at 112.
The FOMB is also authorized to file, and has filed, on
behalf of the Commonwealth and its covered instrumentalities a
Title III petition in federal district court for debt
restructuring. 48 U.S.C. §§ 2146, 2164(a), 2168(a); see also In
re Fin. Oversight & Mgmt. Bd. for P.R., 954 F.3d 1, 5-6 (1st Cir.
2020); Municipality of San Juan, 919 F.3d at 571; In re Fin.
Oversight & Mgmt. Bd. for P.R., 916 F.3d at 104. In such a Title
III case, creditors are authorized to assert claims against the
Commonwealth and its covered instrumentalities. See 48 U.S.C.
§ 2161(a); see also 11 U.S.C. § 101(5) (defining the term "claim"
for purposes of bankruptcy proceedings); id. § 501(a) (providing
that a creditor may file a proof of claim); In re Fin. Oversight
& Mgmt. Bd. for P.R., 954 F.3d at 5-6 (explaining that PROMESA
incorporates sections of the United States Bankruptcy Code and
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makes them applicable in Title III cases); Municipality of San
Juan, 919 F.3d at 571 (same).
PREPA is a public corporation responsible for providing
reliable electric power to the citizens of Puerto Rico and managing
Puerto Rico's energy resources. P.R. Laws Ann. tit. 22, § 196.
UTIER is a labor organization that represents more than three
thousand employees of PREPA.
In April 2017, the Puerto Rico legislature enacted Act
No. 26-2017, known as the "Fiscal Plan Compliance Act" ("Act 26"
or "the Act"). H.B. 938, 18th Leg. Assemb. (P.R. 2017), 2017 P.R.
Leyes 26 (codified as amended at P.R. Leyes An. tit. 3, §§ 9461 et
seq.).2 The Act was designed to implement the fiscal plan certified
by the FOMB in March 2017. Among other things, the Act addressed
health insurance and other benefits provided to employees by
Commonwealth employers. UTIER attempts to assert mandamus claims
as to Article 2.07 of Act 26, which is titled "Uniform Employer
Contribution to Public Corporation Employees Health Plan." See
P.R. Leyes An. tit. 3, § 9477.
Article 2.07 of the Act provides that "[t]he Executive
and Legislative Branches will identify additional savings and
resources to avoid affecting employee contributions to the payment
2 There is currently no official English translation of
the codified statute, and so we rely on the certified English
translation of the Act provided by the parties in their appendix.
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of health plans" ("the Savings Provision"). It also provides that
"any employee of a public corporation or dependent who is currently
enrolled in the health plan and who suffers from a catastrophic,
chronic, or pre-existing terminal illness will keep unaltered the
current employer's health insurance contribution for as long as he
remains linked to public service" ("the Pre-existing Conditions
Provision").3 Act 26 does not define what constitutes a
"catastrophic" illness. The FOMB does not challenge UTIER's
assertion that the definition of "catastrophic" illnesses is
provided in a later Act, Act No. 28-2018, titled the "Special Leave
for Employees with Serious Diseases of a Catastrophic Nature Act"
3 In PREPA's motion before the Title III court to dismiss
UTIER's petition for a writ of mandamus, PREPA quoted a slightly
different translation of Article 2.07 than the certified English
translation provided elsewhere in the record. In that motion,
PREPA quoted the English translation of the Savings Provision as
stating "[t]he Executive and Legislative Branches shall identify
additional savings and resources to prevent adversely affecting
the employees' contributions to the payment of the healthcare
plan," and the Pre-existing Conditions Provision as stating
every employee, or dependent thereof, of a
public corporation who is currently enrolled
in the healthcare plan and who suffers from a
preexisting catastrophic, chronic, or
terminal illness shall continue to receive the
employer contribution in effect for his
healthcare plan, without any change, for the
term he remains in the public service.
The Title III court relied on this translation of the Savings and
Pre-existing Conditions Provisions in its decision dismissing the
petition for writ of mandamus. See In re Fin. Oversight & Mgmt.
Bd. for P.R., 435 F. Supp. 3d 377, 382-83 (D.P.R. 2020). For
purposes of this appeal, there is no material difference between
the two translations of Article 2.07 of the Act.
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("Act 28"), which contains a list of conditions defined as "Serious
Illness[es] of a Catastrophic Nature" for purposes of a "Special
Leave" provision for employees suffering from such illnesses. S.B.
461, 18th Leg. Assemb. (P.R. 2018), 2018 P.R. Leyes 28 (codified
as amended at P.R. Leyes An. tit. 29, §§ 508 et seq.).4
In July 2017, the FOMB filed a Title III debt-
restructuring case on behalf of PREPA as a covered instrumentality
pursuant to 48 U.S.C. § 2164(a). In September 2018, the FOMB
certified a budget for PREPA for fiscal year 2019, which allocated
$120,888,000 for PREPA's employee pensions and benefits. In
December 2018, the FOMB approved a contract between PREPA and
Triple-S Salud Inc. for Triple-S Salud to act as PREPA's employee
health-plan administrator for 2019. On December 28, 2018, PREPA's
then-Chief Executive Officer, José Ortiz-Vázquez ("Ortiz"),
circulated a memorandum to all PREPA employees announcing changes
to the employees' health insurance plans effective January 1, 2019.
The memorandum stated that PREPA would continue its prior policy
of the employees not being required to contribute a payment to the
cost of their health insurance and that their coverage would remain
unaltered. It also stated that "to meet the financial challenges
of [PREPA's] Certified Fiscal Plan, some changes were required in
4 There is also currently no official English translation
of this codified statute, and so we rely on the certified English
translation provided by the parties in their appendix.
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deductibles and co-pays." A table attached to the memorandum
showed that co-pays in some instances were increased, while in
other instances they were decreased.5
On April 24, 2019, UTIER commenced this action in a
Puerto Rico court. The FOMB, on behalf of PREPA and Ortiz, removed
it to the federal Title III court on May 8, 2019. UTIER alleged
that PREPA violated Article 2.07 of Act 26 by (1) failing to
"identify savings and additional resources to avoid affecting the
contributions of the employees for the payment of health plans"
and (2) failing to ensure that employees and their dependents who
suffer from pre-existing catastrophic, chronic, or terminal
diseases continue to receive the same employer contribution for
the entire term of their public employment. UTIER argued that as
a result of the changes to the employee health insurance plans,
employees suffering from serious pre-existing conditions would
"now pay substantially higher sums" than before. UTIER sought a
writ of mandamus compelling PREPA and Ortiz to comply with the
Savings and Pre-existing Conditions Provisions of Article 2.07 of
Act 26.
5 Although the memorandum also said there were some
changes in deductibles and UTIER claims that its members'
deductibles were modified, neither the memorandum nor UTIER's
petition for writ of mandamus identified specifically any such
changes. The table attached to the memorandum also showed both
increasing and decreasing co-insurance percentages, but UTIER
provides no specific allegations concerning those changes.
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The FOMB filed a motion to dismiss the mandamus petition
for lack of jurisdiction and failure to state a claim. The Title
III court took briefing on the issues from both sides. On January
23, 2020, the Title III court issued its decision granting the
FOMB's motion and dismissing the petition. In re Fin. Oversight
& Mgmt. Bd. for P.R., 435 F. Supp. 3d 377, 387-88 (D.P.R. 2020).
First, the court held that, "to the extent that the Petition
s[ought] to challenge the [FOMB]'s determination that the [2019
PREPA] Budget is compliant with a fiscal plan which meets the
requirements of" PROMESA, the court lacked subject matter
jurisdiction because of the jurisdictional bar of 48 U.S.C.
§ 2126(e).6 Id. at 385. Second, "to the extent that the Petition
ask[ed] that [PREPA] be directed to comply with duties imposed by
a Commonwealth statute and plausibly allege[d] that such
compliance is inconsistent with PREPA's certified Budget," the
court held that UTIER failed to state a plausible claim for
mandamus relief because it did not allege there was no other
adequate alternative remedy available. Id. at 385-87. The court
held, and UTIER does not contest, that the PREPA employees
represented by UTIER could assert financial claims against PREPA
6 UTIER has made clear on appeal that it does not intend
its action to be a challenge to the FOMB's certification of PREPA's
2019 budget, given that any such challenge would raise the
jurisdictional bar set forth in 48 U.S.C. § 2126(e). We focus
only on the Title III court's decision to dismiss the mandamus
petition for failure to state a claim.
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as creditors to a Title III debtor under PROMESA. Id. at 386.
The court also rejected as unsupported UTIER's argument that an
adequate alternative remedy exists for purposes of denying a writ
of mandamus only if the alternative remedy is provided by the same
statute the petitioner seeks to enforce. Id. at 386-87. The court
did not address the FOMB's alternative arguments for dismissal of
the mandamus petition. Id. at 385 n.8.
UTIER timely appealed. We address only the single
remaining issue.
II.
UTIER challenges the Title III court's conclusion that
it failed to meet its burden of showing there are no adequate
alternative remedies which would allow its use of mandamus. None
of the arguments advanced on appeal have merit.7
7 As an initial matter, we reject UTIER's argument that
the district court engaged in an impermissible "sua sponte"
dismissal of its mandamus petition. The Title III court dismissed
the mandamus petition only after the FOMB had filed a motion to
dismiss for failure to state a claim and the motion had been fully
briefed, and the fact that the court relied on cases not cited in
the parties' briefs was not improper and did not make its dismissal
of the mandamus petition sua sponte. See, e.g., Goya Foods, Inc.
v. Unanue, 233 F.3d 38, 45 & n.7 (1st Cir. 2000) (citing cases not
cited by the parties); Bay State HMO Mgmt. v. Tingley Sys., Inc.,
181 F.3d 174, 180-82 (1st Cir. 1999) (relying on a case not cited
by the parties).
Also in its brief, UTIER makes the cursory argument that
Act 26 is unconstitutional under the Contracts Clause, U.S. Const.
art. I, § 10. UTIER does not develop this argument and so it is
waived. See United States v. Zannino, 895 F.2d 1, 17 (1st Cir.
1990).
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We review de novo the district court's analysis of a
motion to dismiss for failure to state a claim, taking all well-
pleaded facts as true and determining whether those facts and the
inferences reasonably drawn therefrom plausibly state a claim.
Doe v. Pawtucket Sch. Dep't, 969 F.3d 1, 7 (1st Cir. 2020) (first
citing Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009); and then citing
Penate v. Hanchett, 944 F.3d 358, 365 (1st Cir. 2019)).
A writ of mandamus is an extraordinary remedy that is
available only when certain conditions are met, and this is true
under both federal and Puerto Rico law.8 See, e.g., Gulfstream
Aerospace Corp. v. Mayacamas Corp., 485 U.S. 271, 289 (1988); In
re Cargill, Inc., 66 F.3d 1256, 1259 (1st Cir. 1995); Purcell Ahmed
v. Pons Núñez, 129 P.R. Dec. 711, 714 (1992). "[T]he party seeking
mandamus has the 'burden of showing that its right to issuance of
the writ is "clear and indisputable."'" Gulfstream Aerospace
Corp., 485 U.S. at 289 (quoting Bankers Life & Cas. Co. v. Holland,
346 U.S. 379, 384 (1953)).
Under both federal and Puerto Rico law, the party seeking
mandamus relief must demonstrate that there are no adequate
alternative remedies available. See Mallard v. U.S. Dist. Ct. for
8 UTIER assumes that the question of mandamus relief is
governed by Puerto Rico law, and both parties cite Puerto Rico law
with respect to mandamus in their briefs. We do not have to
address this assumption because the outcome here is the same
whether Puerto Rico or federal law applies.
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S. Dist. of Iowa, 490 U.S. 296, 309 (1989) ("To ensure that
mandamus remains an extraordinary remedy, petitioners must show
that they lack adequate alternative means to obtain the relief
they seek . . . ." (collecting cases)); Wilson v. Sec'y of Health
& Hum. Servs., 671 F.2d 673, 679 (1st Cir. 1982) ("[I]t is apparent
to us that this 'extraordinary' statutory remedy [of mandamus under
28 U.S.C. § 1361] is inappropriate, both because appellant has
failed to meet the showing of exceptional circumstances required
by [Supreme Court cases and First Circuit cases] and because an
alternative remedy -- through administrative proceedings and
[review under a different statutory provision] -- was available."
(citations omitted)); Matos v. Sec'y of Health, Educ. & Welfare,
581 F.2d 282, 286 n.6 (1st Cir. 1978) (noting that "the
extraordinary remedy of mandamus . . . might be available in those
extreme situations where no other remedy was available");
Hernández Agosto v. Romero Barceló, 12 P.R. Offic. Trans. 508, 521
(1982) (stating that, applying Puerto Rico law, "the writ of
mandamus is the appropriate remedy for compelling performance of
a duty allegedly imposed by law . . . when there is no other
adequate remedy at law"); see also P.R. Laws Ann. tit. 32, § 3423
("This writ may not be issued in any case where there is plain and
adequate remedy in the ordinary course of the law.").
UTIER does not argue that its members cannot assert
financial claims against PREPA in PREPA's Title III case for
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alleged overpayments in health insurance, nor does it argue that
this alternative mechanism for relief under PROMESA is somehow
inadequate.
Rather, UTIER's sole argument is that Act 26 does not
contain a mechanism for compelling PREPA to comply with the Savings
and Pre-existing Conditions Provisions of Article 2.07 and that
the Commonwealth statute it seeks to enforce must contain such
relief in order for the remedy to be adequate for purposes of
denying mandamus relief. UTIER cites no authority for this
proposition. The proposition is simply wrong. The case law
establishes that denial of mandamus relief is appropriate if there
is some adequate alternative remedy available, even if the source
of the remedy is distinct from the statute sought to be enforced.
See, e.g., In re City of Fall River, 470 F.3d 30, 32-33 (1st Cir.
2006) (denying a writ of mandamus where conventional review of
agency action under another statute was available pursuant to the
Administrative Procedure Act); Burgos v. Milton, 709 F.2d 1, 3
(1st Cir. 1983) (holding that the district court lacked mandamus
jurisdiction in an action against the IRS for damages because the
Tucker Act provided the ability to seek adequate relief in the
Court of Federal Claims); Guadalupe Pérez v. Saldaña, 133 P.R.
Dec. 42, 54-57 (1993) (denying mandamus relief under Puerto Rico
law where, among other things, the petitioner, who was asserting
a right to University information under the Puerto Rico
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Constitution, could pursue an administrative remedy under the
policy of the University of Puerto Rico).9
The Title III court correctly dismissed the petition for
writ of mandamus because UTIER did not demonstrate that there was
no adequate alternative remedy available for its members to recover
from PREPA.10
Affirmed.
9 Because we cannot locate an English translation of
Guadalupe Pérez, we rely on a translated copy of the case provided
by the FOMB in the addendum to its appellate brief.
10 Because we agree with the Title III court's holding on
this issue, we need not address the FOMB's alternative arguments
for dismissal, which the Title III court also did not address.
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