United States Court of Appeals
For the First Circuit
Nos. 03-1865, 03-1866
ALICIA SANCHEZ-LOPEZ; HECTOR SANTIAGO-GONZALEZ; CONJUGAL
PARTNERSHIP SANTIAGO-VELEZ; ELMER SAURI-SANTIAGO; ERIC BONETA-
MARRERO; NELLY COLON-ORTIZ; IVELISSE VELEZ DE SANTIAGO,
Plaintiffs, Appellees,
v.
MARIA FUENTES-PUJOLS; GOVERNMENTAL DEVELOPMENT
BANK FOR PUERTO RICO; ADA DIAZ-RIVERA,
Defendants, Appellants.
____________________
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF PUERTO RICO
[Hon. José A. Fusté, U.S. District Judge]
Before
Lynch, Circuit Judge,
Lipez, Circuit Judge,
and Garcia-Gregory,* District Judge.
Joan S. Peters, with whom Andrés Guillemard-Noble, Monique
Guillemard-Noble, and Nachman & Guillemard were on brief, for
appellees.
Enrique J. Mendoza Méndez, with whom Mendoza Law Offices was
on brief, for the Governmental Development Bank and the individual
appellants in their official capacities.
Carlos A. Del Valle Cruz, with whom Anabelle Rodriguez and
Ivonne Palerm Cruz were on brief, for the individual appellants in
their personal capacities.
July 15, 2004
*
Of the District of Puerto Rico, sitting by designation.
LYNCH, Circuit Judge. In this political discrimination
case from Puerto Rico, six plaintiffs were awarded a jury verdict
in the total sum of $646,000, plus reinstatement, costs, and
attorneys fees. We vacate the verdict and remand.
The appeal involves both the First Amendment prohibition
on discrimination based on political affiliation, Elrod v. Burns,
427 U.S. 347 (1976), and the Mt. Healthy defense available to
government employers, Mt. Healthy City Sch. Dist. Bd. of Educ. v.
Doyle, 429 U.S. 274 (1977). The Supreme Court's decision in Mt.
Healthy established that even if a plaintiff can demonstrate that
her political affiliation was a substantial factor in the adverse
employment action taken against her, there is no constitutional
violation if the defendant can show both (i) that it would have
taken the same action in any event, and (ii) that it would have
taken that action for reasons that are not unconstitutional. See
Mt. Healthy, 429 U.S. at 286-87. In other words, it is not true
that all a plaintiff needs to show in order to win is that
political discrimination was a motivating reason for the employment
action. The fact that the constitutionally protected activity
played a substantial part in the actual decision to take adverse
employment action does not necessarily amount to a constitutional
violation. Id.
The two distinct questions composing the Mt. Healthy
defense must be answered before a finder of fact may determine that
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political discrimination was the ultimate "but for" cause of an
adverse employment action. In this case, a misapprehension of the
Mt. Healthy defense led to an error in the jury form and
instructions. There is a sufficient likelihood of jury confusion
from those errors that we vacate the judgment for plaintiffs and
remand.
I.
Puerto Rico has two major political parties that dominate
the electoral landscape: the Popular Democratic Party (PDP) and the
New Progressive Party (NPP). Control of the government
periodically switches between the two parties. Entirely too often,
the political party assuming office terminates the employment of
public employees who are affiliated with the party going out of
power and then fills those vacancies with its own members. By the
same token, the outgoing party attempts to secure the continued
tenure of its members in public jobs through a variety of devices,
such as reclassifying policy-type appointments as career positions
or making appointments in violation of Puerto Rico law.
In 1976, the United States Supreme Court held that public
employees have a First Amendment right not to lose their jobs
because of their political affiliation, unless political
affiliation is an appropriate requirement for the effective
performance of the position involved. Elrod, 427 U.S. at 372-73;
see also Cordero v. de Jesus-Mendez, 867 F.2d 1, 9 (1st Cir. 1989).
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That doctrine has been refined over the years. In Branti v.
Finkel, 445 U.S. 507 (1980), for example, the Court held that an
employee need not prove that he or she was coerced into changing
political affiliation in order to prevail under the First
Amendment. Id. at 517. In Rutan v. Republican Party of Ill., 497
U.S. 62 (1990), the Court defined the scope of employment decisions
subject to scrutiny to include promotion, transfer, recall, hiring,
and firing. Id. at 78. And in O'Hare Truck Serv., Inc. v. City of
Northlake, 518 U.S. 712 (1996), the Court extended the protections
of Elrod and Branti to contractors and regular providers of
services to the government. Id. at 726.
In the original political discrimination cases, Branti
and Elrod, there were already findings that the employment
decisions at issue were made on political patronage grounds. See
Branti, 445 U.S. at 510; Elrod, 427 U.S. at 351. The initial issue
presented by those cases was whether historic patronage practices
violated the First Amendment at all. See Elrod, 427 U.S. at 353-
54. The next set of issues concerned whether a plaintiff needed to
show that there had been coercion to change political affiliation,
see Branti, 445 U.S. at 517, and what types of jobs and job changes
(e.g., reappointment) could give rise to claims, see Rutan, 497
U.S. at 68-69. Rutan presented the question whether a First
Amendment claim was stated where a governor had imposed an across-
the-board hiring freeze but had given his "express permission" for
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exceptions to the freeze only for members of his own party, thus
denying hiring, promotion, transfer, and recall to applicants who
were members of other parties. 497 U.S. at 65-66. A majority of
the Court held that a First Amendment claim was indeed stated on
those facts. Id. at 78. For present purposes, it is important
that Rutan did not involve the uniform application of a neutral
employment policy, but rather the selective application of
exceptions according to political party affiliation. See id. at
66.
To the best of our knowledge, the Supreme Court has never
addressed the question whether a political discrimination claim may
be pursued where the new party in power uniformly applies a
personnel practice to all employees -- such as by reviewing all
personnel actions taken during a certain period to determine
whether those actions conformed to local law and undoing them in
every case in which there was a violation.
Despite the thirty years since Elrod, administrations in
Puerto Rico have continued to take employment actions against
public employees because of their political affiliations. With
each change in administration -- at both the commonwealth and
municipal levels -- the federal district courts in Puerto Rico are
flooded with hundreds of political discrimination cases, many of
which are appealed. See, e.g., Gomez v. Rivera Rodriguez, 344 F.3d
103 (1st Cir. 2003) (claims by 24 NPP members who were fired from
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municipal jobs after the PDP won the 2000 mayoral election in
Gurabo); Acevedo-Garcia v. Vera-Monroig, 351 F.3d 547 (1st Cir.
2003) (claims by 82 NPP members who were fired from municipal jobs
after the PDP assumed power following the 1996 mayoral election in
Adjuntas); Acosta-Orozco v. Rodriguez-de-Rivera, 132 F.3d 97 (1st
Cir. 1997) (claims by six PDP members who were fired after the NPP
won the 1992 general election); Kauffman v. P.R. Tel. Co., 841 F.2d
1169 (1st Cir. 1988) (claims by ten NPP members who were fired
after the PDP won the 1984 general election). The practice is so
pervasive that jury awards in cases of political discrimination
threaten to bankrupt local governments in Puerto Rico. See
Acevedo-Garcia v. Vera-Monroig, 368 F.3d 49, 55 n.7 (1st Cir. 2004)
(verdict exceeded town budget). And yet the culture of political
discrimination continues.
II.
The most recent series of political discrimination cases
to reach this court arose out of the 2000 general elections, in
which the PDP prevailed over the NPP at the commonwealth level. As
a result of the 2000 elections, defendant Puerto Rico Government
Development Bank (the "Bank") came under the control of the PDP,
and the Bank's NPP board members were replaced with PDP board
members. Defendant Maria Fuentes-Pujols ("Fuentes") was appointed
the new president of the Bank and, according to plaintiffs,
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defendant Ada Díaz-Rivera ("Diaz") constructively functioned as the
new director of human resources of the Bank.
Under Puerto Rico law, there is a period of time, called
the electoral moratorium period ("veda electoral"), during which no
"movement[s] of personnel" are to take place absent emergencies.
See 3 P.R. Laws Ann. § 1337. The moratorium period comprises the
two months preceding and the two months following a general
election.1 Id. The law was enacted "[f]or the purpose of
guaranteeing the faithful application of the merit principle in
public service during the period before and after elections." Id.
In early 2001, the newly-appointed Fuentes decided to
review all personnel actions taken by the former Bank regime
between August 1, 2000 (one month prior to the beginning of the
electoral moratorium) and the elections in November 2000. For
purposes of this opinion, we will simply refer to that period as
the "review period." Fuentes hired an outside consulting firm
called Applied Management Consulting, Inc. to perform the review,
and a consultant named Ana Bonet conducted the audit. A total of
twenty-three personnel actions had taken place during the review
period, and Bonet's audit determined that all twenty-three were in
violation of the Bank's personnel regulations.
1
In the case of municipalities, the moratorium period
extends until the second Monday of January after the general
elections. 3 P.R. Laws Ann. § 1337.
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The outside audit revealed that the positions of director
of human resources and director of information systems, both
formerly designated as policy-making positions (i.e., political
appointees), had been converted to career positions in violation of
the Bank's personnel regulations. Those conversions affected the
employment status of plaintiffs Hector Santiago-Gonzalez
("Santiago") and Eric Boneta-Marrero ("Boneta"), who held those
respective positions at the time of the conversions. Under the
Bank's personnel regulations, the conversion of a position from
"policy-making" to "career" cannot happen unless there is either a
structural reorganization of the Bank or a significant change in
the functions of the position being converted. According to
Applied Management's audit report, neither prerequisite was
satisfied in this case.
The report also concluded that Santiago's conversion was
invalid for additional reasons. First, because Santiago held the
position at the time the conversion occurred, it was valid under
the regulations only if he had already occupied the position for
six months before the date of the change. But Santiago had only
occupied the position for five months. Second, the announcement of
the position was deficient under the regulations because it listed
the position as requiring a master's degree when in fact the
position actually called for either a master's or a bachelor's
degree. As a result of that deficiency in the announcement, the
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conversion was invalid. And because Santiago had never held a
career position at the Bank, the determination that the conversion
was invalid returned him to a policy-making position from which he
could be, and was, terminated by defendants.
The report concluded that Boneta's conversion, too, was
invalid for an additional reason. Under the regulations, a
conversion may only occur if the incumbent meets the education
criteria for the position. When Boneta's position was converted to
a career position, he had not yet obtained a bachelor's degree,
which was a requirement for holding the position. Boneta, who had
held a career position at the Bank before becoming director of
information systems, was reinstated to that prior career position
once the conversion was determined to be invalid. At trial,
defendants said that they removed both Santiago and Boneta from
their jobs because of the illegality of their appointments.
Plaintiffs countered that the conversions were not
illegal. They claimed that the outgoing administration had
commissioned an outside study on the Bank's classification and
compensation structure and that the Bank's board of directors had
approved the conversions in accordance with the findings of that
study in May 2000. Plaintiffs said that both Santiago and Boneta
had vacated their positions following the conversions, in
accordance with the Bank's regulations, and then had applied for
and had been awarded the respective reclassified positions.
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According to plaintiffs, the specific requirements cited by
defendants -- the six month occupancy requirement and the
educational requirement -- only applied to conversions affecting
incumbents and thus did not apply to either Santiago or Boneta
because they had both vacated their positions.
The Applied Management report commissioned by defendants
concluded that the other twenty-one employees were either
unlawfully appointed to career positions or excessively compensated
in career positions lawfully held.
Among those twenty-one employees was plaintiff Alicia
Sanchez-Lopez ("Sanchez"), who held the position of administrative
assistant. According to the report, her appointment was in
violation of the Bank's regulations because the public announcement
for the position had only been posted for eight days, rather than
for ten days as required. The length of the posting had been
shortened in order to make sure that the position was filled before
the electoral moratorium took effect. Sanchez had not previously
held a career position at the Bank to which she could be
reinstated, so she was fired by the Fuentes regime.
At trial, plaintiffs maintained that there was no
illegality in the appointment. They said that there was an urgent
need to fill the administrative assistant position prior to the
electoral moratorium and that the Bank's president approved the
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shortened posting period as an emergency exception, in compliance
with the regulations.
The Applied Management audit revealed that plaintiff
Nelly Colon-Ortiz ("Colon") was granted a salary that exceeded by
almost fifty percent the lawful maximum compensation for her
position. Following the audit, the Bank corrected her salary to
reflect the maximum compensation allowed for her position.
Plaintiffs argued that Colon's salary was justified by an
exception in the regulations that allows for a higher salary to be
paid where the employee was already receiving a higher salary or
possesses qualifications exceeding those required, or where the
position is difficult to fill.
The audit determined that plaintiff Elmer Sauri-Santiago
("Sauri") occupied a policy-making position in January 1999 and
that, in December 2000, he had exercised his right to be reinstated
to his prior career position as allowed by Puerto Rico law.
However, instead of being reinstated to his prior career position,
Sauri was assigned to a higher position with higher compensation.
As a result, the "reinstatement" effectively amounted to a
promotion, and because it was done during the electoral moratorium,
it was null and void under Puerto Rico law. Consequently,
defendants reinstated Sauri to the position to which he was
entitled under the regulation, and his salary was reduced
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accordingly. Unhappy with his new position, Sauri subsequently
resigned.
Plaintiffs argued at trial that under the regulations,
Sauri had a right to be reinstated to a position "similar or equal
to" his last career position. They contended that the position to
which he was originally reinstated was indeed similar to his
previous career position, but the position to which he was
reinstated by the Fuentes regime was not similar.
At the time of the audit, the Bank had just over 180
employees, of whom about 80% were NPP members and about 20% were
PDP members. There is no evidence that the review process
undertaken by defendants and their outside consultant itself was
applied differentially or in a discriminatory manner; all twenty-
three personnel actions taken during the review period were audited
and corrective action was taken as to all twenty-three employees
affected.
Of the twenty-three employees as to whom corrective
action was taken, the five described above now claim that the
corrective actions that followed the audit were taken against them
due to impermissible political discrimination. The defendants'
rejoinder is that this case is an instance of reverse political
discrimination where the losing party, the NPP, attempted to embed
permanently its employees in public jobs by making appointments and
reclassifying positions in violation of local law. Defendants say
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that they took the corrective actions simply because the personnel
actions taken during the review period were illegal; they claim
that they would have taken the same actions based on such
illegality regardless of the party affiliation of the employees
affected. They say they were trying to reinforce, not defeat, the
merit system. Defendants also argue that two of the plaintiffs,
Santiago and Boneta, do not even have First Amendment claims
because they only held policy-making positions, for which political
affiliation is an appropriate requirement, and the attempts to
convert their positions to career positions were null and void.
III.
The five employees and one of their spouses brought suit
in federal court under 42 U.S.C. § 1983, asserting both due process
claims and First Amendment political discrimination claims. The
suit was brought against the Bank, as well as against Fuentes and
Diaz in both their official and individual capacities. The suit
against the two individuals in their official capacities is in
reality a suit against the Bank. Rosario-Urdaz v. Rivera-
Hernandez, 350 F.3d 219, 222 (1st Cir. 2003). Fuentes and Diaz in
their individual capacities were represented by separate counsel.
The district court dismissed all of plaintiffs' due
process claims on summary judgment. The court held that even if
plaintiffs did have a property interest in their jobs (and thus
could satisfy the first prong of the due process test), they
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nevertheless had not shown that adequate post-deprivation remedies
were unavailable to them (and thus could not satisfy the second
prong of the due process test).
As to the First Amendment claims, the district court
denied defendants' motion for summary judgment on the ground that
defendants' evidence did not compel the conclusion that political
discrimination was not the "but for" cause of the personnel
actions. Jirau-Bernal v. Agrait, 37 F.3d 1, 4 (1st Cir. 1994).
Defendants argue to us, quite erroneously, that the
district court necessarily must have found that the personnel
actions taken during the review period were null and void under
local law in order to enter judgment on the due process claims.
But the district court was clear that it considered there to be a
material dispute of fact as to whether the appointments were null
and void under Puerto Rico law and that it need not resolve that
dispute in order to rule on the summary judgment motion.
Plaintiffs have not cross-appealed the dismissal of their due
process claims.
Defendant Fuentes, the president of the Bank, also filed
a motion for summary judgment, claiming that she was entitled to
qualified immunity. Inexplicably, the motion did not include
defendant Diaz. The district court denied the motion, finding that
there were several disputed issues of fact.
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This left the First Amendment claims to be tried to a
jury. At the trial, which lasted seven days, defendants' position
was that the personnel actions taken during the review period were
null and void under local law and that this had two consequences:
first, it meant that there was insufficient evidence that political
discrimination was a contributing cause to the corrective actions
taken by the new regime, and second, it meant that even if
political discrimination were a motivating factor, defendants would
have authorized the audit in any event and uniformly corrected the
irregular appointments under Puerto Rico law. The second argument
is the Mt. Healthy defense. 429 U.S. at 285-87.
At the close of the evidence, Fuentes moved to renew her
claim for qualified immunity, which was again denied.2 The case
was submitted to the jury, which returned a verdict against
defendants on March 18, 2003. The jury awarded compensatory
damages to plaintiffs as follows: $321,000 to Santiago, $90,000 to
Sauri, $50,000 to Colon, $85,000 to Boneta, $70,000 to Sanchez, and
$10,000 to Ivelisse Velez de Santiago (Santiago's wife). The jury
also assessed punitive damages against Fuentes in the amount of
$2,500 for each employee-plaintiff (a total of $12,500) and against
Diaz in the amount of $1,500 for each employee-plaintiff (a total
of $7,500).
2
Fuentes thereafter made no motion under Fed. R. Civ. P.
50(b) for entry of judgment on qualified immunity.
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The court required plaintiffs to indicate by March 26,
2003 which of them would seek injunctive relief (i.e.,
reinstatement). On March 20, defendants moved to be heard fully on
reinstatement, pointing out that they needed to know who was
seeking reinstatement and on what grounds. On Tuesday, March 25,
the plaintiffs filed their motion for reinstatement, but their
motion was not received by defendants until March 29, a Saturday.
On Tuesday, April 1, defendants filed their opposition to
reinstatement. It was too late: on Monday, March 31, the district
court, without hearing from defendants, had issued the judgment,
which included an order allowing the reinstatement of all five
employee-plaintiffs.
Defendants moved on April 10 to alter or amend the
judgment to deny reinstatement, arguing that they had not been
heard on that issue. On May 5, the court denied the motion without
comment. Also on May 5, the court denied defendants' motion for a
new trial and motion for judgment as a matter of law.
IV.
The Bank, together with Fuentes and Diaz in their
official capacities, appeals from the jury verdict and also
challenges the reinstatement of three of the plaintiffs (Santiago,
Boneta, and Sauri). Fuentes and Diaz in their individual
capacities appeal from the denial of qualified immunity.
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Before addressing defendants' specific claims on appeal,
we describe the Mt. Healthy defense.
A. The Mt. Healthy Defense
Although Mt. Healthy was a freedom of speech case, it is
routinely applied to political discrimination cases of the
Elrod/Branti/Rutan variety. Padilla-Garcia v. Guillermo Rodriguez,
212 F.3d 69, 74 (1st Cir. 2000). In the aftermath of Mt. Healthy,
confusion still sometimes arises about the issue of causation.
On top of several subsidiary layers of causation, there
is an ultimate constitutional question of "but for" causation. See
Givhan v. W. Line Consol. Sch. Dist., 439 U.S. 410, 417 (1979)
(referring to "but for" causation); Acevedo-Diaz v. Aponte, 1 F.3d
62, 66 (1st Cir. 1993). As the Supreme Court clarified in
Crawford-El v. Britton, 523 U.S. 574 (1998),
[A]t least with certain types of claims, proof of an
improper motive is not sufficient to establish a
constitutional violation -- there must also be evidence
of causation. Accordingly, when a public employee shows
that protected [conduct] was a "motivating factor" in an
adverse employment decision, the employer still prevails
by showing that it would have reached the same decision
in the absence of the protected conduct.
Id. at 593 (emphasis added). Thus, even if a plaintiff meets his
or her initial burden of showing that political affiliation was a
motivating factor for an employment decision, that is insufficient
to establish discrimination as a matter of law because the
plaintiff's case at that point does not "distinguish[] between a
result caused by a constitutional violation and one not so caused."
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Mt. Healthy, 429 U.S. at 286. As the Supreme Court noted, to adopt
a view of causation that focuses solely on whether protected
conduct played a part in an employment decision -- the view that
plaintiffs argued here -- would put an "employee in a better
position as a result of the exercise of constitutionally protected
conduct than he would have occupied [otherwise]." Id. at 285.
To give an example, a plaintiff's political affiliation
may have been an employer's motivating reason for terminating the
plaintiff. Nevertheless, the employer may still defeat liability
for that termination by meeting its dual burden under Mt. Healthy
-- by proving, for example, that the plaintiff had been caught
stealing from the employer and that the employer fires every
employee who steals from it. Carrying that line of argument to
this case, defendants here were entitled to defeat liability by
showing that plaintiffs' positions were obtained in violation of
Puerto Rico law and that, even if political animus was a factor,
defendants would have taken corrective action anyway against every
employee whose position was obtained in violation of law.3 If
there is no dispute that the positions were obtained in violation
of Puerto Rico law, then the only question left is whether
3
The illegality-of-appointment argument was the primary
component of defendants' Mt. Healthy defense. Defendants also
raised a cost-cutting justification for the corrective actions, but
that justification is severely undercut by their prompt hiring, it
appears, of members of their own party to fill the positions
vacated as a result of the corrective actions.
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defendants would have fired all employees holding such positions in
any event. If defendants demonstrated that they in fact have a
practice of taking corrective action against all employees in such
positions, or could otherwise show that they would have taken the
corrective action anyway, then they were entitled to prevail.
There are obvious difficulties with this model, which the
Supreme Court may one day address. The first is that when an
employer asserts a Mt. Healthy defense in a political
discrimination case, the trier of fact (absent a prior
determination under state law) essentially becomes a kind of super-
personnel board making determinations about whether particular
personnel actions violated state or local personnel laws. There is
no evidence here that plaintiffs, if they had any administrative
appeal rights under Puerto Rico law, ever exercised them, though
each of the employee plaintiffs received a pre-termination hearing.
It would be different if this were a case in which a duly
authorized agency determination had been made of the legality of
the personnel actions under local law. The second difficulty
concerns whether the Supreme Court would in the end, once the
illegality of the personnel action to be corrected had been
established under local law, require an employer who had shown a
consistently applied practice of remedying all such illegal
appointments to show anything more.
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Defendants argue that the law has recently shifted in
their favor. They lean heavily on the Supreme Court's decision in
Texas v. Lesage, 528 U.S. 18 (1999), which they argue requires only
that they show that plaintiffs' appointments were in violation of
law. They view Lesage as excusing them from meeting their burden
under Mt. Healthy of showing that they would have acted to remove
plaintiffs based on the illegality of their appointments in any
event.
Lesage is important, but it does not carry defendants as
far as they would have it take them. Lesage involved a challenge
to a university's affirmative action policy by an applicant for
admission who, it was undisputed, would not have met the
university's admission criteria even if the university had not
applied its challenged affirmative action criteria. 528 U.S. at
19. The Court held that the applicant alleged no cognizable
injury. Id. at 22. Lesage has been most commonly applied in
similar "applicant" situations and is sometimes interpreted as
holding that an applicant lacks Article III standing to sue for
damages if she cannot show that she would have benefitted in the
absence of the challenged government conduct. See Cotter v. City
of Boston, 323 F.3d 160, 166-67 (1st Cir. 2003); Donahue v. City of
Boston, 304 F.3d 110, 116-17 (1st Cir. 2002).
Importantly, in Lesage it was undisputed that the
plaintiff did not otherwise meet the admission criteria. See
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Lesage, 528 U.S. at 21. In cases such as this one, by contrast,
plaintiffs frequently dispute whether there were any irregularities
in their appointments and, even if there were, whether those
irregularities would have led to their removal were it not for the
employer's alleged bad motive. Defendants' argument is that Lesage
has sub silentio overruled the second prong of Mt. Healthy. We
think not. The Supreme Court was explicit about the limits of its
holding in Lesage: "Simply put, where a plaintiff challenges a
discrete governmental decision as being based on an impermissible
criterion and it is undisputed that the government would have made
the same decision regardless, there is no cognizable injury
warranting relief under § 1983." Id. at 21 (emphasis added).4
Our cases have often presented situations in which
defendants have not uniformly applied a neutral basis, such as
illegality of appointment, for taking employment actions, but
rather have taken action against members of the opposing party but
not against similarly situated members of defendants' own party.
See, e.g., Acevedo-Garcia v. Vera-Monroig, 204 F.3d 1, 10-11 (1st
Cir. 2000) (discriminatory application of an otherwise lawful
layoff plan). By contrast, we have also affirmed entry of summary
judgment for defendants in situations where plaintiffs had no
evidence of differential treatment in the personnel actions taken
4
Even if there were tension between the two cases, we are
bound by Mt. Healthy, which has not been overruled.
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against those who were illegally appointed. See, e.g., Kauffman,
841 F.2d at 1172-73. And we have allowed for a possible claim of
discrimination where, in the guise of restructuring, defendants
eliminated only one job, but not others. Padilla-Garcia, 212 F.3d
at 78. Those holdings are consistent with the notion that simply
showing that an appointment was illegal under local law does not
suffice to meet defendants' Mt. Healthy burden.
B. Jury Instruction and Jury Form Issues
Two of defendants' arguments on appeal involve the
district court's refusal to give certain jury instructions. Our
examination of jury instructions focuses on "whether they
adequately explained the law or whether they tended to confuse or
mislead the jury on controlling issues." Federico v. Order of
Saint Benedict, 64 F.3d 1, 4 (1st Cir. 1995); Brown v. Trs. of
Boston Univ., 891 F.2d 337, 353 (1st Cir. 1989). A properly
preserved objection to the failure to give a requested jury
instruction is reviewed de novo, Gray v. Genlyte Group, Inc., 289
F.3d 128, 133 (1st Cir. 2002), and such a refusal constitutes
reversible error only if it was prejudicial in light of the entire
record, Tum v. Barber Foods, Inc., 360 F.3d 274, 282 (1st Cir.
2004); see also Sheek v. Asia Badger, Inc., 235 F.3d 687, 697 (1st
Cir. 2000). A court's choice of language in jury instructions, by
comparison, is reviewed only for abuse of discretion. Gray, 289
F.3d at 133.
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1. Kauffman Instruction
Defendants' initial argument is that the district court
erred in refusing to give their requested instruction based on
Kauffman v. Puerto Rico Telephone Co., 841 F.2d 1169 (1st Cir.
1988). Kauffman was a case alleging political terminations in
violation of both the First Amendment and due process rights.
Here, defendants requested an instruction under Kauffman to the
effect that a public employee's expectations of permanent
employment as a result of holding a position for a period of time
have no bearing on the illegality of his or her appointment and
thus that an appointment made in violation of the regulations is
necessarily null and void. The record reflects the following
exchange:
[COUNSEL FOR DEFENDANTS]: Your Honor, in the case
of Kauffman -- Kauffman vs. Puerto Rico Telephone, and I
argued it is clear that an employee ignores the fact that
his employment might be null and void, that doesn't go to
the issue of nullity, and neither having occupied the
position for some time period. It is an expectation to
be kept in the position.
THE COURT: I think that the principles that I
instructed the jury on are consistent with the case that
is tried.
While the language referenced in the proposed instruction derives
from the due process section of analysis in Kauffman, 841 F.2d at
1173 ("[U]nder Puerto Rico law any property right associated with
a career position is rendered null and void if a violation of the
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Personnel Act attends the filling of such a position."), portions
of it are also applicable to a First Amendment Mt. Healthy defense.
The defense was entitled to an instruction that
illegality of appointment was a neutral reason for corrective
action, whatever the employee's subjective expectation. But the
requested instruction went beyond that to suggest that a mere
showing of illegality of appointment sufficed to meet their
defense. Defendants overreached.
2. Policy-making Position Instruction
Defendants equate the term "trust position" ("puesto de
confianza") with "policy-making position" and use the term to
signify a position for which political affiliation is an
appropriate requirement. For purposes of this opinion, we refer to
such a position as a "policy-making position." A new government in
power can replace employees in such positions without violating the
First Amendment. See Branti, 445 U.S. at 517.
One of the Bank's defenses was that two of the plaintiffs
had been in such policy-making positions until the former
administration changed those positions to career positions ("puesto
de carrera") in violation of local law. Defendants argued that
because the change had been illegal, the two plaintiffs affected
(Santiago and Boneta) should have been considered as holding only
such policy-making positions, from which they could be removed
without any First Amendment issue.
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Defendants introduced evidence to this effect and
requested a jury instruction that a First Amendment claim is not
stated as to positions for which political affiliation is an
appropriate requirement. The requested instruction was rejected,
and defendants properly preserved their objection. See Fed. R.
Civ. P. 51; Connelly v. Hyundai Motor Co., 351 F.3d 535, 544 (1st
Cir. 2003). In rejecting the instruction as irrelevant, the
district court said:
Those positions were career positions. Whether it was
advisable or wise to convert them is a different story,
but they were converted to career.
When you took the adverse employment action, they were
career positions, and we have to start from that.
This reasoning was error in light of defendants' Mt. Healthy
defense. The theory of defendants' case was that these formerly
policy-making positions had been illegally converted into career
positions, that the illegality of the conversions, in turn, meant
that the positions remained only policy-making positions, and thus
that no violation of the First Amendment had occurred.
We consider the question of prejudice in light of
defendants' claims of cumulative error.
3. Deficient Jury Form
Despite the fact that defendants asserted a Mt. Healthy
defense and the court provided an instruction on that defense, the
jury verdict form did not reflect the law under Mt. Healthy.
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Instead, the form asked only the following questions as to
liability with respect to each plaintiff:
Do you find from a preponderance of the evidence:
1. That the Plaintiff engaged in constitutionally-
protected political activity, a form of free speech, as
defined in this court's instructions?
. . . .
2. That such protected political activity by the
Plaintiff was a substantial or motivating factor in the
Defendants' decision to politically discriminate against
the Plaintiff?
. . . .
3. That the Defendants' acts were the proximate or legal
cause of damages sustained by Plaintiff?
. . . .
6. [As to Fuentes and Diaz,] [t]hat the Defendants acted
with malice or with reckless indifference to the
Plaintiff's federally-protected rights . . . .
a. Standard of Review
"A verdict form must be reasonably capable of an
interpretation that would allow the jury to address all factual
issues essential to the judgment." Sheek, 235 F.3d at 699
(internal quotation marks omitted). To determine whether the
issues were fairly presented to the jury, we examine the court's
instructions and the wording of the verdict form as a whole. Id.;
Johnson v. Teamsters Local 559, 102 F.3d 21, 28 (1st Cir. 1996).
We review the court's instructions de novo, unless the objection to
the instructions was not preserved, in which case our review is for
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plain error only. Gray, 289 F.3d at 133; see Reynolds v. Green,
184 F.3d 589, 594 (6th Cir. 1999).
There is a threshold issue of whether defendants waived
their objection to the jury form. Defense counsel represented to
us at oral argument that he saw the verdict form for the first time
when it was read and explained to the jurors at the end of the
charge. Plaintiffs do not dispute that.5 Defendants immediately
objected to the form on the ground that it did not include a
question about the Mt. Healthy defense -- about whether defendants
would have taken the challenged personnel actions anyway because
the appointments violated Puerto Rico law. The district court
rejected defendants' objection and stated that the instructions on
the affirmative defense had been repeated at least three times in
the charge and that those instructions were very clear. The court
also stated that the second question on the jury form addressed
defendants' concern because it required a finding that plaintiffs'
political activity was a substantial or motivating factor. For
reasons described earlier, this explanation was insufficient.
Where a Mt. Healthy defense has been presented we suggest
that, to the extent it may not be a common practice, district
courts use a verdict form that has at least one question explicitly
5
There is no mention of the verdict form in the trial
transcript before the district court's instructions to the jury,
and the record does not indicate the point at which the form was
given to the parties.
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addressed to that defense. We also suggest that proposed verdict
forms always be shared with counsel and discussed together with the
proposed jury instructions before the jury charge and explanation
of the verdict form in open court. Here, the deficiency in the
form could have been avoided altogether had the district court
followed these suggested procedures.
Defendants had an opportunity to provide a draft jury
form to the district court, which they did not take. They also had
the opportunity to request that the district court provide them
with a copy of the form in advance of its explanation to the jury;
again, they did not request it. By the same token (and taking
defendants' representation as accurate), it would have been better
practice for the district court to review the form with counsel
before explaining it to the jurors.6
When the district court told defense counsel that it was
disinclined to substitute a new form or question, defendants could
and should have requested supplemental jury instructions addressed
to any possible jury confusion. For example, defendants could have
requested that the jury be instructed that even if it found that
political discrimination was a motivating factor, it could not on
6
Once the form was read to the jurors, the district court
was caught in a bit of a dilemma. The withdrawal of the form and
substitution of a new form or belated addition of a new question to
the form may have raised the risk of unduly emphasizing the Mt.
Healthy defense. The district court did not, though, express that
concern, and instead refused to alter the form on the ground that
doing so was unnecessary.
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that basis alone award damages without first addressing the Mt.
Healthy defense. The jury could have been instructed that if it
found that the corrective actions would have been taken against
plaintiffs in any event, then under Mt. Healthy, it could not go on
to damages. Defendants did not request any such instructions. It
is reasonable to infer, however, from the colloquy between court
and counsel in the record, that the district court would have
rejected such a request.
In light of the peculiar circumstances giving rise to the
deficiency in the form, this case does not fit neatly into the
usual doctrine of waiver. So we proceed to ask, on this record,
whether there was a realistic prospect of jury confusion on the Mt.
Healthy issue.
b. Analysis of Potential Confusion Caused by the Form
In response to defense counsel's protestation about the
jury form, the court stated, erroneously in our view, that to
answer the second verdict form question "yes," the jury would need
to have rejected the Mt. Healthy defense. We repeat the court's
instructions on the second verdict form question:
Second, do you find from a preponderance of the evidence
that such protected political activity by the plaintiff
was a substantial or motivating factor in the defendants'
decision to politically discriminate against the
plaintiff?
For the reasons that follow, we agree with defendants that the form
was not adequate and that it had the potential to mislead the jury.
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We start with this observation: defendants' illegality-
of-appointment argument was far from frivolous. Defendants were
able to point to specific alleged violations of Bank regulations
for the personnel actions taken during the review period as to each
of the employee plaintiffs. But it is also true that some of the
alleged violations could have been seen by the jury as involving
technical niceties that might normally have been overlooked. Yet
other alleged violations were clearly more serious -- for example,
the conversions of the two positions from policy-making status to
career status when, allegedly, there was neither a change in the
nature of the positions nor in the Bank's structure that would have
justified the conversions.
The theme of plaintiffs' opening statement was that the
real motivation for the personnel actions that were taken against
the employee plaintiffs was that they were NPP members and that
defendants' stated reasons for the actions were untrue and trivial.
The theme of the opening statement for the Bank and the
two individuals in their official capacities was that they had
followed the rules and regulations of Puerto Rico law without
exception and that the personnel actions that the former NPP regime
had taken as to each of the plaintiffs were unlawful. The theme of
the opening statement for Fuentes and Diaz in their individual
capacities was that plaintiffs "were dismissed or changed from
their positions because they were illegally appointed to those
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positions, and they did not comply with the law." Indeed, the
argument was that it was plaintiffs' party, the NPP, that had
discriminated -- that no one from the PDP party had been assigned
to any positions by the prior administration during the moratorium
period. But if a PDP party member had been unlawfully appointed
during the review period, the defense argued, then the new
administration would have taken corrective action against that
person due to the violation of Puerto Rico law.
In his closing argument, plaintiffs' counsel told the
jury that they would be instructed by the court that even if
plaintiffs
had been wrongly appointed and wrongly transferred, if it
was motivated by politics, you have to find for
plaintiffs. In other words, it wouldn't even matter if,
as they claimed, these plaintiffs had been fired . . .
because the prior appointment had been wrong. Even if
that was so, if you decide that politics was a motivating
factor, you must find for plaintiffs.
As that portion of the closing demonstrates, plaintiffs' case was
tried on a theory of causation directly in conflict with Mt.
Healthy. Their theory was that even if defendants would have taken
the disputed actions anyway because the plaintiffs' appointments
violated Puerto Rico law, that fact was irrelevant if political
discrimination was a motivating factor in the decision. This
argument fundamentally misunderstands Mt. Healthy.7
7
By the same token, defendants argued to the district
judge a theory, described earlier, that also fundamentally
misunderstands Mt. Healthy as being overruled by Lesage.
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The court correctly instructed the jury that plaintiffs
first had to show that their protected political activity was a
substantial or motivating factor for the disputed personnel
actions. The court also instructed the jury that the burden then
shifted to defendants to show that they would have made the same
decisions based on "some other reason . . . standing alone and in
the absence of political discrimination."8 This second instruction
8
The jury instructions were a slight variation on standard
recommended instructions:
If you find that the plaintiff's protected speech
(or act of expression) was a substantial or motivating
factor in the defendant's decision to take action against
the plaintiff, you must consider whether the defendant
has presented an adequate defense to the plaintiff's
case.
The defendant presents an adequate defense to the
plaintiff's case if the defendant can show, by a
preponderance of the evidence, that it would have reached
the same decision to take action against the plaintiff
even in the absence of the plaintiff's protected speech.
In other words, the defendant must show by a
preponderance of the evidence that it would have made the
same decision without considering the plaintiff's
protected speech.
If the defendant shows by a preponderance of the
evidence that it would have reached the same decision
without considering the plaintiff's protected speech,
then you must find in favor of the defendant.
It is important for you to realize that the
defendant has not presented an adequate defense if it
shows merely that it had other, valid reasons for taking
action against the plaintiff. It is a defense only if
the defendant would have acted on those other reasons in
the absence of the plaintiff's protected speech.
Therefore, if the defendant offers other, valid reasons
for taking action against the plaintiff, the defendant
must further show that it would have acted on those
reasons. Otherwise, it has not presented an adequate
defense.
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was at odds with the jury form, which did not provide any question
addressed to whether defendants had carried their burden. And
although not technically incorrect by itself, that second
instruction became susceptible to an incorrect interpretation by
the jury when considered in conjunction with the jury form.
Because there was no question on the jury form about
whether defendants had carried their two part burden under Mt.
Healthy, the jurors might have thought that if they answered the
first two question on the form "yes" -- i.e., that there was
protected political activity and that it was a substantial or
motivating factor in defendants' decisions -- then those findings
alone could or even must lead to an affirmative finding on question
three -- that defendants' "acts were the proximate or legal cause
of damages sustained by Plaintiff" -- and thus that the affirmative
defense was irrelevant. That understanding of the form was
consistent with a plausible, though incorrect, interpretation of
the court's instruction that defendants had to show that they would
have taken the same actions "in the absence of political
discrimination." Considered in conjunction with the absence of
guidance about the Mt. Healthy defense on the jury form, it becomes
apparent that the jurors could have understood that language as
suggesting that defendants had to prove that there was an "absence
5 L. Sand et al., Modern Federal Jury Instructions 87-284 (Matthew
Bender 2000).
-33-
of political discrimination" before they could take advantage of
the affirmative defense and show that they would have acted the
same way for a different reason.
The possibility that the jurors might have misinterpreted
the instructions in this way is bolstered by the fact that
plaintiffs' counsel himself misunderstood the law in precisely that
way and characterized it as such in his closing argument.
Plaintiffs' counsel erroneously told the jury that "it wouldn't
even matter if, as [defendants] claimed, these plaintiffs had been
fired . . . , because the prior appointment had been wrong. Even
if this was so, if you find that politics was a motivating factor,
you must find for plaintiffs."
Had the court's instruction been accompanied by a
separate Mt. Healthy question on the jury form, the potential
confusion most likely would have been avoided. But the court
rejected defendants' objection to the form, on the ground that the
second question required that the jury find that the plaintiffs'
political activity was "a substantial or motivating factor." The
court added that the jury would need to have rejected the Mt.
Healthy defense in order to answer "yes" to that question. For the
reasons explained earlier, an affirmative answer to that second
question did not eliminate the need to go on to ask whether, even
if defendants were politically motivated as to these actions, they
would nevertheless have taken the same actions based on the
-34-
illegality of the appointments. The court did, in fact, tell the
jury in a short instruction during the charge that even if it
answered the second question "yes," it still needed to go on to the
third question, which asked whether "Defendants' acts were the
proximate or legal cause of damages sustained by Plaintiff[s]," and
that it could answer that question "yes" or "no." At least
arguably, that third question embraced Mt. Healthy causation and
implicated defendants' burden. But if the court did indeed
understand the question in that way, then that interpretation
simply cannot be reconciled with the court's comment to defense
counsel about the meaning of the second question. And in any case,
we cannot say with any assurance that the third question and the
applicable instruction adequately corrected for the significant
jury confusion that could have arisen from the misstatements and
omissions described above.
Moreover, the wording of the second verdict form question
was not precise, and that lack of precision might have affected the
jurors' understanding of the interplay between verdict form
questions two and three. The second question asked whether
plaintiffs' political activity was a substantial or motivating
factor "in the defendants' decision to politically discriminate
against the plaintiff[s]" (emphasis added). It did not more
precisely say "in the defendants' decision to take adverse
employment action against the plaintiff[s]." The wording of the
-35-
question thus assumed a conclusion that was meant for the jury, and
accordingly, could have contributed to juror confusion about
whether defendants could meet their burden once there had been a
finding of any political motivation.
If the evidence were very clearly in plaintiffs' favor
that the Mt. Healthy defense failed, that might influence our
assessment of the risk that the jury was misled. But our reading
of the record is that defendants presented a very strong Mt.
Healthy defense. Each of the defense witnesses reinforced the
defense position that the personnel actions taken by the NPP regime
during the review period were unlawful and that the Fuentes regime
uniformly and fairly took corrective actions in accordance with the
outside report from Applied Management.
Ana Bonet, who was primarily responsible for conducting
the Applied Management audit, testified that she had extensive
experience in Puerto Rico personnel services and explained that she
had done similar audit work for about three other Puerto Rico
agencies after the elections. She described in great detail the
irregularities associated with the personnel actions taken as to
each of the five plaintiffs during the review period, and she
described in more general terms the irregularities associated with
the personnel actions taken as to eighteen other employees during
the review period. Bonet also testified about how her task was
presented to her. She explained that she "was told that [Fuentes
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and the executive committee] only wanted to verify whether [the
twenty-three personnel actions during the review period] were
correct. And if they were correct, everything was fine. And, if
not, [Fuentes and the committee] would have to correct it." That
description of the presentation supported the defense theory that
the Fuentes regime applied the audit in a neutral way and would
have taken corrective action regardless of political affiliation.
The jury also heard from Fuentes, the president of the
Bank. She testified in detail about her decision to conduct the
audit. Upon assuming the position, she explained, she learned that
personnel salaries accounted for one of the Bank's highest
expenses. As a result, she decided, in conjunction with the
executive committee, that the Bank should verify whether its
personnel actions were legitimate and hired Applied Management for
that purpose. Legal counsel advised her and the committee that the
best way to start the review process was to begin with the period
of time closest to the electoral moratorium. Fuentes testified
that she and the committee adhered strictly to the determinations
in the outside report and did not involve themselves in the process
of analyzing the legality of the personnel actions. They followed
Bonet's recommendations, and as to the group of personnel actions
involving irregularities in reinstatement, also consulted the
Puerto Rico Department of Justice for an opinion.
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Another defense witness, Aixa Diaz Montijo, who was the
vice president of operations and supervised the Bank's division of
human resources, testified that Applied Management was hired "to
conduct [the audit] process as objectively as possible." Her
testimony also made it clear that every one of the personnel
actions taken during the review period were analyzed as part of the
audit.
To be sure, plaintiffs contested the illegality of the
personnel actions taken during the review period and suggested that
political discrimination was the motivating factor for the actions
taken by the Fuentes regime. But the point here is simply that the
affirmative defense was clearly viable given the testimony and thus
that the existence of jury confusion as to the Mt. Healthy defense
was not at all beside the point.
C. Assessment of Prejudice
The combination of the failure to give the policy-making-
position instruction and the failure of the jury verdict form to
ask a distinct Mt. Healthy question is fatal to plaintiffs'
verdict. We are not convinced that the jurors necessarily and
implicitly concluded by their verdict that defendants had failed to
establish a Mt. Healthy defense and that political discrimination
was the "but for" cause of defendants' actions. We cannot say that
we are confident that the jury properly understood the task before
it, especially in light of the deficient verdict form.
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V.
Defendants have asked that we reverse the verdict or send
the case back for a new trial. If we were confident that no
rational, properly instructed jury could conclude anything other
than that defendants had established their Mt. Healthy defense,
then defendants would have a strong argument for entry of judgment
in their favor. But we cannot reach that conclusion. Plaintiffs
disputed defendants' claim that their appointments were in
violation of Puerto Rico law, so there was a material dispute about
whether defendants even had a neutral reason for the corrective
actions taken.
If, on remand, defendants can persuade a factfinder that
they did indeed have neutral reasons for the personnel actions,
then they will still need to satisfy the second prong of the Mt.
Healthy defense. As to that prong, defendants argue that the
evidence shows that they reviewed all appointments made during the
review period and that they took corrective action against all
employees whose appointments had any defect during that period. If
defendants in fact would have adopted a policy of remedying all
illegality during the review period regardless of the political
affiliation of the affected personnel, and then uniformly applied
that policy, they will be entitled to prevail.
Plaintiffs rely on the fact that all of the employees
affected by defendants' actions were NPP members. That argument
-39-
misunderstands the law under the Elrod/Branti line of cases. While
a jury might consider this impact as evidence that defendants would
not have taken the same action anyway, there is simply not a claim
of "disparate impact" available under this First Amendment
doctrine. If uniformly applied personnel practices, predicated on
legitimate reasons, result in terminations, those terminations are
not unconstitutional because those affiliated with one political
party are disproportionately impacted. It is in the nature of a
change in administrations that job actions by the new party in
power will have a disparate impact on members of the outgoing
party.
Nor does the fact that the new regime focused on a period
of time closely tracking the electoral moratorium period
necessarily help plaintiffs, as they contend. The selection of
that period for review here was perfectly rational -- Puerto Rico
law itself recognizes the electoral moratorium period as the period
of greatest risk of disregard for normal personnel practices. See
3 P.R. Laws Ann. § 1337.
The jury verdict is vacated. The denial of qualified
immunity and the reinstatement order are also vacated. The case is
remanded for proceedings consistent with this opinion.
So ordered. No costs are awarded.
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