Malavé–Torres v. Cusido

839 F.Supp.2d 501

Karla MALAVÉ–TORRES, Plaintiff,

v.José M. CUSIDO, et al., Defendants.

Civil No. 11–1432 (GAG/BJM).

United States District Court, D. Puerto Rico.

March 15, 2012.

Hector J. Perez–Rivera, Luis R. Ortiz–Segura, Pinto–Lugo, Oliveras & Ortiz, PSC, San Juan, PR, for Plaintiff.

Kristy M. Johnson, Carlton Fields, P.A., Miami, FL, Mariela Rexach–Rexach, Schuster & Aguilo LLP, San Juan, PR, for Defendants.

ORDER

GUSTAVO A. GELPI, District Judge.

Order Adopting Report and Recommendation Denying MOTION to Dismiss/Lack of Jurisdiction.

REPORT AND RECOMMENDATION

BRUCE J. McGIVERIN, United States Magistrate Judge.

Karla Malavé–Torres (“Malavé”) sued José M. Cusido (“Cusido”), Sterling Foods, Inc. (“Sterling”) (collectively, “defendants”), and an unnamed insurance company, alleging employment discrimination in violation of Title VII of the Civil Rights Act of 1964 (“Title VII”), 42 U.S.C. §§ 2000e et seq., Law No. 3 of March 13, 1942 (“Law 3”), 29 L.P.R.A. §§ 467 et seq., Law No. 69 of July 6, 1985 (“Law 69”), 29 L.P.R.A. §§ 1321 et seq., and Law No. 100 of June 30, 1959 (“Law 100”), 29 L.P.R.A. §§ 146 et seq., as well as wrongful discharge in violation of Law No. 80 of May 30, 1976 (“Law 80”), 29 L.P.R.A. §§ 185a et seq., and tort liability under Article 1802 of the Puerto Rico Civil Code, 31 L.P.R.A. § 5141. (Docket No. 1). Sterling moved to dismiss for lack of personal jurisdiction, and both Sterling and Cusido move to dismiss for lack of subject matter jurisdiction. (Docket No. 18). Malavé opposed the motions (Docket No. 25), defendants replied (Docket No. 27), and Malavé sur-replied (Docket No. 29). The motion was referred to me for a report and recommendation. (Docket No. 19). For the reasons that follow, I recommend that the motions to dismiss be denied.

MOTION TO DISMISS FOR FAILURE TO STATE A CLAIM

Defendants argue that Puerto Rico employment law has no extraterritorial effect, and that Malavé was not employed in Puerto Rico, requiring dismissal of the Commonwealth claims. Although they label this a challenge to subject matter jurisdiction, in substance the argument goes to the legal sufficiency of the plaintiff's complaint, and should be analyzed under Fed.R.Civ.P. 12(b)(6). As plaintiffs correctly argue, the court has supplemental jurisdiction over the Commonwealth claims, and Puerto Rico employment law applies.

Federal courts have supplemental jurisdiction over claims that “form part of the same case or controversy under Article III” as an action over which there is original jurisdiction. 28 U.S.C. § 1367(a). Thus, “[a] court may exercise supplemental jurisdiction over a state claim whenever it is joined with a federal claim and the two claims ‘derive from a common nucleus of operative facts' and the plaintiff ‘would ordinarily be expected to try them both in one judicial proceeding.’ ” Pejepscot Indus. Park, Inc. v. Maine Cent. R. Co., 215 F.3d 195, 206 (1st Cir.2000) (quoting United Mine Workers v. Gibbs, 383 U.S. 715, 725, 86 S.Ct. 1130, 16 L.Ed.2d 218 (1966)). The complaint describes a single course of events to plead both federal and Puerto Rico causes of action, and defendants do not challenge the sufficiency of supplementaljurisdiction. The court therefore has subject matter jurisdiction over the Commonwealth claims.

In accordance with defendants' invitation to alternatively evaluate their motion under Rule 12(b)(6), I will consider their arguments in light of the standard applicable under that rule. ( See Docket No. 18, p. 11 n. 4).

I. Rule 12(b)(6) Standard

To survive dismissal, “an adequate complaint must provide fair notice to the defendants and state a facially plausible legal claim.” Ocasio–Hernández v. Fortuño–Burset, 640 F.3d 1, 12 (1st Cir.2011). A court parses the allegations of the complaint in two steps. First, “ ‘legal conclusion[s] couched as ... fact[ ]’ or ‘threadbare recitals of the elements of a cause of action’ ” are identified and completely disregarded. Id. (quoting Ashcroft v. Iqbal, 556 U.S. 662, 129 S.Ct. 1937, 1949–50, 173 L.Ed.2d 868 (2009)) (alteration marks omitted). The remaining “[n]on-conclusory factual allegations” are then “treated as true, even if seemingly incredible.” Id. The overall standard is thus only satisfied if those facts support a reasonable inference of liability. Id. However, a court may not “attempt to forecast a plaintiff's likelihood of success on the merits.” Id. A court that considers matters outside the pleadings must give notice to the parties and convert the motion to dismiss into a motion for summary judgment. Fed.R.Civ.P. 12(d). However, no conversion need occur when the district court “chooses to ignore the supplementary materials” provided by the parties. Garita Hotel Ltd. P'ship v. Ponce Fed. Bank, F.S.B., 958 F.2d 15, 18 (1st Cir.1992); see R. 12(d) (conversion required when “matters outside the pleadings are presented to and not excluded by the court ....”) (emphasis added).¹

II. Allegations of the Complaint

Malavé resides in Puerto Rico. (Docket No. 1, ¶ 8). Sterling is a Florida corporation, with an office in Miami, Florida and doing business in Puerto Rico. ( Id., ¶¶ 11–12). Sterling has at least 20 employees. ( Id., ¶ 16). Sterling is a meat packing producer, and has limited participation in the Puerto Rico market. ( Id., ¶ 20). Sterling and Cusido decided to hire a “Marketing Director” to establish a presence in Puerto Rico. ( Id., ¶ 21). Cusido contacted Malavé in late April, 2010, to offer her employment. ( Id., ¶ 22). Malavé accepted an offer for a base salary of $1,546.15 per week, with a car allowance of $650 per month and expenses. ( Id., ¶ 23). Malavé began work on May 1, 2010 in the Marketing Director position. ( Id., ¶ 24). Malavé performed her duties satisfactorily. ( Id., ¶ 25). She had prior business opportunities and marketing contracts in Panama, and she organized a food show in Panama to showcase Sterling's products. ( Id., ¶ 27). She traveled to Panama to set up the show, invited her business contacts, and held the show around August 3, 2010. ( Id., ¶ 28).

Around September 3, 2010, Malavé informed Cusido that she was pregnant and would not travel as frequently as she had before. ( Id., ¶ 29). The defendants subsequently told Malavé that her performance was deficient, and that they had decided to terminate her employment immediately. ( Id., ¶ 31). Malavé had not been informed of any performance issues before she provided notice of her pregnancy, and defendants' statement amazed her. ( Id., ¶¶ 31–32). Cusido attempted to persuade Malavéto resign and “continue other endeavors” following delivery. ( Id., ¶ 33). Following other communications with Cusido, Malavé informed her employer that she believed she was being discriminated against because of her pregnancy. ( Id., ¶ 34). The defendants did not respond to this allegation. ( Id., ¶ 35). Following her dismissal, a male has worked as Marketing Director, using the clients and contacts Malavé developed while working at Sterling. ( Id., ¶ 37). Malavé subsequently sought psychological treatment for anxiety, depression, and self-esteem problems. ( Id., ¶ 38). Malavé suffered a miscarriage. ( Id., ¶ 39). Malavé subsequently became severely depressed and stressed, and began outpatient psychiatric treatment. ( Id., ¶ 40). On October 5, 2010, Malavé filed a charge at the San Juan EEOC office against Cusido and Sterling. ( Id., ¶ 36).

III. Discussion

The defendants argue (1) that Puerto Rico conflict of laws analysis requires dismissal of the Commonwealth claims, and (2) that Puerto Rico employment law, on its own terms, does not apply to Malavé. Therefore, they reason, the Puerto Rico causes of action must be dismissed. Although I will analyze the legal arguments presented by the defendants, I note that they rely extensively on evidence beyond the complaint to support their position. Because I have not converted this motion to one for summary judgment under Rule 12(d), my legal analysis here is based on the facts alleged in the complaint. However, the defendants will not be precluded from revisiting the application of this law to evidence later submitted for summary judgment. With that caveat in mind, I consider each position in turn.

First, defendants argue that conflict of laws analysis requires dismissal of the Commonwealth claims. A federal court with diversity or supplemental jurisdiction applies state substantive law to state law claims. Hoyos v. Telecorp Comm'ns, Inc., 488 F.3d 1, 5 (1st Cir.2007). This includes the forum state's choice of law principles. See Hartford Fire Ins. Co. v. CNA Ins. Co. (Europe), 633 F.3d 50, 54 n. 7 (1st Cir.2011) (diversity case). Puerto Rico courts generally follow the Restatement (Second) of Conflict of Laws. Servicios Comerciales Andinos, S.A. v. Gen. Elec. Del Caribe, Inc., 145 F.3d 463, 478–79 (1st Cir.1998). “The first step in a choice of law analysis is to determine whether an actual conflict exists between the substantive laws of the interested jurisdictions....” Reicher v. Berkshire Life Ins. Co. of Am., 360 F.3d 1, 4 (1st Cir.2004) (applying Restatement under Massachusetts law).

Here, although the defendants recite the choice of law factors applicable to contract disputes, they seek dismissal of Malavé's statutory claims.² They suggest that “the applicable law could be that of Florida, or possibly Panama or Costa Rica,” but fail to address the threshold inquiry of whether there is an actual conflict with Puerto Rico law. This argument is therefore waived, as defendants do not provide the “raw materials” necessary to decide whether a Puerto Rico court would dismiss the Commonwealth claims under a conflict of laws analysis. See Velázquez Rodríguez v. Municipality of San Juan, 659 F.3d 168, 175 (1st Cir.2011) (poor analysis waives consideration of arguments); cf. Reicher, 360 F.3d at 4–5 (comparing Massachusetts and Maryland insurance settlement practices statutes); Millipore Corp. v. Travelers Indem. Co., 115...