CENTRO DE PERIODISMO INVESTIGATIVO, INC., Plaintiff, Appellee, v. FINANCIAL OVERSIGHT AND MANAGEMENT BOARD FOR PUERTO RICO, Defendant, Appellant.
No. 21-1301
United States Court of Appeals For the First Circuit
May 17, 2022
APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF PUERTO RICO [Hon. Jay A. García-Gregory, U.S. District Judge] [Hon. Bruce J. McGiverin, U.S. Magistrate Judge]
Martin J. Bienenstock, with whom Guy Brenner, Adam L. Deming, Mark D. Harris, Joseph S. Hartunian, Timothy W. Mungovan, John E. Roberts, Laura E. Stafford, and Proskauer Rose LLP were on brief, for appellant.
Judith Berkan, with whom Berkan/Méndez, Steven J. Lausell Recurt, Legal Clinic Interamerican University School of Law were on brief, for appellee.
Juan Cartagena, Jose Perez, Lía Fiol-Matta, Rachel B. Sherman, Tara J. Norris, and Patterson Belknap Webb & Tyler LLP on brief for LatinoJustice PRLDEF, amicus curiae.
Brendan Benedict and Benedict Law Group PLLC on brief for Espacios Abiertos, the National Freedom of Information Coalition, the Iowa Freedom of Information Council, and the Nevada Open Government Coalition, amici curiae.
Ariadna Michelle Godreau Aubert and Ayuda Legal Puerto Rico on brief for Asociación de Periodistas de Puerto Rico, amicus curiae.
Tomás A. Román-Santos, Román Santos LLC, Bruce D. Brown, Katie Townsend, Sarah Matthews, Adam Marshall, and Madeline Lamo on brief for the Reporters Committee for Freedom of the Press and
OPINION
THOMPSON, Circuit Judge. The Centro de Periodismo Investigativo (“CPI“), a non-profit media organization based in Puerto Rico, is on a quest to obtain documents from the Financial Oversight and Management Board for Puerto Rico (“the Board“) that the Board has not simply handed over upon request. The Board is resisting CPI‘s reliance on Puerto Ricans’ general constitutional right to access public documents as the basis for why CPI is entitled to the documents it seeks. After CPI turned to the district court for assistance, the Board asked the district court to dismiss the litigation, arguing that it is immune from suit pursuant to both the Eleventh Amendment of the United States Constitution and the Puerto Rico Oversight, Management, and Economic Stability Act (“PROMESA“),
HOW WE GOT HERE
Before we delve into the travel of this case through the district court and start exploring the issues presented in this appeal, we lay out a brief description of PROMESA, the Board, and CPI. Congress, pursuant to its Territorial Clause power,1 passed PROMESA in 2016 to address Puerto Rico‘s “fiscal emergency” by creating “mechanisms for restructuring [its] debts . . . and for overseeing reforms of [its] fiscal and economic policies.” In re Fin. Oversight and Mgmt. Bd. for P.R., 916 F.3d 98, 103-04 (1st Cir. 2019). Congress created the Board in PROMESA “as an entity within the territorial government” of Puerto Rico to help the Commonwealth “achieve fiscal responsibility and access to the capital markets.”
Fin. Oversight and Mgmt. Bd. for P.R., 916 F.3d at 103-04. The Board has seven members, appointed by the President and supported by an executive director and staff (the precise number of whom were not set by the statute).
(1) PROMESA § 103: “The provisions of [PROMESA] shall prevail over any general or specific provisions of territory law, State law, or regulation that is inconsistent with [PROMESA].”
Id. § 2103 .
(2) PROMESA § 105: “The Oversight Board, its members, and its employees shall not be liable for any obligation of or claim against the Oversight Board or its members or employees or the territorial government resulting from actions taken to carry out this chapter.” Id. § 2125 .(3) PROMESA § 106: “[A]ny action against the Oversight Board, and any action otherwise arising out of [PROMESA], in whole or in part, shall be brought in a United States district court for [Puerto Rico].”
Id. § 2126 .
CPI uses investigative journalism to access and distribute information about Puerto Rico to Puerto Ricans so they may be better informed about issues affecting them and may be better prepared to exercise their democratic rights. CPI initiated this litigation against the Board in June 2017, relying on PROMESA § 106 for jurisdiction and asking the district court to issue a declaratory judgment, injunctive relief, and writ of mandamus2 forcing the Board to release documents about Puerto Rico‘s fiscal
situation, communications among Board members, contracts, meeting minutes, and financial disclosure forms for the Board‘s members (“the 2017 Complaint“).3 CPI had requested these documents directly from the Board to no avail. CPI alleged that the Board, by ignoring the requests or providing less than complete responses to CPI‘s requests, was violating P.R. Const. § 4.4
The Board filed a motion to dismiss for lack of subject-matter jurisdiction and for failure to state a claim, arguing that
the Eleventh Amendment to the United States Constitution5 bars CPI‘s quest to force the Board to comply with P.R. Const. § 4, and
The district court judge denied the motion, assuming without deciding that the Board is an arm of the Commonwealth entitled to Eleventh Amendment immunity, concluding Congress (in
PROMESA) waived or abrogated the Eleventh Amendment immunity, and also concluding that PROMESA did not preempt P.R. Const. § 4. We‘ll get into the judge‘s reasoning in a little bit -- for now we stay focused on summarizing the travel of the case through the district court before the case landed on our bench. After the denial of the Board‘s motion to dismiss, the district judge referred the case to a magistrate judge to set “case management deadlines for the production of the requested documents” and to preside over the discovery stage of the litigation.
The magistrate judge held a status conference and the parties thereafter filed a series of informative motions to keep the court apprised of the progress they were making towards the Board producing -- and CPI receiving -- the documents CPI requested. Over the following months, there was some progress. The Board produced some documents and continued to withhold some (the details of which are not relevant to the arguments and issues on appeal before us). CPI, however, became frustrated with the pace of the production process, and in October 2018 it started filing motions asking the court for help to speed up production. These motions included one requesting the court set a status conference date to address the Board‘s purported delays in producing the requested documents and another motion a few months later requesting the court compel the Board to produce the requested documents or assert a reason for withholding each
document withheld as well as to impose a monetary sanction based on the Board‘s alleged contempt for its failure to produce the requested documents. The Board made assurances that the documents CPI wanted were to be delivered soon, so the court denied CPI‘s motions but ordered a status update and promised to schedule a status conference to resolve whatever production issues remained at that time.
The magistrate judge held this next status conference in March 2019; the parties identified categories of documents the Board was withholding, and the magistrate judge ordered the Board and CPI to work through the specific areas of dispute. The magistrate judge noted the parties had agreed that the documents to be produced were all created before a cut-off date of April 30, 2018 (the reason why this date is relevant will become clear in the next paragraph). The magistrate judge also ordered that the parties notify him two weeks later about the categories of documents still in dispute and each party‘s reasons why these categories should or
remaining documents it was withholding. Over the parties’ objections, the district judge adopted the R&R in its entirety in a short order entered directly onto the docket (known in some courts as a “text order“), concluding the magistrate judge‘s recommendations were “well-grounded in both fact and law,” and setting a deadline for the Board to produce the privilege log.7
After the magistrate judge issued the R&R and the parties filed their respective objections but before the district judge entered the order adopting the R&R, CPI started a second case in district court against the Board, seeking the production of documents related to communications between the Board and the federal government as well as between the Board and the Puerto Rico government created on April 30, 2018 and after (“the 2019 Complaint“).8 The Board filed a motion to dismiss the 2019
Complaint, restating its arguments from its first motion to dismiss (lack of subject matter jurisdiction and failure to state a claim) and adding a third reason CPI could not prevail in its quest for the Board‘s documents: PROMESA § 105 provided the Board with immunity from the relief CPI seeks. The district court consolidated this second case with the first case and denied the Board‘s motion to dismiss in a short text order “for the reasons stated in the Court‘s Opinion and Order” entered in the lead case about the 2017 Complaint, briefly listing its main conclusions from the Opinion and Order.
The Board filed a notice of appeal to challenge both the order denying its motion to dismiss the 2019 Complaint and the order requiring it to compile and submit the detailed privilege log. This court granted the Board‘s motions to expedite the appeal as well as to stay the district court proceedings.
OUR TAKE9
Out of the gate, CPI contends we should not hear the Board‘s appeal because it has waived any appellate rights through
but not limited to, email and text messages through any digital messaging system.
conduct it engaged in before the district court during the 2017 suit, as we‘ll
Availability of Interlocutory Review
As CPI tells it, we need not address either of the Board‘s immunity contentions raised in response to the 2019 Complaint because the Board has waived any right to prosecute an appeal of those issues. That is so for a couple of reasons: CPI says the Board missed its opportunity to challenge the district court‘s conclusions that the Board is neither immune from CPI‘s suit nor saved by preemption when the Board did not immediately
appeal the denial of its motion to dismiss the 2017 Complaint. CPI also says the Board waived its appellate rights by producing documents in the first suit and by pretending it would ultimately comply with the agreed-upon documents production stipulations.
The Board replies that CPI is ignoring important facts: CPI filed not one but two separate complaints, and the Board‘s appeal here is from the district court‘s denial of its motion to dismiss the 2019 Complaint, not the 2017 Complaint. Continuing, CPI, says the Board, fails to explain why its participation in the first suit or why discovery orders from the first suit preclude it from appealing the district court‘s rejection of its second-suit jurisdictional challenges.
We first note that while CPI raises this waiver issue before us, arguing the Board‘s lack of diligence in timely pursuing its Eleventh-Amendment-subject-matter-jurisdiction assertions bars this appeal, CPI did not provide any on-point or helpful case law to help us understand why it believes that is so. For support, CPI only cites cases dealing with lack of diligence in other contexts, such as juror disqualification, evidentiary issues during trial, and qualified immunity. The same holds true for why the Board‘s participation in suit one‘s discovery practices prevents this appeal -- CPI gives us no helpful case law applicable to its waiver contention. Regardless, we understand CPI‘s essential argument to be that because the Board slept on its rights
in the first suit, it necessarily waived any immunity defense in the second. So we assess CPI‘s contention.10
Case law tells us an Eleventh Amendment sovereign immunity defense, as asserted here, is jurisdictional and therefore may be raised at any point during litigation, even for the first time on appeal. R.I. Dep‘t of Env‘t Mgmt. v. United States, 304 F.3d 31, 49 (1st Cir. 2002). However, a defendant can waive this immunity defense by participating in the litigation, thereby indicating its consent to
For example, we held a defendant did waive its sovereign immunity when it argued this defense before the district court, did not raise it in a first appeal, then tried to resurrect the issue in a second appeal in the same matter. See Aquinnah/Gay Head Cmty. Ass‘n, Inc. v. Wampanoag Tribe of Gay Head (Aquinnah), 989 F.3d 72, 83 (1st Cir. 2021). Another example of waiver by
litigation conduct: When a state entity engaged in litigation by filing a counterclaim and a third-party complaint before asserting sovereign immunity. Davidson v. Howe, 749 F.3d 21, 28 (1st Cir. 2014). Or, the slam dunk for waiver identified by the Supreme Court was when a state defendant -- sued in state court under a statute in which the state had waived immunity from suit -- removed a case to federal court then filed a motion to dismiss on the basis of sovereign immunity. Lapides, 535 U.S. at 619, 622. We have said there is no waiver, though, when the sovereign defendant “does nothing more than zealously defend against the [court‘s jurisdiction] whenever possible.” Consejo de Salud de la Comunidad de la Playa de Ponce, Inc. v. González-Feliciano, 695 F.3d 83, 105 (1st Cir. 2012).
Our dive into CPI‘s and the Board‘s back-and-forth during the 2017 case‘s discovery proceedings reveals the Board indicated in its filings that it was not conceding its immunity defenses. Soon after the district court judge denied the Board‘s motion to dismiss CPI‘s 2017 Complaint, the parties submitted a joint initial scheduling memorandum to the magistrate judge to kick off the discovery process. In a section called “Statement of Jurisdictional Issues” the Board asserted that the court lacks jurisdiction on both constitutional and statutory immunity grounds (as well as that P.R. Const. § 4 preempts CPI‘s claims). Later on, when the Board filed a limited objection to the R&R about the
privilege log, the Board included a statement that it was reserving its right to assert “its position that th[e] [c]ourt is without jurisdiction over this matter” and was not waiving any of its arguments about either sovereign or statutory immunity. With these rights-preservation filings in the record and our prior discussions of waiver by conduct in mind, we conclude that the Board did not waive its immunity arguments by engaging in the discovery process before CPI filed the 2019 Complaint.
That being said, because the district court explicitly incorporated its legal reasoning from the 2018 order denying dismissal of the 2017 Complaint into the order denying dismissal of the 2019 Complaint, our review of the later order will necessarily have to examine the fully articulated reasoning in the first order.
Therefore, we move on to consider whether CPI‘s other jurisdictional challenges have merit. CPI objects to the Board‘s assertion of interlocutory appellate jurisdiction pursuant to the collateral order doctrine, arguing that the Board‘s challenge to the denial of Eleventh Amendment immunity can wait until the district court enters a final judgment. The same holds for the district court‘s order for production of documents.
In general, this court only allows appeals from final judgments.
interlocutory appeal of the order denying dismissal of the 2019 Complaint is properly before this court pursuant to the collateral order doctrine. Second, an interlocutory appeal of the order directing the Board to create a privilege log is an immediately appealable injunction pursuant to
The collateral order doctrine allows an order issued by a district court to be appealed immediately when the order “finally determines claims of right separable from, and collateral to, rights asserted in the action, too important to be denied review and too independent of the cause itself to require that appellate consideration be deferred until the whole case is adjudicated.” Asociación De Subscripción Conjunta Del Seguro De Responsabilidad Obligatorio v. Flores Galarza, 484 F.3d 1, 13 (1st Cir. 2007) (alteration adopted) (quoting Espinal-Dominguez v. Puerto Rico, 352 F.3d 490, 495 (1st Cir. 2003)); Nieves-Márquez v. Puerto Rico, 353 F.3d 108, 122 n.11 (1st Cir. 2003). Stated differently, the collateral order doctrine applies when the trial court‘s decision is sufficiently final, urgent, important, and separable. Espinal-Dominguez, 352 F.3d at 496 (citing In re Recticel Foam Corp., 859 F.2d 1000, 1004 (1st Cir. 1988)). This court has previously held that a district court‘s denial of a state or state entity‘s claim that the Eleventh Amendment provides full immunity from suit meets the elements of the collateral order doctrine because: (1) the decision “conclusively determines that the State [or state entity]
can be subjected to the coercive processes of the federal courts” (finality), (2) “the principal benefit conferred by the Eleventh Amendment -- an immunity from suit -- will be ‘lost as litigation proceeds past motion practice‘” (urgency), (3) the decision “involves an important legal question (the existence and extent of a ‘fundamental constitutional protection‘)” (importance), and (4) the “question has no bearing on the substantive merits of the case” (separability). Id. at 496-97 (quoting P.R. Aqueduct & Sewer Auth. v. Metcalf & Eddy, Inc., 506 U.S. 139, 145 (1993)).
CPI says these elements aren‘t met because “[t]here would [be] no immediate harm to the Board if this case proceeds to final judgment” and that there could be “effective review” after the Board produces the requested documents or identifies the documents it thinks should be protected from disclosure. But CPI does not attempt to distinguish our case law applying the collateral order doctrine to denials of Eleventh Amendment protection or show, beyond its broad argument, why the collateral order doctrine elements aren‘t met here. In any event, we agree with the Board that the district court‘s order denying its claim of Eleventh Amendment immunity may be appealed now pursuant to the collateral order doctrine. See P.R. Aqueduct & Sewer Auth., 506 U.S. at 141, 147 (holding States and state entities that are (or claim to be) “arms of the State” may appeal a district court decision denying Eleventh Amendment immunity pursuant to the
collateral order doctrine) (citing Cohen v. Beneficial Indus. Loan Corp., 337 U.S. 541 (1949)); cf. Espinal-Dominguez, 352 F.3d at 499 (dismissing an interlocutory appeal for want of appellate jurisdiction because the collateral order doctrine could not make one part of a case reviewable when the Commonwealth of Puerto Rico had also acknowledged that the other remedies the plaintiff sought in the same cause of action would not be shielded by Eleventh Amendment immunity).
The Board claims that its other arguments -- statutory immunity and
sovereign immunity question. See, e.g., Lopez, 588 F.3d at 82 (exercising pendent appellate jurisdiction because whether the state agency involved was an “employer” within the meaning of Title VII “was both determinative and factually and legally entwined with the Eleventh Amendment question“) (citing Nieves-Márquez, 353 F.3d at 123-24); see also Nieves-Márquez, 353 F.3d at 123 (stating the answer to whether any of the causes of action pled allowed for damages as opposed to equitable remedies only was “inextricably intertwined with the issue of Eleventh Amendment immunity“). In contrast here, we can (and do) resolve the Eleventh Amendment immunity issue without any need to explore or resolve either the Board‘s arguments about statutory immunity pursuant to PROMESA § 105 or its arguments about how PROMESA preempts the disclosure obligations in P.R. Const. § 4. And the Board does not suggest any other viable legal theory that would allow us to review these issues now. For these reasons stated, we decline to exercise pendent jurisdiction over the statutory immunity and preemption issues.
CPI‘s final objection to the Board seeking interlocutory appellate review of the two orders now is based on CPI‘s contention that neither order can be properly labeled an injunction as the Board claims. The Board indeed asserts in its brief-in-chief that the privilege log order (but not the order denying its motion to dismiss) is an immediately appealable injunction, arguing that if
this court makes it wait to challenge the privilege log order until after the log is completed, the proverbial cat will be “out of the bag” and CPI will know what documents the Board has in its possession. The Board wants us to rely on a case from the District of Columbia Circuit Court of Appeals where that court held that the district court‘s order requiring the defendant CIA to confirm or deny whether it had the records the plaintiffs requested pursuant to the
The D.C. Circuit Court distinguished the situation in Leopold from an order examined in a prior case in which the district court had ordered the Secret Service to process a FOIA request for visitor logs to the White House and the Vice President‘s residence. Id. (citing Citizens for Resp. & Ethics in Wash. v. U.S. Dep‘t of Homeland Sec. (“CREW“), 532 F.3d 860, 862-63 (D.C. Cir. 2008)). The court held that the order in the Secret Service case had not been immediately reviewable as an injunction because the agency had not yet been forced to disclose any documents, instead only to process the FOIA request, during which the agency would have the opportunity “to withhold some or all of the documents under one or more of FOIA‘s nine exemptions,” CREW, 532 F.3d at 863, at which point, the district court “may agree with the agency, allowing it to withhold the requested records, in which case the government would have no cause to appeal,” Leopold, 987 F.3d at 169 (quoting CREW, 532 F.3d at 864).
Not surprisingly, the Board would like us to find the district court‘s privilege log order akin to Leopold whereas CPI emphasizes the reasoning in CREW. True, the production of the detailed privilege log will tip off CPI to the names of the documents in the Board‘s possession, but CPI is demanding specific categories of reports and other documents (see supra notes 3 and 8) it already knows are in the Board‘s possession. The kinds of documents CPI seeks to obtain (such as financial reports and statements related to the Board and the Commonwealth as well as communications between the Board and various entities) do not, in our view, have the same degree of national security sensitivity upon which the CIA relies to carry out its responsibilities related to national security, the disclosure of which would “reveal intelligence sources and methods.” Leopold, 987 F.3d at 169. As such, contrary to what the Board wants us to believe, the content of the privilege log would not let the cat “out of the bag” in the same way as the information the CIA would have been forced to disclose if it had been forced to admit or deny possessing various documents. Instead, we think the Board‘s situation is more akin to that in CREW -- to ask us to review the privilege log order before the Board has complied and asserted claims of privilege for each document CPI requested that the Board wants to withhold would be premature. See 532 F.2d at 864. Effective review of the district court‘s ultimate determination about which documents the Board may withhold based on a specific claim of privilege can occur after the Board has produced the privilege log and makes these assertions in the first instance. We conclude, therefore, that the privilege log order is not reviewable in this interlocutory appeal as an injunction pursuant to
Sovereign Immunity
The Eleventh Amendment provides that “[t]he Judicial power of the United States shall not be construed to extend to any suit in law or equity, commenced or prosecuted against one of the United States by Citizens of another State, or by Citizens or Subjects of any Foreign State.”
As the district court and the Board point out, this court has long treated Puerto Rico like a state for Eleventh Amendment purposes, including recently. See Borrás-Borrero v. Corporación del Fondo del Seguro del Estado, 958 F.3d 26, 33 (1st Cir. 2020) (noting “Puerto Rico is treated as a state for Eleventh Amendment purposes” but avoiding consideration of the constitutional immunity question because the state entity clearly prevailed on the merits (quoting Fresenius Med. Care Cardiovascular Res., Inc. v. P.R. and Caribbean Cardiovascular Ctr. Corp., 322 F.3d 56, 61 (1st Cir. 2003))); see also Grajales, 831 F.3d at 15 (acknowledging Puerto Rico “enjoys” sovereign immunity in the same way as the states (citing Jusino Mercado v. Puerto Rico, 214 F.3d 34, 39 (1st Cir. 2000))); González-Feliciano, 695 F.3d at 103 n.15; Maysonet-Robles v. Cabrero, 323 F.3d 43, 50 (1st Cir. 2003); De Leon Lopez v. Corporacion Insular de Seguros, 931 F.2d 116, 121 (1st Cir. 1991). The Supreme Court, for its part, “has expressly reserved on the question whether Eleventh Amendment immunity principles apply to Puerto Rico.” Grajales, 831 F.3d at 15 n.3 (citing P.R. Aqueduct & Sewer Auth., 506 U.S. at 141 n.1 (acknowledging this court‘s treatment of Puerto Rico as a State for Eleventh Amendment purposes but not reaching the issue of whether the defendant agency was entitled to the immunity as a state entity because this court had not reached the issue)). The Supreme Court has only once directly addressed whether Puerto Rico is a separate sovereign from the federal government, in a criminal case. In Puerto Rico v. Sánchez Valle, 579 U.S. 59 (2016), the Court held that while each State is a separate sovereign from the federal government for purposes of the
That this court has a long history of treating Puerto Rico as a state for Eleventh Amendment purposes doesn‘t resolve whether the Board itself is also entitled to immunity, however. We have said “[a]rms of a state” may be entitled to immunity, Pastrana-Torres v. Corporación De P.R. Para La Difusión Pública, 460 F.3d 124, 126 (1st Cir. 2006) (citing Metcalf & Eddy, Inc. v. P.R. Aqueduct & Sewer Auth., 991 F.2d 935, 939 (1st Cir. 1993)), but this court has not had an opportunity to examine whether the Board is an “arm” of Puerto Rico and this appeal does not appear to drop the question squarely on our bench for us to decide: The Board asserts “[t]here can be no reasonable dispute that the Board is an ‘arm of the state’ entitled
As we‘ve already previewed, the Eleventh Amendment shield is not impenetrable. Sovereign immunity is a privilege which the holder of the immunity can voluntarily waive. Arecibo Cmty. Health Care, Inc. v. Puerto Rico, 270 F.3d 17, 24 (1st Cir. 2001) (citing Clark v. Barnard, 108 U.S. 436, 447 (1883) and Coll. Sav. Bank v. Fla. Prepaid Postsecondary Educ. Expense Bd., 527 U.S. 666, 675 (1999)). In addition to the waiver-by-litigation conduct we discussed supra, a sovereign can waive its immunity in one of two other ways: either by a “clear declaration” in a statute or constitutional provision that the sovereign “intends to submit itself to the jurisdiction of the federal courts,” id. (quoting Coll. Sav. Bank, 527 U.S. at 676), or by “participat[ing] in a federal program for which waiver of immunity is a stated condition,” id. (citing Mills v. Maine, 118 F.3d 37, 50 (1st Cir. 1997)). Alternatively, “Congress may abrogate the States’ constitutionally secured immunity from suit in federal court . . . by making its intention unmistakably clear in the language of the statute,” Kimel v. Fla. Bd. of Regents, 528 U.S. 62, 73 (2000) (quoting Dellmuth v. Muth, 491 U.S. 223, 228 (1989)), and “act[ing] pursuant to a valid grant of constitutional authority,” Arecibo Cmty. Health Care, Inc., 270 F.3d at 24 n.9 (citing Laro v. New Hampshire, 259 F.3d 1, 5 (1st Cir. 2001)); see also Arecibo Cmty. Health Care, 270 F.3d at 24 n.9 (describing the expression of intention to abrogate as having to be “unequivocal“); Maysonet-Robles v. Cabrero, 323 F.3d at 49 (“Congress may abrogate . . . [Eleventh Amendment] immunity by expressly authoriz[ing] such a suit pursuant to a valid exercise of power.“) (citing Coll. Sav. Bank, 527 U.S. at 670).
The district court concluded that Congress, pursuant to its plenary power to legislate on behalf of Puerto Rico as a United States territory (see supra note 1),
Whether Congress abrogated the Board‘s sovereign immunity in PROMESA § 106 is an issue of first impression for this court. We have not yet closely examined this part of PROMESA, in which Congress said that “any action against the . . . Board, [or] . . . otherwise arising out of [PROMESA] . . . shall be brought in [the district court for the district of Puerto Rico].”
The full text of PROMESA § 106(a) states:
Except as provided in section 2124(f)(2) of this title (relating to the issuance of an order enforcing a subpoena), and subchapter III (relating to adjustments of debts), any action against the Oversight Board, and any action otherwise arising out of this chapter, in whole or in part, shall be brought in a United States district court for the covered territory or, for any covered territory that does not have a district court, in the United States District Court for the District of Hawaii.
Except with respect to any orders entered to remedy constitutional violations, no order of any court granting declaratory or injunctive relief against the Oversight Board, including relief permitting or requiring the obligation, borrowing, or expenditure of funds, shall take effect during the pendency of the action before such court, during the time appeal may be taken, or (if appeal is taken) during the period before the court has entered its final order disposing of such action.
The Board says the general grant of jurisdiction in PROMESA § 106(a) is insufficiently direct to conclude Congress intended to abrogate the Board‘s sovereign immunity. We disagree; instead, we agree with the district court that, by including § 106, Congress unequivocally stated its intention that the Board could be sued for “any action . . . arising out of [PROMESA],” but only in federal court. Congress was unmistakably clear that it had contemplated remedies for constitutional violations and that injunctive or declaratory relief against the Board may be granted, see PROMESA § 106(c). Congress also provided three clear exceptions to the grant of general jurisdiction -- two in paragraph (a) and one regarding certification orders in paragraph (e). This implies the remainder of paragraph (a) serves as establishing general jurisdiction over all other matters not specifically excepted elsewhere in the section. See In re Fin. Oversight & Mgmt. Bd. for P.R., 7 F.4th at 37 (emphasizing the court‘s obligation to “give effect . . . to every word Congress used“). “Any action . . . arising out of [PROMESA]” is certainly broad, but given the limitations included within the same section, we have every reason to give paragraph (a) its plain meaning. See Oliveira, 857 F.3d at 19.
True, the language in PROMESA § 106 may not be as precise as when Congress has written “[a] State shall not be immune under the eleventh amendment . . . from an action in a Federal or State court of competent jurisdiction for a violation of this chapter.” Bd. of Trs. of Univ. of Ala. v. Garrett, 531 U.S. 356, 364 (2001) (citing
The district court also concluded that to consider PROMESA § 106 anything but clear language of Congress‘s intent to abrogate the Board‘s sovereign immunity would render § 106 superfluous. Not so, says the Board, because an action could still be brought under federal law. We note, however, that § 106 doesn‘t explicitly limit the federal court‘s jurisdiction to federal law claims. Congress could have included such a limitation, as it included other limitations in § 106(a) and (e), but it did not and, unlike our dissenting colleague who repeatedly asserts § 106 is intended to provide jurisdiction over federal claims only, we decline to read it in.15
conclude “any action” includes claims based on either federal or state law.16
As to the second necessary part of abrogation in the context of sovereign immunity (abrogation through a “valid exercise of power,” Arecibo Cmty. Health Care, 270 F.3d at 24 n.9), Congress expressly enacted PROMESA using its power pursuant to the
Territorial Clause (again, see supra note 1),
The Board puts forth some additional arguments about why it thinks the district court erred by concluding PROMESA § 106 constituted a waiver or abrogation of immunity, including that the district court relied on the wrong statute‘s legislative history, that the district court should not have been swayed by CPI not having any forum in which to sue the Board if the Board was immune from all causes of actions based on territorial law, and that the
FINAL WORDS
For the reasons stated above, the district court‘s order denying the Board‘s motion to dismiss CPI‘s 2019 Complaint on the basis of sovereign immunity is affirmed. Costs to CPI.
- DISSENTING OPINION FOLLOWS -
LYNCH, Circuit Judge, dissenting. With respect, I dissent. The Board is correct that it is entitled to Eleventh Amendment immunity and the case must be dismissed. The majority‘s conclusion to the contrary conflicts with Supreme Court precedent, First Circuit precedent, and precedent from other circuits, and will have dire consequences.
I.
We have long recognized that Puerto Rico is entitled to Eleventh Amendment immunity. See, e.g., Borrás-Borrero v. Corporación del Fondo del Seguro del Estado, 958 F.3d 26, 33 (1st Cir. 2020); Grajales v. P.R. Ports Auth., 831 F.3d 11, 15 (1st Cir. 2016); Fresenius Med. Care Cardiovascular Res., Inc. v. P.R. and Caribbean Cardiovascular Ctr. Corp., 322 F.3d 56, 61 (1st Cir. 2003).17 The Board is part of the Puerto Rico government.
In my view it is clear that the Board is protected by Eleventh Amendment immunity under numerous doctrines and Eleventh Amendment principles, including that abrogation of Eleventh Amendment immunity must be clearly and unequivocally stated; that grants of jurisdiction to Article III courts alone do not abrogate Eleventh Amendment immunity; that federal courts are prohibited from ordering state officials to conform their conduct to state law under Pennhurst State Sch. & Hospital v. Halderman, 465 U.S. 89 (1984); and that courts may not second-guess Congress where the text of a statute is clear. Further, the provisions of PROMESA on which the majority relies, which provide remedies and instructions as to the exercise of jurisdiction over federal claims, do not support the majority‘s conclusion that Congress intended to abrogate the Board‘s Eleventh Amendment immunity. In fact, the other provisions of PROMESA reinforce that Congress did not intend to abrogate immunity.
The majority and the plaintiffs argue that § 106 expressly abrogates Puerto Rico‘s Eleventh Amendment immunity. “In order to determine whether Congress has abrogated the States’ sovereign immunity, we ask two questions: first, whether Congress
In my view, the majority violates the rule that abrogation of Eleventh Amendment immunity will only be found where Congress has unequivocally expressed its intent to abrogate that immunity. See Kimel v. Fla. Bd. of Regents, 528 U.S. 62, 73 (2000) (“Congress may abrogate the States’ constitutionally secured immunity from suit in federal court only by making its intention unmistakably clear in the language of the statute.” (quoting Dellmuth v. Muth, 491 U.S. 223, 228 (1989))); see also Mojsilovic v. Oklahoma ex rel. Bd. of Regents., 841 F.3d 1129, 1131 (10th Cir. 2016); Burnette v. Carothers, 192 F.3d 52, 57 (2d Cir. 1999); Mills v. Maine, 118 F.3d 37, 41 (1st Cir. 1997).
Section 106(a) is not an abrogation of Eleventh Amendment immunity. It reads:
(a) Jurisdiction
Except as provided in section 2124(f)(2) of this title (relating to the issuance of an order enforcing a subpoena), and subchapter III (relating to adjustments of debts), any action against the Oversight Board, and any action otherwise arising out of this chapter, in whole or in part, shall be brought in a United States district court for the covered territory or, for any covered territory that does not have a district court, in the United States District Court for the District of Hawaii.
Indeed, the text reveals the choice by Congress not to include language abrogating Eleventh Amendment immunity. In Allen v. Cooper, the Supreme Court held that Congress‘s intent to abrogate a state‘s Eleventh Amendment immunity was express where the statute provided that a state “shall not be immune, under the Eleventh Amendment [or] any other doctrine of sovereign immunity, from suit in Federal court.” 140 S. Ct. 994, 999, 1001 (2020) (alteration in original) (quoting
The majority goes on to reason that if Congress had wished to bar the assertion of Puerto Rico state law claims, it would have explicitly added more language to § 106 to make that clear. This proposition is wrong. See Blanciak v. Allegheny Ludlum Corp., 77 F.3d 690, 696 (3rd Cir. 1999) (noting that where the statutory text does not evince a clear intent to abrogate, the court may not act as a “super legislature” and find an intent to abrogate in order to avoid outcomes which seem “unjustifiable on policy grounds“). An exclusive grant of jurisdiction to federal courts for claims against the Board does not constitute a clear statement abrogating Eleventh Amendment immunity. See United States v. Nordic Vill., Inc., 503 U.S. 30, 37-38 (1992) (rejecting argument that provision granting district courts exclusive jurisdiction in bankruptcy proceedings waived sovereign immunity). In essentially requiring Congress to include a clear statement that it did not intend to abrogate Eleventh Amendment immunity -- rather than finding abrogation only in the presence of an unmistakably clear express statement -- the majority turns the longstanding rule on its head.
Section 106(a) is a limited jurisdiction-granting provision.20 The Supreme Court has repeatedly held that jurisdiction-granting clauses like § 106 do not abrogate Eleventh Amendment immunity. See Atascadero State Hosp. v. Scanlon, 473 U.S. 234, 246 (1985) (“A general authorization for suit in federal court is not the kind of unequivocal statutory language sufficient to abrogate the Eleventh Amendment.“); Blatchford v. Native Vill. of Noatak & Circle Vill., 501 U.S. 775, 786 n.4 (1991) (“The fact that Congress grants jurisdiction to hear a claim does not suffice to show Congress has abrogated all defenses to that claim. The issues are wholly distinct.“); see also Mojsilovic, 841 F.3d at 1132 (“A general authorization for suit is insufficient to abrogate the States’ sovereign immunity.“); BV Eng‘g v. UCLA, 858 F.2d 1394, 1397-98, 1397 n.1 (9th Cir. 1988). In each of the cases in which the Supreme Court and our court have recognized Eleventh Amendment immunity, there was a federal statute granting federal jurisdiction. Pennhurst itself involved a grant of jurisdiction under § 504 of the Rehabilitation Act of 1973. 465 U.S. at 92. This must be so, as federal courts exercise jurisdiction only insofar as Congress extends it by statute. See Sheldon v. Sill, 49 U.S. 441, 449 (1850); see also R. Fallon, et al., Hart & Wechsler‘s The Federal Courts and the Federal System 295-97 (7th ed. 2015). The majority errs in treating the statutory grant of jurisdiction in § 106 as not only a necessary but also a sufficient condition to hale Puerto Rico into federal court.
The majority tries to justify its reliance on a jurisdiction-granting provision to find an intent to abrogate by citing to a single case, Seminole Tribe. In Seminole Tribe, the Supreme Court considered the Indian Gaming Regulatory Act‘s remedial scheme for ensuring the formation of Tribal-State compacts, which grants federal courts jurisdiction over “any cause of action initiated by an Indian tribe arising from the failure of a State to enter into negotiations
The majority‘s conclusion also violates the holding of Pennhurst. In Pennhurst, the Supreme Court considered an action against state officials brought under the Ex Parte Young doctrine, which allows suits for constitutional violations to be brought against state officials that the Eleventh Amendment would normally bar. 465 U.S. at 102. The Supreme Court found that the Ex Parte Young exception does not apply in suits brought against state officials for violations of state law, because Article III courts ordering state officials to comply with state law “conflicts directly with the principles of federalism that underlie the Eleventh Amendment.” 465 U.S. at 106; see also Cuesnongle v. Ramos, 835 F.2d 1486, 1496 (1st Cir. 1987) (“[S]overeign immunity prohibits federal courts from ordering state officials to conform their conduct to state law.“). Yet that is now precisely what the majority holds is required in this case. The majority is ordering the Board to comply with Puerto Rico disclosure laws despite the Board‘s Eleventh Amendment immunity. Pennhurst clearly bars this outcome.
Where the language of a provision has a plain and unambiguous meaning, “the sole function of the courts is to enforce it according to its terms.” See Stauffer v. IRS, 939 F.3d 1, 7 (1st Cir. 2019) (quoting In re Fin. Oversight & Mgmt. Bd. for P.R., 919 F.3d 121, 128 (1st Cir. 2019)). “[C]ourts must presume that a legislature says in a statute what it means and means in a statute what it says there.” Owner-Operator Indep. Drivers Ass‘n, Inc. v. Supervalu, Inc., 651 F.3d 857, 862 (8th Cir. 2011) (quoting United States v. I.L., 614 F.3d 817, 820 (8th Cir. 2010)). It is clear from § 106(a) that this section of PROMESA does not abrogate Eleventh Amendment immunity. The majority‘s attempts to read abrogation into this provision by relying on other provisions of PROMESA are unavailing. The majority argues that the fact that Congress in § 106(c)21 contemplates remedies for constitutional violations
The majority attempts to justify its abrogation conclusion with reference to the “except as provided” clause of § 106(a) and the limitation on jurisdiction contained in § 106(e).22 These provisions cabining the general grant of jurisdiction in § 106(a) do not support the majority‘s position on abrogation. Abrogation must be express and clearly stated, and may not, as a matter of law, be found by implication.23 See Kimel, 528 U.S. at 73. Further, to the extent that the majority purports to be relying on the canon that all words must be given effect, the Board‘s reading gives effect to all of the clauses. The Board may be sued, in federal court only, for violations of PROMESA and for violations of the federal constitution.
The majority‘s reading is not consistent with other provisions of PROMESA, under which Congress has created federal law obligations for the Board, to the exclusion of state law obligations. Read in concert with § 106, these provisions, contrary to the majority‘s reading, demonstrate that Congress indeed intended for the Eleventh Amendment to operate to shield the Board from the Puerto Rico disclosure obligations here at issue. Congress, in enacting PROMESA, worked to strike a balance between transparency, necessary to permit public oversight and maintain public confidence, and confidentiality, necessary to permit the Board to work effectively at its difficult and often unpopular tasks.
For example, PROMESA requires the Board to make public the findings of certain investigations, see
II.
There are enormous adverse consequences which flow from the majority‘s reading of § 106 as an abrogation of the Board‘s Eleventh Amendment immunity. The majority‘s holding that the Board cannot avail itself of Eleventh Amendment immunity will have implications far into the future, in addition to posing burdens on the Board in this case and beyond this case.25
In this case, the Board has been ordered to produce privilege logs demonstrating why tens of thousands of documents fall under various privileges that it has claimed. The Board‘s brief explains why this is an enormous burden and interferes with the serious tasks Congress has given it. Because this Puerto Rico cause of action is not limited by a statute of limitations, it is predictable that litigants will try to seek documents created or relied on by the
III.
Eleventh Amendment protection reflects the Constitution‘s structural design, and where, as here, Congress has not expressly abrogated Eleventh Amendment immunity and the sovereign has not waived it, the federal courts must honor that protection and dismiss the case. The majority today finds congressional intent to abrogate absent any express indication of such intent in the text of the statute, violating the Supreme Court‘s mandate not to do so. See, e.g., Seminole Tribe, 517 U.S. at 55-56. The majority decision finds an intent to abrogate in a general grant of jurisdiction, contrary to decisions of the Supreme Court and other circuits. See, e.g., Atascadero, 473 U.S. at 246; see also Burnette, 192 F.3d at 57; BV Engineering, 858 F.2d at 1397-98; Gary A. v. New Trier High Sch. Dist. No. 203, 796 F.2d 940, 944 (7th Cir. 1986). It violates the well-established principle of Pennhurst, that federal courts may not order state officials to comply with state law, a principle which our circuit and our sister circuits repeatedly have upheld. See, e.g., Vega v. Semple, 963 F.3d 259, 284 (2d Cir. 2020); Doe v. Regents of the Univ. of Cal., 891 F.3d 1147, 1152-53 (9th Cir. 2018); O‘Brien v. Mass. Bay Transp. Auth., 162 F.3d 40, 44 (1st Cir. 1998). The implications, not only for the Board‘s future liability, but for Eleventh Amendment doctrine going forward, are significant, and today‘s decision should not go uncorrected.
I respectfully dissent.
Notes
Congress also included a supremacy clause: “The provisions of this chapter shall prevail over any general or specific provisions of territory law, State law, or regulation that is inconsistent with this chapter.”
(c) Timing of relief
Except with respect to any orders entered to remedy constitutional violations, no order of any court granting declaratory or injunctive relief against the Oversight Board, including relief permitting or requiring the obligation, borrowing, or expenditure of funds, shall take effect during the pendency of the action before such court, during the time appeal may be taken, or (if appeal is taken) during the period before the court has entered its final order disposing of such action.
The district court‘s conclusion, that Congress waived the Board‘s Eleventh Amendment immunity, which the plaintiffs also have argued on appeal, is both wrong and misguided. Centro de Periodismo, 2018 WL 2094375, at *5. It is wrong for the same reason that the abrogation holding is wrong: the statute does not clearly evince an intent to waive Eleventh Amendment immunity. Moreover, the district court mistakenly cited the legislative history of a bankruptcy provision rather than PROMESA § 106, describing the provision as a “waiver of sovereign immunity.” Centro de Periodismo, 2018 WL 2094375, at *6 (quoting D. Austin, Cong. Rsch. Serv., R44532, The Puerto Rico Oversight, Management, and Economic Stability Act (PROMESA; H.R. 5278, S. 2328) 36 (2016)).