Perez Acevedo v. Rivero Cubano

United States Court of Appeals
For the First Circuit

No. 06-2633

FÉLIX PÉREZ-ACEVEDO; IRIS YOLANDA-QUIÑONES; CONJUGAL PARTNERSHIP
PÉREZ-QUIÑONES, d/b/a DON MANUEL POULTRY FARM,

Plaintiffs, Appellants,

v.

LUIS RIVERO-CUBANO; YASENIA FIGUEROA-GUZMÁN; X AND Y,

Defendants, Appellees,

COMMONWEALTH OF PUERTO RICO,
Representing the Agriculture Department,

Defendant.

APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF PUERTO RICO
[Hon. Camille L. Velez-Rive, U.S. Magistrate Judge]

Before
Howard, Circuit Judge,
Stahl and Siler,* Senior Circuit Judges.

Noel Avilés-González for appellants.
Juan P. Rivera-Roman and Juan P. Rivera-Roman Law Firm on
brief, for appellants.
Rosa Elena Pérez-Agosto, Assistant Solicitor General,
Department of Justice, with whom Salvador J. Antonetti-Stutts,
Solicitor General, Mariana D. Negrón-Vargas, Deputy Solicitor
General, and Maite D. Oronoz-Rodrìguez, Deputy Solicitor General,
were on brief, for appellees.

*
Of the Sixth Circuit, sitting by designation.
March 12, 2008
 HOWARD, Circuit Judge. The appellants, who are poultry

farmers, sued the Commonwealth of Puerto Rico and two Commonwealth

officials under 42 U.S.C. § 1983. The farmers' suit claimed that

the defendants denied them certain benefits, in violation of their

due process rights under the Fourteenth Amendment to the United

States Constitution. The plaintiffs also presented claims under

Puerto Rico law, which were joined under supplemental jurisdiction.

The magistrate judge dismissed the claims. We affirm.

I.

Plaintiffs Félix Pérez-Acevedo and Iris Yolanda-Quiñones

operate Don Manuel Poultry Farm, a farm dedicated to the production

and sale of fresh eggs. In 2003, Puerto Rico's Secretary of

Agriculture promulgated a regulation that reorganized production in

the poultry industry. Administrative Order No. 2003-058-Amended.1

As part of the reorganizational scheme, farmers could, on a

voluntary basis, join a production "nucleus" that would allow them

to market products under the label "Del País".2 The order also

provided that nucleus members would receive specific benefits from

Puerto Rico's Department of Agriculture, including loan-guarantee

programs, infrastructure programs, and tax credits.

1
The enabling authority for this regulation was adopted in 1996.
P.R. Laws Ann. tit. 5, §§ 3051-59.
2
"Del País" is a mark of geographic origin that means "From the
Country".

-3-
 The plaintiffs did not join a nucleus, as the Don Manuel

Poultry Farm promotes and distributes its own products and they saw

no business reason to join. As a result, they experienced three

disadvantages: 1) they were denied financial assistance for

expansion of their farm from the Department of Agriculture; 2) they

were charged special fees for inspections conducted by regulatory

agencies; and 3) they were rendered newly ineligible for an

existing supermarket credit program, whereby grocers received tax

credits to buy products from designated local producers.

The plaintiffs filed suit under 42 U.S.C. § 1983 against

the Commonwealth of Puerto Rico and two Commonwealth officials,

former Secretary of the Department of Agriculture Luis Rivero-

Cubano and Deputy Controller of the Fresh Eggs Industry of the

Department of Agriculture Yasenia Figueroa-Guzmán, in their

personal and official capacities.3 The plaintiffs alleged that the

"Del País" program had violated their rights under the First and

Fourteenth Amendments to the United States Constitution.4 They

3
The official capacity claims and those against the Commonwealth
were dismissed early on in the litigation and are not part of this
appeal.
4
On appeal, the plaintiffs assert that the actions of the
defendants deprived them of a property interest in violation of the
"Fifth and/or Fourteenth Amendment." As the Fifth Amendment was
not mentioned in their complaint, we do not consider it now. See
General Motors Corp. v. Darling's, 444 F.3d 98, 113 (1st Cir. 2006)
(court of appeals will not entertain legal theories not raised
below).

-4-
also asserted claims under Puerto Rico's Constitution and P.R. Laws

Ann. tit. 31, §§ 5141-42. See 28 U.S.C. § 1367.5

The defendants' motion for judgment on the pleadings,

under Fed. R. Civ. P. 12(c), was granted, and this appeal followed.

II.

We review the grant of judgment on the pleadings de novo.

Mongeau v. City of Marlborough, 492 F.3d 14, 17 (1st Cir. 2007).

A motion for judgment on the pleadings is treated much

like a Rule 12(b)(6) motion to dismiss. Curran v. Cousins, 509

F.3d 36, 43-44 (1st Cir. 2007). "Because [a Rule 12(c)] motion

calls for an assessment of the merits of the case at an embryonic

stage, the court must view the facts contained in the pleadings in

the light most favorable to the nonmovant and draw all reasonable

inferences therefrom . . . ." R.G. Fin. Corp. v. Vergara-Nunez,

446 F.3d 178, 182 (1st Cir. 2006). Under Bell Atlantic v. Twombly,

127 S. Ct. 1955, 1965 (2007), to survive a Rule 12(b)(6) motion

(and, by extension, a Rule 12(c) motion) a complaint must contain

factual allegations that "raise a right to relief above the

speculative level, on the assumption that all the allegations in

the complaint are true . . . ." Id. at 1965 (internal citation

omitted).

5
The supplemental state law claims were dismissed without
prejudice.

-5-
 From this posture, we consider the plaintiffs' claims.

A section 1983 violation occurs when an official acting under color

of state law acts to deprive an individual of a federally protected

right.6 Maymi v. Puerto Rico Ports Authority, ___ F.3d ___, 2008

WL 240376 at *3 (1st Cir. Jan. 30, 2008). Here, we assume that all

facts in the complaint are true. We must determine whether, on

those facts, the plaintiffs would be able show "above the

speculative level" that such a deprivation occurred. Bell

Atlantic, 127 S. Ct. at 1965.

This appeal centers on the plaintiffs' procedural due

process claims.7 The plaintiffs make an initial argument that the

court failed to consider their procedural due process claim in its

order granting the motion for judgment on the pleadings.8 Although

the dismissal order mentions the due process argument several

times, the order does not analyze the claim. Nevertheless, we have

considered the plaintiffs' procedural due process claim and find

that it fails on the merits. See Torromeo v. Town of Fremont, 438

6
For the purposes of a section 1983 analysis, Puerto Rico is
considered a state. Redondo-Borges v. United States Dep't of
Housing and Urban Dev., 421 F.3d 1, 7 (1st Cir. 2005).
7
The plaintiffs have waived the First Amendment and equal
protection claims asserted below by not raising those claims before
us. See United States v. Zannino, 895 F.2d 1, 17 (1st Cir. 1990).
8
The defendants argue that the due process claim was asserted for
the first time on appeal. But the plaintiffs did assert a due
process violation in their complaint, albeit without great detail,
and also argued the due process issue in their opposition to the
motion for judgment on the pleadings.

-6-
F.3d 113, 118 (1st Cir. 2006) (under de novo review we may affirm

the court below on any basis made apparent from the record).

The test for a procedural due process violation requires

the plaintiffs to show first, a deprivation of a protected property

interest, and second, a denial of due process. To meet the first

prong and show that a "statutorily created benefit" is a property

interest, "a person 'must have more than a unilateral expectation

of it. He must, instead, have a legitimate claim of entitlement to

it.'" Coyne v. City of Somerville, 972 F.2d 440, 443 (1st Cir.

1992) (quoting Board of Regents v. Roth, 408 U.S. 564, 577 (1972)).

In order to be "legitimate," the entitlement must be grounded in

some statute, rule, or policy. Roth, 408 U.S. at 576.

The complaint did assert an entitlement to the "benefits,

credits and incentives" the Don Manuel Poultry Farm received prior

to the enactment of the nucleus program, but whether that

entitlement is grounded in state law is less clear. The complaint

referenced two different sources of state law: 1) a tax credit

program; and 2) a 2001 statute regarding financial assistance for

farmers.

The tax credit program, P.R. Laws Ann. tit. 13, § 8440f,

does not confer a property interest upon the plaintiffs: the tax

credits belong to supermarkets, not farmers. See Town of Castle

Rock v. Gonzales, 545 U.S. 748, 767 (2005) (indirect benefits are

not protected property interests.)

-7-
 The plaintiffs' other claim, grounded on an asserted

entitlement to financial assistance based on the 2001 statute,

fares no better. First of all, the claim is not argued on appeal,

and is thus waived. Zannino, 895 F.2d at 17. Second, the

complaint's reference to the statute lacks identifying information

such as a citation or an English language title.9 Conceivably, the

statute grants the plaintiffs a property interest in the financial

assistance. See, e.g., Mard v. Town of Amherst, 350 F.3d 184, 189

(1st Cir. 2003) (finding property interest in firefighter's injury

leave benefits based on Massachusetts law); PFZ Props., Inc. v.

Rodriguez, 928 F.2d 28, 30-31 (1st Cir. 1991) (assuming property

interest in building permit based on Puerto Rico law). But to

assume an entitlement grounded in state law from a complaint that

makes scant reference to an insufficiently identified statute would

go against Bell Atlantic's admonition that a complaint's

allegations must be more than "speculative." 127 S. Ct. at 1965.

We decline to make that assumption here.

Even were we to assume that the plaintiffs had a

protected property interest in financial assistance, to prevail in

their claim they would need to demonstrate a denial of due process.

In this regard, the complaint does not assert that Puerto Rico's

9
"It is well settled that federal litigation in Puerto Rico [must]
be conducted in English." González-De-Blasini v. Family Dep't, 377
F.3d 81, 88 (1st Cir. 2004) (citation and internal quotation marks
omitted).

-8-
procedures in the administration of financial assistance, or in any

other area, violated due process. In their opposition below and in

their appellate brief, however, the plaintiffs reference Puerto

Rico's Uniform Administrative Procedure Act ("UAPA"), P.R. Laws Ann.

tit. 3, §§ 2101-2201, to suggest that they were entitled to a

hearing upon denial of their request for financial assistance. They

do not, however, provide any analysis of the statute to support the

contention that a hearing was required.10

The UAPA provides procedural safeguards for actions

undertaken by Puerto Rico's administrative agencies, but carves out

an exception for certain types of actions, including administration

of loans and subsidies. P.R. Laws Ann. tit. 3, § 2151. Those

actions are considered "informal non-quasi judicial procedures" and

there is no entitlement to formal procedures such as hearings. Id.

The only procedural right available in the case of informal

10
Consideration of another provision mentioned in the plaintiffs'
opposition, 2002 regulation No. 6398, is waived. The plaintiffs
claim that this regulation establishes a framework for providing
financial assistance to farmers. But the regulation is not in the
record, and no English translation is readily available. See
González-De-Blasini, 377 F.3d at 88. The plaintiffs did not file
a motion to supplement the record with this regulation at any
point, nor did they request that this court take judicial notice of
the regulation. Although the plaintiffs discussed the regulation
at oral argument, they neither identified it nor discussed it in
their appellate brief. While a 2001 financial assistance
regulation is mentioned in the plaintiffs' complaint, they have
provided this court with little or no basis to conclude that the
two regulations are one and the same, and no developed
argumentation as to either regulation on appeal. Reliance on 2002
regulation No. 6398 is therefore waived. Zannino, 895 F.2d at 17.

-9-
procedures is the right to petition for reconsideration by filing

a motion within 20 days of an adverse decision. Id. § 2165. Here,

the Department of Agriculture's denial of benefits to the plaintiffs

was an informal procedure. The plaintiffs do not allege that they

requested and were denied reconsideration. In the absence of any

developed argument that the UAPA entitled them to a hearing despite

its express language to the contrary, the plaintiffs' claim that

they were entitled to a hearing fails, as well.

For the above reasons, the plaintiffs have not shown a

denial of rights secured by the Constitution, and as such the motion

for judgment on the pleadings was properly granted.11

Affirmed.

11
The plaintiffs also argued that the court erred in allowing the
motion for judgment on the pleadings to be filed after a pre-
existing deadline. The original deadline to file dispositive
motions was October 15, 2005, and the defendants did not file their
motion until June 27, 2006. In late 2005, both parties consented
to have the case tried by a magistrate judge, who, in response to
delays and rescheduling requests, issued a new scheduling order and
set a new date for trial of August, 2006. The magistrate judge did
not specifically set a new deadline for dispositive motions. There
was no abuse of discretion in the decision to allow the motion.
Judges have "great latitude" to exercise authority in matters of
case management. Rosario-Diaz v. Gonzalez, 140 F.3d 312, 315 (1st
Cir. 1998) (quoting Jones v. Winnepesaukee Realty, 990 F.2d 1, 5
(1st Cir. 1993)) (internal quotation marks omitted).

-10-