               UNITED STATES COURT OF APPEALS
                   FOR THE FIRST CIRCUIT
                                        

No. 92-2287

                 MYRIAM E. LABORDE-GARCIA,

                    Plaintiff, Appellee,

                             v.

             PUERTO RICO TELEPHONE CO., ET AL.,

                  Defendants, Appellants.

                                        

        APPEAL FROM THE UNITED STATES DISTRICT COURT

              FOR THE DISTRICT OF PUERTO RICO

        [Hon. Carmen C. Cerezo, U.S. District Judge]
                                                   

                                        

                           Before

                    Breyer, Chief Judge,
                                       
               Selya and Cyr, Circuit Judges.
                                            

                                        

Jacqueline  D.  Novas  with  whom  Jose  J.  Santiago,  Jose L.
                                                              
Verdiales  and Fiddler,  Gonzalez &amp;  Rodriguez were on  brief for
                                           
appellants.
Guillermo Ramos Luina  with whom  Harry Anduze  Montano was  on
                                                      
brief for appellee.

                                        

                        May 18, 1993
                                        

          BREYER, Chief Judge.  Myriam Laborde-Garcia claims
                             

that  Puerto Rico's  Telephone Company,  and several  of its

officials,  deprived  her  of  her  government  job  without

providing  her  with  the procedural  protections  that  the

Federal  Constitution  requires. Cleveland  Bd. of  Educ. v.
                                                         

Loudermill, 470 U.S. 532 (1985).  The district court entered
          

an injunction ordering  the Company to reinstate her, and it

denied  the  individual  defendants'  claims  of  "qualified

immunity."  The defendants appeal these orders.  28 U.S.C.  

1291; Mitchell v. Forsyth, 472 U.S. 511 (1985).  We affirm. 
                         

                             I

                         Background
                                   

          Ms.   Laborde  is   a   career  employee   of  the

Commonwealth-owned Telephone  Company, where she  has worked

since 1975.   On July 7,  1986, she was  injured in a  work-

related auto accident.  She received treatment  at the State

Insurance  Fund.   One  year later,  on  July 6,  1987,  she

returned to work.  Fourteen months  after that, on September

7,  1988, Ms. Laborde went  back to the  Fund for treatment.

In early October (the following  month) the Company wrote to

Ms. Laborde to tell  her that it was dismissing  her because

of absences related to her "prolonged illness." 

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          Ms. Laborde, almost  immediately thereafter,  told

Company  officials that they had made a mistake.  Her latest

treatment  at the Fund (in  September) was not  related to a

"prolonged illness."   Rather, she said,  the treatment (and

her  absence from  work)  resulted from  a new  work-related

accident, involving moving boxes. That accident had occurred

in  August   1988,  only  two  months   before  her  current

treatment.

          This "mistake" seemed important, for Puerto Rico's

workers' compensation law requires  an employer to "reserve"

the job of  an injured employee undergoing treatment  at the

Fund,  and to "reinstate" the employee in that job, but only

if, inter alia, at the time the worker seeks  reinstatement,
              

no more than "twelve months" have  "lapse[d] . . . from  the
                           

date of the  accident." P.R. Laws Ann., tit. 11,    7.  (See

Appendix for  complete text  of statutory provision).   More

than "twelve months" had "lapse[d]" from Ms. Laborde's first

accident; but only two  months had "lapse[d]" from the  time

of the second. 

          The Company, either because it did not believe Ms.

Laborde, or  because it  thought her  factual claim  made no

difference, neither  changed its  mind  about dismissal  nor

granted Ms. Laborde a hearing at which she could dispute the

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basis for  her dismissal.  Ms.  Laborde subsequently brought

this lawsuit.  She  claimed that the Company, in  effect, by

depriving  her of her job without any kind of prior hearing,

violated the Fourteenth Amendment's Due Process Clause.  The

district court held that Ms. Laborde was correct.  We agree.

                             II

                          The Law 
                                 

          Like the district court, we find the law clear and

in Ms. Laborde's favor.  The  Fourteenth Amendment says that

the  Commonwealth  may not  deprive  a  person of  "property

without due process  of law."   The Supreme  Court has  made

clear  that  "property" includes  the  job  of a  government

employee who  (under local  law) cannot be  dismissed except

for  "good cause."  Loudermill, 470 U.S. at 538-39; see also
                                                            

Kercado-Melendez  v. Aponte-Roque,  829 F.2d  255,  262 (1st
                                 

Cir. 1987), cert. denied, 486 U.S. 1044 (1988).  The Supreme
                        

Court has also  made clear  that the process  "due" such  an

employee normally includes  "'some kind of hearing' prior to

. . . discharge."  Loudermill, 470 U.S. at 542.  The parties
                             

here  agree that  the  Puerto Rico  Telephone  Company is  a

government employer,  Kauffman v. Puerto Rico  Tel. Co., 841
                                                       

F.2d 1169, 1173 (1st Cir. 1987), and that it can dismiss Ms.

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Laborde, a permanent  employee, only for  cause.  P.R.  Laws

Ann.,   tit.  3,     1336(4).    The  Company,  through  its

officials, has  told Ms. Laborde  that she cannot  return to

work.  They did not, and have not yet, provided her with any

significant  opportunity for  a hearing.   Hence,  they have

deprived her  of "property"  without the "process"  that the

Federal Constitution requires.  Loudermill, 470 U.S at 546.
                                          

          The   defendants  make  three   arguments  to  the

contrary.   First, they say  that, under Puerto  Rico's law,

Ms. Laborde  lost her job  when she did not  appear at work;

the workmen's compensation statute  provides only a right to

"reinstatement" (after an  absence caused  by a  job-related

injury).    The Federal  Constitution,  they  add, does  not

protect rights to "reinstatement" because such  'rights' are

only expectations  of employment, which  may or  may not  be

fulfilled.  See Board of Regents v. Roth, 408 U.S. 564,  576
                                        

(1972) (due process clause "is  a safeguard of the  security

of interests  that person  has already acquired  in specific

benefits"); cf.  Kauffman, 841 F.2d  at 1173 (where employee
                         

is illegally  hired, property  right in employment  is never

created).

           As  a matter  of Commonwealth law,  however, this

argument  seems  wrong,  for  the statute  itself  does  not

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separate "discharge" from "reinstatement;" rather, it speaks

both of "reserv[ing]" the job of an employee under treatment

and   "reinstat[ing]"   that   employee   (under   specified

conditions) on request.   See P.R. Laws Ann., tit. 11,    7;
                             

Carron-Lamoutte v. Tourism  Co. of Puerto Rico,  92 J.T.S 97
                                              

(1992); In Re  Hotel Da  Vinci, Inc., 797  F.2d 33, 35  (1st
                                    

Cir. 1986), citing Rojas v. Mendez &amp; Co., 84 J.T.S. 3 (1984)
                                        

(employer cannot validly discharge employee missing work due

to  medical treatment  during twelve-month  period following

disability); but see Union Tronquistas de Puerto Rico, Local
                                                            

901 v. Emery Air Freight Corp., 596 F.Supp. 829, 833 (D.P.R.
                              

1984)  (referring  to  separate  steps  of  "discharge"  and

"reinstatement").  

          Regardless,  as  a  matter  of  federal  law,  the

argument is wrong because the workmen's compensation statute

so  narrows  the  government's   discretion  to  refuse   to

reinstate Ms.  Laborde (during  the relevant  twelve months)

that   it  provides   her  with   a  "legitimate   claim  of

entitlement" to  that continued employment. That  is to say,

local law's narrowing of the employer's discretion to decide

not  to reinstate  means that  Ms. Laborde  could reasonably

have believed, and  relied upon her  belief, that local  law

would likely permit her  to remain employed.  Based  on this

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reasonable expectation created by local law, Ms. Laborde had

a  federally  protected  "property"  interest  in  continued

employment. See Roth, 408  U.S. at 577 (to "have  a property
                    

interest  in a  benefit," a person  must "have  a legitimate

claim of entitlement to it"); id. at 578 (implying existence
                                

of  "property"  in  renewal  of  employment   if  employer's

discretion to choose not to renew had been narrowed); Bishop
                                                            

v.  Wood, 426 U.S. 341, 344-45 (1976); cf. Kentucky Dept. of
                                                            

Corrections  v.   Thompson,  490  U.S.  454,  463-65  (1989)
                          

(liberty interest created if  prison inmate could reasonably

expect  that visit  would  be allowed  absent occurrence  of

listed conditions).   Thus, whether one  views the Company's

actions  as  taking  away  Ms.  Laborde's  present  job,  as

refusing to reinstate her,  or (realistically) as doing both

at  the same time, the  Company deprived Ms.  Laborde of the

sort of "property" that the Constitution protects.

          Second, the  defendants argue  that they  need not

have given Ms. Laborde any further hearing because a hearing

could not have  helped her.  Cf. Carey v.  Piphus, 435  U.S.
                                                 

247, 266-67  (1978) (recovery limited to  nominal damages in

cases  where employer  refuses  hearing but  dismissal still

clearly  justified).   They point  to a  recent Commonwealth

Supreme Court case, Santiago v.  Kodak, 92 J.T.S. 11 (1992),
                                      

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                             7

which  held that  the  Workmen's Compensation  Act does  not

protect  a person who concededly did not report the relevant

accident until after the employer dismissed him.  They claim
                    

that, like the  plaintiff in Santiago,  Ms. Laborde did  not
                                     

report her accident until after her dismissal.

          Santiago, however, does not obviate the need for a
                  

hearing in this case.  Unlike the plaintiff in Santiago, Ms.
                                                       

Laborde  does  not  concede  that  she  did not  report  the

accident  until  after  she  was dismissed.    Instead,  Ms.

Laborde says that she reported her  second accident when she

sought  treatment at the  Fund on September  7, 1988, before
                                                            

her  employer  dismissed  her.    She  adds  that  the  Fund

initially  mixed up  its paperwork,  but later  amended that

paperwork to reflect the  occurrence of her second accident.

These facts,  if proven, might  well bring her  case outside

the scope  of Santiago's holding.   Santiago, by emphasizing
                                            

the  need  to  determine  the facts,  does  not  avoid, but,

rather, reinforces the need for a hearing.

          Third,  the individual  defendants  say  they  are

entitled to  "qualified immunity,"  because, at the  time of

the relevant  events, their federal  legal obligations  were

unclear.  See  Anderson v. Creighton,  483 U.S. 635,  638-41
                                    

(1987)   (state  actors   have  qualified   immunity  unless

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                             8

precedent would have  alerted reasonable person  that action

would   infringe    "clearly   established"   constitutional

principle); Harlow v. Fitzgerald, 457 U.S. 800 (1981).  They
                                

correctly point out  that the Supreme  Court of Puerto  Rico

did not decide until  1992 (after the events here  in issue)

that  Commonwealth   employees  have  a  right   to  a  pre-

termination   hearing  where   accident-related,  time-limit

issues  are  in  dispute.   Carron-Lamoutte,  92  J.T.S  97.
                                           

Carron-Lamoutte,   however,   simply  applied   pre-existing
               

federal  constitutional requirements.   In  1985, Loudermill
                                                            

made clear that permanent government employees possessed the

federal  right to  a  pre-discharge hearing.    In 1987,  in

Kauffman,  this circuit applied  Loudermill to Puerto Rico's
                                           

Telephone Company,  making clear that the  company must give

its career employees  pre-discharge hearings (unless illegal

hiring  meant they had never  become career employees in the

first place).   See Kauffman,  841 F.2d at  1173.  Thus,  in
                            

1988, the basic law governing Ms. Laborde's claims was clear

and in her favor.

          We concede  that defendants, in an  effort to show

that Ms. Laborde  did not possess constitutionally-protected

property, have  succeeded in creating an  argument (based on

their interpretation of the workmen's  compensation statute)

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                             9

that is complicated, counterintuitive, and ultimately wrong.

We also concede  that one who understood that  argument, but

had  not yet  worked out  the proper  legal response,  might

doubt whether or not the Constitution protected Ms. Laborde.

Yet,  we do not believe  that the potential  existence of an

unusual, sophisticated, and ultimately wrong legal argument,

is sufficient, legally speaking, to muddy what, for immunity

purposes,  would  otherwise amount  to  clear legal  waters.

Were that not so, given the ingenuity of the bar, "qualified

immunity"  would become  absolute  in that  it would  become

available in virtually any case argued by a creative lawyer.

We conclude  that the Company's legal  obligation to provide

Ms. Laborde with an appropriate hearing before depriving her

of her  job was  clear in 1988.   And, the  district court's

denial of  the defendants' claims of  qualified immunity was

legally correct.

          The Telephone  Company  itself makes  one  further

argument.  It says that  it is a special kind of  government

entity, namely a  "municipal corporation."    It points  out

that  a "municipal corporation"  cannot be ordered  to pay a

Section  1983  damage award  based  on  the actions  of  its

officials  unless those  actions  are alleged  to have  been

taken  pursuant  to an  official  policy  or custom  of  the

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                             10

corporation.  See Monell v. Dep't of Soc. Servs. of the City
                                                            

of New York, 436 U.S. 658, 690-91 (1978).  It  contends that
           

the court's order directing it to reinstate Ms. Laborde with
                                                            

back  pay constitutes a "damage award."  And, it claims that
         

Ms. Laborde's  complaint is  deficient in  that it  fails to

allege  the existence  of  an official  policy, pattern,  or

practice which  would justify  this damage award,  as Monell
                                                            

requires. 

          Assuming much in defendant's favor for the sake of

argument, we find a  short, conclusive answer to  this claim

in the fact that the complaint does properly allege that the

Company itself  (whether or not a  municipal corporation) is

responsible  for  the violation  of  the  Constitution.   It

claims  that all  of  the individual  defendants "were  duly

appointed officials and/or employees of [the Company];" that

each  of the  individual  defendants was  "charged with  the

administration" of the Company's employment regulations; and

that each  of the individual defendants acted, at all times,

"within  the  scope of  their  employment  as agents  and/or

employees of [the Company]."  These allegations amount to an

assertion  that the  actions  of the  individual  defendants

represented   Company  policy,  for  which  the  Company  is

responsible.   We  do  not read  the complaint's  conclusory

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                             11

statement that plaintiff's "dismissal"  violated "applicable

laws . . . and . . . regulations" as alleging the contrary. 

Moreover,  the   record  before  us   contains  considerable

evidence  that the  employees'  actions  represent  official

Company policy; and it contains no evidence to the contrary.

See  Monell, 436 U.S. at 690 ("Local  governing bodies . . .
           

can be sued directly under   1983 for monetary, declaratory,

or  injunctive relief where . . . the action that is alleged

to be  unconstitutional implements or executes [an official]

policy statement . . . or decision . . . .")

          Finally, we  note that the district  court has not

yet calculated back pay  or other damages.  We  realize that

the way in  which Puerto Rico  law applies to  the facts  as

eventually determined  (whether or not  it permits dismissal

on  such facts)  may  affect such  calculations. See,  e.g.,
                                                           

Carey  v. Piphus, 435  U.S. at 260  &amp; n. 15  ; Hernandez-Del
                                                            

Valle  v. Santa-Aponte, 575  F.2d 321, 324  (1st Cir. 1978);
                      

Brewer v. Chauvin,  938 F.2d 860, 862 &amp; n.2,  864 &amp; n.4 (8th
                 

Cir.  1991); City  of Chicago  v. Dep't  of Labor,  737 F.2d
                                                 

1466, 1471-73 (7th Cir. 1984).   We express no opinion as to

the  proper outcome of the  question of Puerto  Rico law nor

can we  do so before the  facts are finally  determined.  We

here hold only that federal law clearly required the Company

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                             12

to  provide Ms. Laborde with fair pre-termination procedures

--  procedures  that  would  have  given  her  a  reasonable

opportunity to  present facts,  and make  arguments, showing

that she was entitled  to keep her job.  The  district court

held the same, and its determinations are therefore

          Affirmed.
                  

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                             13

                          Appendix
                                  

          "In the  case of  working disability  according to
the provisions of this chapter, the employer  shall be under
obligation  to  reserve the  job  filled by  the  laborer or
employee at the time the accident occurred, and to reinstate
him therein,  subject to the following  conditions: (1) that
the  laborer  or  employee  demand  reinstatement  from  his
employer in his job  within the period of fifteen  (15) days
counted  from the date the laborer or employee is discharged
from  treatment, provided such demand  is not made after the
lapse  of twelve months from  the date of  the accident; (2)
that the laborer or employee be mentally  and physically fit
to fill said job  at the time he demands  reinstatement from
his employer; and (3) that said job still exists at the time
laborer or  employee demands reinstatement.   (The job shall
be  understood to exist when the  same is vacant or is being
filled by another laborer or employee....)"

P.R. Laws Ann., tit. 11,   7 (Article 5-A of the Puerto Rico
Workers' Accident Compensation Act). 

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