Monday, September 9, 2013

Puerto Rico Supreme Court “federalizes” summary judgment practice with implications in all civil cases

Depending on whose interests are at stake, one of many factors to consider on whether to remove a Law 75 or Law 21 case to federal court should be the difference in the procedural rules and the approach for the resolution of summary judgment motions between local and federal courts.

Generally, principals in Law 75 cases perceive the federal court, with its history of Law 75 precedents, as being more receptive to resolve by summary judgment in some measure due to the rigorous and uniform summary judgment procedure, and the “anti-ferret” rule (where the opponent cannot rest on vague and unsubstantiated factual allegations). At the federal district court level, the Local Rules incorporate the “anti-ferret” rule demanding litigants to specify and support their allegations and counter-allegations of the undisputed and disputed material facts.

On the other hand, for decades, at least since the Bishop case in 1986 (Corp. Presiding Bishop v. Purcell, 117 D.P.R. 714 (1986)), the Puerto Rico Supreme Court has been reluctant to approve the use of summary judgment in civil cases treating it as an “extraordinary remedy” appropriate in the clearest of cases where the “court has before it the truth of all the relevant facts.” As a result, summary judgment practice in the local courts has become increasingly rare if not a dead letter (First Amendment cases may be an exception), unpredictable, and procedurally disjointed as some litigants successfully defeat summary judgment motions with vague, unsubstantiated, contradictory, and generalized allegations.

The change to adopt federal procedural practice may have begun in 2010 with the amendments to Puerto Rico’s Rules of Civil Procedure tracking many of the Federal Civil Rules, including Rule FRCP 56 and leading up to the case under consideration: José Zapata Berrios v. J.F. Montalvo Cash & Carry, Inc., CC-2012-0152 (T.S. Aug. 27, 2013). There, by a vote of 5-4, the Court held that Rule 36(b)(c) of the Rules of Civil Procedure (2010) incorporate “anti-ferret” requirements whereby the moving party must substantiate its allegations with evidence and record support and the opponent must answer the factual allegations with admissible evidence and cites to the record. The Court also held that the lower court must disregard a “sham” affidavit; one that is directly and materially contradictory to the declarant’s deposition testimony-a rule having widespread acceptance in the federal courts.

More to say about the facts. Defendant JF Montalvo, a wholesaler and retail groceries chain, terminated Plaintiff, an Assistant to the President, because of an alleged bona fide restructuring of its operations for economic conditions and a substantial reduction in sales. Plaintiff filed suit alleging a termination without cause under P.R. Law 80, a special law protecting certain employees from unjustified termination of their employment. Defendant filed an MSJ with proposed uncontested facts citing to the record. Plaintiff failed to contest each of the facts and opted to allege that the termination was pre-textual based on an additional set of facts. For Plaintiff’s failure to comply with the anti-ferret rule, the Court held that the proposed uncontested facts should have been admitted as uncontroverted. Disregarding the sham affidavit and accepting the undisputed facts, the Court concluded that summary judgment was appropriate as a matter of law; the termination was justified under Law 80; and reversed the judgment below declining to enter summary judgment for the employer.

Time will tell, but it may now be that the difference in procedural standards may not be so prominent a factor when deciding whether to remove a Law 75 case to federal court.