United States Court of Appeals
For the First Circuit
No. 12-1694
MANUEL RUIZ-SÁNCHEZ ET AL.,
Plaintiffs, Appellants,
v.
THE GOODYEAR TIRE & RUBBER COMPANY,
Defendant, Appellee.
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF PUERTO RICO
[Hon. Jay A. García-Gregory, U.S. District Judge]
Before
Lynch, Chief Judge,
Torruella and Selya, Circuit Judges.
Julio César Alejandro Serrano, with whom Eileen Landrón
Guardiola, Eduardo Vera Ramírez, Luis A. Rodríguez Muñoz and
Landrón & Vera, LLP were on brief, for appellants.
Jorge L. Capó-Matos, with whom Alberto J. Bayouth-Montes and
O'Neill & Borges LLC were on brief, for appellee.
May 31, 2013
SELYA, Circuit Judge. When a tire company closed its
plant in Puerto Rico, it offered its employees severance pay
contingent upon the execution of general releases. The plaintiff
acquiesced. Nearly a year later, he reversed direction and
asserted claims for unjust dismissal under Puerto Rico law. The
district court rejected these claims.
The plaintiff appeals the dismissal of a particular claim
under a protective Puerto Rico statute, P.R. Laws Ann. tit. 29,
§§ 185a-185m, known colloquially as Law 80. As framed, his appeal
implicates a fairly debatable question of first impression about
the meaning and purport of Law 80's anti-waiver provision. See id.
§ 185i.
If the answer to that question were dispositive of the
case in its present posture, we might well certify it to the
Supreme Court of Puerto Rico under P.R. Laws Ann. tit. 32, app.
III, Rule 53.1(f). But there is a logically antecedent issue about
whether Law 80 applies at all to the plaintiff's discharge. The
district court bypassed this issue, but we think that, in the
interests of comity and federalism, it should be decided first.
After all, if Law 80 does not apply, then there will be no need for
us to answer prematurely the vexing question of statutory
interpretation raised by the parties.
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For this reason, we vacate the relevant portion of the
judgment and remand for further proceedings consistent with this
opinion.
I. BACKGROUND
"Because this case was decided below on a motion to
dismiss, we rehearse the facts as revealed by the complaint and the
documents annexed thereto." Katz v. Pershing, LLC, 672 F.3d 64, 69
(1st Cir. 2012).
For thirty-three years, plaintiff-appellant Manuel Ruiz-
Sánchez toiled for Kelly Springfield Puerto Rico, Inc., a wholly
owned subsidiary of defendant-appellee Goodyear Tire and Rubber
Company. During his tenure there, he attained the position of
general manager.
On April 7, 2009, Goodyear's human resources manager,
Emily Baranek, signaled the end of the plaintiff's long career when
she informed Kelly Springfield's work force that the plant would
cease operations at month's end. To ease the blow, she announced
that Goodyear was prepared to offer severance packages; provided,
however, that each recipient sign a general release of "all known
and unknown claims, promises, causes of action, or similar rights
of any type that [the employee] presently may have . . . with
respect to [Goodyear]." Anyone who disagreed with the proposed
amount of his or her severance payment was directed to contact
Baranek.
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The arrangement constructed a forty-five day window
within which an employee could "review and consider" the offer and
the release. Any employee who signed a release was given the right
to revoke it within seven days thereafter.
The plaintiff's response was less than enthusiastic. In
a letter dated April 23, he expressed dissatisfaction with the
amount of his proposed severance payment ($28,512) and suggested
instead a significantly higher figure ($105,742). In the same
letter, he inquired about avoiding severance altogether through a
transfer to a different position at Goodyear's office in Miami.
This inquiry was apparently prompted by the fact that some
employees were afforded the opportunity to transfer from Kelly
Springfield's Puerto Rico plant to Miami. Baranek responded
verbally; she rejected the more munificent severance payment
suggested by the plaintiff, explained that Goodyear was not willing
to increase the amount of its offer, and scotched any possibility
of a transfer. She later confirmed these advices in writing.
On April 30 (the day that the plant closed), the
plaintiff accepted the $28,512 severance package and signed the
proffered release. At that point in time, twenty-two days remained
in the forty-five day "consideration period." The seven-day
"rescission period" passed without incident.
Almost one year later, the plaintiff sued Goodyear in a
local court. His complaint asserted claims for unjust dismissal
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under both Law 80 and a Puerto Rico statute prohibiting age
discrimination. Noting diverse citizenship and the existence of a
controversy in the requisite amount, Goodyear removed the action to
the United States District Court for the District of Puerto Rico.
See 28 U.S.C. §§ 1332(a), 1441.
In due course, Goodyear moved to dismiss the complaint
both for lack of personal jurisdiction and for failure to state a
claim. The district court rejected Goodyear's jurisdictional
contention. Ruiz-Sánchez v. Goodyear Tire & Rubber Co., No.
10-1598, 2011 WL 4709875, at *4-5 (D.P.R. Sept. 30, 2011). It then
ruled that the release foreclosed the age discrimination claim but
that the Law 80 claim could go forward. Id. at *5-7 (citing P.R.
Laws Ann. tit 29, § 185i).
Goodyear moved for reconsideration of the Law 80 ruling.
The district court reconsidered the matter and concluded, on
reflection, that the release barred the Law 80 claim as well.
Ruiz-Sánchez v. Goodyear Tire & Rubber Co., 859 F. Supp. 2d 225,
229 (D.P.R. 2012). The court proceeded to dismiss the case with
prejudice.
This timely appeal ensued. In it, the plaintiff
challenges only the dismissal of his Law 80 claim.
II. ANALYSIS
The district court's dismissal of the Law 80 claim
followed a motion to reconsider an earlier order. We normally
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review a district court's decision to grant or deny reconsideration
for abuse of discretion. See, e.g., Bennett v. Saint-Gobain Corp.,
507 F.3d 23, 34 (1st Cir. 2007). Here, however, the parties'
arguments are directed to the underlying issue — the propriety vel
non of dismissal — so the Rule 12(b)(6) standard of review applies.
See Santiago v. Puerto Rico, 655 F.3d 61, 67 (1st Cir. 2011). This
standard is familiar. We assay orders of dismissal for failure to
state a claim "de novo, assuming the truth of all well-pleaded
facts contained in the operative version of the complaint and
indulging all reasonable inferences in the plaintiff's favor."
Morales-Cruz v. Univ. of P.R., 676 F.3d 220, 224 (1st Cir. 2012)
(internal quotation marks omitted).
In this case, the district court proceeded immediately to
the issue of whether the release, which was annexed to the
plaintiff's complaint, bars the maintenance of his Law 80 claim.
Release is an affirmative defense. See Fed. R. Civ. P. 8(c)(1).
Dismissal "on the basis of an affirmative defense requires that (i)
the facts establishing the defense are definitively ascertainable
from the complaint and the other allowable sources of information,
and (ii) those facts suffice to establish the affirmative defense
with certitude." Nisselson v. Lernout, 469 F.3d 143, 150 (1st Cir.
2006) (internal quotation marks omitted).
Because this is a diversity case, the substantive law of
Puerto Rico controls. Erie R.R. Co. v. Tompkins, 304 U.S. 64, 78
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(1938); Borges ex rel. S.M.B.W. v. Serrano-Isern, 605 F.3d 1, 6
(1st Cir. 2010). It follows that the validity of the plaintiff's
Law 80 claim must be evaluated under Puerto Rico law.
Puerto Rico law generally allows for release or
settlement of a claim, referred to as a "compromise." See P.R.
Laws Ann. tit. 31, § 4821; see also id. § 4 ("Rights 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."). The type of
compromise at issue here is an "extrajudicial compromise" — a
compromise entered either "before the commencement of an action" or
"without the court's intervention." Neca Mortg. Corp. v. A & W
Developers S.E., 1995 P.R.-Eng. 905,586 (1995). A validly
consummated compromise has "the same authority as res []judicata"
as to the claims released.1 P.R. Laws Ann. tit. 31, § 4827;
Citibank Global Mkts. v. Rodríguez Santana, 573 F.3d 17, 22 (1st
Cir. 2009). The Supreme Court of Puerto Rico has enumerated three
prerequisites for the release or settlement of a claim: (i) "an
uncertain legal relationship," (ii) "an intent to eliminate [the]
uncertainty," and (iii) "reciprocal concessions." Citibank v.
1
Although it may seem unconventional to use the res judicata
label in this context due to the absence of an earlier judgment,
Puerto Rico law nonetheless gives res judicata effect to
extrajudicial compromises. See P.R. Laws Ann. tit. 31, § 4827.
This doctrinal nuance derives from article 1816 of the Spanish
Civil Code.
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Dependable Ins. Co., 21 P.R. Offic. Trans. 496, 505-06 (1988). The
release at issue here satisfies these prerequisites.
With respect to the first prerequisite, the termination
of the plaintiff's employment necessarily created an uncertain
legal relationship. After all, "[t]he 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."
Cabán Hernández v. Philip Morris USA, Inc., 486 F.3d 1, 12 (1st
Cir. 2007).
With respect to the second prerequisite, the language of
the release manifests an obvious intent to eliminate those
uncertainties. In pertinent part, the release memorializes the
plaintiff's agreement "to release all known and unknown claims"
arising out of his employment, and specifically lists Law 80 as one
type of claim which the plaintiff intends to forego. In this
regard, the release "acknowledge[s] that this Severance Payment is
more than [Goodyear] is otherwise obliged to provide."
With respect to the third prerequisite, the parties made
reciprocal concessions. The plaintiff agreed not to pursue any
claims that he may have had arising out of the aborted employment
relationship; Goodyear agreed to give the plaintiff a severance
payment to which he otherwise may not have been entitled.
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At first blush, then, the fulfillment of these three
requirements appears to warrant the conclusion that the release was
a valid settlement of the plaintiff's Law 80 claim pursuant to
Puerto Rico law. See Citibank, 21 P.R. Offic. Trans. at 505-06.
But appearances sometimes can be deceiving, and the plaintiff
resists this conclusion.
As an initial matter, the plaintiff suggests that his
execution of the release and his acceptance of the severance
payment should not matter because those acts occurred under duress.
In this connection, his brief dwells on "the compressed time frame"
and the imminence of the plant closure. But there are no facts in
the record (and, specifically, nothing plausibly alleged in the
complaint) to support a remonstrance that the plaintiff did not
have adequate time to consider the severance package. Indeed, the
known facts point in the opposite direction: the plaintiff had
forty-five days to decide whether to sign the release — and he
opted to act after only twenty-three days had elapsed. In the same
vein, he had available a seven-day rescission period, but he let it
expire. For aught that appears, the plaintiff had ample time to
consider the release fully and to make an informed judgment about
whether to sign it. Any claim of duress is woven entirely out of
flimsy strands of speculation and surmise and, thus, cannot survive
scrutiny. See Ashcroft v. Iqbal, 556 U.S. 662, 678-79 (2009).
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If more were needed — and we doubt that it is — the legal
underpinnings of the "duress" argument are afforded only
perfunctory treatment in the plaintiff's brief. We have said
before, and today reaffirm, that "[i]t is not enough merely to
mention a possible argument in the most skeletal way, leaving the
court to do counsel's work, create the ossature for the argument,
and put flesh on its bones." United States v. Zannino, 895 F.2d 1,
17 (1st Cir. 1990).
This brings us to the much harder question that
undergirds the appeal. Law 80 contains an anti-waiver provision
stating that:
The right of an employee who is discharged
from his employment without just cause, to
receive the compensation provided in § 185a of
this title, is hereby declared to be
unwaiveable.
Any contract or part thereof in which the
employee waives the compensation to which he
is entitled to, pursuant to §§ 185a-185m of
this title, shall be null and void.
P.R. Laws Ann. tit. 29, § 185i. The Supreme Court of Puerto Rico
has not authoritatively determined the relationship between this
provision and extrajudicial compromises of the kind embodied in the
release.
Nor are the contours of that relationship readily
apparent. Generally speaking, Law 80 requires employers to
compensate at-will employees who are discharged without just
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cause.2 Id. § 185a. Specifically, the law entitles such employees
to a form of severance pay known as "mesada," which is calculated
according to a formula based on the employee's salary and years of
service.3 Id.; Otero-Burgos v. Inter Am. Univ., 558 F.3d 1, 7-9
(1st Cir. 2009). Section 185b describes the reasons that
constitute just cause for terminating an employee. If an employee
is discharged for one of these reasons, the employer will escape
liability under Law 80. P.R. Laws Ann. tit. 29, §§ 185a-185b. To
further protect at-will employees from "the inequality of
bargaining power" inherent in the employer-employee relationship,
section 185i provides that an employee may not waive the
prophylaxis of Law 80. See Otero-Burgos, 558 F.3d at 9 n.21.
The court below concluded that Law 80's anti-waiver
provision applies to prospective waivers of Law 80 rights, not to
waivers that come about when "an employee waives his Law 80 rights
in an agreement posttermination . . . in order to avoid
litigation." Ruiz-Sánchez, 859 F. Supp. 2d at 228. On this basis,
the court held that the anti-waiver provision did not override the
release executed by the plaintiff. Id. at 228-29. Because the
2
For reasons that are not immediately apparent, the official
English translation of Law 80 uses the terms "just cause" and "good
cause" synonymously. Compare, e.g., P.R. Laws Ann. tit. 29,
§ 185a, with, e.g., id. § 185b.
3
Based on the plaintiff's salary and years of service, the
amount of his Law 80 severance benefit, if owed, would
significantly exceed the amount ($28,512) paid to him by Goodyear
in consideration for the release.
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release memorialized an otherwise valid extrajudicial compromise,
it foreclosed any claim of entitlement to Law 80 relief. Id.; see
P.R. Laws Ann. tit. 31, §§ 4, 4821, 4827.
Confining the application of section 185i to prospective
waivers of Law 80 claims, which has the effect of denying its
application to extrajudicial compromises that settle previously
accrued claims, may be a reasonable interpretation of the statute.4
It is, however, not the only reasonable interpretation. The choice
between these two reasonable interpretations is fairly debatable,
and the sources that we normally look to for edification — such as
the language and purpose of the statute, see, e.g., Arevalo v.
Ashcroft, 344 F.3d 1, 10 (1st Cir. 2003); legislative history, see,
e.g., Passamaquoddy Tribe v. Maine, 75 F.3d 784, 788-89 (1st Cir.
1996); analogous statutes and case law, see, e.g., Blinzler v.
Marriott Int'l, Inc., 81 F.3d 1148, 1151 (1st Cir. 1996); and
policy considerations, see, e.g., id. — point in different
directions.
On the one hand, it is evident that Law 80 was designed
to provide economic protection from the ravages of arbitrary
dismissals; and the text of section 185i contains no distinction
between prospective waivers and waivers of previously accrued
4
By "previously accrued," we mean that at the time of the
release, the employee has an actionable Law 80 claim relating to
work performed in the past. Such a claim might arise, say, when an
employee already has been discharged or when the decision to
discharge him already has been communicated to him.
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claims. By like token, section 185i's reference to "[a]ny
contract" might be thought to imply that it applies unreservedly to
extrajudicial compromises.
So, too, it can be argued that a broad reading of section
185i is consistent with general trends in Puerto Rico labor law.
After all, judicial supervision of contracts between employers and
employees is not uncommon in Puerto Rico. See, e.g., P.R. Laws
Ann. tit. 3, § 320. Other provisions within Law 80 also may be
read to suggest a legislative preference for judicial or agency
oversight of Law 80 claims. See id. tit. 29, §§ 185h, 185k, 185m.
On the other hand, none of these conclusions is
compelled. Indeed, there are factors that support a narrower
interpretation of section 185i. It can be argued that the absence
of a distinction between prospective waivers and waivers of
previously accrued claims in the text of the statute is telling.
The same can be said for the absence of any mention of the anti-
waiver provision's applicability to extrajudicial compromises. On
at least one other occasion when the Puerto Rico legislature sought
to limit the availability of extrajudicial compromises, it did so
explicitly. See id. § 282 (imposing requirement that "[e]very
extrajudicial settlement in regard to the payment of [certain types
of] wages . . . shall be null" unless approved by the Department of
Labor and Human Resources). The absence of any such language in
section 185i may suggest the conclusion that the legislature, in
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enacting Law 80, did not intend to interfere with the rights of
employers and employees to settle previously accrued claims through
extrajudicial compromises.
The short of it is that the push and pull of these
competing centrifugal and centripetal forces muddy the waters as to
how the Puerto Rico legislature intended section 185i to be
construed vis-à-vis extrajudicial compromises of previously accrued
Law 80 claims. This interpretive question is difficult, and we
have no clear guidance on it from the Commonwealth's highest court.
In addition, this question is a potentially important one, and
prudence strongly suggests that a federal court — which is, after
all, not the final arbiter of state law, see Andrew Robinson Int'l,
Inc. v. Hartford Fire Ins. Co., 547 F.3d 48, 51-52 (1st Cir. 2008)
— should not rush to answer it unnecessarily.
Given the interests of comity and federalism, we would be
inclined to certify this question to the Supreme Court of Puerto
Rico if answering it would be dispositive of this case. See Acadia
Ins. Co. v. McNeil, 116 F.3d 599, 605 (1st Cir. 1997) ("[W]hen the
meaning of a state law depends on the decisionmaker's ability to
discern the state legislature's intent from an array of mixed
signals, considerations of federalism, comity, and practicality
suggest that the state's highest tribunal is best positioned to
make an informed and authoritative judgment."). But we cannot say
that answering it would be dispositive because the district court
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bypassed the seminal question of whether Law 80 applies at all to
the plaintiff's loss of employment. We believe that this logically
antecedent question should be answered before any inquiry is
attempted into the difficult interpretive question about the
meaning and purport of section 185i.
To put into better perspective why we hold this belief,
we pause to limn the parameters of the bypassed question. In its
motion to dismiss, Goodyear offered an alternative basis for
dismissal: it contended that Law 80 had no application in the
circumstances of this case. It rested this contention on
exceptions and exclusions contained in Law 80 itself,5 and it has
renewed this alternative contention on appeal.
We add that Goodyear's alternative contention, though not
yet proven, appears to be colorable. It does, however, require
further factual development — factual development that precludes
5
By way of elaboration, Law 80 provides that just cause for
termination includes the "closing of the operations of the
establishment." P.R. Laws Ann. tit. 29, § 185b(d). Goodyear
argues that this provision inoculates it against the plaintiff's
Law 80 claim. But the plaintiff counters that Goodyear transferred
some less senior Kelly Springfield employees from the Puerto Rico
plant to jobs in Miami. He notes that, in order for an employer to
obtain the benefit of the plant-closing exclusion, the transfer of
employees post-closing must be made according to seniority, as long
as the transferred employees are in the same "occupational
classification" and no "clear and conclusive difference in favor of
the efficiency or capacity of the workers compared" exists. Id.
§ 185c. The parties dispute whether Goodyear's actions satisfied
these fact-intensive conditions, and the plaintiff's complaint
contains nothing that would permit a court to resolve this dispute
on a Rule 12(b)(6) motion.
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resolving the contention through a Rule 12(b)(6) motion to dismiss.
See Morales-Cruz, 676 F.3d at 224. Under these circumstances, we
believe that the wisest and most practical course is to vacate the
order dismissing the Law 80 claim and remand so that the parties
may undertake the further factual development necessary to inform
a decision as to whether Law 80 applies. If the district court
determines, on a developed factual record, that Law 80 does not
apply, that will be the end of the matter (subject, of course, to
the usual right of appeal). If, however, the court determines that
Law 80 does pertain, the question of whether the release can be
given effect despite Law 80's anti-waiver provision would then come
front and center. Should the district court find itself faced squarely
with that question, the court can certify it to the Supreme Court of Puerto
Rico. See P.R. Laws Ann. tit. 32, app. III, Rule 53.1(f); P.R. Sup. Ct.
R. 25, P.R. Laws Ann. tit. 4A, § 25.
III. CONCLUSION
We need go no further. For the reasons elucidated above,
we vacate the order of dismissal as to the Law 80 claim6 and remand
for further proceedings consistent with this opinion.
Vacated and remanded. No costs.
— Concurring Opinion Follows —
6
The plaintiff has not appealed from the district court's
dismissal of his age discrimination claim, and we leave the
judgment intact as to that claim.
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TORRUELLA, Circuit Judge (Concurring). I agree with the
majority's result and its reasoning that we need not reach the
question of law regarding waiver of appellant's Law 80 claim.
However, I concur to briefly note my disagreement with
the majority's conclusion that Section 185i -- Law 80's anti-waiver
provision -- is ambiguous. In my view, a plain reading of that
provision indicates a categorical prohibition on the waiver, by
contract, of an employee's Law 80 rights to compensation,
prospective or accrued, including post-termination and in the
extrajudicial settlement context. The statute refers generally to
the rights of employees who are "discharged," in the past tense, as
coming within the coverage of those who cannot waive receipt of
compensation, indicating that contracts made by employees vested
with accrued rights are invalid if they contain waivers of those
rights. Further, the right that "is hereby declared to be
unwaiveable" is not conditioned or modified, supporting a reading
of categorical unwaiveability. Finally, the provision declares
that "any" contract waiving the right to compensation due under Law
80 shall be null and void. The use of such a categorical term
includes all contracts within its scope, rejecting any
differentiation between pre- and post-termination contracts.
Since, as stated, we need not reach this issue at this
stage, I leave the interpretation of Section 185i's scope to the
Puerto Rico Supreme Court.
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