Acevedo-Garcia v. Vera-Monroig

United States Court of Appeals
For the First Circuit
Nos. 03-2103
03-2292

LUIS A. ACEVEDO-GARCIA ET AL.,

Plaintiffs, Appellees,

v.

ROBERTO VERA-MONROIG, Individually and as Mayor of Adjuntas;
MUNICIPALITY OF ADJUNTAS; IRMA M. GONZALEZ-DELGADO, Individually
and as Personnel Director of Adjuntas,

Defendants, Appellants.

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

[Hon. Jaime Pieras, Jr., Senior U.S. District Judge]

Before
Selya, Circuit Judge;
Coffin, Senior Circuit Judge;
and Lynch, Circuit Judge.

Jorge Martinez Luciano, with whom Johanna Emmanuelli and Law
Offices of Pedro Ortiz Álvaraz, P.S.C. were on brief, for the
Municipality of Adjuntas and the individual appellants in their
official capacities.

Luis Villares Sarmiento, with whom Sanchez-Betances & Sifre,
P.S.C. was on brief, for the individual appellants in their
personal capacities.

Gael Mahony, with whom Pamela O'Brien, Holland & Knight LLP
and Israel Roldan-Gonzalez were on brief, for appellees.

May 19, 2004
 LYNCH, Circuit Judge. In these appeals, we address the

willful and longstanding efforts of a Puerto Rico municipality, its

mayor, and its personnel director to obstruct and delay the payment

of a $6.9 million jury award in a civil rights case. This is the

fourth time this case has come before this court.1

In November 2001, a jury awarded verdicts totaling

$6,956,400 against the Municipality of Adjuntas in Puerto Rico (the

Town), its mayor, Roberto Vera-Monroig (Vera), and its personnel

director, Irma Gonzalez-Delgado (Gonzalez). The jury found that

the defendants had engaged in political discrimination in violation

of the First Amendment when, after Vera won the 1996 mayoral

election, they systematically laid off municipal employees who were

members of the opposing political party. Cf. Branti v. Finkel, 445

U.S. 507, 517 (1980) (dismissal of a public employee based solely

on political allegiance violates the First Amendment). The

verdicts won by the twenty plaintiffs in this case -- a subset of

the 82 employees who sued the defendants after being terminated

from career positions with the Town -- included punitive damages

awards of $300,000 against each of the two individual defendants in

their personal capacities. This court upheld the verdicts in

December 2003. Acevedo-Garcia v. Vera-Monroig (Acevedo-Garcia

1
See Acevedo-Garcia v. Vera-Monroig (Acevedo-Garcia III), 351
F.3d 547 (1st Cir. 2003); Acevedo-Garcia v. Vera-Monroig (Acevedo-
Garcia II), 296 F.3d 13 (1st Cir. 2002) (per curiam); Acevedo-
Garcia v. Vera-Monroig (Acevedo-Garcia I), 204 F.3d 1 (1st Cir.
2000).

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III), 351 F.3d 547, 577 (1st Cir. 2003) (rehearing and rehearing en

banc denied Feb. 17, 2004).

These appeals arise more than two years after the

plaintiffs' first attempt to collect the judgment, which remains

unpaid. Two questions are presented: (1) whether the district

court erred when it required the Town to include a sum sufficient

to satisfy the judgment in its 2003-2004 budget, and (2) whether

the court improperly required the reinstatement of the twenty

plaintiffs as a contempt sanction for the Town's failure to comply

with that order. We affirm the district court's decision to issue

the budget-inclusion order but vacate and remand for recalculation

of the amount. As to the contempt sanction, we affirm the finding

of contempt but vacate the reinstatement order and remand for

consideration of alternative sanctions.

I.

The jury returned verdicts for the plaintiffs on November

23, 2001, and the district court entered judgment accordingly on

December 3, 2001. On December 20, the court awarded the plaintiffs

an additional $96,300 in attorneys' fees and costs. A few months

later, in March 2002, the court denied the plaintiffs' motion for

reinstatement. The defendants did not file a motion to stay the

judgment under Fed. R. Civ. P. 62.

On April 29, 2002, the plaintiffs made their first effort

to execute on the judgment. From Vera and Gonzalez in their

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personal capacities, the plaintiffs sought immediate payment of the

punitive damages awards; from the Town,2 they sought an order

requiring the remaining judgment sum and attorneys' fees and costs

to be included in the municipality's 2002-2003 budget. The

plaintiffs' motion relied on 21 P.R. Laws Ann. § 4303(c), which

requires municipalities in Puerto Rico to include outstanding court

judgments in their annual budgets, and on Fed. R. Civ. P. 69, which

provides that federal judgments shall be executed in accordance

with local law. The defendants opposed the motion, arguing that

they should be entitled to a stay of execution pending appeal

without posting a bond or providing other security because, in

light of the Town's recurring budget cycle, there was no risk that

the plaintiffs would be unable to collect.

On May 16, 2002, the district court granted the

plaintiffs' motion. Citing § 4303(c), it ordered the Town to

include in its budget for the 2002-2003 fiscal year the sum of

$6,956,400, plus the $96,300 fees and costs award, plus appropriate

post-judgment interest. In addition, the court required Vera and

Gonzalez to pay the punitive damages award immediately, but it

permitted them to stay execution pending appeal by posting a

$600,000 supersedeas bond. The Town sought an emergency stay of

execution from this court. We granted only a temporary ten-day

2
For convenience, we refer to the municipality and the
individual defendants in their official capacities collectively as
the "Town."

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stay to allow the Town to post an appropriate bond or present its

arguments for a longer stay to the district court.3 Acevedo-Garcia

v. Vera-Monroig (Acevedo-Garcia III), 296 F.3d 13, 18 (1st Cir.

2002) (per curiam).

The defendants returned to the district court, which

generously allowed the Town extra time to develop its arguments.

The Town urged the court to grant it a stay of execution pending

appeal without any requirement for a supersedeas bond or other

judgment security. It represented:

Due to the recurring nature of the Municipality's budget
and its ability to obtain large scale financing from the
Government Development Bank, it has the financial ability
to pay the outstanding monetary judgment, shall the same
be affirmed.

In response, the plaintiffs agreed to drop their objection to a

stay of execution if the Town could provide proof that the

Government Development Bank was prepared to loan the Town

sufficient funds to cover the judgment.

On August 26, 2002, the district court accepted the

defendants' argument, subject to the condition recommended by the

plaintiffs. The court informed the Town that it would stay

execution of the judgment if, by October 3, 2002, the Town could

produce a certified letter of intent from the Government

Development Bank guaranteeing Adjuntas a loan large enough to

3
Vera and Gonzalez also sought a stay without the need to
post a supersedeas bond. We upheld the bond requirement. Acevedo-
Garcia II, 296 F.3d at 18.

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satisfy the judgment in the event the judgment were affirmed by

this court.4 The court specified that the amount of the guaranteed

loan had to be at least $6,356,400 (i.e., the full judgment amount

minus the punitive damages awards). The court warned: "No

extensions of time will be granted. Failure to abide by this order

shall result in severe sanctions, including execution of judgment."

For whatever reason, the Town did not live up to its

representations. The Government Development Bank turned down the

Town's request for a loan, and the court was so informed on October

3, 2002. The Town offered no other security, though Vera and

Gonzalez in their personal capacities complied with the court's

order and posted a supersedeas bond to secure the punitive damages

awards. One week later, plaintiffs petitioned for a writ of

execution as to the Town. The Town did not respond, however, and

the district court did not rule on the motion. And there matters

sat.

Nearly four months later, on February 4, 2003, the

plaintiffs renewed their motion with the district court. They

asked the court to order the Town to include the judgment sum in

its 2003-2004 budget, pointing out that although nearly nine months

had passed since the court's first budget-inclusion order, Adjuntas

had neither included the judgment in its 2002-2003 budget nor

4
The court noted that the Government Development Bank had
been willing to provide such a letter to another municipality in a
similar political discrimination case.

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obtained the promised loan guarantee from the Government

Development Bank. Again, there was no response from the Town.

On February 13, 2003, the district court granted the

plaintiffs' motion. The court ordered the Town to include in its

budget for fiscal year 2003-2004 the entire amount of the judgment

($6,956,400), plus the fees and costs award ($96,300), plus post-

judgment interest.

The Town did not appeal this order. Nor did it comply.

Nor, indeed, did it inform the district court of its failure to

comply. It was the plaintiffs who finally brought the Town's

noncompliance to the court's attention in a July 3, 2003 motion.

The plaintiffs appended to their motion a "certification" issued by

the Town's Director of Finance stating that the Town had not

assigned "any entry of expenditure" to satisfy the judgment. They

asked that the court order Vera, as mayor, to show cause why he

should not be held in contempt of court.

The Town filed an opposition to the show cause order on

July 11. It said that Vera had tried to include the judgment in

the Town's 2003-2004 budget but was precluded from doing so under

Article 19.013 of the Puerto Rico Autonomous Municipalities Act, 21

P.R. Laws Ann. § 4912, pursuant to which (according the Town) the

municipality would be "automatically fined" for submitting a

grossly unbalanced budget. The judgment sum, the Town said,

exceeded the Town's entire expected income for the fiscal year.

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The Town attached a letter from Bárbara M. Sanfiorenzo Zaragoza,

Esq., the Puerto Rico Commissioner of Municipal Affairs, who stated

that a sum as large as the judgment in this case could not be

budgeted within a single fiscal year. The Town offered no

alternative security.

Understandably unhappy with the defendants'

noncompliance, the district court entered an order on July 18, 2003

holding the Town in contempt. As a sanction, the court ordered the

Town to reinstate, on a staggered basis before the end of 2003, the

twenty plaintiffs whose dismissals had been the basis for the

original political discrimination suit. Defendants immediately

appealed, and this court issued an unpublished order staying the

reinstatement sanction.

On August 13, 2003, the defendants filed a motion in the

district court to vacate not only the reinstatement order, but also

the May 2002 and February 2003 budget-inclusion orders. The motion

purported to rely on Fed. R. Civ. P. 59(e), 60(b), 62(c), and

62(f). Included in this motion was a request by Vera and Gonzalez

in their personal capacities to set aside the portion of the May

2002 budget-inclusion order requiring them to post a supersedeas

bond. The district court denied the motion without opinion.

These are the defendants' consolidated appeals from (1)

the grant of the reinstatement sanction order; and (2) the denial

of the defendants' August 13, 2003 motion to set aside the sanction

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and budget-inclusion orders. Vera and Gonzalez join the appeals in

their personal capacities insofar as the district court denied

their request to set aside the supersedeas bond requirement.

II.

A. Denial of Rule 62(f) Motion

We can dispense quickly with defendants' arguments under

Fed. R. Civ. P. 62(f). The defendants devote much of their brief

to the contention that the district court could not issue the

budget-inclusion orders, and thus could not sanction the defendants

for violating those orders, because the defendants were entitled to

an automatic stay of execution under Rule 62(f). Under that rule,

a judgment debtor is entitled to a stay of execution if, under

state law, the judgment operates as a lien on the debtor's property

and would have entitled the debtor to a stay if the action had been

filed in state court. See Castillo v. Montelepre, Inc., 999 F.2d

931, 941-42 (5th Cir. 1993). For reasons that need not be

elaborated here, defendants assert that Puerto Rico law entitled

them to a stay until the judgment became "firm and unappealable."

This issue is now moot. If Puerto Rico law did entitle

defendants to a stay (a question we do not decide), that

entitlement ended when this court affirmed the judgment on direct

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appeal. This court's mandate has now issued in Acevedo-Garcia III,

and the time for seeking certiorari expired on May 17, 2004.5

We turn to the defendants' remaining arguments.

B. Defendants' Attack on the Budget-Inclusion Orders

The defendants argue that the district court abused its

discretion by refusing to vacate its budget-inclusion orders for

two reasons. First, emphasizing that Fed. R. Civ. P. 69(a)

restricts the process for executing on a federal judgment to those

procedures allowed under local law, they argue that the budget-

inclusion orders in this case were illegal under various provisions

of Puerto Rico law. Second, the defendants say that even if the

district court had the power to issue a budget-inclusion order, the

court wrongly required the Town to include in its budget certain

amounts actually owed by Vera and Gonzalez personally.

1. Vehicle of Attack: Defendants' Motion Under
Rules 59(e) and 60(b)

The first question is whether defendants are entitled to

challenge the budget-inclusion orders at all, given the procedural

posture of this case. Plaintiffs point out that this is not an

appeal from the budget-inclusion orders themselves but from the

denial of the defendants' August 13, 2003 motion under Rules 59(e)

5
Nor does defendants' Rule 62(f) argument help them in their
challenge to the district court's finding of contempt. Even if we
assume, for argument's sake, that defendants were entitled to a
stay under Rule 62(f), that fact has no bearing on the validity of
the contempt order. See infra Part II.C.1.

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and 60(b) to vacate those orders. Nothing in those rules,

plaintiffs argue, permits the Town to dispute the merits of the

February 2003 and May 2002 budget-inclusion orders so long after

the fact.

As to Rule 59(e), the plaintiffs are plainly correct.

The defendants' August 13 motion was not filed within 10 days of

either budget-inclusion order. See Fed. R. Civ. P. 59(e) ("Any

motion to alter or amend a judgment shall be filed no later than 10

days after entry of the judgment."); Garcia-Velazquez v. Frito Lay

Snacks Caribbean, 358 F.3d 6, 11 (1st Cir. 2004) (district court

lacks the power to grant an untimely Rule 59(e) motion).

Whether the defendants' motion was proper under Rule

60(b) is a harder question.6 The motion did not specify the

paragraph of Rule 60(b) under which defendants sought relief, and

defendants' appellate papers do not clarify the point. If the

defendants meant that the district court's budget-inclusion orders

were legal "mistake[s]" subject to correction under Rule 60(b)(1),

their argument must fail. See Silk v. Sandoval, 435 F.2d 1266,

6
We bypass the plaintiffs' argument that the Town cannot rely
on Rule 60(b) because it could have appealed the budget-inclusion
orders directly. Cf. Parrilla-Lopez v. United States, 841 F.2d 16,
20 (1st Cir. 1988) ("Rule 60(b) may not be used as a substitute for
an appeal."). We are not certain that the budget-inclusion orders
were in fact immediately appealable, either as final orders, 28
U.S.C. § 1291, or under the collateral-order doctrine, see United
States v. Billmyer, 57 F.3d 31, 34-35 (1st Cir. 1995). In the end,
it does not matter, as we do not rest our conclusion on the
defendants' failure to appeal.

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1267-68 (1st Cir. 1971) (a mistake of law is not a "mistake" within

the meaning of Rule 60(b)(1)). Moreover, to the extent the

defendants' motion challenged the May 2002 budget-inclusion order

under Rule 60(b)(1), it was time-barred. See Fed. R. Civ. P. 60(b)

(motions under Rule 60(b)(1) must be brought within one year of the

challenged order or judgment); Claremont Flock Corp. v. Alm, 281

F.3d 297, 300 (1st Cir. 2002).

Nevertheless, Rule 60(b)(6) provides more flexible time

parameters, and there may have been extenuating circumstances.

Thus, we will bend over backwards, give the defendants the benefit

of the doubt, and accept Rule 60(b) as a proper vehicle for

attacking the budget-inclusion orders. We review the district

court's denial of the motion for abuse of discretion. United

States v. $23,000 in U.S. Currency, 356 F.3d 157, 165 (1st Cir.

2004).

2. Validity of the Budget-Inclusion Orders Under
Rule 69(a)

There is no merit to the defendants' argument that the

budget-inclusion orders were not "in accordance with the practice

and procedure of the state in which the district court is held"

under Rule 69(a). In fact, the Puerto Rico Autonomous

Municipalities Act mandates that money judgments against a

municipality be included in the municipal budget for the next

fiscal year:

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 In the general budget draft resolution of each
municipality, it shall be mandatory to include
appropriations with sufficient credits for the following
purposes, and in the order of priority provided below:
(a) Interest, amortizations and withdrawal from the
municipal public debt;
(b) other statutory expenditures and obligations;
(c) payment of court judgments . . . .

21 P.R. Laws Ann. § 4303 (emphasis added). The same conclusion was

reached by the district court, which specifically cited § 4303(c)

in its May 2002 budget-inclusion order.

The Town acknowledges § 4303(c) but argues that the

statute should not be literally enforced where, as the Town says is

the case here,7 the judgment in question is so large that complying

with § 4303(c) would make it impossible for the municipality to

balance its budget. The Town says that other provisions of the

Autonomous Municipalities Act require it to maintain a balanced

budget, so it is not free to comply with § 4303(c) under the

circumstances.

We are not persuaded. The Town relies on 21 P.R. Laws

Ann. § 4301, which provides in relevant part:

The Mayor shall draft the balanced Budget Resolution Bill
of income and expenditures of the municipality for each
fiscal year, which he/she must present before the
Municipal Assembly together with a budget message, no
later than the 15th of May of each year . . . .

7
According to the Town, the judgment in this case exceeds its
entire annual budget. Papers filed by the Town in the district
court indicate that Adjuntas had revenues in 2002-2003 of slightly
over $6 million.

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(emphasis added). For purposes of these appeals, we will accept

the Town's representation that § 4301 requires the mayor to submit

a balanced budget to the municipal assembly. But nothing in this

or any other provision cited by the Town8 suggests that the

balanced-budget requirement excuses a municipality from complying

with the "mandatory appropriation" rules in § 4303. On the

contrary, § 4303 itself outlines some of the expenditures that the

mayor must consider "[i]n order to estimate the resources to draft

and balance the budget." Id. Under § 4303, the mayor has no

discretion to decline to fund court judgments -- their inclusion in

the budget is "mandatory." The defendants' suggestion to the

district court that the Town would be "automatically fined" for

including the judgment in its budget borders on willful

misrepresentation.9

8
The Town also cites 21 P.R. Laws Ann. § 4371, which declares
a "public policy" that municipalities maintain a "fair and equal
balance" between fiscal resources and economic obligations; § 4356,
which limits unapproved emergency spending to 5% of the authorized
budget in a given year; and § 4354(b), which bars municipalities
from entering contracts requiring future payments in amounts
exceeding appropriations. None of these provisions offers any
reason to read an exception into the unambiguous terms of
§ 4303(c).
9
The Town told the district court that it would be
"automatically" fined under 21 P.R. Laws Ann. § 4912 for submitting
a "grossly unbalanced budget." That statute does permit the
Commissioner of Municipal Affairs to levy a fine against any
municipality or municipal employee who "[v]iolates the provisions
of law and the regulations governing the administration of the
municipality's general operating budget." But § 4912 is
discretionary, not mandatory. See id. ("The Commissioner may
impose and collect an administrative fine . . . ." (emphasis

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 Statutory arguments aside, there is no necessary tension

between the requirement that the mayor submit a balanced budget and

the command in § 4303(c) that court judgments be promptly paid.

After all, the Town was prepared to pay the entire judgment in

October 2002 by securing a loan from the Government Development

Bank -- a loan that, presumably, the Town would have repaid over a

period of years consistent with its budgetary obligations under

Puerto Rico law. Although that loan was turned down for reasons

not in the record, the Town has made no effort to show that

alternative forms of financing (bonds, private lenders, etc.) are

unavailable. Cf. 21 P.R. Laws Ann. § 4051(h) (municipalities have

the power to "[c]ontract loans . . . and incur debts in the form of

borrowings, bond issues or notes"). In the plaintiffs' words, the

Town's "responsibility is to fund payment of the judgment, and to

do so by whatever financing means will accomplish appropriate

objectives of the [Town], including balancing the budget."

The Town's remaining arguments based on Puerto Rico law

are also unavailing. The Town says that the budget-inclusion

orders are inconsistent with Puerto Rico law prohibiting the

attachment or garnishment of public funds. But a court does not

"attach" public funds by ordering that future budgets take account

added)). The maximum fine under § 4912 is only $5,000. Id. And
it is far from clear that the Town would "violate[]" Puerto Rico
law by including the judgment in its budget -- on the contrary, it
seems more likely that the Town would violate Puerto Rico law by
failing to do so. See § 4303(c).

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of a court judgment, as the Puerto Rico Supreme Court has

recognized. See Librotex, Inc. v. P.R. Aqueducts & Sewer Auth.,

138 D.P.R. 938, 942-43 (P.R. 1995) (direct attachment of the funds

of a public agency was impermissible, but an equitable order

requiring the judgment to be included in the agency's next budget

cycle was acceptable). The Town further argues that the budget-

inclusion orders in this case were tantamount to a supersedeas bond

requirement, and under Puerto Rico law, municipalities are exempt

from such requirements. See P.R. R. Civ. P. 69.6(a). The analogy

fails: Puerto Rico law not only permits but requires

municipalities to include court judgments in their annual budgets.

§ 4303(c). Moreover, by defendants' logic, virtually any form of

judgment security required of a municipality would be tantamount to

a supersedeas bond and, thus, precluded by Puerto Rico law. We do

not think that Puerto Rico law so insulates municipalities from

their judgment creditors.

We hold that the district courts' budget-inclusion orders

were consistent with Puerto Rico law and, accordingly, not in

violation of Rule 69(a).10

10
We likewise hold that the district court did not err in
denying the individual defendants' request, as part of the
defendants' August 13, 2003 motion, to be released from the
supersedeas bond requirement. Vera and Gonzalez offered no basis
for that request in the district court. To the extent the motion
was predicated on Rule 62(f), the issue is now moot for the reasons
explained above. If there was another basis for their objection to
the bond requirement, Vera and Gonzalez have waived it by failing
to argue the point on appeal. See Smilow v. S.W. Bell Mobile Sys.,

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 3. Amount of the Budget-Inclusion Order

Defendants' second argument is that the district court

abused its discretion in the amount that it ordered the Town to

include in its budget. The February 2003 budget-inclusion order

required the Town to include the entire judgment ($6,956,400) in

its 2003-2004 budget. The Town says that, at a minimum, the court

should have reduced this sum by $600,000, the amount of the

punitive damages awards against the individual defendants in their

personal capacities. Cf. City of Newport v. Fact Concerts, Inc.,

453 U.S. 247, 271 (1981) (municipalities are immune from punitive

damages in § 1983 suits).

Defendants appear to be correct. We say "appear to be"

because there are ambiguities in the record concerning the

calculation and breakdown of the judgment. The parties have not

directly addressed this issue in their briefs. We note that in the

plaintiffs' first motion to execute on the judgment, they sought an

order compelling the Town alone to pay $6,406,400 plus fees, costs

and interest. It is unclear how plaintiffs derived that number.

The district court, in its various orders, attributed to the Town

a somewhat lower sum: $6,356,400, which is the total judgment of

$6,956,400 minus the $600,000 in punitive damages. Not

surprisingly, the defendants employ the district court's numbers in

their appellate papers, but they too filed papers in the district

Inc., 323 F.3d 32, 43 (1st Cir. 2003).

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court using the $6,406,400 number. Neither party offers an

explanation for the $50,000 difference. Perhaps it reflects an

estimate of the interest owed -- we cannot tell.

To make matters more confusing, the defendants say that

$1.5 million of the judgment attributed to the Town was actually an

award of due-process damages against Gonzalez personally. But that

is far from clear on the record before us. Certain language in the

district court's judgment does suggest (though it does not

explicitly state) that due process damages were assessed against

Gonzalez in her personal capacity. Yet elsewhere the court treats

the $1.5 million award against Gonzalez as a liability of the Town.

This issue is plainly relevant to the budget-inclusion order, as it

affects the amount of the Town's liability, and we are surprised

that none of the parties has addressed it explicitly.11

Given the gaps in the record, we will remand to the

district court to reconsider the proper amount of the budget-

inclusion order. If the $6,956,400 sum in the February 2003

budget-inclusion order included the punitive damages awards, then

defendants are correct and the sum should be reduced. Similarly,

the Town is not liable for other damages awarded solely against the

11
We are also surprised that counsel for Gonzalez in her
personal capacity joined in the defendants' joint brief, if in fact
(as that brief asserts) the Town's position is that Gonzalez is
individually liable for the $1.5 million in due-process damages.
The conflict of interest between the Town and Gonzalez on this
issue is apparent.

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individual defendants in their personal capacities, if any. We

note that the Town remains liable for the $96,300 in fees and costs

awarded by the district court. In addition, the Town is liable for

post-judgment interest, and at least an initial portion of that

award should be calculated and included in the next budget-

inclusion order as a specific sum. We are confident that the

district court, with the assistance of the parties, will be able to

work through these details on remand.12

C. The Contempt Finding and Reinstatement Sanction Order

Defendants also appeal what they call the "Reinstatement

Contempt Sanction Order." It is not clear to us whether the

defendants are attempting to appeal from the finding of contempt

itself or, as they more clearly argue, from the district court's

choice of reinstatement as a sanction.

1. Contempt Finding

To the extent defendants challenge the contempt finding

itself, we reject their arguments. Defendants contend, for

example, that the district court had no jurisdiction to issue the

12
This remand is not a license to defendants to attack the
merits of the judgment. Even before this court, defendants have
asserted a series of arguments that are not defenses to execution
but rather attacks on the amount of the damages awarded. For
example, the Town argues that Puerto Rico law provides a damages
cap for municipalities and that this damages cap should apply in
§ 1983 actions in federal court. It is far too late in the day for
these arguments, which should have been raised during the merits
phase of this case. Defendants would be well-advised to refrain
from reiterating them on remand.

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reinstatement sanction order because the plaintiffs had earlier

appealed the district court's March 8, 2002 denial of

reinstatement, and that appeal was still pending before this court

at the time. It is true that the filing of a notice of appeal

divests the district court of jurisdiction over matters related to

the appeal. United States v. Brooks, 145 F.3d 446, 456-57 (1st

Cir. 1998); United States v. Distasio, 820 F.2d 20, 23 (1st Cir.

1987). But that principle has no bearing on a court's power to

hold a party in contempt for violating a court order related to

execution on a judgment. The federal rules contemplate that,

absent a stay, a victorious plaintiff may execute on the judgment

even while an appeal of that judgment is pending. See, e.g., Fed.

R. Civ. P. 62. If a party violates an unstayed execution order,

the fact that the underlying judgment is on appeal does not deprive

the district court of its normal contempt powers.

Similarly, the contempt finding was valid even if

defendants are correct that they should have received an automatic

stay of the May 2002 budget-inclusion order under Rule 62(f).13

Defendants argue that because (in their view) they were entitled to

a Rule 62(f) stay, the budget-inclusion order should never have

issued, so there was no basis for holding them in contempt. This

argument fails. It is well-settled that a party is not free to

13
Again, we take no view as to whether defendants were
entitled to such a stay.

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violate a court order simply because it believes (correctly or not)

that the order is invalid. Walker v. City of Birmingham, 388 U.S.

307, 320-21 (1967); In re Providence Journal Co., 820 F.2d 1342,

1346 (1st Cir. 1986).

We affirm the district court's finding of contempt.

2. Reinstatement Order

The district court's choice of sanction, however, is a

different matter. The court required the Town to reinstate all

twenty plaintiffs, not at the plaintiffs' request or as relief to

which they were entitled on the merits, but solely as a sanction

for the Town's failure to comply with the court's budget-inclusion

order. The court did so notwithstanding the fact that, in March

2002, the court itself had concluded that ordering reinstatement on

the facts of this case would be "unreasonably burdensome" on the

Town.

The plaintiffs do not now defend the reinstatement order;

in fact, they have filed a motion in the district court to vacate

the reinstatement order and impose alternative sanctions. Because

no party wishes the present reinstatement order to continue in

effect, we vacate it.14 We do so to permit the district court to

hear arguments on alternative sanctions. Plaintiffs have reserved

the right to seek entry of a new reinstatement order by the

14
The plaintiffs ask in their brief that we simply continue
this court's earlier stay of the reinstatement order. We deny that
request.

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district court, if need be, and the defendants have likewise

reserved the right to object to any such order. We entrust the

matter to the discretion of the district judge.

We add this. The defendants have now had nearly thirty

months since the district court's December 2001 judgment to plan

how to meet their obligations should the judgment be affirmed.

They have not done so. On the contrary, they have engaged in what

appears to be a deliberate strategy of obstruction and delay. The

consequences of defendants' initial illegality and continuing

irresponsibility should fall on them. If there are ramifications

under Puerto Rico law for the defendants' failure to meet their

obligations under federal law, so be it -- it is not the function

of the federal courts to extricate defendants from a mess of their

own making. Had defendants applied themselves with diligence to

addressing the problem, rather than engaged in willful blindness,

we doubt this matter would be before us for the fourth time.

III.

The district court's denial of the defendants' August 13,

2003 motion is affirmed, but the amount of the budget-inclusion

order is vacated. The matter is remanded to the district court for

entry of a budget-inclusion order that (i) excludes any amounts

solely owed by Vera or Gonzalez personally, (ii) includes the

$96,300 fees and costs award, and (iii) includes an appropriate and

specific sum as an initial award of post-judgment interest. The

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district court's finding of contempt is affirmed, but the

reinstatement sanction is vacated and the matter is remanded to the

district court for consideration of alternative sanctions.

Costs of these appeals are awarded to plaintiffs.

So ordered.

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