Diaz-Diaz et al v. Fortuo-Burset et al, No. 3:2011cv01632 - Document 40 (D.P.R. 2013)

Court Description: OPINION AND ORDER DENYING 30 MOTION for Reconsideration re 29 Opinion and Order, filed by Joseline Silva-Lamb, Evelyn Garcia-Cordero, Larissa Santiago-Tirado, Jose Torres-Rodriguez, Brenda M Corsi-Ramirez, Roberto Aponte-Feliciano, Narha Diaz-Diaz. Signed by Judge Jose A Fuste on 2/6/2013.(mrj)

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UNITED STATES DISTRICT COURT DISTRICT OF PUERTO RICO 1 2 3 NARHA DIAZ-DIAZ, et al., 4 Plaintiffs, 5 v. 6 7 8 9 10 11 Civil No. 11-1632 (JAF) LUIS G. FORTUà O-BURSET, in his personal and official capacity, and RUBà N HERNà NDEZ-GREGORAT, in his personal and official capacity, Defendants. 12 13 OPINION AND ORDER 14 Before the court is a motion to alter or amend judgment, filed by Plaintiffs. (Docket 15 No. 30.) Plaintiffs request that their motion be construed as one under Fed. R. Civ. P. 59(e). 16 (Docket No. 32.) Defendants oppose the motion. (Docket No. 36.) For the following 17 reasons, we deny Plaintiffs motion. 18 19 I. Factual Synopsis 20 In this suit, Plaintiffs claimed that a Commonwealth statute, known as Law 7, the 21 Special Act Declaring a State of Fiscal Emergency and Establishing a Comprehensive 22 Fiscal Stabilization Plan to Salvage the Credit of Puerto Rico, 3 L.P.R.A. §§ 8791 8810 23 (2009) [hereinafter Law 7 ], violated their rights, giving rise to claims under the U.S. 24 Constitution via 42 U.S.C. § 1983, the Puerto Rico Constitution, and the Commonwealth s 25 general tort statute, 31 L.P.R.A. § 5141 ( Article 1802 ). (Docket No. 1.) Plaintiffs sued 26 Governor Luis Fortuño-Burset, in his individual and official capacity, and Rubén -2- Civil No. 11-1632 (JAF) 1 Hernández-Gregorat, in his individual capacity and official capacity as Secretary of 2 Transportation and Public Works (together Defendants ). Defendants moved for dismissal 3 under Federal Rule of Civil Procedure 12(b)(6). (Docket No. 17.) Plaintiffs opposed. 4 (Docket No. 18.) We granted Defendants motion to dismiss. (Docket No. 29.) 5 II. 6 Legal Analysis 7 Plaintiffs now bring a motion pursuant to Fed. R. Civ. P. 59(3). (Docket Nos. 30; 8 32.) In this circuit, a motion asking the court to modify its earlier disposition of a case 9 because of an allegedly erroneous legal result is brought under [Rule] 59(e) of the Federal 10 Rules of Civil Procedure. Cahoon v. Shelton, 647 F.3d 18, 29 (1st Cir. 2011) (quoting In re 11 Sun Pipe Line Co., 831 F.2d 22, 24 (1st Cir. 1987)). First Circuit case law generally 12 offer[s] three grounds for a valid Rule 59(e) motion: An intervening change in the 13 controlling law, a clear legal error, or newly-discovered evidence. 1 Soto-Padró v. Pub. 14 Bldgs. Auth., 675 F.3d 1, 11 (1st Cir. 2012) (quoting Morán Vega v. Cruz Burgos, 537 F.3d 15 14, 18 (1st Cir. 2008)). Plaintiffs motion impliedly argues that our judgment was based on 16 a clear legal error. We disagree. 17 In our opinion and order, we held that Plaintiffs had failed to plead the elements of a 18 claim under the Contract Clause of the U.S. Constitution. In evaluating such a claim, courts 19 employ a two-part test. See United Auto., Aerospace, Agr. Implement Workers of Am. Int l 20 Union v. Fortuño, 633 F.3d 37, 47 (1st Cir. 2011) (affirming the dismissal of a challenge to 21 Law 7 under the Contract Clause). A court asks: 1) whether the state law operated as a 1 The First Circuit has also mentioned prevention of manifest injustice as another narrow ground for granting a Rule 59(e) motion. Marie v. Allied Home Mortg. Corp., 402 F.3d 1, 7 n.2 (1st Cir. 2005) (citing 11 Charles Alan Wright, Arthur R. Miller & Mary Kay Kane, Federal Practice and Procedure § 2810.1 (2d ed. 1995)). Civil No. 11-1632 (JAF) -3- 1 substantial impairment of a contractual relationship; if we find impairment, we next ask 2 2) whether the impairment was reasonable and necessary to serve an important government 3 purpose. Id. (internal quotation marks and citations omitted). The plaintiff bears the 4 burden of establishing lack of reasonableness or necessity. Id. at 45. 5 In our opinion, we cited United Auto, 633 F.3d at 46, holding that Plaintiffs had 6 failed to plead sufficient facts to show that Law 7 was unnecessary or unreasonable. 7 (Docket No. 29 at 7.) Similar to the plaintiffs in United Auto, these Plaintiffs failed to 8 describe the CBA that they claim that Law 7 impaired. They submitted no example of the 9 CBA, nor did they describe any of the supposed layoff protections beyond briefly 10 mentioning that the CBA required unspecified negotiations preceding any layoffs. 11 (Docket Nos. 1; 18.) As Defendants argue in their opposition, (Docket No. 36), Plaintiffs 12 motion for reconsideration completely ignores this basis for our earlier dismissal. 13 Plaintiffs sole argument here is that because their salaries are paid from revenue 14 sources that Law 7 does not purport to affect, Defendants interference with their CBAs 15 was unreasonable. (Docket No. 30 at 2.) We already considered, and rejected, Plaintiffs 16 argument that the independent source of their salaries distinguished their case from United 17 Auto and Dominguez Castro v. Puerto Rico, 178 D.P.R. 1, 88 (P.R. 2010). In our opinion, 18 we noted that this argument was insufficient to overcome Plaintiffs failure to plead a proper 19 claim under the Contract Clause. (Docket No. 29 at 5 n.2.) The same is still true. We 20 remind Plaintiffs that a party cannot use a Rule 59(e) motion to rehash arguments 21 previously rejected. Soto-Padró, 675 F.3d at 11 (internal quotation marks and citations 22 omitted). Civil No. 11-1632 (JAF) -4- 1 Even if it were necessary to address this argument, Plaintiffs would still fail to show 2 that the challenged provisions of Law 7 were not reasonable and necessary to serve an 3 important government purpose. United Auto, 633 F.3d at 41. In United Auto, the First 4 Circuit set forth a long list of considerations that inform this determination. 633 F.3d at 46. 5 Some of the factors that we consider include whether Law 7: 1) was an emergency 6 measure; 2) was one to protect a basic societal interest, rather than particular individuals; 7 3) was tailored appropriately to its purpose; 4) imposed reasonable conditions; and 5) was 8 limited to the duration of the emergency. Id. (citing Energy Reserves Grp., 459 U.S. at 410 9 n.11). Plaintiffs have failed to make any arguments with respect to several of these factors. 10 No facts have been pled to suggest that [Law 7] was enacted to benefit a special interest at 11 the expense of Puerto Rico s public employees. Id. Nor have Plaintiffs shown that Law 7 12 was not an emergency measure limited to the duration of the emergency. Id. Another 13 important consideration that Plaintiffs fail to address is their diminished expectation that 14 their contracts will not be impaired by the government, by virtue of their status as public 15 employees. Id. (citing Baltimore Teachers Union, 6 F.3d at 1021). 16 Instead of addressing these numerous considerations, Plaintiffs present one weak and 17 undeveloped argument: That it was unreasonable for Law 7 to target their CBA, because 18 their salaries were paid from traffic-related revenues rather than from Puerto Rico s general 19 fund. (Docket No. 30.) Defendants respond that it was reasonable to target Plaintiffs 20 salaries; regardless of which revenue stream funded Plaintiffs salaries, the savings 21 generated by these measures would still help stabilize Puerto Rico s overall fiscal health. -5- Civil No. 11-1632 (JAF) 1 (Docket No. 36.) We agree with Defendants. Plaintiffs were former employees of the 2 Commonwealth Department of Transportation and Public Works ( DTOP ), and employee 3 compensation is a principal expenditure in Puerto Rico s total consolidated budget in 2009. 4 See id. at 49 n.18 (Boudin, J., concurring) (citing P.R. Office of Mgmt. & Budget, 5 Government of Puerto Rico, FY 2009-2010 Budget: Executive Summary 8 (2009)). Any 6 money that the government saved on employee salaries would have freed up revenue to go 7 toward other ends, consistent with Law 7 s broadly-stated purpose of establishing a 8 comprehensive and coherent fiscal stabilization plan. See Section 2 of Act Mar. 9, 2009, 9 No. 7, 3 L.P.R.A. § 8791 (2009). During one of the worst financial crises in its history, 10 [Puerto Rico s] government has been running a large structural deficit, and its credit has 11 been in jeopardy. Id. Against such a backdrop, Plaintiffs barebones arguments are 12 insufficient to show that Defendants cost-saving measures were not reasonable and 13 necessary to serve an important government purpose. Id. at 41. 14 III. 15 Conclusion 16 17 Given the foregoing, we hereby DENY Plaintiffs motion to reconsider (Docket No. 30). 18 IT IS SO ORDERED. 19 San Juan, Puerto Rico, this 6th day of February, 2013. 20 21 22 s/José Antonio Fusté JOSE ANTONIO FUSTE United States District Judge

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