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Miguel Guzman-Rivera v. Kermit Lucena-Zabala; Zaida Camacho-Rossy; Anabelle

April 22, 2011



The opinion of the court was delivered by: Torruella, Circuit Judge.

Before Torruella, Leval,*fn1 and Lipez, Circuit Judges.

This case requires us to determine whether the deficient manner in which the members of the Puerto Rico Examining Board of Accountants (the "PREBA" or the "Board")*fn2 presided over the administrative hearings to suspend and revoke appellant's Certified Public Accountant ("CPA") license disqualifies them from the protections of quasi-judicial immunity. We affirm the district court's determination that it does not.

I. Facts and Procedural History

When reviewing a district court's grant of a motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6), we take the well-pleaded facts in the light most favorable to the plaintiff and draw all reasonable inferences in his favor. Penalbert-Rosa v. Fortuno-Burset, 631 F.3d 592, 594 (1st Cir. 2011).

Appellant, Miguel Guzma-Rivera ("Guzman"), received a license to practice as a CPA from the PREBA on February 12, 1998. P.R. Laws Ann. tit. 20, § 779. On June 5, 2006, the PREBA required appellant to submit to an involuntary practice review*fn3 and to provide a corresponding report (the "Practice Review Report") on or before August 31, 2006. On June 19, 2006, Guzman requested that the practice review be postponed until 2007 but the PREBA denied the request based on a "need and urgency" to conduct the review. At Guzman's request, the PREBA scheduled a hearing for October 20, 2006, but due to his own scheduling error he failed to appear. Guzman contacted the Board on October 23, 2006 to explain his absence and to request a rescheduling, but the Board did not respond to his request.

On November 17, 2006, the PREBA issued a resolution summarily suspending Guzman's CPA license indefinitely. Guzman's suspension, which took place without the benefit of a hearing, was based on Guzman's failure to comply with the PREBA's disciplinary requirement of submitting to a practice review. Guzman was notified of the suspension on November 27, 2006. On November 29, 2006, Guzman requested that the Board reconsider its decision because he had already begun the practice review process. The Board scheduled a hearing for December 18, 2006 and sent Guzman notice of the same. The notice that Guzman received did not comply with the requirements of Puerto Rico law; it did not contain information regarding the nature or purpose of the hearing, the legal provisions authorizing the hearing, Guzman's alleged violations, his right to attend the hearing with counsel, or the consequences of his failure to appear. See P.R. Laws Ann. tit. 3, § 2159. During the December 18, 2006 hearing, the PREBA informed Guzman that the Puerto Rico Association of Certified Public Accountants ("PRACPA") had referred his case to the PREBA based on a 2005 audit. PREBA ordered the practice review process based on PRACPA's referral. The PREBA informed Guzman that his CPA license would remain suspended until he presented his Practice Review Report. The deadline to submit the Practice Review Report was set for January 31, 2007. Guzman completed the requested Practice Review Report on March 6, 2007.*fn4 The PRACPA approved the Practice Review Report on July 3, 2007 and Guzman submitted it to the PREBA on July 13, 2007.

On August 17, 2007, the PREBA informed Guzman that it would not lift the suspension on his license. The PREBA's reasons were as follows: (i) Guzman bought certification stamps on the same day he had been suspended; (ii) the Practice Review Report was delivered after the January 31, 2007 deadline; and (iii) the practice review opinion was adverse on the merits. The PREBA notified Guzman that it would hold another hearing on September 24, 2007. Again, the notice did not comply with local law requirements. See P.R. Laws Ann. tit. 3, § 2159.

At the September 24, 2007 hearing, the PREBA did not discuss the contents of the Practice Review Report. Instead, the Board questioned Guzman regarding the delay in submitting his Practice Review Report and about the certification stamps he acquired on November 17, 2006.*fn5 The PREBA failed to inform Guzman of his due process rights.

On October 24, 2007, the PREBA issued a resolution revoking Guzman's CPA license, stating that Guzman did not follow the standards of the profession and that he had a clear intention to violate the Public Accountancy Act and the profession's code of ethics. Guzman was notified of the same on October 27, 2007. On October 29, 2007, Guzman filed a request for reconsideration, which the PREBA denied on November 26, 2007, without explanation.

On December 26, 2007, Guzman filed for judicial review before the Puerto Rico Court of Appeals alleging that the PREBA had violated his due process rights when suspending and revoking his CPA license. On June 16, 2008, the Puerto Rico Court of Appeals issued a judgment revoking the PREBA's ruling and ordering it to reinstate Guzman's license "immediately and without any kind of delay." Guzman Rivera v. Examining Bd. of Certified Pub. Accountants, No. KLRA2007-01378, 2008 WL 3211317, at *28*fn6 (P.R. Cir. June 16, 2008) (certified translation provided by the parties). The court held that "the Board erred in law, when suspending, as well as revoking [Guzman's CPA license]. Certainly, the Board totally disregarded the procedures required to suspend and revoke a license." Id. at *22. Yet, the court held that the Board could "make the corresponding findings, if any, pursuant to the rulings of [the] judgment" and noted that the Board could carry out an administrative hearing if it deemed that such a hearing was necessary.*fn7 Id. at *28.

On August 13, 2008, Guzman filed a complaint in the United States District Court for the District of Puerto Rico against the appellees,*fn8 suing the individual defendants in their official and individual capacities. Guzman alleged a violation of section 1983 of the Civil Rights Act of 1964 due to defendants' violations of his Fourteenth Amendment due process rights. On November 10, 2008, appellees filed a motion to dismiss the case pursuant to, inter alia, Federal Rule of Civil Procedure 12(b)(6) claiming that they were entitled to absolute immunity in their individual capacities because they were performing quasi-judicial duties.

The court granted defendants' motion to dismiss on the ground that they were entitled to absolute immunity in their individual capacities. Guzman-Rivera v. Lucena-Zabala, No. 08-1897 (SEC), 2009 WL 1940477, at *7 (D.P.R. July 1, 2009). The court concluded that the appellees perform "traditional 'adjudicatory' function[s]," that the functions are comparable to those of a judge, and that procedural safeguards, including the right to appeal the Board's decision via judicial review in the Puerto Rico courts, protect the individual whose license is in dispute. Id. at *6-7 (citing Bettencourt v. Bd. of Registration in Med. of Mass., 904 F.2d 772, 783 (1st Cir. 1990)). The court found that "the allegedly deficient manner in which the members of the Board presided over [the] administrative hearings is irrelevant, insofar as the tasks they performed were in fact adjudicatory in nature, are functionally comparable to those of a judge, and thus entitle[] them to the absolute immunity that is vested upon judges." Id. at *7.

The court entered judgment on July 1, 2009. Appellant filed a motion for reconsideration on July 15, 2009 and appellees filed their response thereto on the same day. Plaintiff filed a timely notice of appeal on July 31, 2009. The district court denied the motion for reconsideration on ...

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