Miguel Guzmán-Rivera v. Kermit Lucena-Zabala

Of the Second Circuit, sitting by designation. *
United States Court of Appeals
For the First Circuit
No. 09-2175
MIGUEL GUZMÁN-RIVERA,
Plaintiff, Appellant,
v.
KERMIT LUCENA-ZABALA; ZAIDA CAMACHO-ROSSY; ANABELLE
NÚÑEZ-UBARRI; LÁZARO SERRANO-CID; ZULMARIE URRUTIA-VÉLEZ;
OJEL RODRÍGUEZ-TORRES; PUERTO RICO EXAMINING BOARD OF
ACCOUNTANTS; INSURANCE COMPANIES A, B, C, D, E, F, G AND H,
Defendants, Appellees.
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF PUERTO RICO
[Hon. Salvador E. Casellas, U.S. Senior District Judge]
Before
Torruella, Leval, and Lipez, *
Circuit Judges.
Ricardo Guzmán-López de Victoria, with whom Ivy Mercado-Ramos
and Guzmán & Mercado, P.S.C., were on brief for appellant.
Rosa Elena Pérez-Agosto, Assistant Solicitor General, with
whom Irene S. Soroeta-Kodesh, Solicitor General, Leticia M.
Casalduc-Rabell, Deputy Solicitor General, and Zaira Z. Girón-
Anadón, Deputy Solicitor General, were on brief for appellees.
April 22, 2011

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The PREBA was created pursuant to the Public Accountancy Act of 1
1945, Act No. 293 of May 15, 1945 and governs the CPA practice in
Puerto Rico. P.R. Laws Ann. tit. 20, §§ 771-789. The Board
consists of five members who are appointed by the Governor. Id.
§ 773.
The practice review was to be conducted by a fellow CPA and 2
concerned the appellant's previous twelve months of practice.
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TORRUELLA, Circuit Judge. 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") presided over the administrative hearings to suspend and 1
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.
Peñalbert-Rosa v. Fortuño-Burset, 631 F.3d 592, 594 (1st Cir.
2011).
Appellant, Miguel Guzmán-Rivera ("Guzmán"), 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 and to 2
provide a corresponding report (the "Practice Review Report") on or

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before August 31, 2006. On June 19, 2006, Guzmán 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 Guzmán's request, the PREBA scheduled a hearing for October 20,
2006, but due to his own scheduling error he failed to appear.
Guzmán 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 Guzmán's CPA license indefinitely. Guzmán's
suspension, which took place without the benefit of a hearing, was
based on Guzmán's failure to comply with the PREBA's disciplinary
requirement of submitting to a practice review. Guzmán was
notified of the suspension on November 27, 2006. On November 29,
2006, Guzmán 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 Guzmán
notice of the same. The notice that Guzmán 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, Guzmán'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

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Guzmán's Practice Review Report was delayed due to the 3
difficulty he had in locating a reviewing CPA who would work during
the 2006-2007 Christmas period. Guzmán informed the PREBA of these
delays via e-mail.
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Guzmán 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 Guzmán 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. Guzmán completed the requested Practice
Review Report on March 6, 2007. The PRACPA approved the Practice 3
Review Report on July 3, 2007 and Guzmán submitted it to the PREBA
on July 13, 2007.
On August 17, 2007, the PREBA informed Guzmán that it
would not lift the suspension on his license. The PREBA's reasons
were as follows: (i) Guzmán 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 Guzmán 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

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Guzmán explained that at the time he bought the stamps he did 4
not know that his license had been suspended, as he first received
notice of the suspension on November 27, 2006.
Where no official translation of a Puerto Rico court decision is 5
available, all pinpoint citations used herein refer to the
certified translation submitted by the appellant. See Appendix to
Brief of Appellant, at 23-51, Guzmán-Rivera v. Lucena-Zabala, No.
09-2175 (1st Cir. argued Nov. 2, 2010).
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Board questioned Guzmán regarding the delay in submitting his
Practice Review Report and about the certification stamps he
acquired on November 17, 2006. The PREBA failed to inform Guzmán 4
of his due process rights.
On October 24, 2007, the PREBA issued a resolution
revoking Guzmán's CPA license, stating that Guzmán 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. Guzmán was notified of the same on October 27, 2007. On
October 29, 2007, Guzmán filed a request for reconsideration, which
the PREBA denied on November 26, 2007, without explanation.
On December 26, 2007, Guzmán 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 Guzmán's license "immediately and without any kind of
delay." Guzmán Rivera v. Examining Bd. of Certified Pub.
Accountants, No. KLRA2007-01378, 2008 WL 3211317, at *28 (P.R. 5

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The Puerto Rico Court of Appeals ordered Guzmán's license 6
reinstated due to the Board's failure to provide Guzmán with due
process. They did not, however, rule on the merits of whether
Guzmán's license could be suspended based on the Practice Review
Report. The PREBA could follow the proper procedures and suspend
or revoke Guzmán's license in the future.
Guzmán sued Kermit Lucena-Zabala, Zaida Camacho-Rossy, Anabelle 7
Núñez-Ubarri, Lázaro Serrano-Cid, Zulmarie Urrutia-Vélez, Ojel
Rodríguez-Torres, the PREBA and several insurance companies.
Appellant named "Insurance Companies A, B, C, D, E, F and G" to
designate insurance companies that are not yet identified but may
have available coverage for the claims presented.
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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 [Guzmán'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. Id. at *28. 6
On August 13, 2008, Guzmán filed a complaint in the
United States District Court for the District of Puerto Rico
against the appellees, suing the individual defendants in their 7
official and individual capacities. Guzmán 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)

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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. Guzmán-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

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denied the motion for reconsideration on August 5, 2009. This
court has jurisdiction pursuant to 28 U.S.C. § 1291.
II. Discussion
The district court granted appellees' motion to dismiss
pursuant to Federal Rule of Civil Procedure 12(b)(6) based on its
conclusion that the individual defendants were entitled to absolute
immunity and that Guzmán's constitutional right to due process was
adequately protected. Guzmán appeals such dismissal and contends
that the defendants are not entitled to absolute immunity because
they acted outside the scope of their duties by disregarding the
procedural safeguards mandated by Puerto Rico law.
We review a district court's dismissal for failure to
state a claim upon which relief can be granted de novo. Peñalbert-
Rosa, 631 F.3d at 594; Coggeshall v. Mass. Bd. of Registration of
Psychologists, 604 F.3d 658, 662 (1st Cir. 2010). We agree with
the district court's assessment that the defendants are entitled to
immunity in their individual capacities.
"[T]here are some officials whose special functions
require a full exemption from liability." Butz v. Economou, 438
U.S. 478, 508 (1978). Judges are entitled to absolute immunity
from lawsuits even where they are accused of deciding the case due
to improper motives. Id. at 508-09. "If a civil action could be
maintained against a judge by virtue of an allegation of malice,
judges would lose 'that independence without which no judiciary can

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either be respectable or useful.'" Id. at 509 (quoting Bradley v.
Fisher, 80 U.S. 335, 347 (1872)). The Supreme Court has extended
this immunity to federal agency officials performing adjudicatory
duties. Id. at 514. We have found that this immunity may apply to
licensing boards where the board members' roles are "functionally
comparable" to those of judges. See Bettencourt, 904 F.2d at 783-
84.
To determine whether the agency officials' roles are akin
to those of a judge, we must first determine whether the PREBA
members "perform a traditional 'adjudicatory' function, in that
[they] decide[] facts, appl[y] law, and otherwise resolve[]
disputes on the merits (free from direct political influence)[.]"
Id. at 783. Next, we must determine whether the cases the PREBA
members decide are "sufficiently controversial that, in the absence
of absolute immunity, [they] would be subject to numerous damages
actions[.]" Id. Finally, we must ask whether the PREBA members
"adjudicate disputes against a backdrop of multiple safeguards
designed to protect a[n] [accountant's] constitutional rights[.]"
Id. We address only the first and third prongs of the analysis as
Guzmán does not contest that the second prong was met. Guzmán-
Rivera, 2009 WL 1940477, at *7.
First, we conclude that the PREBA members perform
traditional adjudicatory functions. Members of the PREBA are
statutorily authorized to issue licenses to practice and to revoke

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In Spanish, this statute is known as "Ley de Procedimiento 8
Administrativo" ("L.P.A.U.").
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or suspend them. P.R. Laws Ann. tit. 20, §§ 779-780. When
revoking or suspending a CPA license, the PREBA is required to hold
a hearing to determine if there is cause to revoke or suspend the
license. See id. § 780. The Public Accountancy Act, id. § 782,
permits the Board to institute proceedings against a certified
public accountant and requires the Board to comply with the
requirements of the Uniform Administrative Procedures Act8
("UAPA"), P.R. Laws Ann. tit. 3, §§ 2101-2201. The UAPA allows
each agency to designate "examining officials . . . to preside over
the adjudicatory procedures that are held" and provides that
"[t]hese officials or employees shall be designated by the title of
administrative judges." Id. § 2153. Like judges, the PREBA
members who preside over the adjudicatory procedures decide facts,
apply laws, and otherwise resolve disputes on the merits. Id.
§ 2164 ("The [final] order or resolution shall include and expound
the findings of fact[,] . . . the conclusions of law that provide
the grounds for the adjudication, and the availability of the
recourse of reconsideration or review, as the case may be.").
Therefore, the first prong of the functional analysis is met. See
Bettencourt, 904 F.2d at 783.
We must now ask whether the PREBA members, like judges,
"adjudicate disputes against a backdrop of multiple safeguards

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designed to protect a[n] [accountant's] constitutional rights[.]"
Id. Guzmán argues that the district court erred in finding that
this prong of the analysis was met. He argues that his
constitutional right to due process was not adequately protected
because, as the Puerto Rico Court of Appeals determined, the PREBA
disregarded all procedural safeguards required under Puerto Rico
law, Guzmán Rivera, No. KLRA2007-01378, at *22, and due to this
unlawful deprivation he was stripped of his proprietary right to
practice his profession for twenty months.
As our precedents indicate, the third prong of the
functional analysis is meant to examine whether, generally, "enough
safeguards exist to 'enhance the reliability of information and the
impartiality of the decisionmaking process . . . .'" Bettencourt,
904 F.3d at 783 (quoting Butz, 438 U.S. at 512) (examining whether
Massachusetts' medical licensing proceedings generally provide
sufficient safeguards against malicious action by members of the
medical licensing board). "The UAPA provides procedural safeguards
for actions undertaken by Puerto Rico's administrative agencies
. . . ." Pérez-Acevedo v. Rivero-Cubano, 520 F.3d 26, 31 (1st Cir.
2008) (citing P.R. Laws Ann. tit. 3, § 2151). The UAPA mandates
that, in every formal adjudicatory proceeding, an agency safeguard
"(A) [t]he right to timely notice of the charges or complaints or
claims against one of the parties[;] (B) [t]he right to introduce
evidence[;] (C) [t]he right to an impartial adjudication[; and] (D)

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[t]he right to have the decision based on the record of the case."
P.R. Laws Ann. tit. 3, § 2151. The UAPA allows for the PREBA and
the accountant to litigate against a backdrop of procedures that
provide for an adversarial process which includes the use of
complaints, the opportunity to intervene, pre-hearing conferences,
and discovery. Id. §§ 2154-2158. The accused accountant has the
right to be represented by counsel, present witnesses, cross-
examine witnesses, examine evidence, and request the issuance of
subpoenas. P.R. Laws Ann. tit. 20, § 782(d). The PREBA is also
represented by an attorney. Id. § 782(h). These safeguards ensure
that there is impartial adjudication. In addition to explicitly
guaranteeing the right to impartial adjudication, the UAPA allows
a party who is adversely affected by an agency resolution to file
a motion for reconsideration. P.R. Laws Ann. tit. 3, § 2165.
Further, the adversely affected party may file a petition for
review before the Puerto Rico Court of Appeals, id. § 2171-2172, or
before the Court of First Instance, P.R. Laws Ann. tit. 20,
§ 782(j).
The procedures available to an accountant under the UAPA
are similar to those that were available to the physician in
Bettencourt. See 904 F.2d at 783-84 (noting that in Massachusetts
medical licensure proceedings, the physician may be represented by
counsel, there is a Board prosecutor, there is a transcribed
record, there is an opportunity to present evidence and for cross-

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examination, there is a written opinion, and there is an
opportunity to appeal to the Supreme Judicial Court of
Massachusetts). In Bettencourt, we found the procedures available
sufficiently ensured the impartiality of the decisionmaking process
and provided protection against the Board of Registration in
Medicine's malicious actions. Id. We find that the procedures
available to an accountant before the PREBA are very similar to
those that were available to physician in Bettencourt, are a
sufficient safeguard against the PREBA's wrongful actions, and
justify granting absolute immunity to the PREBA members. See
Diva's Inc. v. City of Bangor, 411 F.3d 30, 41 (1st Cir. 2005)
(concluding that the right to request an explanation for the denial
of the permit and the right to appeal the decision to the Bangor
Board of Appeals were sufficient procedural safeguards to protect
the permit applicant from a violation of its constitutional
rights).
The issue Guzmán raises is whether the deficient manner
in which the members of the PREBA presided over the administrative
hearings disqualifies them from the protections of immunity.
Guzmán alleges that, due to their undisputed disregard for the
procedural safeguards required under Puerto Rico law, Guzmán-
Rivera, No. KLRA2007-01378, at *22, the defendants acted outside
the scope of their duties and are therefore not entitled to

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Guzmán also argues that the Ninth Circuit's decision in 9
Chalkboard, Inc. v. Brandt, 902 F.2d 1375 (9th Cir. 1989), supports
his contention that appellees lacked jurisdiction to summarily
suspend his CPA license and that they are therefore not entitled to
quasi-judicial immunity. In Chalkboard, Inc., the Ninth Circuit
noted that in order for an agency's action to be considered
judicial or prosecutorial, the function must have been assigned to
the agency by state law. Id. at 1378. The Ninth Circuit denied
immunity to agency officials who summarily closed a day care center
because it concluded that the agency was not authorized by any
Arizona statute to effect a summary-closure. Id. at 1379-80.
Although the Arizona Administrative Procedure Act, a general
purpose statute, had previously granted the agency the power to
effect a summary-closure in the event of an emergency, a subsequent
statute specifically addressing the closure of day care centers
conferred the authority for summary-closure to the county attorney
or attorney general and the courts. Id. at 1378-79.
This appeal does not present facts similar to those at issue in
Chalkboard, Inc. In the present appeal, assuming that this had
been an emergency situation warranting summary suspension of
Guzmán's CPA license, the PREBA would have been authorized under
Puerto Rico law to effect such a summary suspension. See P.R. Laws
Ann. tit. 3, § 2167; San Gerónimo Caribe Project, Inc. v.
Regulations and Permits Admin., 2008 TSPR 130, 2008 PR Sup. LEXIS
135, at *23-26 (P.R. July 31, 2008) (certified translation on file
with the First Circuit).
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absolute immunity. Ricci v. Key Bancshares of Me., Inc., 768 F.2d 9
456, 462 (1st Cir. 1985). But as Ricci states, "[t]he requirement
that conduct protected by absolute immunity falls 'within the outer
perimeter of [the official's] . . . line of duty' is read fairly
expansively." Id. (alterations in original). The Supreme Court
has stated that "the necessary inquiry in determining whether a
defendant judge is immune from suit is whether at the time he took
the challenged action he had jurisdiction over the subject matter
before him." Stump v. Sparkman, 435 U.S. 349, 356 (1978). The
Court further instructed that we construe the scope of the judge's

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jurisdiction broadly. Id. "A judge is absolutely immune from
liability for his judicial acts even if his exercise of authority
is flawed by the commission of grave procedural errors." Id. at
359; see also Decker v. Hillsborough Cnty. Attorney's Office, 845
F.2d 17, 21 (1st Cir. 1988). Here, the PREBA's summary suspension
of Guzmán's license was a grave and unacceptable procedural error.
Guzmán Rivera, No. KLRA2007-01378, at *22. Nevertheless, the PREBA
had jurisdiction to revoke or suspend Guzmán's license and the
members of the PREBA are therefore entitled to immunity. See
Stump, 435 U.S. at 359.
III. Conclusion
We affirm the district court's grant of appellees' motion
to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6).
Affirmed.

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