Reynaldo Cruz, a former employee of the Puerto Rico Aqueduct and Sewer Authority (PRASA) and a former member of the Unión Independiente Auténtica de los Empleados de la Autoridad de Acueductos y Alcantarillados (UIA), sued under 42 U.S.C. § 1983. He challenged the constitutionality of the Puerto Rico Labor Relations Act and a collective bargaining agreement that required him to maintain union membership and pay dues as a condition of employment. Following the Supreme Court's 2018 decision in Janus v. AFSCME, which overruled Abood v. Detroit Board of Education, the Governor conceded that the mandatory dues provisions were unconstitutional. PRASA and UIA ceased deducting dues and accepted Cruz's resignation. However, Cruz sought not only prospective relief but also restitution of $525 in dues withheld after his resignation, plus interest and nominal damages. To resolve the monetary claim, UIA moved to deposit the funds into the court registry under Federal Rule of Civil Procedure 67, reserving its rights and defenses. The district court denied the motion initially but later ordered UIA to deposit the funds unconditionally. Once deposited, the district court dismissed the entire case as moot, reasoning that the live controversy had evaporated. Cruz appealed, arguing that the case was not moot because he still needed a judicial determination of his legal entitlement to the funds to qualify as a prevailing party for attorney's fees.
Chief Judge Barron, writing for the panel, addressed the mootness doctrine in the context of a Rule 67 deposit. The court acknowledged that Cruz's claims for prospective relief were moot because the defendants had ceased the challenged conduct. However, the core dispute concerned whether the deposit of funds mooted the claim for monetary relief and the associated right to attorney's fees. The court reasoned that under settled law, a ruling on a motion to alter or amend judgment merges with the prior determination, leaving only one judgment for appellate review. The district court had stated that the deposited funds were '[Cruz's] for the asking,' which the First Circuit interpreted as a judgment that Cruz was entitled to the funds. Consequently, the premise that Cruz could not obtain the money without a further judgment was mistaken. Nevertheless, the court recognized a critical nuance: Cruz's ability to recover attorney's fees under 42 U.S.C. § 1988 depends on being a 'prevailing party.' If the case is dismissed as moot, Cruz might be barred from claiming fees because he would not have obtained a judicially sanctioned determination of his rights. The court found that this potential loss of attorney's fees constituted a live controversy sufficient to prevent mootness. The court rejected the argument that Cruz waived this point, noting that he had raised the issue of Rule 67 misuse to evade liability and fees. Therefore, the district court's dismissal was premature because it failed to address whether Cruz's prevailing party status—and thus his right to fees—remained a live issue.
The decision remands the case to the District Court for the District of Puerto Rico to determine whether Cruz is a prevailing party entitled to attorney's fees. By retaining jurisdiction over the appeal, the First Circuit ensures that the procedural history regarding the Rule 67 deposit and the mootness argument is fully resolved before the case is closed. This ruling clarifies that a defendant cannot use a Rule 67 deposit to unilaterally extinguish a plaintiff's right to fees if the plaintiff's prevailing party status remains contested. It also signals that courts must carefully scrutinize whether a deposit truly resolves all aspects of a controversy, particularly when fees are at stake.
Podcast (federal-narrative-summaries): Play in new window | Download