Cruz v. Bristol-Myers Squibb Co., PR, Inc. , 699 F.3d 563 ( 2012 )

United States Court of Appeals
For the First Circuit
No. 11-1617
CESAR I. CRUZ; JOSE I. LASANTA; MARCELO DIAZ,
Plaintiffs, Appellants,
JANE DOE; JANE DOE 1; JANE DOE 2;
CONJUGAL PARTNERSHIP LASANTA-DOE 1;
CONJUGAL PARTNERSHIP CRUZ-DOE;
CONJUGAL PARTNERSHIP DIAZ-DOE 2,
Plaintiffs,
v.
BRISTOL-MYERS SQUIBB COMPANY, PR, INC.;
BRISTOL-MYERS SQUIBB MFG., INC.;
BMS SEVERANCE PLAN,
Defendants, Appellees.
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF PUERTO RICO
[Hon. Francisco A. Besosa, U.S. District Judge]
Before
Lynch, Chief Judge,
Boudin and Lipez, Circuit Judges.
Frank E. Laboy Blanc on brief for appellants.
Lourdes C. Hernández-Venegas, Ana B. Rosado-Frontanés, and
Schuster Aguiló LLP on brief for appellees.
November 7, 2012
LIPEZ, Circuit Judge. After they were fired from their
jobs, appellants Cesar Cruz, Jose Lasanta, and Marcelo Diaz filed
suit in federal district court against their former employer,
appellee Bristol-Myers Squibb Manufacturing Company ("Bristol-
Myers"), and against the severance plan established by Bristol-
Myers pursuant to the Employee Retirement Income and Security Act
("ERISA"), 29 U.S.C. §§ 1001-1461, appellee BMS Severance Plan.
The district court granted appellees' motion for summary judgment,
and appellants now challenge that ruling, as well as a number of
the district court's other orders. Discerning no error, we affirm.
I.
A. Factual Background
In 2003, Bristol-Myers began winding down operations at
the multi-building site where Cruz had worked as a mechanic since
1993. By letter, Bristol-Myers notified Cruz on July 29, 2003,
that he would receive a cash bonus upon discharge, in addition to
any severance package for which he might be eligible. The letter
explained that the amount of the bonus depended on the timing of
the discharge: if Cruz's employment ended when normal operations in
Building 5 stopped, he would get three months' salary; if he left
when operations in Buildings 2 and 29 stopped, he would get six
months' salary; if he was dismissed when sterile operations in
Building 5 stopped, he would get nine months' salary.
-2-
As part of the winding-down process, Bristol-Myers
developed a ranking system to determine the order in which
employees occupying the same positions would be terminated. The
ranking system took into account both professional skills and
seniority within the company. In 2007, as operations in Building
2 were coming to a halt, Bristol-Myers decided to terminate two of
its four mechanics. Among the mechanics, Cruz was ranked third in
skills and fourth in seniority. On June 22, 2007, he was informed
that there would be a reduction in force that would result in his
discharge on August 29, 2007. At the time, Cruz was forty-two
years old. The two mechanics who were retained were, respectively,
fifty years old and forty-three years old. No one was hired to
replace Cruz, and he was paid a cash bonus of six months salary.
Prior to Cruz's dismissal, Bristol-Myers had adopted a
severance plan, pursuant to ERISA, to assist employees who were
being downsized. Under the plan, in exchange for signing a general
release of any claims against Bristol-Myers, Cruz would have been
eligible for a severance package of $47,833. Cruz never signed the
release and, as a result, never received a severance package.
B. Procedural History
Appellants' complaint was filed on April 11, 2008,
asserting federal claims under ERISA, the Age Discrimination in
Employment Act ("ADEA"), 29 U.S.C. §§ 621-634, the Americans with
Disabilities Act ("ADA"), 42 U.S.C. §§ 12101-12213, the Worker
-3-
Adjustment and Retraining Notification Act ("WARN"), 29 U.S.C. §§
2101-2109, and the Consolidated Omnibus Budget Reconciliation Act
("COBRA"), 29 U.S.C. §§ 1161-1169, which amended ERISA. The
complaint also asserted a common-law breach of contract claim, as
well as an employment discrimination claim under the Puerto Rico
Anti-Discrimination Act (also known as Law 100), P.R. Laws. Ann.
tit. 29, §§ 146-151, and an unjustified dismissal claim under
Puerto Rico Law 80, P.R. Laws Ann. tit. 29, §§ 185a-m.
Because the allegations in the complaint were difficult
to decipher, appellees filed a motion for a more definite
statement. See Fed. R. Civ. P. 12(e). On July 11, 2008,
appellants submitted a new complaint raising identical claims,
which appellees answered. After reviewing the new complaint, the
district court tentatively determined that there was no basis for
appellants to be joined together as plaintiffs in a single lawsuit.
See Fed. R. Civ. P. 20(a)(1). Hence, the district court ordered
appellants to show cause why Diaz and Lasanta should not be severed
from the case, leaving Cruz (as the first named plaintiff) to
proceed alone. Appellants responded that joinder was proper
because their individual rights to relief arose from the same
occurrence - namely, a large-scale reduction in force at the
Bristol-Myers site where they had worked.
On February 25, 2009, before the district court had
conclusively ruled on the propriety of joinder, appellants filed a
-4-
motion seeking to have their suit certified as a collective action
under the ADEA. See 29 U.S.C. § 626(b) (incorporating 29 U.S.C.
§ 216(b)); see also Hoffman-La Roche Inc. v. Sperling, 493 U.S.
165, 170 (1989) ("Congress has stated its policy that ADEA
plaintiffs should have the opportunity to proceed collectively.").
On January 28, 2010, the district court issued an order severing
Diaz and Lasanta and dismissing their claims without prejudice on
the ground that appellants had failed to establish that a question
of law or fact common to all of them would arise in the case. See
Fed. R. Civ. P. 20(a)(1)(B). The district court then declared the
motion seeking certification of appellants' suit as a collective
action to be moot. See Cruz v. Bristol Myers Squibb Co. P.R. Inc.,
264 F.R.D. 22 (D.P.R. 2010).
On February 10, 2010, the district court issued a
scheduling order informing the remaining parties that any amended
pleadings had to be filed by March 9, 2010. After the deadline
passed, Cruz filed a "corrected complaint" on April 26, 2010, which
deleted his ADA, WARN, and COBRA claims. Appellees answered the
corrected complaint on May 4, 2010, and discovery began. On June
13, 2010, Cruz moved to amend the complaint in order to augment his
ADEA and Law 100 claims with information unearthed during
discovery. The district court denied his motion without comment.
On December 13, 2010, after discovery had concluded, Cruz once more
moved to amend the complaint for the purposes of reinforcing his
-5-
existing claims, adding an allegedly indispensable party (an
unidentified successor-in-interest to Bristol-Myers), and rejoining
Diaz as a plaintiff. The motion was denied, again without comment.
On January 11, 2011, appellees moved for summary
judgment, affixing to their motion a statement of uncontested facts
("SUF"), as required by the district court's rules. See D.P.R.
Civ. R. 56(b). On January 23, 2011, Cruz opposed the summary
judgment motion but neglected to submit a counter-statement along
with his opposition admitting, denying, or qualifying each fact in
the SUF. See D.P.R. Civ. R. 56(c). Instead, he submitted a short
narrative outlining his view of the case. Deeming admitted the
facts in appellees' SUF, see D.P.R. Civ. R. 56(e), the district
court granted appellees' motion for summary judgment, see Cruz v.
Bristol Myers Squibb Co. PR, Inc., 777 F. Supp. 2d 321, 340 (D.P.R.
2011). This appeal followed.
II.
A. Party Joinder
We begin our analysis by considering whether the district
court abused its discretion in severing Diaz and Lasanta. See
Coughlin v. Rogers, 130 F.3d 1348, 1351 (9th Cir. 1997) (reviewing
for abuse of discretion). Multiple plaintiffs may join together in
a single action if "they assert any right to relief jointly,
severally, or in the alternative with respect to or arising out of
the same transaction, occurrence, or series of transactions or
-6-
occurrences" and "any question of law or fact common to all
plaintiffs will arise in the action." Fed. R. Civ. P. 20(a)(1)(A)-
(B). If both elements of this test are not satisfied, "a court, in
its discretion, may sever the misjoined parties, so long as no
substantial right will be prejudiced by the severance. In such a
case, the court can generally dismiss all but the first named
plaintiff without prejudice to the institution of new, separate
lawsuits by the dropped plaintiffs . . . ." Coughlin, 130 F.3d at
1350 (citations omitted).
In this case, appellants made no effort to demonstrate
that any common question of law or fact would arise. It appears
that each appellant lost his job under different circumstances and
each has distinct legal claims against appellees. Although the
rules governing party joinder are construed liberally for the sake
of convenience and economy, see Desert Empire Bank v. Ins. Co. of
N. Am., 623 F.2d 1371, 1375-76 (9th Cir. 1980), we discern no abuse
of discretion in the district court's decision to sever Diaz and
Lasanta and dismiss their claims without prejudice.
B. Certification as a Collective Action
For substantially the same reasons, the district court
did not abuse its discretion in declining to certify appellants'
suit as a collective action under the ADEA. See Thiessen v. Gen.
Elec. Capital Corp., 267 F.3d 1095, 1102 (10th Cir. 2001)
(reviewing for abuse of discretion). Employees seeking to bring a
-7-
collective action under the ADEA must establish that they are
similarly situated. See 29 U.S.C. § 626(b) (incorporating 29
U.S.C. § 216(b)); Hipp v. Liberty Nat'l Life Ins. Co., 252 F.3d
1208, 1216-17 (11th Cir. 2001). This requirement is even less
stringent than the test for party joinder, see Grayson v. K Mart
Corp., 79 F.3d 1086, 1095-96 (11th Cir. 1996), but it still has
teeth, see Morgan v. Family Dollar Stores, Inc., 551 F.3d 1233,
1261 (11th Cir. 2008). The modest factual showing that must be
made "cannot be satisfied simply by unsupported assertions," Myers
v. Hertz Corp., 624 F.3d 537, 555 (2d Cir. 2010) (internal
quotation marks omitted), such as those in this case. Appellants'
barebones motion for certification stated only that appellants are
"similarly situated and victims of a single decision, policy or
plan" to reduce Bristol-Myers' workforce. These conclusory
allegations were insufficient to warrant the certification of a
collective action.
C. Amendments to the Complaint
There also was no abuse of discretion in the denial of
Cruz's belated motions to amend his complaint. See Trans-Spec
Truck Serv., Inc. v. Caterpillar, Inc., 524 F.3d 315, 326 (1st Cir.
2008). Cruz argued his motions under Rule 15's liberal amendment
policy, which "provides that . . . '[t]he court should freely give
leave when justice so requires.'” Id. at 327 (quoting Fed. R. Civ.
P. 15(a)(2)). Because the motions to amend came after the deadline
-8-
established by the district court's scheduling order, however, they
could be granted only upon a showing of good cause, see O'Connell
v. Hyatt Hotels of P.R., 357 F.3d 152, 154-55 (1st Cir. 2004); Fed.
R. Civ. P. 16(b)(4). "Rule 16(b)'s 'good cause' standard
emphasizes the diligence of the party seeking the amendment."
O'Connell, 357 F.3d at 155.
Partly due to his misapprehension of the correct legal
standard, Cruz made minimal effort to demonstrate that good cause
justified permitting an amendment. Cruz filed his first motion to
amend three months after the deadline set forth in the district
court's scheduling order. The motion sought to add factual
allegations regarding "a statement . . . made in writing by
plaintiff's immediate supervisor obtained during our efforts to
prepare for the case and to comply with various information
requests put forth by [defendants]." This document was evidently
in plaintiff's possession, raising questions as to why it abruptly
surfaced over two years after he initiated this litigation.
Counsel claimed that their efforts to obtain this evidence were
complicated by Cruz's move to Florida and ill-defined health
problems. These cursory explanations do not demonstrate why this
supposedly crucial piece of information could not have been
uncovered earlier with appropriate diligence.1
1
The timing of Cruz's first motion to amend was puzzling,
since by that point it was unlikely that he would face further
motions to dismiss. The value of adding factual support for his
-9-
Cruz's second motion to amend came nine months after the
district court's deadline. This motion similarly failed to offer
sufficient explanation for the delay in seeking amendment. Cruz
never identified the allegedly indispensable party he sought to add
as a successor-in-interest to Bristol-Myers, and he failed to
explain why he delayed until after discovery had ended to seek to
rejoin Diaz as a plaintiff, despite having already filed three
versions of his complaint. See O'Connell, 357 F.3d at 155 ("Such
a long and unexplained delay vindicates the district court's
conclusion that plaintiffs were not diligently pursuing this
litigation."); Leary v. Daeschner, 349 F.3d 888, 907 (6th Cir.
2003) (affirming denial of leave to amend where "[p]laintiffs gave
the district court no excuse for their considerable delay").
"A scheduling order is not a frivolous piece of paper,
idly entered, which can be cavalierly disregarded by counsel
without peril.” Johnson v. Mammoth Recreations, Inc., 975 F.2d
604, 610 (9th Cir. 1992) (internal quotation marks omitted).
Cruz's failure to show his diligence in seeking an amendment doomed
this motion as well.
claims was therefore limited. Moreover, Cruz could not hope to
evade summary judgment by relying only on his complaint. See Ruiz-
Rosa v. Rullán, 485 F.3d 150, 156 (1st Cir. 2007) ("Allegations
made in a plaintiff's complaint, standing alone, are not enough to
oppose a properly supported motion for summary judgment.").
-10-
D. Summary Judgment
We review the grant of a motion for summary judgment de
novo. See Vicor Corp. v. Vigilant Ins. Co., 674 F.3d 1, 20 (1st
Cir. 2012). Because Cruz did not properly controvert appellees'
SUF, the district court deemed the facts therein admitted, as was
its prerogative. See D.P.R. Civ. R. 56(e); Ríos-Jiménez v.
Principi, 520 F.3d 31, 38-39 (1st Cir. 2008). We therefore confine
our analysis to those facts, see Ríos-Jiménez, 520 F.3d at 39, as
summarized above and described in greater detail in the district
court's decision, see Cruz, 777 F. Supp. 2d at 331-34.
1. The ADEA Claim
Under the ADEA, it is unlawful for an employer to
discharge an employee because of the employee's age. See 29 U.S.C.
§ 623(a)(1); Bonefont-Igaravidez v. Int'l Shipping Corp., 659 F.3d
120, 123 (1st Cir. 2011). To prevail on an ADEA claim, an employee
must establish by a preponderance of the evidence that age was the
but-for cause of his or her termination. See Gross v. FBL Fin.
Servs., Inc., 557 U.S. 167, 176 (2009); Vélez v. Thermo King de
P.R., Inc., 585 F.3d 441, 446 (1st Cir. 2009). "Where, as here,
the employee lacks direct evidence, we utilize the burden-shifting
framework developed by the Supreme Court to facilitate the process
of proving discrimination." Bonefont-Igaravidez, 659 F.3d at 123
(citing McDonnell Douglas Corp. v. Green, 411 U.S. 792, 802-05
(1973)); see also Vélez, 585 F.3d at 446-47 & n.2. In the context
-11-
of a reduction in force, the first step of this framework requires
the employee to make out a prima facie case of discrimination by
showing that (1) he or she was at least forty years old at the time
of discharge; (2) he or she was qualified for his or her position;
(3) he or she was fired; and (4) his or her employer either did not
treat age neutrally or retained younger employees in the same
position. See Woodman v. Haemonetics Corp., 51 F.3d 1087, 1091
(1st Cir. 1995). The burden then shifts to the employer to
articulate a legitimate, nondiscriminatory reason for the
employee's termination, see id., which the employee may rebut by
showing that the proffered reason is "merely a pretext for
impermissible age discrimination," id. at 1092.
In this case, there is no dispute that Cruz satisfied the
first three requirements of a prima facie discrimination case.
However, there is no evidence that Bristol-Myers either failed to
treat age neutrally in deciding to discharge Cruz or retained
younger employees in his position. The record plainly shows that
Cruz was laid off pursuant to a ranking system that considered only
his professional skills and seniority, and the two mechanics who
were retained were both older than Cruz. Hence, no prima facie
case was established. See Goncalves v. Plymouth Cnty. Sheriff's
Dep't, 659 F.3d 101, 105-07 (1st Cir. 2011).
-12-
2. The Law 100 and Law 80 Claims
The Law 100 claim fails for similar reasons. Under Law
100, "a plaintiff has the initial burden to establish a prima facie
case by (1) demonstrating that he was actually or constructively
discharged, and (2) alleging that the decision was discriminatory."
Velázquez-Fernández v. NCE Foods, Inc., 476 F.3d 6, 11 (1st Cir.
2007) (internal quotation marks omitted). After the plaintiff
makes this "rather undemanding" showing, the burden of persuasion
then shifts to the employer to show that it had just cause for the
employee's termination. Id.; see also Baralt v. Nationwide Mut.
Ins. Co., 251 F.3d 10, 16 & n.8 (1st Cir. 2001) (explaining that
making out prima facie case under Law 100 requires less than what
plaintiff must bring forward to satisfy prima facie showing under
ADEA). If the employer can establish just cause, then, "as under
the ADEA, the burden of persuasion returns to the employee to show
that the employer's decision was motivated by age discrimination."
Velázquez-Fernandez, 476 F.3d at 11 (internal quotation marks
omitted). "Ultimately . . . the employee is faced with the same
burden of persuasion as an employee bringing suit under the ADEA."
Id.
As the Puerto Rico Supreme Court has explained, because
Law 100 does not define what constitutes just cause, guidance is
drawn from Law 80. See Báez García v. Cooper Labs., Inc., 20 P.R.
Offic. Trans. 153, 164 (P.R. 1987); see also Baltodano v. Merck,
-13-
Sharp & Dohme (I.A.) Corp., 637 F.3d 38, 41-42 (1st Cir. 2011)
("Law 80 and Law 100 employ identical standards for just cause.").
According to Law 80, a dismissal is for just cause if it results
from the "[f]ull, temporar[y] or partial closing of the operations
of the establishment." P.R. Laws Ann. tit. 29 § 185b(d).
Hence, even assuming that Cruz made the "minimal showing"
required to make out a prima facie case under Law 100, Baralt, 251
F.3d at 16, Bristol-Myers has shown that there was just cause for
his dismissal, since the company was engaged in a large-scale
reduction in force. Defendant has adduced evidence showing that
Cruz's layoff took place as a result of a neutrally-applied ranking
system that took into account both his seniority and skill level.
Cruz has not rebutted this showing by demonstrating that his
termination was, in fact, motivated by age discrimination. Indeed,
any inference of discrimination is severely undermined by the fact
that the two employees who were retained after the layoff were
older than Cruz.
Likewise, the Law 80 claim fails. Law 80 requires an
employer to make severance payments to an employee who is
discharged without just cause. See P.R. Laws. Ann. tit. 29, §
185a; see also Baltodano, 637 F.3d at 41-42. It, too, employs a
burden-shifting scheme. See id. at 42. Once an employee has
established that he or she was discharged, it is up to the employer
to show that the discharge was for just cause. See id. The
-14-
employee then must rebut this showing. See id. As we have already
said, Bristol-Myers showed that there was just cause for Cruz's
dismissal, and Cruz has not rebutted this showing.
3. The ERISA and Breach of Contract Claims
The final two claims - the ERISA claim and the breach of
contract claim - fail for entirely different reasons. The ERISA
claim alleges that Cruz was denied the severance package due to him
under the severance plan. This claim is barred because, as Cruz
concedes, he neglected to exhaust his administrative remedies prior
to filing suit, as required under ERISA. See Madera v. Marsh USA,
Inc., 426 F.3d 56, 61-62 (1st Cir. 2005). Cruz attempts to
circumvent this bar by arguing that the severance plan was not a
bona fide ERISA plan and, therefore, that the exhaustion
requirement is inapposite. However, this argument is woefully
undeveloped. It is not supported by reference to either legal
authority or evidence in the record. As a result, we deem it
waived. See McDonough v. Donahoe, 673 F.3d 41, 49 n.14 (1st Cir.
2012).
The breach of contract claim alleges that the July 29,
2003 letter informing Cruz that he would receive a cash bonus upon
discharge constituted a contract that Bristol-Myers breached by
paying him less than the agreed amount. Even if the letter was a
contract, there is no evidence that Bristol-Myers failed to
perform. The letter described a three-tiered bonus structure, with
-15-
the bonus amount determined by the timing of Cruz's departure. The
letter clearly stated that, if Cruz was dismissed when operations
in Buildings 2 and 29 stopped, he would receive six months' salary.
That is precisely what happened.
III.
In sum, there was no error in the management of this case
or the grant of appellees' motion for summary judgment. The
judgment of the district court is affirmed.
So ordered.
-16-