Asociación De Subscripción Conjunta Del Seguro De Responsabilidad Obligatorio v. Flores Galarza

HOWARD, Circuit Judge,

concurring in the judgment.

One part of this appeal concerns a takings claim under the Fifth and Fourteenth Amendments of the federal Constitution against Juan Flores Galarza, a state official acting in his individual capacity, for withholding millions of dollars from the JUA, a state-created pool of insurers. The lead opinion concludes that a viable takings claim may exist against state officials acting in their individual capacities, but that Flores Galarza is entitled to qualified immunity because his withholding funds was reasonable in light of the unique circumstances present. Ante at 97-98. I am not entirely convinced that federal takings claims may ever properly lie against state officials acting in their individual capacities. Cf. Monell v. N.Y City Dep’t of Social Servs., 436 U.S. 658, 687 , 98 S.Ct. 2018 , 56 L.Ed.2d 611 (1978) (“It beggars reason to suppose that Congress would have exempted municipalities from suit [in enacting 42 U.S.C. § 1983 ], insisting instead that compensation for a taking come from an officer in his individual capacity rather than from the government unit that had the benefit of the property taken.”); Langdon v. J.J. Swain, 29 Fed.Appx. 171, 172 (4th Cir.2002) (“[T]akings actions sound in tort against governmental entities rather than individual state employees in their individual capacities.”). But we should not be resolving this difficult question here because the JUA’s individual capacity claim against Flores Galarza is not ripe under Williamson County Regional *38 Planning Commission v. Hamilton Bank of Johnson City, 473 U.S. 172, 195 , 105 S.Ct. 3108 , 87 L.Ed.2d 126 (1985).

In Williamson County, the Supreme Court held that a federal takings claim is not ripe until the claimant has met two preconditions. See 473 U.S. at 186, 194-95 , 105 S.Ct. 3108 . First, in regulatory takings cases, the claimant must show that the government entity charged with enforcing the regulation at issue has rendered a final decision on the regulation’s meaning (“the finality requirement”). See id. at 186 , 105 S.Ct. 3108 ; Pascoag Reservoir & Dam, LLC v. Rhode Island, 337 F.3d 87, 91 (1st Cir.2003) (stating that the finality requirement does not apply in physical takings cases). Second, in regulatory and physical takings cases, the claimant must pursue compensation for the alleged taking through state processes, so long as the state provides a “reasonable, certain and adequate provision for obtaining compensation” (“the litigation requirement”). Williamson County, 473 U.S. at 194-95 , 105 S.Ct. 3108 ; Pascoag, 337 F.3d at 92 . The litigation requirement follows from the principle that no federal takings violation occurs until “just compensation” has been denied by the state. See Suitum v. Tahoe Reg’l Planning Agency, 520 U.S. 725, 733 , 117 S.Ct. 1659 , 137 L.Ed.2d 980 (1997).

My disagreement with the lead opinion’s treatment of the ripeness issue concerns its application of the litigation requirement. 36 According to the lead opinion, claimants must avail themselves only of state process to recover compensation if the state has adopted a process “particularly aimed at providing compensation when government action effects a taking” and that “such [process does] not include litigation of a state takings claim [under the state constitution] or any general remedial cause of action under state law.” Ante at 17. Based on this reasoning, the JUA’s claim against Flores Galarza is deemed ripe because Puerto Rico does not offer a specific administrative process or cause of action to seek “compensation in the unusual circumstance of an alleged unconstitutional taking arising from the government’s appropriation of funds.” Id. at 16.

There is no support in Supreme Court precedent for the conclusion that claimants are relieved of the litigation requirement unless the state has adopted specific processes (presumably by way of statute) through which such compensation may be recovered. Indeed, Williamson County suggests just the opposite. The Williamson County Court derived the litigation rule from procedural due process cases holding that a plaintiff does not have a due process claim “unless or until the state fails to provide an adequate remedy for the property loss.” Id. at 195 , 105 S.Ct. 3108 (citing Hudson v. Palmer, 468 U.S. 517 , 532 n. 12, 104 S.Ct. 3194 , 82 L.Ed.2d 393 (1984)). In the due process context, the Court has held that common-law remedies available in state-court actions are adequate. Hudson, 468 U.S. at 534-35 , 104 S.Ct. 3194 . Yet the causes of action recognized as adequate in Hudson are exactly the sort of “general remedial causes of action under state law” that the lead opinion deems insufficient here. Ante at 16.

Several other federal courts have rejected my colleagues’ limitation on the litigation requirement. The Second Circuit has held that a federal takings claim was not ripe under Williamson County because the claimant had not brought a state-court *39 action seeking recovery under the takings clause of the Connecticut Constitution. Villager Pond, Inc. v. Town of Darien, 56 F.3d 375, 379-80 (2d Cir.1995); see also Southview Assocs. v. Bongartz, 980 F.2d 84 , 100 (2d Cir.1992) (concluding that takings case was not ripe because plaintiff did not bring claim under Vermont Constitution’s takings clause seeking compensation). 37 Similarly, the Ninth Circuit ordered dismissal of a federal takings claim as not ripe where the claimant did not bring an action for recovery under the Hawaii Constitution’s takings clause. Austin v. City & County of Honolulu, 840 F.2d 678, 681 (9th Cir.1988). And the Fifth Circuit rejected a takings claim on ripeness grounds where the claimant could have, but did not, bring a state-court nuisance action to obtain compensation. See Samaad v. City of Dallas, 940 F.2d 925, 935 (5th Cir.1991); accord Wiltzius v. Town of New Milford, 453 F.Supp.2d 421, 431 (D.Conn.2006) (takings claim not ripe because claimant did not bring state court action under state constitution to seek compensation); Franco v. Dist. of Columbia, 456 F.Supp.2d 35, 42 (D.D.C.2006) (takings claim not ripe where claimant failed to bring contract action in state court to obtain compensation); Bender v. City of Clearwater, 2006 WL 1046944 , at *23 (M.D.Fla. Apr.19, 2006) (“Plaintiff must look to state remedies for compensation for the alleged taking, whether that remedy is titled ‘an inverse condemnation’ claim or something else, such as a suit for damages or trespass, before he can pursue his takings claim in federal court.”). These cases amply demonstrate that adequate state process under the litigation requirement encompasses more than just those state processes “particularly aimed at providing compensation” for a government taking. 38 Ante at 16,

In light of this understanding of the litigation requirement, the remaining question is whether Puerto Rico provides “an adequate procedure” for the JUA to seek compensation. The burden of proving that *40 no adequate state process is available rests with the JUA. See Liberty Mut. Ins. Co. v. La. Dep’t of Ins., 62 F.3d 115, 117 (5th Cir.1995). It is not enough to show only that the adequacy of state process remains unsure and undeveloped; it must be shown to be unavailable. See Culebras Enters. Corp. v. Rivera Rios, 813 F.2d 506, 513-15 (1st Cir.1987) (holding that taking claimant was required to seek compensation from the Puerto Rico courts even though the Puerto Rico Supreme Court had never awarded damages in an inverse condemnation action); accord, e.g., Villager Pond, 56 F.3d at 380 ; S. Pac. Transp. Co. v. City of Los Angeles, 922 F.2d 498 , 505 n. 8 (9th Cir.1990).

Puerto Rico’s Constitution includes a takings provision, See P.R. Const. Art. II, § 9, and Flores Galarza suggests that the JUA could seek compensation through a mandamus action. It is not entirely clear that the JUA could obtain the compensation that it seeks through either an action under the Commonwealth’s Constitution or some other cause of action. But it has not been shown that such relief is unavailable either. In these circumstances, the JUA was required to pursue its state-law remedies before turning to the federal Constitution for relief. E.g., Southview Assocs., 980 F.2d at 100. Because the JUA did not pursue compensation through the state system, its federal claim against Flores Galarza, in his individual capacity, should have been dismissed on ripeness grounds. 39

Before BOUDIN, Chief Judge, TORRUELLA, * GIBSON, ** LYNCH, LIPEZ and HOWARD, Circuit Judges.

Order of Court

The panel of judges that rendered the decision in this case having voted to deny the petitions for rehearing and stay of mandate and the petition for rehearing en banc having been carefully considered by the judges of the court in regular, active service and a majority of said judges not having voted to order that the appeal be heard or reheard by the court en banc,

it is ordered that the petitions fore rehearing and stay of mandate and the petition for rehearing en banc be denied. A statement joined in by three judges follows.

BOUDIN, Chief Judge, LYNCH and HOWARD, Circuit Judges.

It appears to us that the panel majority decision likely conflicts directly with binding Supreme Court authority 1 and prior decisions in this court, 2 as well as the law in other circuits. 3 If so, a panel majority lacks the authority to so conclude. In our view, a federal takings claim, which is what has been presented here, is not ripe until a plaintiff seeks compensation from the *41 state — unless it is manifest that there is no possibility of receiving such compensation in any state proceeding.

It is well settled that the burden of demonstrating the absolute lack of such a state proceeding is on the plaintiff. See Deniz, 285 F.3d at 146. In Puerto Rico, our own precedent has determined that such a proceeding and a remedy may very well exist under the Puerto Rico Constitution, P.R. Const. Art. II, § 9. See Id. at 146-47 (“Although the remedy is not memorialized in Puerto Rico’s Civil Code, the case law makes clear that inverse condemnation is generally available under Puerto Rico law.”).

However, this issue arose only in the course of an interlocutory appeal, and the district court has entered no final judgment denying or granting relief and bringing the litigation to an end. It is uncertain whether the panel’s interlocutory opinion deciding the ripeness issue will affect the ultimate outcome in this case. It may even be that some aspects of the case would remain even if prior precedent on the ripeness issue had been followed. 4

If the panel majority’s decision on the ripeness issue does prove to be relevant to any relief which may be ultimately granted, nothing prevents an en banc court from reviewing that determination on appeal after a final judgment. Irving v. United States, 162 F.3d 154 , 161-62 & n.7 (1st Cir.1998) (en banc), cert. denied, 528 U.S. 812 , 120 S.Ct. 47 , 145 L.Ed.2d 41 (1999). Resources for en banc review are limited, and the complexities of this case and the interlocutory context in which the issue has arisen make deferral the appropriate course.

. The finality requirement does not apply because the JUA seeks compensation for a physical, rather than a regulatory, taking. Pascoag, 337 F.3d at 91 .

. Indeed, in Southview, 980 F.2d at 100, the court explicitly rejected the argument that Williamson County’s litigation requirement mandated the claimant to pursue state processes only if the state provided a specific statutory avenue of relief.

. I understand that the lead opinion seeks to limit the litigation requirement because of its concern that preclusion principles will prevent takings claims from being litigated in federal court, if claimants must pursue state remedies in state court. See ante at 17. This was the view of four Justices of the Supreme Court in San Remo Hotel v. City & County of San Francisco, 545 U.S. 323, 349 , 125 S.Ct. 2491 , 162 L.Ed.2d 315 (Rehnquist C.J., concurring) who proposed revisiting the litigation requirement. The majority, however, disagreed, concluding that "it is hardly a radical notion to recognize that ... a significant number of plaintiffs will necessarily litigate their federal takings claims in state courts.” Id. at 347 , 125 S.Ct. 2491 . As the Court has rejected this concern as a basis for revisiting the litigation requirement, it does not serve as an adequate basis for substantially limiting it in this circuit.

The lead opinion also supports its limiting construction of the litigation requirement by suggesting that requiring claimants to pursue state constitutional takings claims or other general causes of action would require claimants to exhaust state remedies, which is inconsistent with Supreme Court caselaw interpreting 42 U.S.C. § 1983 . E.g., Pasty v. Fla. Bd. of Regents, 457 U.S. 496 , 102 S.Ct. 2557 , 73 L.Ed.2d 172 (1982) The Williamson County Court accepted this argument for purposes of the finality requirement, by holding that a claimant need not exhaust judicial review after a state agency has definitively interpreted a regulation. 473 U.S. at 192-93 , 105 S.Ct. 3108 . But the Court did not endorse a similar limiting principle for the litigation requirement. Moreover, Washlefske v. Winston, 234 F.3d 179, 183 (4th Cir.2000), relied on by the lead opinion for its exhaustion analysis, states that exhaustion is not required to meet the finality requirement; it says nothing about the scope of the litigation requirement.

. I agree that, to the extent the JUA is pursuing facial challenges to Puerto Rico statutes, the litigation requirement is not implicated. San Remo, 545 U.S. at 345-46 , 125 S.Ct. 2491 .

. Williamson County Reg’l Planning Comm’n v. Hamilton Bank of Johnson City, 473 U.S. 172 , 105 S.Ct. 3108 , 87 L.Ed.2d 126 (1985).

. Deniz v. Municipality of Guaynabo, 285 F.3d 142, 146 (1st Cir.2002); Pascoag Reservoir & Dam, LLC v. Rhode Island, 337 F.3d 87 (1st Cir.), cert. denied, 540 U.S. 1090 , 124 S.Ct. 962 , 157 L.Ed.2d 795 (2003).

.See, e.g., Villager Pond, Inc. v. Town of Darien, 56 F.3d 375, 379-80 (2d Cir.1995), cert. denied, 519 U.S. 808 , 117 S.Ct. 50 , 136 L.Ed.2d 14 (1996); Southview Assocs. v. Bongartz, 980 F.2d 84 , 100 (2d Cir.1992), cert. denied, 507 U.S. 987 , 113 S.Ct. 1586 , 123 L.Ed.2d 153 (1993); Samaad v. City of Dallas, 940 F.2d 925, 934-35 (5th Cir.1991); Austin v. City & County of Honolulu, 840 F.2d 678, 681 (9th Cir.), cert. denied, 488 U.S. 852 , 109 S.Ct. 136 , 102 L.Ed.2d 109 (1988).

. Both Judge Lipez in the majority opinion and Judge Howard in the concurrence state that certain of the claims are "facial challenges” to Law 253 and, therefore, may not be subject to Williamson County's "litigation requirement.” Flores Galarza, 2007 WL 613719, at *7 ; id. at *29 n.39 (Howard, J., concurring) ("I agree that, to the extent the JUA is pursuing facial challenges to Puerto Rico statutes, the litigation requirement is not implicated.”); see San Remo Hotel, L.P. v. San Francisco, 545 U.S. 323, 345-46 , 125 S.Ct. 2491 , 162 L.Ed.2d 315 (2005) ("Petitioners ... could have raised most of their facial takings challenges, which by their nature requested relief distinct from the provision of 'just compensation,’ directly in federal court.”).