United States Court of Appeals
For the First Circuit
No. 06-1968
ALEJANDRO CABÁN HERNÁNDEZ ET AL.,
Plaintiffs, Appellants,
v.
PHILIP MORRIS USA, INC. ET AL.,
Defendants, Appellees.
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF PUERTO RICO
[Hon. Jaime Pieras, Jr., Senior U.S. District Judge]
Before
Lipez, Circuit Judge,
Selya, Senior Circuit Judge,
and DiClerico,* District Judge.
Iris Y. Valentín-Juarbe, with whom Nicolas Nogueras-Cartagena
was on brief, for appellants.
Radamés A. Torruella, with whom Miguel A. Rivera-Arce and
McConnell Valdés were on brief, for appellees.
May 1, 2007
__________
*Of the District of New Hampshire, sitting by designation.
SELYA, Senior Circuit Judge. This is an employment
discrimination case in which three ousted employees challenge the
district court's entry of summary judgment in favor of their
quondam employer. After close perscrutation of a substantial
record, we conclude (i) that we have jurisdiction over this appeal;
(ii) that the lower court permissibly refused to consider the
employees' counter-statement of material facts; (iii) that the
employees knowingly and voluntarily released their claims (under
both federal and local law) coincident with the termination of
their employment; (iv) that those releases were valid, enforceable,
not the product of coercion, and dispositive of the claims asserted
by the employees here; and (v) that, in the absence of viable
claims on the part of the employees, the derivative claims mounted
by their spouses cannot stand. Accordingly, we affirm the entry of
summary judgment.
I. BACKGROUND
Prior to 2003, plaintiffs-appellants Alejandro Cabán
Hernández (Cabán), Peter Villano Blas (Villano), and José Colón
Luna (Colón) toiled in Puerto Rico for defendant-appellee Philip
Morris USA, Inc. During that year, Philip Morris undertook a
corporate restructuring, the aim of which was to align its Puerto
Rico operations more closely with its operations in the continental
United States. As part and parcel of this reorganization, Philip
Morris notified Cabán, Villano, and Colón (collectively, the
-2-
appellants), early in 2004, that their positions were to be
eliminated.
Philip Morris afforded the appellants an opportunity to
interview for jobs within the restructured enterprise. But there
was a rub: Spanish was the appellants' native tongue — among them,
only Villano was fluent in English — and the new posts required an
ability to communicate effectively in English.
In May of 2004, all three appellants participated in an
English-language interview process. Cabán and Colón were not
offered new positions. Villano received an offer but for a job
that he deemed unsuitable. The employment of all three men with
Philip Morris ended shortly thereafter. They did, however, elect
to receive special severance benefits (a subject to which we
shortly shall return).
In March of 2005, the appellants brought a civil action
in Puerto Rico's federal district court. In their complaint, they
alleged that Philip Morris had discriminated against them on the
basis of their national origin, in violation of 42 U.S.C. §§ 2000e
to 2000e-17 (Title VII) and P.R. Laws Ann. tit. 29, § 146 (Law
100). They claimed, among other things, that Philip Morris had
fostered a work environment that was discriminatory, hostile, and
harassing as to Spanish-speaking employees; that they had been
trimmed from the payroll as a direct result of this discriminatory
animus; and that the company had imposed the English-speaking
-3-
requirement for the revamped positions as a means of ensuring their
departures.
The appellants' wives joined in the suit. They brought
claims under Article 1802 of the Civil Code, P.R. Laws Ann. tit.
31, § 5141, averring that Philip Morris's discriminatory actions
toward their husbands had caused them (the wives) mental anguish
and emotional distress.
Philip Morris denied the material allegations of the
complaint and pleaded an affirmative defense of release. See Fed.
R. Civ. P. 8(c). At the conclusion of discovery, it moved for
summary judgment. See Fed. R. Civ. P. 56(c). In connection with
that motion it submitted, as required by the district court's local
rules, a statement of material facts not in dispute, adorned with
record citations. See D.P.R.R. 56(b). Although the appellants
seasonably opposed the motion, the district court determined that
the counter-statement of facts upon which their opposition relied
was not in conformity with the local rules. See D.P.R.R. 56(c).
Consequently, the court deemed Philip Morris's statement of facts
admitted. See D.P.R.R. 56(e).
In due course, the district court granted the summary
judgment motion, concluding that the appellants had executed valid
releases when they left their employment and that those releases
barred the prosecution of the claims asserted in the complaint.
This timely appeal ensued.
-4-
II. APPELLATE JURISDICTION
The appellants suggest for the first time in their reply
brief that we lack jurisdiction over their appeal because the
district court's grant of summary judgment did not finally dispose
of all claims against all parties. Ordinary raise-or-waive rules
do not apply with respect to claims that a court lacks subject
matter jurisdiction. See, e.g., Am. Fiber & Finishing, Inc. v.
Tyco Healthcare Grp., 362 F.3d 136, 138-39 (1st Cir. 2004); see
also Espinal-Dominguez v. Puerto Rico, 352 F.3d 490, 495 (1st Cir.
2003) (explaining that "[b]ecause federal courts are powerless to
act in the absence of subject matter jurisdiction, [they] have an
unflagging obligation to notice jurisdictional defects" whenever
such defects come to their attention). Accordingly, we begin with
the jurisdictional objection.
To put this objection into perspective, we must canvass
the record. In their complaint, the appellants named what appeared
to be two discrete corporations, Philip Morris USA, Inc. and Philip
Morris-Puerto Rico, as defendants. Both were served but only the
former answered the complaint and, later, moved for summary
judgment.
Building on this foundation, the appellants posit that
they are entitled to a default judgment against Philip Morris-
Puerto Rico. See Fed. R. Civ. P. 55(a). They further posit that
the existence of this loose end deprives us of appellate
-5-
jurisdiction.1 See 28 U.S.C. § 1291; Fed. R. Civ. P. 54(b); see
also Alstom Caribe, Inc. v. Geo. P. Reintjes Co., ___ F.3d ___, ___
(1st Cir. 2007) [No. 06-2386, slip. op. at 7] (explaining that to
be "final" and, thus, immediately appealable, a decision must be
one that "ends the litigation on the merits and leaves nothing for
the court to do but execute the judgment") (quoting Catlin v.
United States, 324 U.S. 229, 233 (1945)).
This nascent jurisdictional objection does not survive
scrutiny. The record reflects that, shortly after suit was
commenced, the district court scheduled its initial case-management
conference. See Fed. R. Civ. P. 16(b). In preparing for that
conference, the parties stipulated that Philip Morris USA
maintained a branch office in Puerto Rico and did business in
Puerto Rico under the name "Philip Morris-Puerto Rico." The clear
import of this stipulation was that Philip Morris-Puerto Rico was
not a separate corporate entity but, rather, a division of Philip
Morris USA.
The district court accepted this stipulation and, in
subsequent orders, referred to the employer as "Philip Morris USA."
1
The appellants claim that they were first alerted to this
issue by the naming of both Philip Morris USA and Philip Morris-
Puerto Rico on the cover of Philip Morris's brief in this court and
by the mention of both appellations in the corporate disclosure
statement. See Fed. R. App. P. 26.1. Because ordinary principles
of waiver do not apply to possible defects in a court's subject
matter jurisdiction, see Am. Fiber & Finishing, 362 F.3d at 138-39,
we do not test the authenticity of this claim.
-6-
Consistent with this understanding, the court, in granting summary
judgment, noted that Philip Morris's Puerto Rico branch had been
merged into Philip Morris USA several years before the occurrence
of the events giving rise to this suit. See Cabán Hernández v.
Philip Morris USA, Inc., No. 05-1284, slip op. at 10 (D.P.R. Apr.
27, 2006) (unpublished).
The parties' stipulation resolves the jurisdictional
objection. Stipulations "eliminate the need for proving
essentially uncontested facts," thus husbanding scarce judicial
resources. Gomez v. Rivera Rodríguez, 344 F.3d 103, 120 (1st Cir.
2003). Since stipulations are important to the efficient and
expeditious progress of litigation in the federal courts, parties
are encouraged to stipulate as to factual matters. See TI Fed.
Credit Union v. DelBonis, 72 F.3d 921, 928 (1st Cir. 1995). Once
a party has entered into a stipulation, however, that party is not
at liberty to renege unilaterally on a stipulated fact without
leave of court, which ordinarily will not be granted absent a
showing of good cause. See Am. Honda Motor Co. v. Richard
Lundgren, Inc., 314 F.3d 17, 21 (1st Cir. 2002); TI Fed. Credit
Union, 72 F.3d at 928.
Here, the trial court correctly read the stipulation to
mean that there was only one defendant. Cf. Gomez, 344 F.3d at 121
("Determining the meaning and effect of a stipulation presents a
question of law . . . ."). The appellants have shown nothing that
-7-
would constitute good cause or otherwise justify relief from the
stipulation. Certainly, the mere mention of the appellation
"Philip Morris-Puerto Rico" in the corporate disclosure statement
does not afford a basis for undoing the stipulation. The use of
the name on the brief cover is even less informative: for aught
that appears, the brief cover merely replicated the caption of the
case as set out in the appellants' complaint. In all events, that
loose language cannot be used as a wedge to split an organization
that the parties have agreed is a single corporation into two
separate corporate entities.
To cinch matters, it is evident that Philip Morris relied
on the stipulation and, thus, did not file an answer to the
complaint on behalf of Philip Morris-Puerto Rico. Under the
circumstances, that reliance was both reasonable and detrimental.
A party's detrimental reliance, reasonably undertaken, weighs
heavily in the balance when the adverse party attempts to revoke a
factual stipulation. See Am. Honda, 314 F.3d at 21. That weight
grows even more ponderous when, as in this case, the revocation
attempt is not made until after judgment has entered and the case
is on appeal.
Having completed our canvass of the record, we conclude,
without serious question, that the stipulation must be accorded
full force and effect. That conclusion, in turn, ends the
jurisdictional inquiry. Because the parties stipulated that Philip
-8-
Morris-Puerto Rico is not an independent entity, the district
court's entry of summary judgment in favor of Philip Morris USA,
Inc. was a final order that disposed of all claims against all
parties to the case. Accordingly, we have jurisdiction to
entertain the appeal. See 28 U.S.C. § 1291; see also Alstom
Caribe, ___ F.3d at ___ [slip op. at 12].
III. THE MERITS
We turn now to the merits. Before addressing the
district court's decision, we must plot the contours of the summary
judgment record. Then, after limning the summary judgment
standard, we test the viability of the appellants' statements of
claim. At that stage, we divide our analysis into three segments,
discussing separately the appellants' Title VII claims, their
claims under Puerto Rico law, and their spouses' claims.
A. Summary Judgment Record.
The appellants assert that their counter-statement of
material facts, submitted as part of their opposition to Philip
Morris's summary judgment motion, should be considered an integral
part of the summary judgment record. They base this assertion on
a claim that the district court erred in finding the counter-
statement noncompliant with the local rules. In pertinent part,
those rules require a party opposing a motion for summary judgment
to accept, deny, or qualify each entry in the movant's statement of
material facts paragraph by paragraph and to support any denials,
-9-
qualifications, or new assertions by particularized citations to
the record. See D.P.R.R. 56(c).
What transpired below is not in dispute. The appellants
submitted a timely opposition to the summary judgment motion, but
their counter-statement of material facts did not conform to the
requirements of the local rules. Consequently, the district court,
in accordance with the provisions of Local Rule 56(e), deemed
Philip Morris's statement unopposed and accepted its stated facts
as true.
Before us, the appellants attempt to confess and avoid.
They admit that they did not furnish specific record citations to
support their version of the facts but they nonetheless argue that
their submission of selected excerpts (rather than unexpurgated
documents) minimized the hardship to the district court and, thus,
constituted substantial compliance with the strictures of Local
Rule 56. That argument gives short shrift to the interests at
stake, and we reject it.
We repeatedly have emphasized the importance of local
rules similar to Local Rule 56. Such rules were inaugurated in
response to this court's abiding concern that, without them,
"summary judgment practice could too easily become a game of cat-
and-mouse." Ruiz Rivera v. Riley, 209 F.3d 24, 28 (1st Cir. 2000).
Such rules are designed to function as a means of "focusing a
district court's attention on what is — and what is not — genuinely
-10-
controverted." Calvi v. Knox County, 470 F.3d 422, 427 (1st Cir.
2006). When complied with, they serve "to dispel the smokescreen
behind which litigants with marginal or unwinnable cases often seek
to hide [and] greatly reduce the possibility that the district
court will fall victim to an ambush." Id.
Given the vital purpose that such rules serve, litigants
ignore them at their peril. In the event that a party opposing
summary judgment fails to act in accordance with the rigors that
such a rule imposes, a district court is free, in the exercise of
its sound discretion, to accept the moving party's facts as stated.
See Cosme-Rosado v. Serrano-Rodriguez, 360 F.3d 42, 45 (1st Cir.
2004); Ruiz Rivera, 209 F.3d at 28.
A review of the record in this case reveals that the
district court acted justifiably in rebuffing the appellants'
proffered counter-statement and crediting Philip Morris's version
of the facts. To begin, the appellants did not admit, deny, or
qualify Philip Morris's assertions of fact paragraph by paragraph
as required by Local Rule 56(c). Instead, they submitted an
alternate statement of facts in narrative form.2 This failing
alone would have warranted a "deeming" order.
2
While this might have been permissible if the appellants were
content to accept Philip Morris's statement of facts as true but
wished to augment it with additional facts, see Euromodas, Inc. v.
Zanella, Ltd., 368 F.3d 11, 15 (1st Cir. 2004), that was not the
appellants' goal.
-11-
To make matters worse, the appellants did not adhere to
the record citation requirement. Some assertions in the
appellants' counter-statement were completely unsupported by any
hint of a record citation. Numerous other "facts" memorialized in
their counter-statement were supported only by general references
to multiple exhibits (e.g., a reference to "Exhibits 1 through 6"),
yet those exhibits — deposition transcripts and answers to
interrogatories — collectively comprised hundreds of pages. This
is far removed from compliance with the requirement that "[a]n
assertion of fact . . . shall be followed by a citation to the
specific page or paragraph of identified record material supporting
the assertion," D.P.R.R. 56(e) (emphasis supplied), and leaves the
district court to grope unaided for factual needles in a
documentary haystack.
Rules like Local Rule 56 are meant to ease the district
court's operose task and to prevent parties from unfairly shifting
the burdens of litigation to the court. The appellants' submission
contravened the local rule and, thus, thwarted this salutary
purpose. Given this significant noncompliance, the district court
did not abuse its discretion in deeming Philip Morris's statement
of facts unopposed and crediting the factual assertions contained
therein.
-12-
B. Summary Judgment Standard.
Orders granting summary judgment engender de novo review.
Calvi, 470 F.3d at 426. That review is confined to the record that
was properly before the district court at the time of its decision.
Mandel v. Boston Phoenix, Inc., 456 F.3d 198, 204 (1st Cir. 2006).
Here, then, our task is to determine whether the district court
appropriately granted summary judgment based on the facts as set
forth in Philip Morris's moving papers.
We will affirm the entry of summary judgment if — and
only if — the facts as stated show beyond any legitimate question
the movant's entitlement to judgment as a matter of law. See
DePoutot v. Raffaelly, 424 F.3d 112, 117 (1st Cir. 2005); see also
Fed. R. Civ. P. 56(c). In marshaling the facts for this purpose,
we must draw all reasonable inferences in the light most favorable
to the nonmovant. See Calvi, 470 F.3d at 426. That does not mean,
however, that we ought to draw unreasonable inferences or credit
bald assertions, empty conclusions, rank conjecture, or vitriolic
invective. See Cadle Co. v. Hayes, 116 F.3d 957, 960 (1st Cir.
1997); Medina-Muñoz v. R.J. Reynolds Tobacco Co., 896 F.2d 5, 8
(1st Cir. 1990).
C. Title VII Claims.
Five years ago, we held squarely that rights conferred by
Title VII, like many other rights created by federal statutory law,
may be surrendered through the execution of a release. See
-13-
Melanson v. Browning-Ferris Indus., Inc., 281 F.3d 272, 274 (1st
Cir. 2002). The waiver must, of course, be knowing and voluntary.
Id. Because release is an affirmative defense, see Fed. R. Civ. P.
8(c), the burden rests with the releasee to establish that a
particular release satisfies these criteria. See id. at 276; see
also Rivera-Flores v. Bristol-Myers Squibb Carib., 112 F.3d 9, 12
(1st Cir. 1997).
Conducting this inquiry requires the use of a wide-angled
lens. We must, therefore, evaluate the totality of the
circumstances in order to determine whether an employer has
adequately demonstrated the knowing and voluntary character of an
employee's asserted waiver. See Smart v. Gillette Co. Long-Term
Disab. Plan, 70 F.3d 173, 181 (1st Cir. 1995). We have mentioned
certain factors that typically inform this inquiry. These include:
(1) the plaintiff's education, business
experience, and sophistication; (2) the
parties' respective roles in deciding the
final terms of the arrangement; (3) the
agreement's clarity; (4) the amount of time
available to the plaintiff to study the
agreement before acting on it; (5) whether the
plaintiff had independent advice — such as the
advice of counsel — when [signing] the
agreement; and (6) the nature of the
consideration tendered in exchange for the
waiver.
Id. at 181 n.3. This list, however, is intended to be illustrative
rather than exhaustive. See id. at 181. As long as the
circumstances viewed in the aggregate show that the waiver was
knowing and voluntary, the employer need not establish that every
factor cuts in its favor.
-14-
In this instance, a canvass of the six Smart factors
shows, beyond hope of contradiction, that each appellant's waiver
was knowing and voluntary. We explain briefly.
One Smart factor — the second — favors the appellants:
Philip Morris unilaterally crafted the terms of the proposed
settlement. That factor, however, is of only modest import here;
it might have cut more sharply in the appellants' favor had there
been evidence that they attempted to negotiate the terms of the
release but were rebuffed. The summary judgment record, however,
discloses no such evidence.
The first Smart factor strongly favors Philip Morris.
Although the appellants' educational backgrounds vary, each of them
has a high-school diploma and some educational instruction beyond
the high-school level. Cabán worked for Philip Morris for over
three decades; Colón worked there for nearly a quarter-century; and
Villano, after spending almost a decade in a comparable position
with another firm, worked approximately five years at Philip
Morris. All three held responsible supervisory positions, and each
applied for a new position that required substantial business
acumen. Given the lack of any evidence to the contrary, a
reasonable factfinder scarcely could conclude either that the
appellants were insufficiently sophisticated to waive their claims
or that those waivers were the product of anything other than free
will.
-15-
The third Smart factor also weighs heavily in the
employer's favor. The releases, all of which were substantially
similar, were crystal clear. Each release stated explicitly that
the signer was waiving "any claims, known or unknown, promises,
causes of action, or similar rights" against Philip Morris arising
"under the guise of many different laws (including federal, state
and local laws and statutes, executive orders, rules and
regulations, other administrative guidelines, and Common Law legal
doctrines)." This language hardly could have been more direct or
to the point.
The fourth, fifth, and sixth Smart factors push in the
same direction. The releases and other documents were furnished to
the appellants both in English and Spanish. The company then gave
the appellants a significant amount of time — forty-five days —
within which to decide whether to sign the releases. The
appellants were advised, both orally and in writing, of their right
to consult with counsel before making a decision. This opportunity
was not squandered; two of the appellants sent the document package
(including the proffered release) to a lawyer before executing the
release. The third appellant (Villano) spoke to an attorney before
accepting the company's offer, but did not submit the critical
documents for the attorney's perusal.
Each appellant elected to take the proffered
consideration and signed a Spanish-language version of the release.
-16-
The releases provided for a seven-day rescission period; that is,
an employee who chose to execute a release had seven days from the
date of execution within which to cancel it. None of the
appellants exercised his right of rescission within the allotted
time frame.
We add, moreover, that the consideration was substantial.
In exchange for signing a release, an employee received a lump sum
equal to three months' salary as well as other benefits (such as
career transition services).
Notwithstanding these indicia of knowledge and volition,
the appellants assert that the packages they received were
confusing, as each package contained both a description of the
severance benefits to which a discharged employee was automatically
entitled as well as a description of the additional benefits that
would inure to him should he opt to sign the proffered release. We
agree that, in an ideal world, a severance package might well
contain completely separate forms for accepting these two types of
emoluments. But employers are required to provide fair notice to
affected employees, not perfect notice. Here, when the entire
package is taken into account, the appellants' argument falters.
The most important reason is that, in a subsection
entitled "Description of the Increased Benefits for Eligible
Employees," the paperwork informed each affected employee, clearly
and conspicuously, that "[i]n addition to all of the benefits
-17-
described above" — that is, in addition to the severance benefits
to which he was entitled — he would, "if [he] sign[ed] the General
Agreement and Release that [was] enclosed," receive the additional
benefits enumerated in the materials. To reinforce this point, the
materials expressly advised each affected employee that the receipt
of severance benefits was not contingent on his execution of the
release. In the circumstances of this case, these caveats
satisfied the employer's obligation to give fair notice.
To say more about the releases themselves would be
supererogatory. The Smart factors overwhelmingly favor a finding
that the appellants knowingly and voluntarily executed the
releases. That one of the six factors tends to favor the
appellants is not enough to tip the summary judgment balance; the
law is clear that no single factor is determinative in evaluating
whether a waiver is knowing and voluntary. See Smart, 70 F.3d at
181. It is sufficient to sustain the validity of a release and the
enforceability of its terms, at the summary judgment stage, that
the relevant circumstances point unerringly toward that result.
The appellants have a fallback position. They asseverate
that, notwithstanding the persuasive force of the Smart factors, a
finding that they acted knowingly and voluntarily is precluded (or,
at least, called into legitimate question) because they were
coerced into signing the releases. In this regard, they complain
that each of them "felt [he] had no other alternative but to sign
-18-
the agreement and general release" due to the "pressure, rage,
indignation, depression, demoralization and confused mental state
[caused] by the hostile, discriminatory work environment" created
by Philip Morris. Appellants' Br. at 44. To drive this point
home, the appellants attempt to draw an analogy to situations in
which an employer has made working conditions so unsavory that
options given to employees become "nothing more than a charade."
Vega v. Kodak Carib., Ltd., 3 F.3d 476, 480 (1st Cir. 1993); see
Young v. Sw. Savs. & Loan Ass'n, 509 F.2d 140, 144 (5th Cir. 1975).
These importunings comprise more cry than wool. The
cases that the appellants cite to support their claim of coercion
are, without exception, constructive discharge cases. In those
instances, the employees claimed that they were choosing between
further service under intolerable working conditions and
resignation. See, e.g., Vega, 3 F.3d at 480. Here, however, there
was no such Hobson's choice: the appellants already had been told
of their impending loss of employment at the time they opted to
waive their rights. Their choice was either to sign the proffered
releases and receive extra benefits or to pursue legal action over
the loss of their jobs. Either way, they would no longer be
subject to the hostile work environment that they claim flourished
at Philip Morris. So viewed, that hostile work environment, even
-19-
if it existed, could not have played a legally significant role in
the appellants' decisions to sign the proffered releases.3
That ends this phase of the matter. For the reasons
elucidated above, we find the case law upon which the appellants
rely to be inapposite and their legal theory untenable.
Accordingly, we reject their claim of coercion and hold that the
district court appropriately granted summary judgment on the Title
VII claims.
D. Law 100 Claims.
Because diversity jurisdiction is present here, see 28
U.S.C. § 1332(a), we also must consider the appellants' claims
under Puerto Rico law.4 The basic premise under which diversity
jurisdiction operates is straightforward: a federal court sitting
in diversity is bound to apply state substantive law.5 See Erie
R.R. Co. v. Tompkins, 304 U.S. 64, 78 (1938); Alternative Sys.
Concepts, Inc. v. Synopsys, Inc., 374 F.3d 23, 32 (1st Cir. 2004).
3
At any rate, the summary judgment record does not appear to
establish a genuine issue of material fact as to the existence of
a hostile work environment.
4
The appellants and their spouses are citizens of Puerto Rico;
Philip Morris is a Virginia corporation that maintains its
principal place of business in that state; and the amount in
controversy exceeds the minimum required for diversity
jurisdiction.
5
For purposes related to diversity jurisdiction, Puerto Rico
is deemed to be the functional equivalent of a state. See 28
U.S.C. § 1332(e); see also Díaz-Rodríguez v. Pep Boys Corp., 410
F.3d 56, 58 (1st Cir. 2005).
-20-
State contract law falls within this sphere. See, e.g., Pritzker
v. Yari, 42 F.3d 53, 65 (1st Cir. 1994). Consequently, the effect
of the releases on the appellants' Law 100 claims must be evaluated
under substantive principles of Puerto Rico law.
As a general rule, "[r]ights 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." P.R. Laws Ann. tit. 31, § 4;
see Ponce Gas Serv. Corp. v. L.R.B., 104 P.R.R. 983, 987 (1976)
("Save when expressly prohibited or restricted by law, rights may
be waived and compromised."). The appellants have not identified
any provision of Puerto Rico's Civil Code, or any specific tenet of
Puerto Rico's case law, that invalidates the releases or undercuts
their efficacy.6 In point of fact, the Puerto Rico courts have
explicitly given their imprimatur to releases of employment
discrimination claims. See, e.g., Marte v. Pegasus Broad., No.
KLAN0400915 (P.R. Cir. Feb. 15, 2005) (English translation
unpublished). As a theoretical matter, then, a release of Law 100
claims is authorized under the law of Puerto Rico.
6
The appellants' casual reference to the prohibition on waiver
in Law 80, P.R. Laws Ann. tit. 29, § 185i, is a red herring. Law
80 creates a right to compensation if an employer dismisses an
employee without just cause. See id. § 185a. Here, however, none
of the appellants has brought a claim under Law 80. Moreover,
although a release of a claim for wages may be void under Puerto
Rico law unless certain prerequisites have been met, see Am.
Colonial Broad. Corp. v. Super. Ct., 94 P.R.R. 270, 274 (1967), the
appellants have not made such a claim.
-21-
The fact that the appellants legally could have released
their Law 100 claims does not mean that they did so here. The
question reduces to whether the documents that they signed actually
effected a release in accordance with Puerto Rico law.
Interpreting Article 1709 of the Civil Code, P.R. Laws Ann. tit.
31, § 4821, the Puerto Rico Supreme Court has enumerated three
requirements for the valid release or settlement of a claim: (i) an
uncertain legal relationship, (ii) an intent to eliminate the
uncertainty, and (iii) reciprocal concessions. See Citibank, N.A.
v. Dependable Ins. Co., 21 P.R. Offic. Trans. 496, 506 (1988). The
releases at issue here satisfy these requirements.
The 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. The language of the
releases signed by the appellants is unarguably intended to
eliminate those uncertainties. And, finally, the parties made
reciprocal concessions: each appellant agreed not to pursue any
legal claims arising out of the failed employment relationship,
while Philip Morris agreed to pay to each a substantial sum that it
was not otherwise obligated to pay and to furnish ancillary
services as well. Thus, the releases were valid settlements of the
Law 100 claims.
-22-
To be sure, the appellants again argue that the releases
are void because they "were deceived and induced into signing
through mistake, deception and duress." Appellants' Br. at 49.
This argument, which we found wanting when the appellants dubbed it
"coercion" and raised it in connection with their Title VII claims,
see supra Part III(C), has no more traction in connection with
their Law 100 claims.
We need not tarry. Although the appellants correctly
point out that Article 1217 of the Civil Code, P.R. Laws Ann. tit.
31, § 3404, renders consent to a settlement void when given "by
error, . . . by intimidation, or deceit," Puerto Rico law presumes
good faith in negotiations. See Citibank, 21 P.R. Offic. Trans. at
512. Wrongdoing or bad faith is never assumed but, rather, must be
proved affirmatively by the party who challenges an agreement based
on an absence of consent. See id. And when examining efforts to
invalidate consent, Puerto Rico courts consider the education,
social background, economic status, and business experience of the
challenger. See Miranda Soto v. Mena Eró, 9 P.R. Offic. Trans. 628,
634 (1980).
In this instance, the appellants are reasonably well-
educated, experienced individuals, all of whom have held
responsible positions in the private sector. Tellingly, they have
presented no significantly probative evidence of deception, duress,
objectively reasonable error, or other circumstances sufficient to
-23-
trigger Article 1217. Put bluntly, this record compels a finding
that the appellants knowingly and voluntarily consented to
releasing their employment-related claims (including their Law 100
claims).
E. Spousal Claims.
The final argument advanced in this appeal relates to
negligence claims propounded by the appellants' spouses under
Article 1802, P.R. Laws Ann. tit. 31, § 5141. The spouses (who
also are appellants in this court) note that they never signed
releases. Based on this premise, they contend that their claims
for damages should not be barred.
Though ingenious, this contention is without merit.
Under Puerto Rico law, close relatives of one who has suffered the
slings and arrows of employment discrimination may invoke Article
1802 as a vehicle for prosecuting a cause of action. See Santini
Rivera v. Serv Air, Inc., 137 D.P.R. 1 (1994). But such a cause of
action is wholly derivative and, thus, its viability is contingent
upon the viability of the underlying employment discrimination
claim. See Marcano-Rivera v. Pueblo Int'l, Inc., 232 F.3d 245, 258
n.7 (1st Cir. 2000); Baralt v. Nationwide Mut. Ins. Co., 183 F.
Supp. 2d 486, 488 (D.P.R. 2002) (citing the court's own translation
of Maldonado Rodríguez v. Banco Cent. Corp., 138 D.P.R. 268
(1995)). Because the district court appropriately granted summary
-24-
judgment on the underlying claims, see supra Parts III(C)-(D), the
spouses' derivative claims cannot succeed.
IV. CONCLUSION
We need go no further.7 The short of it is that this
appeal is properly before us. Upon review, we conclude that the
appropriately configured summary judgment record makes manifest
that the appellants signed clear and unequivocal releases of all
claims against Philip Morris — and did so after having been
afforded fair notice, ample time to consider their options, and an
opportunity to consult with counsel. The district court determined
that those valid and enforceable releases, for which the appellants
received substantial consideration, barred their attempt to assert
employment-related causes of action against Philip Morris, whether
under federal or Puerto Rico law. That determination was legally
correct, as was the district court's concomitant grant of summary
judgment on the claims asserted by the appellants' spouses.
Affirmed.
7
The appellants attempt to raise another ground of appeal,
which relates to the district court's denial of a motion to compel
discovery. We have no occasion to address that assignment of
error: the discovery in question concerns the merits of the
discrimination claims, not the validity of the releases. Because
we have upheld the entry of summary judgment based on the releases,
any discovery dispute related to the merits of the released claims
is moot.
-25-
Cabán Hernández v. Philip Morris USA, Inc.
Court: Court of Appeals for the First Circuit
Date filed: 2007-05-01
Citations: 486 F.3d 1
Copy Citations