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“Sham Affidavit Doctrine” Now Incorporated to Puerto Rico´s Case Law

By on January 3, 2016

SAN JUAN – The commonwealth’ Supreme Court adopted recently the “sham affidavit doctrine” developed by federal courts as part of a wrongful termination claim brought under Act 80 of 1978, known as the Unjust Dismissal Act.
The sham affidavit doctrine states that a party cannot create an issue of fact by submitting an affidavit that contradicts his or her own deposition testimony. The Supreme Court ruled that courts can no longer consider a plaintiff’s affidavit that contradicts prior deposition testimony in determining whether a genuine controversy of a material fact exists that would preclude entering summary judgment. The decision, which follows a string of rulings favorable to employers, also reiterates an employer’s prerogative in reorganizing a business to stay competitive without having to incur Act 80 liability as long as the reorganization is bona fide. 
The plaintiff in Lugo Montalvo v. Sol Meliá Vacation Club sued his former employer alleging national origin discrimination and unjustified dismissal under Act 80.  The employer argued that the plaintiff was terminated with just cause because his department was closed and his position eliminated as a result of a corporate reorganization. The employer filed a motion for summary judgment primarily based on several of the plaintiff’s own admissions during his deposition. As part of his petition opposing the summary judgment, the plaintiff submitted a sworn statement that contradicted his prior deposition testimony. The lower court denied the employer’s motion for summary judgment, finding that there were genuine controversies of material fact. On appeal, the employer argued that the plaintiff’s sworn statement was a sham affidavit filed for the sole purpose of creating a controversy of fact, and should not have been considered by the lower court. The Court of Appeals rejected the employer’s argument and affirmed the lower court’s denial of the motion for summary judgment.
The Supreme Court of Puerto Rico ruled that the lower courts erred in considering the plaintiff’s sworn affidavit. The court recognized two types of sham affidavits. The first is the sham affidavit by omission and the second is the sham affidavit by contradiction. The sham affidavit by omission, which was previously adopted by the top court, consists of a party withholding relevant information during a deposition to create an issue of material fact by stating said information through an affidavit. 
This time, the Supreme Court also adopted the sham affidavit by contradiction doctrine, which applies when the inconsistencies in both statements are evident and not mere discrepancies of lesser-importance or good-faith errors. It also applies when no adequate reason is given to explain the discrepancies and the later statement is not the result of the discovery of new evidence. 
After evaluating and comparing the plaintiff’s deposition testimony with the sworn statement filed at the summary judgment stage, the court ruled that the statement was a sham affidavit by contradiction. As such, it should not have been accepted and the lower courts erred in finding there were genuine issues of material fact. 
The Supreme Court held that the employer met its burden of establishing that the plaintiff was terminated as a result of the reorganization that closed his department due to a decrease in sales. The court acknowledged that an employer can eliminate employment positions, create new ones or merge existing positions to stay competitive as long as it is a bona fidereorganization without violating Act 80.
Chief Justice Liana Fiol Matta and justices Anabelle Rodríguez and Maité Oronoz concurred with a dissenting opinion written by Justice Luis Estrella that states that the sham affidavit doctrine is incompatible with local summary judgment rules.  
Estrella said the mere fact that an affidavit given by a party in a case contradicts a prior deposition testimony, is not sufficient cause for it to be rejected and not all contradictory statements are a hoax.He stressed that the courts should not make findings of credibility when they grant or refuse a request for summary judgment. He warned that in order for courts to apply the “sham affidavit” doctrine, they must first determine that the contradiction is a hoax. 

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