UECFSE v. United States

• Court: Court of Appeals for the First Circuit
• Decided: April 16, 2021
• Docket: 19-2243P
• Status: Published

Opinion

United States Court of Appeals For the First Circuit

No. 19-2243

IN RE: THE FINANCIAL OVERSIGHT AND MANAGEMENT BOARD FOR PUERTO RICO, AS REPRESENTATIVE FOR THE COMMONWEALTH OF PUERTO RICO; THE FINANCIAL OVERSIGHT AND MANAGEMENT BOARD FOR PUERTO RICO, AS REPRESENTATIVE FOR THE PUERTO RICO HIGHWAYS AND TRANSPORTATION AUTHORITY; THE FINANCIAL OVERSIGHT AND MANAGEMENT BOARD FOR PUERTO RICO, AS REPRESENTATIVE FOR THE PUERTO RICO ELECTRIC POWER AUTHORITY (PREPA); THE FINANCIAL OVERSIGHT AND MANAGEMENT BOARD FOR PUERTO RICO, AS REPRESENTATIVE FOR THE PUERTO RICO SALES TAX FINANCING CORPORATION, a/k/a Cofina; THE FINANCIAL OVERSIGHT AND MANAGEMENT BOARD FOR PUERTO RICO, AS REPRESENTATIVE FOR THE EMPLOYEES RETIREMENT SYSTEM OF THE GOVERNMENT OF THE COMMONWEALTH OF PUERTO RICO; THE FINANCIAL OVERSIGHT AND MANAGEMENT BOARD FOR PUERTO RICO, AS REPRESENTATIVE OF THE PUERTO RICO PUBLIC BUILDINGS AUTHORITY,

Debtors. ________________________

HERMANDAD DE EMPLEADOS DEL FONDO DEL SEGURO DEL ESTADO, INC., a/k/a Unión de Empleados de la Corporación del Fondo del Seguro del Estado (UECFSE); UNIÓN DE MÉDICOS DE LA CORPORACIÓN DEL FONDO DEL SEGURO DEL ESTADO CORP. (UMCFSE); LIZBETH MERCADO CORDERO; FRANCISCO J. REYES MÁRQUEZ,

Plaintiffs, Appellants,

ASOCIACIÓN DE EMPLEADOS GERENCIALES DEL FONDO DEL SEGURO DEL ESTADO CORP. (AEGFSE); EVA E. MELÉNDEZ FRAGUADA; JOSÉ E. ORTIZ TORRES,

Plaintiffs,

v.

UNITED STATES; FINANCIAL OVERSIGHT AND MANAGEMENT BOARD; COMMONWEALTH OF PUERTO RICO,

Defendants, Appellees, RICARDO ROSSELLÓ NEVARES, through the Secretary of Justice; ROSA E. RODRÍGUEZ-VÉLEZ,

Defendants.

APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF PUERTO RICO

[Hon. Laura Taylor Swain,* U.S. District Judge]

Before

Thompson, Kayatta, and Barron, Circuit Judges.

Rolando Emmanuelli Jiménez, with whom Jessica E. Méndez Colberg and Bufete Emmanuelli, C.S.P. were on brief, for appellants. Benjamin H. Torrance, Assistant United States Attorney, with whom Geoffrey S. Berman, United States Attorney, and David S. Jones, Assistant United States Attorney, were on brief, for appellee the United States. Mark D. Harris, with whom Timothy W. Mungovan, John E. Roberts, Laura Stafford, Larry Alan Rappaport, Martin J. Bienenstock, Stephen L. Ratner, Jeffrey W. Levitan, Shiloh Rainwater, and Proskauer Rose LLP were on brief, for appellees the Financial Oversight and Management Board and the Commonwealth of Puerto Rico.

April 16, 2021

* Of the Southern District of New York, sitting by designation. BARRON, Circuit Judge. Two unions representing public

employees in Puerto Rico together with one of their individual

members brought this suit against the United States, the Financial

Oversight and Management Board ("FOMB"), and the Commonwealth

raising a range of claims under federal constitutional and

international law. The claims all concern the legal status of

Puerto Rico. The District Court dismissed them because it

concluded that the plaintiffs lacked standing to bring them under

Article III of the federal Constitution. We affirm.

I.

The plaintiffs are two unions, Hermandad de Empleados

del Fondo del Seguro del Estado, Inc., and Unión de Médicos de la

Corporación del Fondo del Seguro del Estado Corp., and one of their

members, Lizbeth Mercado Cordero.1 The unions have a combined

membership of about two thousand employees, and they have each

entered into collective bargaining agreements with CFSE, which is

Puerto Rico's State Insurance Fund Corporation.

The plaintiffs brought their suit in May 2018 and filed

their second amended complaint on October 5, 2018, against the

United States, the FOMB, and the Commonwealth of Puerto Rico. The

eighty-one-page complaint requests a declaration that the Puerto

Rico Oversight, Management, and Economic Stability Act

1Francisco J. Reyes Márquez was an additional individual plaintiff below, but has since passed away.

- 3 - ("PROMESA"), see 48 U.S.C. § 2101 et seq., and all of the FOMB's

actions taken pursuant to it violate the First, Fifth, Thirteenth,

Fourteenth, and Fifteenth Amendments of the U.S. Constitution;

seeks to "enjoin[] and stay[]" the defendants "from pursuing this

and any . . . cases" under PROMESA and from taking any other

actions under that law; requests a declaration "overruling the

Insular Cases because they instituted an unconstitutional colonial

regime"; and requests an order "declar[ing] the existence of an

illegal colonial regime that is subject to the procedures enacted

by international law to decolonize[] Puerto Rico, under the

Declaration on the Granting of Independence to Colonial Countries

and Peoples, adopted by General Assembly resolution 1514 (XV) of

December 14, 1960."

On the defendants' motions, the District Court dismissed

the plaintiffs' claims for declaratory relief for lack of subject

matter jurisdiction. See Fed. R. Civ. P. 12(b)(1). It reasoned

that the plaintiffs had failed to allege concrete and

particularized injuries that their requested relief could redress.

It concluded on this ground that the plaintiffs had "failed to

demonstrate that they have standing to pursue their claims."2 The

plaintiffs timely appealed.

2 The District Court did not reach the defendants' Rule 12(b)(6) arguments.

- 4 - II.

Article III limits the judicial power to actual cases

and controversies. See U.S. Const. art. III, § 2, cl. 1. An

actual case or controversy only exists if the plaintiff has

demonstrated "such a personal stake in the outcome of the

controversy as to assure that concrete adverseness which sharpens

the presentation of issues upon which the court so largely

depends." Baker v. Carr, 369 U.S. 186, 204 (1962).

"To satisfy the personal stake requirement, [the]

plaintiff must establish each part of a familiar triad: injury,

causation, and redressability." Katz v. Pershing, LLC, 672 F.3d

64, 71 (1st Cir. 2012) (citing Lujan v. Defs. of Wildlife, 504

U.S. 555, 560-61 (1992)). The redressability element of

constitutional standing requires that the plaintiff show "that a

favorable resolution of [the] claim would likely redress the

professed injury." Id. at 72. That means "it cannot be merely

speculative that, if a court grants the requested relief, the

injury will be redressed." Dantzler, Inc. v. Empresas Berríos

Inventory & Operations, Inc., 958 F.3d 38, 47 (1st Cir. 2020)

(citing Simon v. E. Ky. Welfare Rts. Org., 426 U.S. 26, 42-43

(1976)). And although the plaintiff "need not demonstrate that

[the] entire injury will be redressed by a favorable judgment,

[the plaintiff] must show that the court can fashion a remedy that

will at least lessen [the] injury." Id. at 49 (citing Antilles

- 5 - Cement Corp. v. Fortuño, 670 F.3d 310, 318 (1st Cir. 2012)). Our

review of a ruling as to whether the requirements of Article III

standing have been met is de novo. See Me. People's All. v.

Mallinckrodt, Inc., 471 F.3d 277, 283 (1st Cir. 2006).

The plaintiffs contend that the District Court erred in

dismissing their suit on Article III grounds in part because their

second amended complaint had alleged that "the enactment of laws

by the Commonwealth that were incorporated to the Fiscal Plans

certified by the FOMB" "inva[ded]" their "pecuniary interest,

collective bargaining agreement and property (employment,

salaries, bonuses, pensions and health plans)." The laws in

question are Acts 66-2014, 3-2017, 8-2017, and 26-2017, each of

which the plaintiffs allege "impair[s] . . . labor rights and

benefits" that their collective bargaining agreements had

previously secured. The fiscal plan in question is the

Commonwealth's Fiscal Plan of 2018, certified by the FOMB on June

29 of that year. That plan provides in relevant part that a

payroll and hiring freeze for public employees as well as certain

restrictions to their healthcare and to their sick and vacation

days "must be continued."

The problem with the plaintiffs' contention is that none

of the relief that they seek would prevent any of the laws that

they contend caused them pecuniary harm from continuing to have

full force and effect. For that reason, it is entirely speculative

- 6 - on this record that any of that relief would spare the plaintiffs

the pecuniary harm that they trace back to those laws. And,

because it is entirely speculative on this record that such relief

would redress the claimed pecuniary harm, that claimed pecuniary

harm provides no support for the plaintiffs' argument that the

District Court erred in dismissing their claims for lack of Article

III standing. See Dantzler, 958 F.3d at 47, 49.

The plaintiffs do separately contend that they have

standing to seek the relief at issue because PROMESA's constraints

and the FOMB's oversight powers dilute the power of their vote in

elections in Puerto Rico due to the limits that PROMESA and the

FOMB place on the powers of the Puerto Rico government. But, the

plaintiffs do not contend that any of these limits have diluted

their voting power within Puerto Rico vis-à-vis others in Puerto

Rico. Thus, the precedents on which they rely to show that the

burden imposed on their right to vote suffices to secure their

standing under Article III are readily distinguished. See, e.g.,

Baker, 369 U.S. at 207-08 (explaining that the statute in question

inflicted an injury on the plaintiffs because it "disfavor[ed] the

voters in the counties in which they reside, placing them in a

position of constitutionally unjustifiable inequality vis-à-vis

voters in irrationally favored counties").

In the end, the plaintiffs are contending that the harm

they have suffered results from the fact that PROMESA and the

- 7 - FOMB's actions are preemptive of local law. The plaintiffs fail

to explain, however, why this type of harm is not a generalized

grievance of just the sort that cannot suffice the demands of

Article III. See Gill v. Whitford, 138 S. Ct. 1916, 1923 (2018)

(explaining that plaintiffs must show a concrete and

particularized injury to demonstrate that they have a "'personal

stake in the outcome,' distinct from a 'generally available

grievance about government'" (citation omitted) (first quoting

Baker, 369 U.S. at 204; and then quoting Lance v. Coffman, 549

U.S. 437, 439 (2007))).

The plaintiffs do assert at one point in their briefing

that "the fact that they do not have a right to vote for the

federal officers who appointed and imposed PROMESA, aggravates

their [voting rights] injury." But, even assuming that this

assertion is responsive to the concern that the plaintiffs are

seeking relief for what is merely a generalized grievance, none of

the relief that they seek would redress their injury insofar as it

inheres in restrictions in their ability to vote in federal

elections. Thus, this argument, too, fails to show that the

District Court erred in dismissing their claim on standing grounds.

III.

The issues that the plaintiffs' complaint raises

concerning the legal status of Puerto Rico are weighty ones. But,

to be fit for adjudication in federal court, they must be raised

- 8 - in a suit that satisfies the requirements of Article III. Because

we agree with the District Court that the plaintiffs have not met

their burden to satisfy those federal constitutional requirements,

we affirm the order dismissing their claims for lack of standing.

- 9 -