United States Court of Appeals
For the First Circuit
No. 00-1703
NILDA M. SALDANA-SANCHEZ; RAFAEL DELGADO-MESTRE; JUAN NIEVES-
SANTIAGO; MIGUEL RAMOS-CRUZ; SINFORIANO CASTILLO-GARCIA; JULIO
C. MOJICA-UBILES; MIGUEL A. OCASIO-SANTOS; MARGARITA POUPART-
FONTANEZ; HILDA TORRES-PENA; MINERVA PACHOT-RIVERA; JOSE L.
ORTIZ-ORTIZ; ZULMA RIVERA-ORTIZ; ANGEL L. RODRIGUEZ-LAZU; LUZ R.
DIAZ-MORALES; JOSE L. BAEZ-RODRIGUEZ; JOSE IVAN CASTILLO-ORTIZ,
Plaintiffs-Appellants,
LUZ M. ORTIZ-QUINTANA,
Plaintiff,
v.
JULIO CESAR LOPEZ-GERENA, Mayor of the Municipality of
Humacao; RAMON VEGA-SOSA,
Defendants-Appellees,
MARGARITA GONZALEZ-VAZQUEZ; RAUL FERRER
Defendants.
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF PUERTO RICO
[Hon. Juan M. Pérez-Giménez, U.S. District Judge]
Before
Selya, Circuit Judge,
Stahl, Senior Circuit Judge,
and Lynch, Circuit Judge.
Antonio Bauza-Torres for appellants.
James A. Toro, with whom Claudio Aliff Ortiz and Aldarondo
& Lopez Bras, were on brief, for appellee Lopez-Gerena.
Irene S. Soroeta-Kodesh, with whom Gustavo A. Gelpi,
Solicitor General, and Rosa N. Russe Garcia, Deputy Solicitor
General, were on brief, for appellee Vega-Sosa.
July 12, 2001
STAHL, Senior Circuit Judge. In this appeal we review
the grant of a protective order in favor of defendant-appellee
Julio Cesar Lopez-Gerena in his official capacity as mayor of
the municipality of Humacao, Puerto Rico. Plaintiffs-appellants
Nilda M. Saldana-Sanchez et al. (the “plaintiffs”) sought
discovery from Lopez-Gerena in order to bolster their claim that
Humacao was obliged to satisfy a judgment for punitive damages
awarded them in a § 1983 action against Lopez-Gerena's
predecessor, defendant-appellee Ramon Vega-Sosa, and others.
Lopez-Gerena obtained the protective order on the ground that no
purpose could be served by the proposed discovery because
Humacao enjoyed immunity from punitive damages liability. The
plaintiffs appealed. We vacate and remand.
I.
In the general election of 1988, Ramon Vega-Sosa was
elected mayor of Humacao, Puerto Rico, after defeating the
incumbent mayor, Juan M. Higgins, in a primary challenge.
During Vega-Sosa's first year in office, he dismissed a number
of municipal employees hired by the former administration,
ostensibly as part of an effort to cut costs. Those terminated
included many who had been political supporters of the defeated
incumbent.
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In 1990, in the United States District Court for the
District of Puerto Rico, seventeen of the terminated employees
commenced a civil rights action under 42 U.S.C. § 1983 against
Vega-Sosa, his personnel director, Raul Ferrer (collectively,
with Lopez-Gerena, the “defendants”), and others.1 Their
complaint alleged that they had been terminated because of their
earlier support for Higgins and that the terminations violated
their rights under the First, Fifth and Fourteenth Amendments.
The plaintiffs sought reinstatement, back pay, front pay,
compensatory and punitive damages, and attorneys' fees.
The suit named Vega-Sosa and Ferrer as defendants in
both their personal and official capacities. Soon after the
suit was filed, Vega-Sosa invoked the protection of P.R. Laws
Ann. tit. 32, §§ 3085-3092 (commonly known as “Law 9"), a
statute providing defense and indemnification benefits to
certain categories of public officials -- including mayors and
ex-mayors -- when they are sued in their personal capacities.2
1
The complaint named four individuals as defendants: Vega-
Sosa, his wife, Margarita Gonzalez-Vazquez, Ferrer, and Ferrer's
wife, identified only as “Mrs. Ferrer.” We find nothing in the
record to suggest that Mrs. Ferrer or Ms. Gonzalez-Vazquez were
involved in the actions that are the subject of this suit and it
appears that both were later dismissed from the case.
2
Law 9 provides, in pertinent part, that a mayor or ex-mayor
sued for damages in a personal capacity may, “when the cause of
action is based on alleged violations of the plaintiff's civil
rights due to acts or omissions committed in good faith, in the
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Vega-Sosa's request for a defense was granted by the Puerto Rico
Department of Justice in June 1990, and he was thereafter
defended, in his personal capacity, by the Department of
Justice. It is not clear from the record whether Vega-Sosa's
defense in the official-capacity suit, which we treat, as a
matter of law, as a suit against Humacao itself, e.g., Andino-
Pastrana v. Municipio Des San Juan, 215 F.3d 179, 180 (1st Cir.
2000), was handled by the same or different counsel.
A. Proceedings Before the District Court
The case was tried before a jury in October 1996.
After an eighteen-day trial, the jury returned a verdict for the
plaintiffs, awarding them a total of $679,804 in compensatory
damages and $326,616 in punitive damages.3 The district court
subsequently ruled that the plaintiffs were entitled to
reinstatement and granted plaintiffs' request for attorneys'
course of [the mayor's or ex-mayor's] employment and within the
scope of his employment,” seek representation from the
Commonwealth of Puerto Rico, as well as indemnification for “any
judgment that may be entered against his person.” P.R. Laws
Ann. tit. 32, § 3090.
3
After judgment issued on the jury verdict, the defendants
renewed an earlier motion for judgment as a matter of law,
joining with it motions for a new trial and/or remittitur.
Although the defendants challenged the punitive damages award on
sufficiency grounds, they made no argument regarding immunity
from punitive damages. The defendants' motions were denied.
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fees, but denied their request for back pay4 and declined to rule
on the request for front pay until it was determined whether all
the plaintiffs actually wished to be reinstated and whether
their reinstatement was practicable.
Nothing in either the jury verdict or the district
court judgment distinguished between the suits against the
defendants in their personal and official capacities. Such a
distinction, had it been made, would have been significant in
determining the extent of Humacao's responsibility for the
judgment. Because the municipality is the real party in
interest in an official capacity suit, a judgment against the
defendants in their official capacities would run against
Humacao directly. E.g., Andino-Pastrana, 215 F.3d at 180. By
contrast, a judgment against the defendants solely in their
personal capacities would make Humacao liable only indirectly,5
through the workings of the Law 9 indemnification provisions.6
4
Back pay was denied because the district court considered
back pay to have been included in the award of compensatory
damages made by the jury. The district court's denial of back
pay was affirmed by this court in Saldana Sanchez v. Vega Sosa,
175 F.3d 35, 37 (1st Cir. 1999).
5The personal capacity judgments against Vega-Sosa and
Ferrer would presumably also have made them individually liable
for the damages awarded; however, it is undisputed that both men
are judgment-proof.
6
Law 9 provides that judgments against mayors and ex-mayors
covered by its provisions will be defrayed by the relevant
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For nearly two years after the judgment issued, the
plaintiffs and defendants negotiated over its requirements,
including the amount of fees and interest to be paid and the
terms of plaintiffs' reinstatement. Eventually Humacao and its
new mayor, Lopez-Gerena7, reached an agreement with the
plaintiffs regarding the compensatory damages and attorneys'
fees that would be paid and the mechanism by which the
plaintiffs would be reinstated. The agreed-upon damages amounts
were subsequently paid to the plaintiffs and the reinstatements
took place. The municipality refused, however, to pay the
punitive damages portion of the award, arguing that the Supreme
Court's decision in City of Newport v. Fact Concerts, Inc., 453
U.S. 247 (1981), rendered Humacao immune from liability for
punitive damages awarded in a
§ 1983 action.
Humacao's refusal to pay the punitive damages award
precipitated an additional two years of district court
municipality. P.R. Laws Ann. tit. 32, § 3092. In the event
that a municipality lacks to the funds to pay a judgment, the
Commonwealth will do so, but the municipality must reimburse the
Commonwealth for any amounts so paid. Id.
7
When Lopez-Gerena became mayor, he replaced Vega-Sosa as
titular defendant in the official capacity suit pursuant to Fed.
R. Civ. P. 25(d)(1), while Vega-Sosa remained in the case in his
personal capacity. Vega-Sosa continues to be represented by the
Puerto Rico Department of Justice. Lopez-Gerena is represented
by other counsel.
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proceedings. This phase of the case began in July 1998, when
the district court issued an order directing the plaintiffs,
within sixty days, either to submit briefs establishing
Humacao's obligation to pay the punitive damages judgment or to
acknowledge that no such liability existed.8 The plaintiffs
failed to meet the deadline. Instead, more than two months
after the deadline passed, the plaintiffs moved for an extension
of time, a request which was denied in January 1999.
Given the framework established by the court, this
denial might have concluded the matter, but it did not. In
February 1999, the plaintiffs noticed a deposition of Vega-
Sosa's attorney in connection with the punitive damages issue.
The defendants sought, and were granted, a protective order
preventing the discovery. Nothing in the order made clear
whether the court considered the plaintiffs' punitive damages
judgment still viable as a general matter.9 The status of the
8The record does not indicate why Humacao was allowed to
raise this issue so long after the judgment became final. Nor
does the record indicate why the district court assigned the
burden on this issue to plaintiffs -- a somewhat surprising
decision, given that the burden for establishing affirmative
defenses, such as immunity, generally lies on the defendant.
9Vega-Sosa argued for the protective order solely on the
ground that the proposed deponent was Vega-Sosa's attorney and
the circumstances were not such as would justify deposition of
opposing counsel. See, e.g., Shelton v. American Motors Corp.,
805 F.2d 1323, 1327-28 (8th Cir. 1986) (discussing the concerns
raised when opposing counsel is deposed and the limited
-8-
issue was further muddied when, in April 1999, the plaintiffs
filed a motion requesting the “withdrawal at this time of
consideration of the issue who is responsible for the payment of
punitive damages” (emphasis added), suggesting that they
reserved the right to revisit the issue. The district court
approved the request by margin order, without explanation.
Understandably confused, the defendants almost
immediately filed a motion requesting “clarification” of the
status of the punitive damages issue. In their motion, the
defendants argued that, notwithstanding the permissive language
of the plaintiffs' motion, the withdrawal should be treated as
concluding the district court's consideration of the plaintiffs'
request for punitive damages. This result was dictated, the
defendants contended, by the plaintiffs' failure to demonstrate
Humacao's liability within the original sixty-day window
established by the court or to obtain an extension of time for
making their case. The district court responded with another
margin order, this one stating simply: “The plaintiffs withdrew
any claim to punitive damages by motion dated March 31, 1999,
granted by this Court by margin order dated April 18, 1999.”
circumstances under which such depositions are appropriately
allowed). The record does not suggest that the district court
relied on any other ground in granting the motion.
-9-
The plaintiffs did not appeal or otherwise respond to this
order.
More than nine months later, in March 2000, the
plaintiffs noticed the deposition of Lopez-Gerena. In addition
to Lopez-Gerena's testimony, the plaintiffs sought a variety of
documents relating to the grant of defense and indemnification
benefits to Vega-Sosa. Lopez-Gerena moved for a protective
order, arguing that, because Humacao was immune from any
liability for punitive damages, and no other issues were
outstanding, the proposed discovery would serve no purpose. The
plaintiffs opposed the motion, contending that the discovery
would show that Humacao had, in fact, waived any immunity it
might have had under City of Newport.
On April 3, 2000, the district court issued an order
granting Lopez-Gerena's motion without elaboration. On April
24, the plaintiffs moved for reconsideration of that order.
Four days later, the plaintiffs filed a notice of appeal with
respect to the April 3rd order. On July 28, 2000, the district
court entered an order denying reconsideration accompanied by a
written opinion. In its opinion, the district court agreed with
Lopez-Gerena that, as a matter of law, the plaintiffs had no
right to recover the punitive damages from Humacao and,
therefore, that the discovery could serve no purpose. On
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September 1, 2000, the plaintiffs filed a second notice of
appeal concerning the July 28th denial of reconsideration.
Ultimately, that second notice of appeal was dismissed.
B. Proceedings on Appeal
Oral argument for this appeal took place on April 4,
2001. During the hearing, it became clear that the plaintiffs'
contention that Humacao was liable for punitive damages rested
heavily on the contents of a small number of documents relating
to the Law 9 benefits provided to Vega-Sosa. These documents --
which plaintiffs' counsel claimed to have seen -- were alleged
to contain a clear waiver of Humacao's immunity. Defendants'
counsel countered that they had reviewed the same documents, and
had found no such waiver of immunity.
Perceiving an opportunity to expedite the resolution
of an issue that had lingered before the district court for
some time, we directed the defendants to produce the requested
documents to both plaintiffs' counsel and this court within ten
days. We further directed that the plaintiffs to inform us,
once they had reviewed the documents, whether they continued to
maintain that Humacao had waived its immunity. We retained
jurisdiction over the matter pending compliance with our order.
-11-
The documents having been produced, and the plaintiffs
continuing to assert that they demonstrate a waiver of Humacao's
immunity, we now consider the plaintiffs' appeal.
II.
Although the discovery issue before us is quite narrow,
the context in which it arises is complicated and touches upon
a number of difficult and unresolved questions of law. Few of
these questions receive more than cursory treatment in the
parties' briefs, and we do not consider them ripe for our
attention. However, in the interest of providing guidance to
the district court on remand, we include some discussion of
these issues where we find it appropriate.
A. Jurisdiction
Before reaching the merits, we address an argument
offered by Lopez-Gerena as a challenge to our jurisdiction over
the subject matter of this appeal. Although confusingly
presented, the thrust of Lopez-Gerena's contention is that the
plaintiffs lost their right to have this Court review the
punitive damages issue, in any form, by failing to respond to
the district court's ruling on the defendants' motion for
“clarification.” Lopez-Gerena asserts that the district court's
May 1999 order, stating that the plaintiffs had withdrawn “any
claim of punitive damages,” constituted a conclusive
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determination by the district court that its consideration of
the punitive damages issue was at an end. When the plaintiffs
did not appeal the order within the thirty days allowed by Fed.
R. App. P. 4(a)(1)(A), Lopez-Gerena argues, the order “became
final”, and that “deprived this Court of jurisdiction on any
matter related to the Municipality's liability for payment of
punitive damages.”
Lopez-Gerena's argument is without merit. To begin
with, the record does not support Lopez-Gerena's premise that
the district court's ruling on the motion for clarification was
meant to, or effectively did, signal an end to the court's
consideration of the punitive damages issue. It is true that
the ambiguous language of the margin order could be read as a
statement that the court considered the issue to have been
permanently withdrawn. However, the district court's subsequent
actions belie such an interpretation. If the court understood
its “clarification” ruling to have finally disposed of the
punitive damages issue, we think it only logical that the
protective order would have been granted on that basis. Yet the
court's written opinion offers a different explanation,
grounding the protective order in Humacao's supposed immunity
from punitive damages liability -- a “merits” issue that, by
Lopez-Gerena's reasoning, was no longer even before the court.
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Lopez-Gerena has advanced no compelling reason why we should
accord the district court's earlier order a preclusive effect
that the district court itself did not observe or even
acknowledge, and we decline to do so.
Furthermore, even if the district court's grant of a
protective order had been premised on its earlier, unappealed
determination that the punitive damages issue had been
withdrawn, we still would have jurisdiction over this appeal of
the protective order and later denial of reconsideration.10 The
defendants do not dispute that the notice of appeal was timely
filed with respect to these orders. We also think it evident
that these orders were, under the circumstances, “final
decisions” of the district court and thus within the
jurisdictional grant conferred by 28 U.S.C. § 1291.11 As a
10
If the district court had clearly indicated that the
protective order was granted because the punitive damages issue
was no longer before the court, we might well have declined on
grounds of forfeiture to address whether the plaintiffs are owed
punitive damages. However, we would not have lacked
jurisdiction over the appeal.
11
Although the precise issue has not been considered by this
court, other jurisdictions are in agreement that, when a
district court blocks discovery sought to facilitate execution
of a prior judgment, its ruling should be treated as final and
appealable, because there is no later proceeding from which an
appeal could be taken. E.g., Cent. States, Southeast &
Southwest Areas Pension Fund v. Express Freight Lines, Inc., 971
F.2d 5, 6 (7th Cir. 1992); Wilkinson v. FBI, 922 F.2d 555, 558
(9th Cir. 1991); Rouse Constr. Int'l v. Rouse Constr. Corp., 680
F.2d 743, 745-46 (11th Cir. 1982). Decisions of this court are
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result, our jurisdiction over the subject matter of this appeal
stands on solid ground, and we proceed to its merits.
B. Protective Order in Favor of Lopez-Gerena
Our precedent makes clear that the plaintiffs face a
heavy burden in seeking to overturn the district court's
protective order. Under the abuse of discretion standard
applied in discovery matters, we may reverse a district court
“only upon a clear showing of manifest injustice, that is, where
the lower court's discovery order was plainly wrong and resulted
in substantial prejudice to the aggrieved party.” Ameristar Jet
Charter, Inc. v. Signal Composites, Inc., 244 F.3d 189, 192 (1st
Cir. 2001) (quoting Mack v. Great Atl. & Pac. Tea Co., 871 F.2d
179, 186 (1st Cir. 1989)). However, it is also well-established
that an order denying or limiting discovery may not be upheld if
it rests on an incorrect legal standard or a misapplication of
the law to the relevant facts. See Reed v. Baxter, 134 F.3d
351, 358 (6th Cir. 1998) (vacating a protective order premised
on a mistaken application of the law of attorney-client
privilege); Springer v. Seaman, 821 F.2d 871, 882-83 (1st Cir.
1987) (vacating an order denying discovery based upon an
in accord with this reasoning. Cf. Sheehan v. Doyle, 513 F.2d
895, 898 (1st Cir. 1975) (holding discovery order to be final
and appealable under 28 U.S.C. § 1291 where the discovery was
ancillary to proceedings in another jurisdiction and nothing
else was before the district court).
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incorrect conclusion regarding the relevance of the information
sought); Trevino v. Celanese Corp., 701 F.2d 397, 406 (5th Cir.
1983) (vacating a protective order limiting discovery where
district court gave no explanation for its actions and appeals
court could find no sound reason for granting the protective
order);12 see also Pye v. NLRB, 238 F.3d 69, 73 (1st Cir. 2001)
(“A court abuses its discretion if it applies an improper legal
standard or erroneously applies the law to particular facts.”).
Finding the district court's protective order in favor of Lopez-
Gerena to be unsupportable on the grounds given, and discerning
no alternative ground adequate to sustain it, we conclude that
vacatur of the protective order is required.
1. District Court's Justification
In its written opinion, the district court found a
protective order in favor of Lopez-Gerena to be justified
because, as a matter of law, Humacao cannot be liable for the
punitive damages judgment. The district court’s reasoning
12
Cases vacating protective orders on this ground have not
always separately analyzed the question of prejudice, see Reed,
134 F.3d at 358; Springer, 821 F.2d at 882-83, perhaps because
the prejudice resulting from the unjustified grant of a
protective order will usually be obvious. We think it beyond
reasonable dispute that denial of the discovery sought by
plaintiffs in this case would be prejudicial, as one of
plaintiffs’ chief arguments for waiver of Humacao's immunity
rests on the alleged contents of the documents requested.
Denial of the discovery would effectively doom this argument.
-16-
appears to rest on two grounds: first, that recovery is barred
by the Commonwealth of Puerto Rico's sovereign immunity, and,
second, that recovery of punitive damages is prohibited by the
scope of Law 9. We address these issues in turn.
The district court's discussion of sovereign immunity
focuses entirely on language in Law 9 stating that the statute
is not to be construed as a waiver of the Commonwealth’s
sovereign immunity--that is, the immunity afforded it under the
Eleventh Amendment. See Ortiz-Feliciano v. Toledo-Davila, 175
F.3d 37, 39 (“[T]he Commonwealth is protected by the Eleventh
Amendment to the same extent as any state. . . .”) (citing
Metcalf & Eddy, Inc. v. P.R. Aqueduct & Sewer Auth., 991 F.2d
935, 939 n.3 (1st Cir. 1993)). Nothing in the district court's
opinion explains why it believed the Commonwealth's Eleventh
Amendment immunity was implicated by this case, and we see no
reason why it would be. The Commonwealth is not a named
defendant in this action. Nor is there any indication that the
Commonwealth would be called upon to pay the damages plaintiffs
seek. Although, in many applications, Law 9 requires the
Commonwealth to pay the judgment of an indemnified official, see
P.R. Laws Ann. tit. 32, § 3092 (stating that, in general, “[t]he
Secretary of the Treasury shall pay the judgments, costs and
attorney's fees imposed on the defendants from the available
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funds in the Treasury of Puerto Rico”), the provisions of the
statute relating to indemnification of mayors and ex-mayors
indicate that judgments in these cases are paid by the
municipalities themselves, see id. (explaining that, when Law 9
benefits are provided to mayors and ex-mayors, the resulting
“judgments, costs and attorney's fees . . . shall be defrayed
from available funds in the corresponding . . . municipality”).13
Indeed, it appears undisputed that the portions of the
judgment in this case that have been paid -- the compensatory
damages and attorneys' fees -- were paid by Humacao. In light
of these facts, this case is clearly distinguishable from those
in which we have found the Eleventh Amendment to present a bar
to recovery under Law 9. See Ortiz-Feliciano 175 F.3d at 40-41
(affirming a district court's denial, on Eleventh Amendment
grounds, of plaintiffs' request for an order directing the
Commonwealth to accord Law 9 benefits to the defendants and pay
the judgment); Fernandez v. Chardon, 681 F.2d 42, 59-60 (1st
Cir. 1982), aff'd sub nom. Chardon v. Fumero Soto, 459 U.S. 987
(1982) (holding that the Eleventh Amendment precluded a district
13
As noted above, the statute does provide for the
Commonwealth to assume initial responsibility for a judgment
that a municipality cannot afford to pay. Id. However, there
has been no suggestion that this is the case here.
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court from issuing an order requiring the Commonwealth to pay a
damages award entered against officials of the Puerto Rico
Department of Education).
In addition, the district court's analysis appears to
rest on the assumption that the plaintiffs only have a judgment
against Vega-Sosa in his personal capacity, and thus may only
reach Humacao through Law 9. We find nothing in the record
before us to support this assumption and think that it may well
be incorrect.14 This is significant because, if there is a
judgment against Vega-Sosa in his official capacity, it runs
against Humacao itself,15 and the Commonwealth's immunity is
14There is no doubt that the plaintiffs’ sued Vega-Sosa and
Ferrer in both their personal and official capacities. Indeed,
the defendants specifically sought to have the official capacity
suit dismissed in their motion for summary judgment -- a motion
which was denied by the district court. It also appears
undisputed that the plaintiffs submitted the proof necessary to
establish Humacao’s liability under § 1983. As this Court has
previously stated, under Puerto Rico law, the actions of a mayor
“constitute[] the official policy of the municipality,” Cordero
v. Jesus-Mendez, 867 F.2d 1, 7 (1st Cir. 1989), and, therefore,
a Puerto Rico municipality is “liable as a matter of law for an
unconstitutional discharge of its municipal employees by the
Mayor,” id. at 8. We find nothing in the record to suggest that
the plaintiffs abandoned their official capacity claims.
15Vega-Sosa's counsel appears to argue at one point that the
official capacity judgment against Vega-Sosa effectively
disappeared when Vega-Sosa ceased being mayor. This is
nonsensical. The judgment was, at all times, a judgment against
Humacao. Andino-Pastrana, 215 F.3d at 180. As Fed. R. Civ. P.
25(d)(1) makes clear, the substitution of a public official by
his or her successor in an official capacity suit does not
affect the underlying action.
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irrelevant with respect to that judgment. See Monell v. Dep't
of Soc. Servs., 436 U.S. 658, 690 n. 54 (1978) (noting that
state sovereign immunity is no bar to municipal liability under
§ 1983).
The district court’s reliance on Law 9 as a basis for
the protective order is also inapposite. To begin with, we
question whether the issue of Law 9's scope was open to the
district court to interpret, in light of this court's precedent
on the subject. In Gonzalez-Torres v. Toledo, 586 F.2d 858 (1st
Cir. 1978), we specifically considered the scope of
indemnification available under Puerto Rico law, in order to
determine whether an individual capacity defendant, once
afforded Law 9 benefits, retained an interest in the judgment
sufficient to maintain an appeal. See id. at 859. The
defendant in question had been the target of a § 1983 suit and
had a damages judgment -- including a significant punitive
damages component -- entered against him. Id. The
Commonwealth, acting pursuant to Law 9, moved to indemnify him
against the judgment, but the defendant nonetheless sought to
appeal the verdict. Id. In connection with this issue, the
Secretary of Justice of Puerto Rico filed a certification with
this court stating that the Commonwealth had assumed “full
payment of any judgment that might be entered.” Id. (emphasis
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added). Thereafter, this Court held that the superintendent was
“under no personal obligation as a result of the judgment,” and
thus not a real party in interest, id. at 859-60 -- necessarily
implying that the Commonwealth had assumed payment of all the
damages, including the punitive damages.
Furthermore, even if the issue was properly considered
by the district court, the conclusion the court reaches could
not be supported on the grounds given. In reasoning that Law 9
must be interpreted to preclude indemnification of punitive
damages, the court relied not on the language of Law 9 itself,16
but on two unrelated statutory provisions describing the
recovery available in suits brought against the Commonwealth or
its municipalities under various Puerto Rico causes of action.17
16
The language of the statute is inclusive, stating that the
benefits available to a covered official include “payment of any
judgment that may be entered against his person.” P.R. Laws
Ann. tit. 32, § 3085 (emphasis added). At least one
jurisdiction has interpreted similarly nonspecific language to
require indemnification of punitive damages judgments. See Bell
v. City of Milwaukee, 746 F.2d 1205, 1271-72 (7th Cir. 1984)
(holding that Wisconsin indemnification statute requiring
municipality to pay “the judgment” resulting from a suit against
its officials extended to punitive damages judgments).
17
The first provision relates to the damages recoverable in
civil rights suits brought against the Commonwealth; it includes
the statement that “[a] judgment against the Commonwealth shall
in no case include . . . punitive damages.” See P.R. Laws Ann.
tit. 32, § 3083. The second concerns the damages available to
plaintiffs suing municipalities for negligent damage to their
persons or property; it includes the statement that “[j]udgment
entered against any municipality in accordance with . . . this
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The district court offers no explanation as to why the scope of
liability described in these statutes should influence our
understanding of Law 9's indemnification provisions,18 and we
find its approach to interpreting the statute unconvincing.
Finally, we reiterate that the district court's
reasoning ignores the plaintiffs' claim that they have a
judgment directly against Humacao deriving from the official
capacity suit. Because Law 9 is only implicated where there is
a personal capacity judgment against an official, the district
court's second rationale would be no bar to recovery against
Humacao on an official capacity judgment.
2. City of Newport
Although we find that the district court failed to
articulate a valid basis for its conclusion that Humacao could
not be liable for the punitive damages judgment, we may still
uphold the protective order if the court's decision to grant it
can be justified on another ground having record support. E.g.,
Hodgens v. Gen. Dynamics Corp., 144 F.3d 151, 172 (1st Cir.
title shall in no case . . . award punitive damages.” P.R. Laws
Ann. tit. 21, § 4703.
18
Indeed, it seems to us that Puerto Rico's legislature
might well choose not to authorize recovery of punitive damages
in suits against itself or its municipalities in certain classes
of cases, while still considering it desirable to indemnify its
officials against such judgments.
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1998). On appeal, the defendants press the argument, offered in
their motion for a protective order but not reached by the
district court, that the court's decision may be justified as an
application of the principles outlined by the Supreme Court in
City of Newport. We now turn to this contention.
In City of Newport, the Court held that, as a general
rule, municipalities are immune from punitive damages judgments
when sued under § 1983. 453 U.S. at 271. In reaching this
result, the Court employed a framework it has used on a number
of occasions to determine whether immunities available at common
law should be allowed as affirmative defenses in § 1983 actions.
Id. at 258 & n. 18 (discussing Court's approach to incorporating
common-law immunities and citing cases). Under this approach,
the Court considered, first, whether incorporation of the
immunity was consistent with the history of § 1983, and, second,
whether the policies served by the immunity were compatible
with the purposes of § 1983. Id. The Court concluded that
incorporation of the common law immunity from punitive damages
was justified under both prongs of the analysis. After an
extensive review of contemporary cases and the available
legislative history, the Court found that municipal immunity
from punitive damages “was not open to serious question” when
the statute was enacted, id. at 259, and that there was “no
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evidence that Congress intended to disturb the settled common-
law immunity,” id. at 266. In addition, the Court concluded
that such immunity was not inconsistent with the purposes of §
1983, reasoning that the imposition of punitive damages awards
was likely to provide a windfall to plaintiffs -- at taxpayers'
expense -- without significantly advancing the compensation or
deterrence aims of the statute. Id. at 266-271.
It is undisputed that Humacao is a “municipality” that
would, as an initial matter, be entitled to the immunity defense
recognized by City of Newport. The question for us, then, is
whether the defendants are correct that, as a matter of law, the
plaintiffs cannot show a waiver of Humacao's City of Newport
immunity, and, therefore, cannot establish Humacao's liability
for the punitive damages. This question cannot be answered with
certainty on the present record. However, we find that the
plaintiffs have articulated plausible grounds supporting a
possible waiver of immunity, and therefore conclude that the
district court's order cannot be justified on the basis of City
of Newport.19
19
For purposes of this analysis, we rely on the information
available at the time the appeal was initially argued before
this court. Although additional documentary evidence was
produced in response to this court's order, consideration of
this information in resolving the present appeal is problematic
because the plaintiffs supplemented their briefing to take
account of the documents -- without seeking our approval to do
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The plaintiffs' principal contention, both below and
on appeal, is that certain documents relating to the extension
of Law 9 benefits to Vega-Sosa and Vega-Sosa's acceptance of
those benefits operate as a waiver of Humacao's immunity. The
plaintiffs provide limited detail concerning the contents of
these documents; however, they suggest that, among other things,
the requested discovery will reveal one or more resolutions of
Humacao's municipal council indicating a consent to pay the full
judgment, including punitive damages. In response, the
defendants offer a variety of arguments that, in their view,
establish that the plaintiffs cannot succeed in proving waiver,
no matter what the documents may say. We need consider only two
of these arguments.20 The first focuses on whether Vega-Sosa had
authority to waive Humacao's immunity; the second challenges the
plaintiffs' ability to make any waiver argument at this point in
the proceedings, given the plaintiffs' failure to do so at
trial.
so -- while the defendants did not.
20
The defendants' remaining arguments rest on premises
already rejected by this court, including the assumption that
the plaintiffs' judgment runs only against Vega-Sosa in his
personal capacity; the assumption that payment of the judgment
necessarily implicates the Commonwealth's Eleventh Amendment
immunity; and the conclusion that Law 9 must be interpreted to
prohibit indemnification of punitive damages judgments.
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The defendants' first argument is easily rejected.
Although the plaintiffs do imply in their briefs that Vega-Sosa
may be responsible for waiving Humacao's immunity, this is not
their only theory for waiver. See Pl. Br. p. 16 (alleging the
existence of a resolution “by which[,] in accepting legal
representation by the Justice Department [pursuant to Law 9,]
the municipality accepted also to pay any judgment entered in
the case”) (emphasis added). The defendants do not appear to
dispute that Humacao's municipal legislature could have executed
a waiver of its City of Newport immunity, and precedent supports
the view that such a waiver is possible. See, e.g., O'Neill v.
Krzeminski, 839 F.2d 9, 13 (3d Cir. 1988) (holding that
municipality's indemnification agreement with defendant
constituted a waiver of its City of Newport immunity); Cornwell
v. City of Riverside, 896 F.2d 398, 399-400 (9th Cir. 1990)
(holding that City of Newport did not bar municipality from
deciding to pay a punitive damages judgment for an official
pursuant to a state statute that allowed, but did not require,
municipalities to pay such damages); see also Bell, 746 F.2d at
1271-72 (holding that state indemnification statute waived
municipality's immunity from punitive damages with respect to
indemnified judgments). As a result, the defendants' argument,
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even if correct, would not preclude the possibility that the
plaintiffs might prove a waiver of immunity.
The defendants' second contention fares no better, at
least on the present record. In arguing that the plaintiffs
were required to make their waiver-of-immunity arguments at
trial, the defendants take it as a given that the immunity
defense itself was properly raised below. This is far from
clear. Our review of the record indicates that the defendants
made only one bare, unexplained reference to nonliability for
punitive damages in their answer,21 and never said anything else
that could be construed as raising the issue until long after
the judgment became final. Furthermore, the language that
appeared in the answer failed to mention either the word
“immunity” or the City of Newport case, nor did it attempt to
distinguish between the personal capacity suit and the official
capacity suit. As a result, it was perhaps most logically read
not as invoking any immunity, but as rejecting the plaintiffs'
contention that the actions complained of could justify a
punitive damages award.
21This reference appears as part of the Eighth Affirmative
Defense, which reads (emphasis added):
In the hypothesis that plaintiffs are entitled to any
relief, which appearing defendants deny, plaintiffs
are not entitled to recover under 42 U.S.C.1983 nor
are they entitled to punitive damages.
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Under the circumstances, we are skeptical that such a
brief, ambiguous reference was sufficient to place the issue
before the court, or to trigger any duty on the part of the
plaintiffs to respond. See Violette v. Smith & Nephew Dyonics,
Inc., 62 F.3d 8, 11 (1st Cir. 1995) (holding that defendants’
mere mention of affirmative defense of preemption in answer,
never developed or pressed before the court, was insufficient to
meet requirement that party must “actually present a claim or
defense to the district court before arguing the matter on
appeal”); Williams v. Ashland Eng'g Co., 45 F.3d 588, 592 (1st
Cir. 1995) (discussing the standard to be applied when
determining if an affirmative defense is preserved by non-
specific language in an answer and noting that a defendant “who
asserts [an affirmative defense] in a largely uninformative
way[] acts at his peril”); see also Sales v. Grant, 224 F.3d
293, 296 (4th Cir. 2000), cert. denied, ___ U.S. ___, 121 S. Ct.
1959 (2001) (holding that the inclusion of a “single, cursory
sentence” on the defense of qualified immunity in the answer was
insufficient to preserve the defense where it was never
mentioned again and defendants sought to raise it for the first
time on remand from an earlier appeal). If it was not, the
plaintiffs have at least a plausible argument that it is the
defendants, not they, whose arguments are barred on procedural
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grounds. See Barnett v. Housing Auth. of Atlanta, 707 F.2d
1571, 1580 (11th Cir. 1983) (finding City of Newport defense to
be waived by defendants' failure, at trial, to challenge jury
instruction regarding punitive damages); Black v. Stephens, 662
F.2d 181, 184 n.1 (3d Cir. 1981) (same).22
In view of the foregoing, we conclude that, on the
present record, the district court could not have found that
Humacao's City of Newport immunity was nonwaivable. While
plaintiffs' assertions regarding alleged waivers of immunity
were somewhat non-specific,23 they included allegations that, if
22We acknowledge the conclusion of at least one court that
failure to raise City of Newport immunity at trial will not
prevent a defendant from doing so on appeal. Williams v.
Butler, 746 F.2d 431, 444 (8th Cir. 1984), vacated on other
grounds sub nom. City of Little Rock v. Williams, 475 U.S. 1105
(1986) (affirming district court's decision to strike punitive
damages award despite failure of defendant to object to the
punitive damages instruction at trial, and stating that it would
have been reversible error if the award had been allowed).
However, even acceptance of this view would not excuse the
seeming failure of the defendants in the present case to raise
the issue until after the judgment became final. If this
occurred, the defendants would also have to demonstrate that
they are entitled to relief from the judgment under Fed. R. Civ.
P. 60(b). See Allmerica Fin. Life Ins. & Annuity Co. v.
Llewellyn, 139 F.3d 664, 665 (9th Cir. 1998) (holding that
district court could not consider waiver defense not raised
until after judgment became final without first granting relief
from the judgment pursuant to Fed. R. Civ. P. 60(b)); see also
id. at 666 (concluding that attorney's unexplained failure to
timely raise the defense did not justify granting relief from
the judgment).
23Of course, the lack of details in the plaintiffs'
allegations is hardly surprising, given that the documents on
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true, could constitute waivers of immunity under relevant
precedent. As a result, the district court's grant of the
protective order cannot be justified on this basis.
III.
Because we find that the district court's protective
order rests on no legally supportable ground, we vacate the
order and remand the matter for further proceedings consistent
with this opinion. On remand, we anticipate that the plaintiffs
will be allowed to complete any remaining discovery sought in
the deposition notice issued to Lopez-Gerena. We leave it to
the district court to determine what other proceedings may be
necessary to resolve whether Humacao is liable for the
plaintiffs' punitive damages judgment.
Vacated and remanded. Costs to appellants.
which the arguments were premised were not then in the
plaintiffs' possession.
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