Opinion
Case No. 17-3283 (LTS) (Jointly Administered) Adv. Proc. No. 18-091-LTS
2019-09-27
IN RE: The FINANCIAL OVERSIGHT AND MANAGEMENT BOARD FOR PUERTO RICO, as representative of The Commonwealth of Puerto Rico, et al., Debtors. Hermandad de Empleados del Fondo del Seguro Del Estado, Inc.; Unión de Médicos de la Corporación del Fondo del Seguro del Estado Corp., Plaintiffs, v. Commonwealth of Puerto Rico; the Financial Oversight and Management Board for Puerto Rico; State Insurance Fund Corporation; Javier Rivera Ríos; Hon. Wanda Vázquez Garced; Omar J. Marrero; Hon. Francisco Parés Alicea; José Iván Marrero Rosado, Defendants.
BUFETE EMMANUELLI C.S.P., By: Rolando Emmanuelli Jiménez, Jessica E. Mendez Colberg, Yasmin Colón Colón, Wilbert López Moreno, 472 Tito Castro Ave., Marvesa Bldg. Suite 106, Ponce, Puerto Rico 00716, Attorneys for Plaintiffs Hermandad de Empleados del Fondo del Seguro Del Estado, Inc. and Unión de Médicos de la Corporación del Fondo del Seguro del Estado Corp. O'NEILL & BORGES LLC, By: Hermann D. Bauer, Ubaldo M. Fernández, 250 Muñoz Rivera Ave., Suite 800, San Juan, Puerto Rico 00918, PROSKAUER ROSE LLP, By: Martin J. Bienenstock, Stephen L. Ratner, Timothy W. Mungovan, Jonathan E. Richman, Eleven Times Square, New York, NY 10036 and Guy Brenner, 1001 Pennsylvania Ave., NW, Suit 600 South, Washington, DC 20004, Attorneys for Defendant the Financial Oversight and Management Board for Puerto Rico in its own right and as representative of the Commonwealth of Puerto Rico. DENNISE N. LONGO QUIÑONES, Secretary of Justice of Puerto Rico, By: Wandymar Burgos Vargas, Deputy Secretary in Litigation, Department of Justice, P.O. Box 9020192, San Juan, Puerto Rico 00902, Attorneys for Defendants Wanda Vázquez Garced, Francisco Pares Alicea, and José Iván Marrero Rosado. O'MELVENY & MYERS LLP, By: John J. Rapisardi, William J. Sushon, Peter Friedman, 7 Times Square, New York, NY 10036, MARINI PIETRANTONI MUÑIZ LLC, By: Luis C. Marini-Biaggi, Carolina Velaz-Rivero, MCS Plaza, Suite 500, 255 Ponce de Léon Ave., San Juan, Puerto Rico 00917, Attorneys for Defendant Omar J. Marrero. WEINSTEIN-BACAL, MILLER & VEGA, By: Stuart A. Weinstein-Bacal, Peter W. Miller, Javier A. Vega-Villalba, P.S.C. González-Padín Building - Penthouse, 154 Rafael Cordero Street, Plaza de Armas, Old San Juan, Puerto Rico 00901, Attorneys for Defendants State Insurance Fund Corporation and Javier Rivera Ríos.
BUFETE EMMANUELLI C.S.P., By: Rolando Emmanuelli Jiménez, Jessica E. Mendez Colberg, Yasmin Colón Colón, Wilbert López Moreno, 472 Tito Castro Ave., Marvesa Bldg. Suite 106, Ponce, Puerto Rico 00716, Attorneys for Plaintiffs Hermandad de Empleados del Fondo del Seguro Del Estado, Inc. and Unión de Médicos de la Corporación del Fondo del Seguro del Estado Corp.
O'NEILL & BORGES LLC, By: Hermann D. Bauer, Ubaldo M. Fernández, 250 Muñoz Rivera Ave., Suite 800, San Juan, Puerto Rico 00918, PROSKAUER ROSE LLP, By: Martin J. Bienenstock, Stephen L. Ratner, Timothy W. Mungovan, Jonathan E. Richman, Eleven Times Square, New York, NY 10036 and Guy Brenner, 1001 Pennsylvania Ave., NW, Suit 600 South, Washington, DC 20004, Attorneys for Defendant the Financial Oversight and Management Board for Puerto Rico in its own right and as representative of the Commonwealth of Puerto Rico.
DENNISE N. LONGO QUIÑONES, Secretary of Justice of Puerto Rico, By: Wandymar Burgos Vargas, Deputy Secretary in Litigation, Department of Justice, P.O. Box 9020192, San Juan, Puerto Rico 00902, Attorneys for Defendants Wanda Vázquez Garced, Francisco Pares Alicea, and José Iván Marrero Rosado.
O'MELVENY & MYERS LLP, By: John J. Rapisardi, William J. Sushon, Peter Friedman, 7 Times Square, New York, NY 10036, MARINI PIETRANTONI MUÑIZ LLC, By: Luis C. Marini-Biaggi, Carolina Velaz-Rivero, MCS Plaza, Suite 500, 255 Ponce de Léon Ave., San Juan, Puerto Rico 00917, Attorneys for Defendant Omar J. Marrero.
WEINSTEIN-BACAL, MILLER & VEGA, By: Stuart A. Weinstein-Bacal, Peter W. Miller, Javier A. Vega-Villalba, P.S.C. González-Padín Building - Penthouse, 154 Rafael Cordero Street, Plaza de Armas, Old San Juan, Puerto Rico 00901, Attorneys for Defendants State Insurance Fund Corporation and Javier Rivera Ríos.
PROMESA
Title III
OPINION AND ORDER GRANTING THE MOTIONS TO DISMISS PLAINTIFFS’ FIRST AMENDED ADVERSARY COMPLAINT PURSUANT TO FED. R. CIV. P. 12( B )(1) AND ( B )(6)
LAURA TAYLOR SWAIN, United States District Judge
Before the Court are (i) the Motion to Dismiss Plaintiffs’ First Amended Adversary Complaint Pursuant to Fed. R. Civ. P. 12(b)(1) and (b)(6) (Docket Entry No. 22 in Adv. Proc. No. 18-091, the "Oversight Board's Motion to Dismiss") filed by the Financial Oversight and Management Board for Puerto Rico (the "Oversight Board") on its own behalf and on behalf of the Commonwealth of Puerto Rico (the "Commonwealth"), and (ii) Defendant Government Officials’ Hon. Ricardo Rosselló Nevares, Hon. Teresita Fuentes, José Iván Marrero Rosado, and Christian Sobrino's Motion to Dismiss Plaintiffs’ First Amended Adversary Complaint Under Fed. R. Civ. P. 12(b)(1) and 12(b)(6) (Docket Entry No. 25, the "Government Officials’ Motion to Dismiss" and, together with the Oversight Board's Motion to Dismiss, the "Motions"). Also before the Court is Defendants State Insurance Fund Corporation and Jesús Rodríguez Rosa's Motion for Joinder (Docket Entry No. 26, the "Joinder"), whereby State Insurance Fund Corporation ("SIFC" and, collectively with the Oversight Board and the Commonwealth, the "Government Entities") (the Government Officials collectively with the Government Entities, the "Defendants") joins in all arguments asserted in the Oversight Board's Motion to Dismiss, and the Administrator of SIFC joins in all arguments asserted in the Government Officials’ Motion to Dismiss. The Court has considered carefully all of the submissions made in connection with the Motions. Except as explained below, the Court has subject matter jurisdiction of this action pursuant to 48 U.S.C. § 2166. For the following reasons, the Motions are granted. Plaintiffs’ First and Second Prayers for Relief are dismissed in part pursuant to Federal Rule of Civil Procedure 12(b)(1) (" Rule 12(b)(1)"), and the remainder of Plaintiffs’ claims are dismissed pursuant to Federal Rule of Civil Procedure 12(b)(6) (" Rule 12(b)(6)").
All docket entry references are to entries in Adv. Proc. No. 18-091, unless otherwise specified.
Rules 12(b)(1) and 12(b)(6) are applicable to this adversary proceeding pursuant to Federal Rule of Bankruptcy Procedure 7012.
I.
BACKGROUND
The following recitation of facts is drawn from the Amended Complaint, except where otherwise indicated.
Plaintiffs, Hermandad de Empleados del Fondo del Seguro del Estado, Inc. ("UECFSE"), and Unión de Médicos de la Corporación del Fondo del Seguro del Estado Corp. ("UMCFSE" and, together with UECFSE, "Plaintiffs" or the "Unions"), are labor unions that represent employees of SIFC. (Am. Compl. ¶¶ 8, 11.) SIFC is a public corporation that provides workers’ compensation insurance coverage and other related services to workers in the Commonwealth. (Id. ¶¶ 1-3, 55.) UECFSE represents those employees responsible for SIFC's general operation, and UMCFSE represents only those employees who provide medical services to injured workers served by SIFC. (Id. ¶¶ 8, 11.) The Unions are tasked with protecting and defending the rights of their members and negotiating collective bargaining agreements on such members’ behalf. (Id. ¶¶ 9, 12.)
The Unions each negotiated and entered into separate collective bargaining agreements (the "CBAs") with SIFC covering periods that have since elapsed. (Id. ¶¶ 9-10, 12-13 & Exs. A and B.) Each CBA provides, however, that it will remain enforceable until a new collective bargaining agreement is in effect. (Am. Compl. ¶¶ 10, 13.) Given that neither Union has executed a new collective bargaining agreement with SIFC, Plaintiffs assert that the CBAs continue to govern the terms of Union members’ employment with SIFC. (Id. ) The CBAs address, in relevant part, "vacation and illness pay, training, employee classifications, job reclassifications, fringe benefits, licenses due to job accidents, employee suspensions, and dispute resolution." (Id. ¶ 83.)
On June 17, 2014, the Legislative Assembly of Puerto Rico (the "Legislative Assembly") enacted the "Government of the Commonwealth of Puerto Rico Special Fiscal and Operational Sustainability Act," Act No. 66 of 2014. (Id. ¶ 15(a); see Docket Entry No. 23, the "Translation Motion," Ex. 1, "Act No. 66-2014.") Act No. 66-2014 "devises a plan to deal with the consequences of the fiscal and economic crisis of the downgrading of Puerto Rico's credit rating," which it describes as a "serious economic and fiscal emergency." (Act No. 66-2014 at 1, 5.) In order to allow the Commonwealth to meet its liquidity needs and the payroll of public employees, and to cover the costs of essential services to the residents of Puerto Rico, Act No. 66-2014 implements a variety of measures to cut back on spending without resorting to the dismissal of career public employees or otherwise affecting critical functions of government agencies. (Id. ) Section 17 of Act No. 66-2014, titled "Fiscal Control in Public Corporations," provides that public corporations such as SIFC "shall recognize to both union and nonunion employees their vacation leaves accrued as of the effective date of this Act; however, the excess thereof accrued before and during the effective term of this Act shall not be liquidated in cash." (Id. § 17.) Public corporations must also "establish a plan whereby both union and nonunion employees shall exhaust the [vacation] leaves accrued in excess so that no excess is carried over after the effective term of this Act." (Id. ) Section 17 of Act No. 66-2014 further provides that excess sick leave accrued by employees of public corporations before the effective date of the Act shall be "frozen at the pay rate in effect as of June 30th, 2014, and the liquidation thereof in cash shall only be made in the event of separation from public service." (Id. ) Any excess sick leave accrued after the effective date of Act No. 66-2014 must be used on or before June 30 of the year following the year in which it was accrued, and such balance will be forfeited after that date. (Id. )
On January 23, 2017, the Legislative Assembly enacted the "Act to Attend to the Economic, Fiscal, and Budget Crisis and to Guarantee the Functioning of the Government of Puerto Rico," Act No. 3 of 2017. (Am. Compl. ¶ 15(b); see Transl. Mot., Ex. 2, "Act No. 3-2017.") Act No. 3-2017 addresses the "serious fiscal, economic, and budgetary crisis" faced by the Commonwealth by "ensur[ing] that the Government ... continues operating and offering essential services to the citizens." (Act No. 3-2017 at 1 & Art. 3). Article 14 of Act No. 3-2017, titled "Fiscal Control in the Public Corporations," imposes a variety of restrictions related to public employment in the Commonwealth. (Id. Art. 14.) For example, it requires all public corporations to "suspend the non-economic clauses in the agreements in effect that have direct or indirect economic effects on the operation of the public corporation that exacerbate the budgetary situation thereof or that need to be suspended to alleviate the budgetary situation." (Id. ) Article 14 also directs public corporations to recognize accrued vacation days for employees, although it limits the ability of employees "to liquidate in cash the excess accrued before and during the term of" Act No. 3-2017. (Id. ) Similarly, Article 14 provides that excess sick leave accrued by employees prior to the effective date of the Act will be frozen at the salary of the employee in effect on June 30, 2014, and will be liquidated in cash only if the employee leaves public service. (Id. )
The title of the certified translation of Act No. 3-2017 submitted by the Oversight Board and the Commonwealth at Exhibit 2 to the Translation Motion—the "Law to Address the Economic, Fiscal, and Budgetary Crisis to Guarantee the Operation of the Government of Puerto Rico"—differs slightly from the title identified in the Amended Complaint.
On February 4, 2017, the Legislative Assembly enacted the "Administration and Transformation of the Human Resources of the Government of Puerto Rico Act," Act No. 8 of 2017. (Am. Compl. ¶ 15(c); see Transl. Mot., Ex. 3, "Act No. 8-2017.") Act No. 8-2017 creates a "Government of Puerto Rico Human Resources Management and Transformation System" that is "entirely in harmony with collective bargaining, the main purpose of which will be to apply, reinforce, evaluate, and protect the principle of merit in public service." (Act No. 8-2017 § 5.1.) Act No. 8-2017 also provides that the government of the Commonwealth shall be converted into a "[s]ingle [e]mployer so that the employees will become employees of the Government and not of their different entities." (Id. at 2.) To that end, Act No. 8-2017 allows for the consolidation or elimination of public services and the transfer of employees between public agencies. (See id. § 6.4(2).) According to the Legislative Assembly, Act No. 8-2017 "facilitates the transfer of employees," "interconnects all the agencies and public corporations," "encourages mobility for the continuity of ... public services," and "guarantees the continuity of the jobs of each public servant in career office." (Id. at 2.)
The title of the certified translation of Act No. 8-2017 submitted by the Oversight Board and the Commonwealth at Exhibit 3 to the Translation Motion—the "Law for the Management and Transformation of Human Resources in the Government of Puerto Rico"—differs slightly from the title identified in the Amended Complaint.
On April 29, 2017, the Legislative Assembly enacted the "Fiscal Plan Compliance Act," Act No. 26 of 2017. (Id. ¶ 15(d); see Transl. Mot., Ex. 4, "Act No. 26-2017" and, collectively with Act No. 66-2014, Act No. 3-2017, and Act No. 8-2017, the "Challenged Legislation.") Act No. 26-2017 was enacted in response to the Commonwealth's "historically unprecedented monumental fiscal crisis," and it implements a variety of measures to ensure compliance with the Commonwealth fiscal plan certified by the Oversight Board in March 2017. (Act No. 26-2017 at 2, 5.) It also seeks to guarantee that the Commonwealth has "sufficient liquidity to be able to pay the payroll of public employees and to pay for the essential services it offers its citizens." (Id. at 7.)
The title of the certified translation of Act No. 26-2017 submitted by the Oversight Board and the Commonwealth at Exhibit 4 to the Translation Motion—the "Compliance with the Fiscal Plan Act"—differs slightly from the title identified in the Amended Complaint.
With respect to labor reform, Act No. 26-2017 "establish[es] a uniform system of fringe benefits." (Id. at 1.) In furtherance of that objective, Article 1.02 of Act No. 26-2017 vacates all laws and collective bargaining agreement provisions applicable exclusively to fringe benefits that are contrary to Act No. 26-2017. (Id. Art. 1.02.) Nevertheless, Act No. 26-2017 provides that it "does not eliminate the right of unions to negotiate working conditions, wages, and other non-economic conditions" not addressed therein. (Id. )
Article 2.10 of Act No. 26-2017 mandates that each public corporation "recognize to all public employees, union and nonunion, the balances of vacation and sick leaves accrued" as of its effective date, but further provides that employees "will not be able to liquidate in cash the accrued excesses" before that date. (Id. Art. 2.10.) Public corporations are also required to "establish a plan to exhaust the excess accrued of the balances accrued for employees ... [so that] there will be no accruals in excess of what is permitted in sick or vacation leaves; provided, further, that after [the effective date of Act No. 26-2017,] the excess balance that has not been used will be lost." (Id. ) Finally, the "Nullity" provision of Act No. 26-2017 provides in pertinent part that:
As from the effective date of this Law, any clause or provision of a collective bargaining agreement, agreement, supplementary agreement, regulation, administrative order, circular, and/or contractual letter will be null and void in the provisions that grant to union or nonunion public officials or employees of the Government, including all union or non-union employees of the Public Corporations of the Government of Puerto Rico, greater fringe benefits than those authorized in this Law.
(Id. Art. 2.19.)
On June 29, 2018, the Oversight Board certified a Commonwealth Fiscal Plan (the "2018 Fiscal Plan"), which was subsequently revised on October 23, 2018. (Am. Compl. ¶¶ 16, 17.) According to Plaintiffs, the Challenged Legislation was "incorporated by Defendants" into the 2018 Fiscal Plan and, similarly, the 2018 Fiscal Plan was "based on the assumption that the provisions of [the Challenged Legislation] and budget cuts [would] continue to be enforced through the duration of the [2018 Fiscal Plan]." (Id. )
Plaintiffs contend that the Commonwealth government has, "through the approval and adoption of the [Challenged Legislation], and in an attempt to comply with the [Oversight Board], retroactively destroyed and substantially impaired" the CBAs to the extent that the CBAs have been rendered "almost useless." (Id. ¶ 19.) According to Plaintiffs, "the major aspects of the CBA[s] being altered" by the Challenged Legislation are "vacation license, illness license, employee mobility or transfer within or out of the corporation, the rights and protection of the appropriate unit, bonuses, and job classifications." (Id. ¶ 110.) Defendants’ actions, Plaintiffs maintain, violate Plaintiffs’ rights under the Contract Clause of the United States Constitution (the "Contract Clause") and the Collective Bargaining Clause of the Commonwealth Constitution (the "Collective Bargaining Clause"). (Id. ¶¶ 21, 35.)
Plaintiffs’ Amended Complaint contains four Prayers for Relief. (Id. ¶¶ 138-45.) The First and Second Prayers for Relief seek an order declaring the Challenged Legislation null and void as violative of Plaintiffs’ rights under the Contract Clause and Collective Bargaining Clause, respectively. (Id. ¶¶ 138-41.) The Third and Fourth Prayers for Relief, which are predicated on those same alleged constitutional violations, request awards of compensatory damages, punitive damages, costs, and attorneys’ fees. (Id. ¶¶ 142-45.) Plaintiffs allege that the Official Defendants other than the Governor are "empowered to implement," variously, the SIFC budget, the Commonwealth budget, the fiscal plans, and Act No. 26-2017. (Id. ¶¶ 43-47.)
II.
DISCUSSION
Defendants move pursuant to Rule 12(b)(1) to dismiss certain of Plaintiffs’ claims for lack of subject matter jurisdiction, and pursuant to Rule 12(b)(6) to dismiss the Amended Complaint in its entirety for failure to state a claim upon which relief may be granted. Defendants argue that (i) Plaintiffs’ claims for declaratory relief are moot to the extent they challenge the provisions of Act No. 66-2014, Act No. 3-2017, and Act No. 8-2017 that affect fringe benefits guaranteed by the CBAs, because Act 26-2017 incorporates or vacates the relevant provisions of the earlier legislation; (ii) Plaintiffs fail to state a claim under the Contract Clause; and (iii) Plaintiffs’ claims under the Collective Bargaining Clause are time barred and fail to state a cognizable claim. The Oversight Board also asserts that Section 105 of the Puerto Rico Oversight, Management, and Economic Stability Act ("PROMESA") precludes all of Plaintiffs’ claims against it and its members. Additionally, the Government Officials contend that Plaintiffs lack standing under Article III of the United States Constitution to sue them because Plaintiffs have not alleged any actions by those officials that have caused Plaintiffs harm that would be redressed by the relief sought in this adversary proceeding. As courts presented with motions to dismiss under both Rules 12(b)(1) and 12(b)(6) should ordinarily decide jurisdictional questions before addressing the merits, Deniz v. Municipality of Guaynabo, 285 F.3d 142, 149 (1st Cir. 2002), the Court begins its analysis with Defendants’ argument regarding mootness under Rule 12(b)(1).
PROMESA is codified at 48 U.S.C. § 2101 et seq. References to "PROMESA" sections in this Opinion and Order are to the uncodified version of the statute.
A. Rule 12(b)(1) : Subject Matter Jurisdiction – Mootness
Defendants argue that Plaintiffs’ claims for declaratory relief as to Act No. 66-2014, Act No. 3-2017, and Act No. 8-2017 are moot to the extent that they affect fringe benefits guaranteed by the CBAs, because "those laws have been superseded by [Act No.] 26-2017." (Oversight Board's Mot. to Dismiss at 10.) Hence, Defendants contend, there is no live controversy regarding the parties’ obligations with respect to fringe benefits independent of Act No. 26-2017, and any declaration concerning such obligations would be an advisory opinion.
Challenges to the Court's subject matter jurisdiction on mootness grounds are properly asserted under Rule 12(b)(1). See D.H.L. Assocs., Inc. v. O'Gorman, 199 F.3d 50, 54 (1st Cir. 1999). Although the party invoking the jurisdiction of a federal court bears the burden of proving the existence of such jurisdiction, Johansen v. United States, 506 F.3d 65, 68 (1st Cir. 2007), "[t]he burden of establishing mootness rests with the party invoking the doctrine." Am. Civil Liberties Union of Mass. v. U.S. Conference of Catholic Bishops, 705 F.3d 44, 52 (1st Cir. 2013). "A case is moot where it is ‘impossible for a court to grant any effectual relief whatever to the prevailing party.’ " Massachusetts v. United States Dep't of Health & Human Servs., 923 F.3d 209, 220 (1st Cir. 2019) (quoting Chafin v. Chafin, 568 U.S. 165, 172, 133 S. Ct. 1017, 185 L. Ed. 2d 1 (2013) ). Mootness review is grounded in the "case or controversy" requirement under Article III of the United States Constitution, U.S. Const. art. III, § 2, cl. 1, and "ensures that courts do not render advisory opinions." Id. (quoting Overseas Military Sales Corp. v. Giralt-Armada, 503 F.3d 12, 16-17 (1st Cir. 2007) ). "For declaratory relief to withstand a mootness challenge, the facts alleged must ‘show that there is a substantial controversy ... of sufficient immediacy and reality to warrant the issuance of a declaratory judgment.’ " Id. (quoting Preiser v. Newkirk, 422 U.S. 395, 402, 95 S. Ct. 2330, 45 L. Ed.2d 272 (1975) ).
Here, there is not and cannot be a live controversy, either immediate or real, pertaining to Plaintiffs’ rights under any provisions of Act No. 66-2014, Act No. 3-2017, and Act No. 8-2017 that have expressly been either incorporated into or repealed by Act No. 26-2017. (See, e.g., Act 26-2017, Art. 1.02 (repealing all laws applicable exclusively to fringe benefits that are contrary to the provisions of Act 26-2017).) Any declaration concerning the validity of such provisions would thus amount to an impermissible advisory opinion. Accordingly, insofar as Plaintiffs seek a declaration that incorporated or repealed provisions impair their CBAs and constitutional rights, Defendants have met their burden of demonstrating that such claims are moot. Cf. Massachusetts, 923 F.3d at 221 (finding moot a challenge to the validity of federal agency rules that was "made for the first time after they ha[d] ceased to exist"); Catholic Bishops, 705 F.3d at 54 (vacating on mootness grounds trial court's declaratory judgment with respect to expired federal government contract); Gulf of Maine Fisherman's All. v. Daley, 292 F.3d 84, 88 (1st Cir. 2002) ("The promulgation of new regulations and amendment of old regulations are among such intervening events as can moot a challenge to the regulation in its original form."). The components of Plaintiffs’ First and Second Prayers for Relief that challenge the incorporated or repealed provisions of Act No. 66-2014, Act No. 3-2017, and Act No. 8-2017 are therefore dismissed for lack of subject matter jurisdiction pursuant to Rule 12(b)(1).
The Court now turns to the merits issues presented by Plaintiffs’ remaining claims.
B. Rule 12(b)(6) : Failure to State a Claim
To survive a motion to dismiss for failure to state a claim upon which relief can be granted pursuant to Rule 12(b)(6), a complaint must plead "enough facts to state a claim to relief that is plausible on its face." Bell Atlantic Corp v. Twombly, 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007). The Court accepts as true the non-conclusory factual allegations in the complaint and draws all reasonable inferences in the plaintiff's favor. Miss. Pub. Employees’ Ret. Sys. v. Boston Scientific Corp., 523 F.3d 75, 85 (1st Cir. 2008). The court may consider "documents the authenticity of which are not disputed by the parties, ... documents central to the plaintiffs’ claim, ... [and] documents sufficiently referred to in the complaint." Id. at 86 (internal quotation marks and citation omitted). The complaint must allege enough factual content to nudge a claim "across the line from conceivable to plausible." Ashcroft v. Iqbal, 556 U.S. 662, 680, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (citing Twombly, 550 U.S. at 570, 127 S.Ct. 1955 ). 1. Claims Against the Oversight Board (All Prayers for Relief)
The Oversight Board argues that Section 105 of PROMESA requires dismissal of Plaintiffs’ claims against it. Under Section 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 [PROMESA]." 48 U.S.C.A. § 2125 (West 2017). Plaintiffs do not dispute that Section 105 precludes their claims against the Oversight Board and, indeed, suggest that they might withdraw them. Accordingly, insofar as Prayers for Relief One, Two, Three, and Four are asserted against the Oversight Board, they are dismissed pursuant to Section 105 of PROMESA.
2. Claims Under the Contract Clause (First, Third, and Fourth Claims for Relief)
As noted above, Plaintiffs’ First Prayer for Relief seeks an order declaring that the Challenged Legislation "is null and void and violate[s] the Contract Clause of the U.S. Constitution." (Am. Compl. ¶¶ 138-39.) The related Third and Fourth Prayers for Relief seek compensatory damages, punitive damages, costs, and attorneys’ fees based on Defendants’ alleged Contract Clause violations. (Id. ¶¶ 142-45.) The Constitution of the United States provides that "[n]o State shall ... pass any ... Law impairing the Obligation of Contracts." U.S. Const. art. I, § 10, cl. 1. The Contract Clause, by its terms, applies only to measures that are state (or territory) laws. Although the language of the Contract Clause is "unequivocal," it "does not make unlawful every state law that conflicts with any contract" and, in considering claims brought under the Contract Clause, courts must "reconcile the strictures of the Contract Clause with the essential attributes of sovereign power necessarily reserved by the States to safeguard the welfare of their citizens." United Auto., Aero., Agric. Impl. Workers of Am. Int'l Union v. Fortuño, 633 F.3d 37, 41 (1st Cir. 2011) (internal quotation marks and citations omitted). In doing so, courts apply a two-pronged test: they examine first "whether the state law has operated as a substantial impairment of a contractual relationship," and then, if the law has, "whether the impairment was reasonable and necessary to serve an important government purpose." Id. When a plaintiff brings suit against a state or territory for impairing a contract to which the governmental unit is a party, the plaintiff bears the burdens of pleading and proof as to both prongs of the Contract Clause analysis. Id. at 43. In seeking dismissal of Plaintiffs’ claims under the Contract Clause, Defendants argue principally that Plaintiffs have failed to meet their burden of pleading facts sufficient to show that the Challenged Legislation does not serve an important governmental purpose and is not reasonable and necessary under the circumstances.
With respect to the first prong of the Contract Clause analysis, the Court assumes for purposes of the instant motion practice only that Plaintiffs have adequately pleaded substantial impairment of the CBAs by the Challenged Legislation. See Ambac Assurance Corp. v. Commonwealth of P.R. (In re Fin. Oversight & Mgmt. Bd. for P.R.), 297 F. Supp. 3d 269, 288 (D.P.R. 2018) (assuming arguendo "as did the First Circuit in Fortuño, that [the] [p]laintiff ha[d] pled the requisite substantial impairment" and evaluating the remaining components of the plaintiff's Contract Clause claim), aff'd, 927 F.3d 597 (1st Cir. 2019). Thus, the Court proceeds directly to consideration of the second prong—whether the Challenged Legislation is reasonable and necessary to serve an important government purpose.
The Oversight Board appears to concede that Plaintiffs have met their pleading burden as to the substantial impairment element of their Contract Clause claims with respect to at least some claimed impairments. (See Oversight Board's Mot. to Dismiss at 12-13 ("Some of the CBA provisions Plaintiffs cite are, on the face of the Complaint, not substantially impaired at all, and, in the appropriate procedural posture, the Oversight Board will dispute allegations of other impairments.").)
The First Circuit considers "the reasonableness inquiry" to "ask[ ] whether the law is reasonable in light of the surrounding circumstances," while "the necessity inquiry focuses on whether Puerto Rico imposed a drastic impairment when an evident and more moderate course would serve its purposes equally well." Fortuño, 633 F.3d at 45-46 (internal quotation marks, citations, and brackets omitted). In analyzing these questions, courts may consider "whether the act (1) was an emergency measure; (2) was one to protect a basic societal interest, rather than particular individuals; (3) was tailored appropriately to its purpose; (4) imposed reasonable conditions; and (5) was limited to the duration of the emergency." Id. at 46. "Where the state [or territory] is alleged to have impaired a contract to which it is a party, ‘less deference to a legislative determination of reasonableness and necessity is required, because the State's self-interest is at stake.’ " Id. at 41 (citation omitted). However, "less deference does not imply no deference," and "the state's judgment that the impairment was justified is afforded meaningful deference." Id. at 45 (citation omitted). Plaintiffs’ unsupported contention that reasonableness and necessity can be found only where the challenged measure is "the only way in which the government can actually save money and have a significant impact in restoring and helping the fiscal crisis the Commonwealth is going through" must therefore be rejected. (See Am. Compl. ¶ 124; Omnibus Opposition to Defendants’ Motions to Dismiss (Docket Entry No. 31, the "Opposition") at 28.) Plaintiffs likewise err in asserting that the "reasonable and necessary" inquiry is "required to be evaluated as [a] question[ ] of fact in a trial ... and [is] impossible to rule upon without expert witness testimony." See, e.g., Fortuño, 633 F.3d at 44 (affirming dismissal of Contract Clause claim under Rule 12(b)(6) for failure to plead adequately that the challenged measures were unreasonable and unnecessary).
Plaintiffs have failed to plead facts from which this Court can infer that the Challenged Legislation was not reasonable and necessary to serve an important government purpose. First, the Amended Complaint contains no factual proffers controverting the recitations in the Challenged Legislation that the statutes serve the important general government purpose of addressing the Commonwealth's fiscal crisis as well as the more specific objectives of "devis[ing] a plan to deal with the consequences of the fiscal and economic crisis of the downgrading of Puerto Rico's credit rating" (Act No. 66-2014 at 1), "ensur[ing] that the Government of Puerto Rico continues operating and offering essential services to the citizens" (Act No. 3-2017 at 1), "facilitat[ing] the transfer of employees" (Act No. 8-2017 at 2), "interconnect[ing] all the agencies and public corporations" (id. ), "encourag[ing] mobility for the continuity of ... public services" (id. ), "guarantee[ing] the continuity of the jobs of each public servant in career office" (id. ), complying with the 2017 fiscal plan (Act No. 26-2017 at 7), and ensuring that the Commonwealth has "sufficient liquidity to be able to pay the payroll of public employees and to pay for the essential services it offers its citizens" (id. ). See Fortuño, 633 F.3d at 44 (quoting with approval the Second Circuit's statement in Buffalo Teachers Fed'n v. Tobe, 464 F.3d 362, 368 (2d Cir. 2006), that "plaintiffs have the burden of proof on [the issue of motivation by self-interest as opposed to the general welfare] because the record of what and why the state has acted is laid out in committee hearings, public reports, and legislation, making what motivated the state not difficult to discern"). Courts, moreover, routinely consider the goal of improving a government's financial condition an important government purpose in the Contract Clause context. See Buffalo Teachers, 464 F.3d at 368 ("The New York legislature had a legitimate public purpose in passing the Act and its wage freeze power. It is not disputed that Buffalo was suffering at the time, and continues to suffer, a fiscal crisis."); Baltimore Teachers Union, Am. Fed'n of Teachers Local 340, AFL-CIO v. Mayor & City Council of Balt., 6 F.3d 1012, 1019 (4th Cir. 1993) ("[E]nsuring the financial integrity of the [c]ity is a significant public purpose."); cf. Ambac, 297 F. Supp. 3d at 288-89 (plaintiff's complaint failed to demonstrate that addressing the Commonwealth's "fiscal, public health, safety, welfare and recovery concerns" was not an important government purpose); Fortuño, 633 F.3d at 46-47 (implying that the reduction of a $3.2 billion Commonwealth deficit constitutes an important government purpose). Plaintiffs’ sole argument challenging the government purposes proffered by Defendants—that Act 26-2017 was intended merely to "mak[e] all employees equal[,]" (Opp'n at 28)—mischaracterizes the cited statutory provision and overlooks the myriad of goals described in and advanced by that statute and the other Challenged Legislation, and is therefore unavailing to fulfill Plaintiffs’ burden as to the first prong of the test.
Second, the Amended Complaint lacks sufficient factual content to demonstrate that the Challenged Legislation was not reasonable and necessary to accomplish the purposes identified by the Legislative Assembly. Plaintiffs allege that "[t]here are many other ways in which the [Commonwealth] [g]overnment can obtain funds in the midst of this fiscal crisis, which do not have to impair the rights of the [SIFC] employees." (Am. Compl. ¶ 125.) The Amended Complaint proposes the following "possible options the Commonwealth [g]overnment has that do not include taking away legal contractual rights of [SIFC] employees": (i) "[i]ncreas[ing] ... compliance and revenue collection across the major tax lines (personal income tax, corporate income tax, and SUT)"; (ii) "[r]educ[ing] or eliminat[ing] ... useless credits or incentives"; (iii) taking "rightsizing measures within the instrumentalities of the Commonwealth that do not operate as private businesses or enterprises"; and (iv) "[p]lanning, develop[ing] and invest[ing] in economic growth projects to increase revenues and collections." (Id. ¶ 128.) These allegations as to alternative measures are, however, insufficiently specific to carry Plaintiffs’ burden of alleging facts that could, if taken as true, demonstrate that the measures imposed by the Challenged Legislation are not reasonable and necessary to advance the Legislative Assembly's stated objectives of addressing the Commonwealth's fiscal crisis and making its public-sector workforce more flexible. Nor does the Amended Complaint proffer any facts from which the Court could determine that tax reform, "rightsizing" measures, and "economic growth projects" sufficient to obviate the need for the measures imposed by the Challenged Legislation could feasibly be undertaken. See Ambac, 297 F. Supp. 3d at 288 (dismissing under Rule 12(b)(6) Contract Clause claim challenging Act No. 26-2017, among other Commonwealth statutes, where the plaintiff "fail[ed] to plead any factual content suggesting that ‘other available alternatives with lesser impact to the paramount constitutional rights affected’ might have existed that would ultimately have been ‘a more moderate course of action’ that would serve the stated purposes of the relevant actions ‘equally well’ " (quoting Fortuño, 633 F.3d at 47 )); see also Trinidad Hernandez v. ELA, 188 D.P.R. 828 (P.R. 2013) (Transl. Mot., Ex. 7 at 4-7) (dismissing federal and Commonwealth Contract Clause claims seeking invalidation of pension reform legislation where the plaintiffs failed to plead facts showing that proposed alternatives were feasible and less burdensome than the measures imposed by the challenged statute). Plaintiffs’ proposed alternative solutions are merely generic measures for increasing revenue that could, in theory, apply to any government entity under any circumstances. Thus, Plaintiffs have failed to allege plausibly that the Challenged Legislation was unreasonable or unnecessary, particularly in light of the "meaningful deference" that must be afforded to the Legislative Assembly's judgment that the impairments to the CBAs here were justified. See Fortuño, 633 F.3d at 44.
Also absent from the Amended Complaint are any allegations suggesting that Act No. 66-2014, Act No. 3-2017, Act No. 8-2017, and Act No. 26-2017 were not emergency measures. See Fortuño, 633 F.3d at 46. Nor do Plaintiffs contend that the Challenged Legislation was intended to protect particular individuals rather than basic societal interests. See id.
Plaintiffs’ reliance on this Court's partial denial of a motion to dismiss the complaint in Union de Trabajadores de la Industria Eléctrica y Riego, Inc. v. Puerto Rico Elec. Power Auth., Adv. Proc. No. 17-229 ("UTIER")—another adversary proceeding before this Court in which a labor union challenged Act No. 66-2014, Act No. 3-2017, Act No. 8-2017, and Act No. 26-2017—in arguing the sufficiency of their own pleading is misplaced. The proposed alternative measures described in the complaint in UTIER differed materially from those pled here. The measures proposed in the UTIER complaint were targeted to PREPA, the particular government entity involved, and purported to address particular components of PREPA's operations that were at least conceivably ripe for improvement: (i) reexamining subsidies extended to a high percentage of PREPA customers; (ii) improving collection of over $1 billion in accounts receivable; (iii) reevaluating deals with petroleum suppliers who historically sold PREPA fuel at inflated prices; (iv) improving PREPA's inefficient auction process for contracts; and (v) targeting theft of electric service. See UTIER, Docket Entry No. 38 ¶ 132. Here, by contrast, the proposed alternative measures enumerated in the Amended Complaint are not specifically tailored to SIFC, and Plaintiffs fail to plead any facts even suggesting how those proposed measures could be implemented effectively. The UTIER decision provides no basis for a conclusion that the Amended Complaint is sufficient in this regard.
In sum, Plaintiffs have failed to meet their burden of pleading facts sufficient to allow the Court to draw a reasonable inference that the Challenged Legislation is unreasonable and unnecessary to effectuate an important government purpose. Accordingly, the First Claim for Relief, and the Third and Fourth Claims for Relief insofar as they are predicated on Contract Clause violations, are dismissed for failure to state a claim upon which relief can be granted. Cf. Asociación de Empleados Gerenciales de la Corporación del Fondo del Seguro del Estado v. Corporación del Fondo del Seguro del Estado, Case No. SJ2014CV00204(907), 2015 WL 4075649 (TCA) (P.R. Cir. May 29, 2015) (Motion of Defendant the Financial Oversight and Management Board for Puerto Rico to Submit Certified Translations (Docket Entry No. 34, "Reply Translation," Ex. 1 at 14)) (upholding judgment dismissing complaint challenging Act No. 66-2014 under the Commonwealth Constitution's Contract Clause, finding that the statute had "the legitimate and urgent purpose of preventing the collapse of the Government of Puerto Rico's finances and guaranteeing basic and essential services for the citizens," and concluding that "the measures taken ... [were] undoubtedly reasonable and necessary to advance the important governmental purpose of saving Puerto Rico's finances").
3. Claims Under the Collective Bargaining Clause of the Commonwealth's Constitution (Second, Third, and Fourth Claims for Relief)
Plaintiffs’ Second Prayer for Relief seeks an order declaring that the Challenged Legislation "is null and void and violates the Right to Collective Bargaining of the Commonwealth's Constitution." (Am. Compl. ¶¶ 140-41.) The Third and Fourth Prayers for relief seek compensatory damages, punitive damages, costs, and attorneys’ fees based on Defendants’ alleged Collective Bargaining Clause violations. (Id. ¶¶ 142-45.) Defendants move to dismiss each claim.
Section 17 of the Commonwealth Constitution—the Collective Bargaining Clause—provides that "[p]ersons employed by ... agencies or instrumentalities of the government operating as private businesses or enterprises[ ] shall have the right to organize and to bargain collectively with their employers through representatives of their own free choosing in order to promote their welfare." P.R. Const. art. II, § 17. Plaintiffs allege in the Amended Complaint that the Challenged Legislation, "by vacating or eliminating the labor rights and benefits already negotiated under the [CBAs], and eliminating the right to negotiate the clauses impaired by such legislation, ha[s] violated Plaintiffs [sic] members’ right to collective bargain [sic]" under the Collective Bargaining Clause. (Am. Compl. ¶ 135.) Defendants assert that Plaintiffs’ Collective Bargaining Clause claims must be dismissed as time barred under "the one-year limitations period in 31 L.P.R.A. § 5298 for constitutional claims for impairment of property rights." (Oversight Board's Mot. to Dismiss at 23.) Defendants also contend that, in any event, Plaintiffs fail to allege plausibly that the Challenged Legislation deprives Plaintiffs of their right to bargain collectively.
31 L.P.R.A. § 5298 imposes a one-year statute of limitations period—or "prescriptive" period—on actions brought under Commonwealth law to "recover or retain possession" and to "demand civil liability for grave insults or calumny, and for obligations arising from [damage to another through] fault or negligence." Although the parties have not cited, and this Court has not otherwise found, authority specifically establishing the statute of limitations applicable to claims asserted under the Collective Bargaining Clause, Commonwealth and federal courts have applied the one-year statute of limitations under 31 L.P.R.A § 5298 to claims arising from the deprivation of other rights secured by both the Commonwealth Constitution and the United States Constitution. See, e.g., Plaza de Descuentos, S.E. v. E.L.A., 178 D.P.R. 777 (2010) (Transl. Mot., Ex. 10 at 3-5) (applying one-year limitations period to federal and Commonwealth claims arising from the "deprivation of private property for public uses"); Velez-Velez v. Puerto Rico Highway & Transp. Auth., 795 F.3d 230, 235 (1st Cir. 2015) (applying one-year limitations period to federal constitutional claims under 42 U.S.C. § 1983 ); Rivera-Torres v. Castillo, 109 F. Supp. 3d 477, 482 (D.P.R. 2015) (same). Defendants contend that the one-year limitations period under 31 L.P.R.A. § 5298 should apply because Plaintiffs’ Collective Bargaining Clause claims likewise allege impairment of constitutional rights. Given the similar nature of Plaintiffs’ claims under the Collective Bargaining Clause and those to which courts have previously applied 31 L.P.R.A. § 5298, this Court applies a one-year statute of limitations here as well.
Consistent with these principles and precedents, the parties’ arguments here assume that the relevant statute of limitations is one year. They differ, however, on the point from which the statute of limitations is to be measured. Plaintiffs argue that their Collective Bargaining Clause claims are timely because the damages associated with such claims are continuous. Plaintiffs assert that their claims continue to accrue under the "continuing tort doctrine" because Plaintiffs are "currently suffering damages that will not cease until the cause that originated them cease[s] to exist." (Opp'n at 31.) Defendants contend that facial constitutional challenges to legislation, like Plaintiffs’ Collective Bargaining Clause claims here, accrue when the legislation is enacted, and the Challenged Legislation does not implicate the continuing violation doctrine.
In the First Circuit, "state law governs ‘when a state-created cause of action accrues.’ " Quality Cleaning Prod. R.C., Inc. v. SCA Tissue N. Am., LLC, 794 F.3d 200, 204 (1st Cir. 2015). Under Puerto Rico law, claims subject to the one-year statute of limitations established by 31 L.P.R.A. § 5298 accrue when a plaintiff has "both notice of her injury and knowledge of the likely identity" of the person or entity that caused it. Espada v. Lugo, 312 F.3d 1, 3 (1st Cir. 2002) ; see Rivera Ruiz v. Municipio Autonomo de Ponce, 196 D.P.R. 410 (P.R. 2016) (Reply Transl., Ex. 4, "Rivera Ruiz," at 5) ("As a general rule, the one year prescriptive term provided in ... 31 L.P.R.A. § 5298 [ ] begins to run from the time the aggrieved party had—or should have had—knowledge of the damage suffered and was in a position to exercise his cause of action."). Nevertheless, the Puerto Rico Supreme Court has held that when a plaintiff alleges a "tortious or negligent act or omission of a continuing nature, the prescriptive term to file an action seeking compensation begins to run when the last acts or omissions are verified or the definitive result is produced," whichever is later. Rivera Ruiz at 14. This principle "does not rest on the intrinsic nature of the harm caused by the disturbance, but on the continuing or progressive nature of the cause that originates it, which constantly renews the damaging action." Id. at 8 (quoting Arcelay v. Sánchez, 77 D.P.R. 824, 839 (1955) ). Federal courts in this Circuit applying similar principles to claims under both Puerto Rico law and federal law have held that a continuing violation occurs only when the unlawful acts are continuous and not merely when there are continual harmful effects from some discrete act. See Muniz-Rivera v. United States, 204 F. Supp. 2d 305, 315 (D.P.R. 2002), aff'd, 326 F.3d 8 (1st Cir. 2003) ; M.R. (Vega Alta), Inc. v. Caribe Gen. Elec. Prod., Inc., 31 F. Supp. 2d 226, 240 (D.P.R. 1998) (noting that "Puerto Rico courts, as well as courts of other jurisdictions, have consistently held that the continuing harmful effect of the original tort does not constitute a continuing tort for purposes of tolling the statute of limitations" and collecting cases); Monteferrante v. Williams-Sonoma, Inc., 241 F. Supp. 3d 264, 272 (D. Mass. 2017) (" ‘[C]ourts must be careful to differentiate between [the unlawful] acts and the ongoing injuries which are the natural, if bitter, fruit of such acts,’ which do not restart the clock." (second alteration in original) (quoting Gilbert v. City of Cambridge, 932 F.2d 51, 58 (1st Cir. 1991) )).
Although it appears that neither the Supreme Court of Puerto Rico nor any lower Commonwealth court has spoken on the precise issue currently before this Court, various federal courts of appeals, including the First Circuit, have held that claims asserting facial challenges to legislative enactments accrue upon the enactment or effective date of the law in question. See Asociación de Suscripción Conjunta del Seguro de Responsabilidad Obligatorio v. Juarbe-Jimenez, 659 F.3d 42, 50 (1st Cir. 2011) (holding that "a facial takings challenge accrues at the time the offending statute or regulation is enacted or becomes effective"); Colony Cove Properties, LLC v. City of Carson, 640 F.3d 948, 956 (9th Cir. 2011) ("[T]he statute of limitations for facial challenges to an ordinance runs from the time of adoption[.]"); Smith v. City of Enid, 149 F.3d 1151, 1154 (10th Cir. 1998) ("[T]he constitutional injury, the injury which triggers the statute of limitations for purposes of § 1983, occurred when the 1990 amendment became law, not when the consequence of that constitutional injury ... manifested itself."). Juarbe-Jimenez, while not necessarily controlling because it involved claims under the United States Constitution only, is factually analogous to the instant case and instructive at the very least. See Davila-Torres v. Feliciano-Torres, 924 F. Supp. 2d 359, 369 (D.P.R. 2013) (applying the same statute of limitations principles, including the continuing violation doctrine, to claims brought under the federal and Commonwealth constitutions); Torres-Santiago v. Diaz-Casiano, 708 F. Supp. 2d 178, 186 (D.P.R. 2009) (in declining to exercise supplemental jurisdiction over claims brought under Puerto Rico law, noting that the same statute of limitations analysis that applied to the plaintiffs’ federal constitutional claims would apply to their claims asserted under the Commonwealth Constitution). In Juarbe-Jimenez, the First Circuit emphasized that an anticipated decrease in the plaintiff's revenue due to the challenged regulation was "simply a harmful effect of [its] passage," and thus application of the continuing violation doctrine was not warranted. 659 F.3d at 52. The doctrine did not apply, the court noted, "despite the fact that the [plaintiff] did not know the precise dollar amount that would be subject to the [challenged regulation] in future years," because the plaintiff "was aware that the [regulation] would operate automatically on all profits earned" after it came into effect. Id. Accordingly, the Juarbe-Jimenez plaintiffs’ Takings Clause claim accrued upon the regulation's enactment and was precluded under the applicable statute of limitations. See id.
Where the Puerto Rico Supreme Court has not spoken directly on a Puerto Rico law issue presented to a federal court, the court should "ascertain the rule the state court would most likely follow under the circumstances." Quality Cleaning, 794 F.3d at 206 (citations omitted).
Here, the Amended Complaint raises facial challenges to Act No. 66-2014, Act No. 3-2017, Act No. 8-2017, and Act No. 26-2017 by alleging that such laws interfere with Plaintiffs’ right to bargain collectively and thus violate Plaintiffs’ rights under the Commonwealth Constitution. Based upon Plaintiffs’ allegations that the statutes in question changed the terms and conditions of their employment, depriving them of rights to various benefits and of the right to collectively bargain, any damages they may have sustained occurred as a direct consequence of the Challenged Legislation's enactment and not due to any subsequent conduct of Defendants. The enactment of Act No. 26-2017 was the last allegedly unlawful act, see Rivera Ruiz at 14, and the alleged changes in employment conditions and deprivation of collective bargaining rights that immediately followed were the "definitive result[s]" of that act, see id. The consequences that follow from such results, like the Juarbe-Jimenez plaintiffs’ anticipated loss of revenues, are "simply ... harmful effect[s]" of the Challenged Legislation's passage. See 659 F.3d at 52. Plaintiffs’ contention that their damages increase "each day under the mandates of the Challenged Legislation," (Opp'n at 31) is thus of no moment in determining when the statute of limitations accrues. See Rivera Ruiz at 8 (emphasizing that application of the continuing violation doctrine does not turn on the "nature of the harm caused by the disturbance" (quoting Arcelay, 77 D.P.R. at 839 )). Absent a plausible allegation that Defendants’ actions subsequent to the Challenged Legislation's enactment have caused Plaintiffs to incur damages, the continuing violation doctrine is inapplicable. Further, no allegations in the Amended Complaint or other material in the record indicate that Plaintiffs were unaware of the effects of any of the Challenged Legislation at the time each law was enacted. Hence, at the latest, Plaintiffs’ Collective Bargaining Clause claims accrued on April 29, 2017, the date Act No. 26-2017, the most recent of the four laws, was enacted. Plaintiffs did not initiate the instant case until July 25, 2018—more than one year after the enactment of Act 26-2017 and therefore after the statute of limitations had expired.
The facts of Rivera Ruiz, the sole decision cited by Plaintiffs in support of their theory that the continuing violation doctrine saves their Collective Bargaining Clause claims, are readily distinguishable. The plaintiffs in that case did not, as Plaintiffs have done here, challenge the constitutionality of a statute or regulation; rather, they alleged that a municipality's repeated failure to take steps to protect against recurring flood damage constituted tortious behavior that caused them continuous damages. Id. at 2-3. Plaintiffs’ Amended Complaint lacks any analogous allegations of continued conduct or omissions by Defendants.
Accordingly, the Second Claim for Relief, as well as the Third and Fourth Claims for Relief insofar as they are predicated on Collective Bargaining Clause violations, are dismissed as time barred.
In light of the foregoing conclusions, the Court need not address the parties’ additional arguments.
Because the Government Officials are named in their official capacities only, the claims asserted against them are construed as claims against the Commonwealth and SIFC. See Am. Policyholders Ins. Co. v. Nyacol Prod., Inc., 989 F.2d 1256, 1259 (1st Cir. 1993) ("Generally, a suit against an officer in the officer's official capacity constitutes a suit against the governmental entity which the officer heads."). Consequently, in light of this Court's determination that Plaintiffs’ Amended Complaint should be dismissed pursuant to Rule 12(b)(6) as against the Commonwealth and SIFC, the Court need not address the Government Officials’ arguments regarding the insufficiency of Plaintiffs’ allegations against them.
III.
CONCLUSION
For the foregoing reasons, the Motions are granted. Plaintiffs’ First and Second Prayers for Relief are dismissed pursuant to Rule 12(b)(1) insofar as they assert claims for declaratory relief concerning Act No. 66-2014, Act No. 3-2017, and Act No. 8-2017, and the remainder of Plaintiffs’ claims are dismissed pursuant to Rule 12(b)(6) for failure to state a claim upon which relief may be granted. This Opinion and Order resolves Docket Entry Nos. 22 and 25. The Clerk of Court is directed to enter judgment accordingly and close this adversary proceeding. The Clerk of Court is also directed to update the case caption as set forth above, for the reasons detailed in footnote 2 above.
SO ORDERED.