Santiago-Ramos et al v. Autoridad de Energia Electrica de Puerto Rico (AEE) et al

Filing 165

REPORT AND RECOMMENDATION re: 139 Motion for Summary Judgment. Further, 160 Motion for Leave to File Excess Pages is retroactively GRANTED. Objections to R&R due by 3/16/2015. On oral order from the presiding district judge, this period shall not be extended. Signed by US Magistrate Judge Silvia Carreno-Coll on 2/26/2015. (NBB)

IN THE UNITED STATES COURT
FOR THE DISTRICT OF PUERTO RICO

DUAMEL SANTIAGO-RAMOS,
ET AL.,
Plaintiffs,
v.

CIV. NO.: 11-1987(JAG/SCC)

AUTORIDAD DE ENERGÍA
ELÉCTRICA DE P.R.,
Defendant.

REPORT AND RECOMMENDATION
In this action, a putative class consisting of most electric
ratepayers in Puerto Rico sues Defendant Autoridad de
Energía Eléctrica de Puerto Rico (“AEE”),1 alleging that the
rates that AEE charges its customers are unconstitutional in

1.

AEE is a statutorily-created public utility with a monopoly on power
generation and sale in Puerto Rico. The Court has already determined
that AEE is a state actor for § 1983 purposes. See Docket No. 28, at 8–9;
see also Pérez v. AEE, 741 F. Supp. 23, 26 (D.P.R. 1990) (holding that AEE
is a state actor for § 1983).

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various respects. On referrals from the presiding judge, I have
been dealing with this case for some time. I previously recommended, Docket No. 90—and the presiding judge adopted,
Docket No. 101—that a motion for summary judgment filed by
AEE on the basis of claim preclusion be denied. I subsequently
presided over a class certification hearing. See Docket No. 107.
In a report and recommendation following that hearing, I
determined that although Plaintiffs’ offer of proof was weak
(and the opposition weaker), the putative class likely satisfied
the requirements of Rule 23(a) and (b)(3). Docket No. 111, at 23.
Nonetheless, I offered a preliminary analysis of some of
Plaintiffs’ core claims and found them wanting, id. at 19–23;2 I
thus recommended that the presiding judge hold the motion to
certify in abeyance and order AEE to file a motion for summary judgment on the claims’ merits before certifying the class
and forcing Plaintiffs to incur the substantial costs of class
notice, id. at 23–24. The presiding judge adopted my recommendations and ordered a period of expedited discovery to be

2.

I also recommended that the Court refuse to appoint three of the four
attorneys seeking to be class counsel. Docket No. 111, at 13–19; see also
Docket No. 113 (holding recommendation in abeyance while
dispositive motion practice is pending).

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followed by dispositive motion practice. Docket No. 113.
AEE has now filed a motion for summary judgment seeking
dismissal of this action, Docket No. 139, which has been
referred to me for a report and recommendation, Docket No.
164. Surviving at this time are: (1) Plaintiffs’ claims under the
Takings Clause; (2) Plaintiffs’ procedural due process claims;
and (3) Plaintiffs’ claims under the First Amendment’s Establishment and Free Association Clauses. Below, I take up
Plaintiffs’ claims in that order. In doing so, and because some
of Plaintiffs’ claims should be dismissed even based on the
facts they propose, I take up the parties’ statements of uncontested material facts only insofar as is necessary to rule on the
motion.
I. The Takings Clause
The Fifth Amendment’s Takings Clause provides that
private property shall not be “taken for public use, without just
compensation.” U.S. CONST., amend. V. The Clause “does not
prohibit the taking of property, but instead places a condition
on the exercise of that power.” First English Evangelical Lutheran
Church of Glendale v. Cnty. of Los Angeles, 482 U.S. 304, 314
(1987). Takings are thus not prohibited, but in the case of
“otherwise proper interference” with private property by the

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government, compensation is required. Id. at 315; see also Lingle
v. Chevron U.S.A. Inc., 544 U.S. 528, 543 (2005) (explaining that
“the Takings Clause presupposes that the government has
acted in pursuit of a valid public purpose”). Takings Claims are
not the proper vehicle by which to seek relief for impermissible
interference with property rights. Lingle, 544 U.S. at 543 (“[I]f
a government action is found to be impermissible—for instance
because it fails to meet the ‘public use’ requirement or is so
arbitrary as to violate due process—that is the end of the
inquiry. No amount of compensation can authorize such an
action.”);3 see also Garcia-Rubiera v. Fortuño (“Garcia-Rubiera II”),
665 F.3d 261, 277 (1st Cir. 2011) (explaining that where the
plaintiffs complained of the allegedly illegitimate purpose to
which the government put their funds, they were making a
substantive due process—not a takings—argument).
Plaintiffs, acknowledging that they must identify a property

3.

That said, a plaintiff who proves that a taking was for private benefit
“is entitled to an injunction against the unconstitutional taking, not
simply compensation.” Fideicomiso de la Tierra del Caño Martín Peña v.
Fortuño, 604 F.3d 7, 17 (1st Cir. 2010) (internal quotations omitted).

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interest that has been interfered with,4 point to a “proprietary
interest in [AEE’s] electric power services and in the monies
paid for the purchase of those services.” Docket No. 155, at 10.
They allege that this interest has been interfered with in three
ways: first, that there has been a physical taking for a private
use, namely certain private entities that benefit from municipal
power subsidies; second, that there has been a physical taking
insofar as certain funds have been spent in violation of various
Puerto Rico statutes; and third, that statutory subsidies
benefitting a minority of AEE’s subscribers effect a regulatory
taking on the majority. There are numerous problems with
Plaintiffs’ theories, which I address below starting with their
identification of a property interest.
A. Plaintiffs fail to identify a valid property interest.
In effect, Plaintiffs point to two putative property interests:
electric service itself, and the funds that pay for such services.
With regard to an interest in utility services, Plaintiffs rely on

4.

A takings claim entails a two-part inquiry. First, the plaintiff must point
to a “recognized property interest which may be protected by the Fifth
Amendment”; he must then show that this interest was taken without
compensation. Asociación de Subscripción Conjunta del Seguro de
Responsabilidad Obligatorio v. Flores-Galarza, 484 F.3d 1, 27–28 (1st Cir.
2010).

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Memphis Light, Gas and Water Division v. Craft, 436 U.S. 1 (1978).
Memphis Light is not really on point, however, because it
recognized a property interest not in electricity service itself,
but in the non-termination of that service during a dispute over
an unpaid bill.5 See id. at 5. Here, though, Plaintiffs are not
complaining about their service being terminated; to the
contrary, they are paying their bills and complaining about the

5.

Memphis Light found a property interest based on Tennessee state law.
Following Memphis Light courts in this district have found that
customers of public utilities in Puerto Rico also have a property interest
in continued service. See, e.g., Marrero-Garcia v. Irizarry, 829 F. Supp.
523, 528 (D.P.R. 1993) (“It is therefore clear that under Puerto Rico law
a subscriber to a public utility services has a protectable property
interest in the continued receipt of services.”), aff’d, 33 F.3d 117 (1st Cir.
1994); see also Albizu-Merced v. P.R. Elec. Power Auth., Civ. No. 111969(JAG), 2013 WL 101618, at *3 (D.P.R. Jan. 8, 2013) (same), rev’d on
reconsideration on other grounds, 2014 WL 5844195 (D.P.R. Nov. 13, 2014).
Non-subscribers, however, have been found to have no such interest.
See, e.g., Marrero-Garcia, 829 F. Supp. at 528 (“This property interest is
not extended to those receiving public utility services who are not
subscribers, however.”). Similarly, courts outside of this district have
found that there is no property interest in the provision of new water
service. See, e.g., L&F Homes & Dev., LLC v. City of Gulfport, Miss., Civ.
No. 10-387, 2012 WL 2994077, at *3 (S.D. Miss. July 20, 2012), aff’d, 538
F. App’x 395 (5th Cir. 2013); Ramos v. Proulx, Civ. No. 82-422, 1987 WL
8385, at *2 (D. Mass. Mar. 25, 1987); see also Nat’l Educ. Ass’n—R.I. ex rel.
Scigulinsky v. Ret. Bd. of R.I. Employees’ Ret. Sys., 172 F.3d 22, 29 (1st Cir.
1999) (explaining that there is no Fifth Amendment property interest
even in “entirely plausible expectations of economic benefit”).

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uses to which those payments are put. I therefore see no basis
for holding that AEE customers have a property interest in
electric services as such.6
Plaintiffs also point to their interest in the funds used to
purchase electricity from AEE, though they are unspecific
about whether their putative interest is in the pre-purchase or
post-purchase funds. This matters because once the money is
paid to AEE, it belongs to AEE rather than the ratepayer—which is to say that Plaintiffs lose their property
interest in the funds once they pay them to AEE.7 Cf. Roedler v.
6.

Even if Plaintiffs did have a property interest in electric service, their
claim would fail because they cannot plausibly argue that such an
interest was taken. That is, Plaintiffs are paying for and receiving
electrical services, but they are unhappy about the amount that they are
spending and the purposes for which their payments are being used.
Furthermore, if Plaintiffs were asserting an interest in a particular
electricity rate, or in a rate that reflected AEE’s compliance with the
law, I would still have to conclude that no such property interest exists.
See, e.g., Coleman v. Sanitation Dist. No. 1 of N. Ky., Civ. No. 13-2, 2014
WL 705322, at *6 (E.D. Ky. Feb. 24, 2014) (collecting cases and holding
that ratepayers have no property interest in particular electricity rates
or rates reflecting utility compliance with the law); Crosby v. City of
Jackson, 813 F. Supp. 476, 480 (S.D. Miss. 1993) (similar), aff’d, 5 F.3d 528
(5th Cir. 1993).

7.

The money paid to AEE for electrical service is different than the
premiums paid for compulsory state car insurance in Garcia-Rubiera v.
Calderon (“Garcia-Rubiera I”), 570 F.3d 443 (1st Cir. 2009). In that case,

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U.S. Dep’t of Energy (“Roedler I”), Civ. No. 98-1843, 1999 WL
1627346, at *10 (D. Minn. Dec. 23, 1999) (“The Plaintiffs cannot
demonstrate ownership of the property at issue, which are the
fees that [the defendant] paid [to the United States], and thus
have no standing to pursue a taking claim. The Plaintiffs
concede that they simply paid their monthly electricity bills.
Revenue paid by the customers for service belongs to the
company.”), aff’d, 255 F.3d 1347 (Fed. Cir. 2001) (“Roedler II”);8
see also Bd. of Pub. Utility Commn’rs v. N.Y. Tel. Co., 271 U.S. 23,
31 (1926) (“The revenue paid by the customers for [utility]
service belongs to the company.”). On the other hand, the prepayment funds—in which Plaintiffs undoubtedly have an
interest—are merely the costs to Plaintiffs of purchasing
electricity. Those funds are thus not taken, they are paid for
services rendered. Cf. Roedler I, 1999 WL 1627346, at *10. And
insureds retained a property interest in their paid premiums because
those premiums were held “in a fiduciary capacity” while the insureds
were given the opportunity to seek recoupment upon proof of private
insurance. Id. at 452. AEE clients have no such continuing interest in the
money they pay AEE for utility service.
8.

On appeal, the Federal Circuit affirmed the district court’s judgment in
Roedler, repeating the district court’s standing analysis; it is not clear,
however, whether it endorsed that analysis. See Roedler v. U.S. Dep’t of
Energy, 255 F.3d 1347, 1355 (Fed. Cir. 2001).

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Plaintiffs actual complaints concern what is done with the
money after it is paid—and after it is no longer their property.
In similar circumstances, the Federal Circuit in Roedler II held
that a plaintiff would not be able to satisfy Article III’s “injury
in fact” requirement. 255 F.3d at 1355–56. Specifically, that
court held that customers of an electric utility, “who paid
passed-through costs” to the government via the rates paid to
the company and “thus suffered indirect economic injury”
when the government failed in its obligations to the utility,
lacked standing to sue for a taking, even though the utility
might have had standing to sue for its own injuries. Id. (citing
Ben Oehrleins v. Hennepin Cnty., 115 F.3d 1372, 1379–81 (8th Cir.
1997)). Thus, if Plaintiffs’ putative property interest is in the
post-payment funds, they in fact have no interest; and if it is in
the pre-payment funds, they have an interest but no injury.
A further problem with the property interest that Plaintiffs
identify is that, as a general matter, a requirement to pay
money is not a taking. In United States v. Sperry, for instance,
the plaintiff, a successful claimant before the Iran-United States
Claims Tribunal, argued that a fee paid to the United States out
of its award constituted a taking. See 493 U.S. 52, 58 (1989). The
Supreme Court rejected this argument, writing that it was

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“artificial to view deductions of a percentage of a monetary
award as physical appropriations of property.” Id. at 62 n.9. To
the contrary, the Court held, the government may—and
routinely does—require the payment of fees for its services,
and these are not takings. Id. at 62 n.9 & surrounding text.
Likewise, Justice Kennedy, in his concurring opinion in Eastern
Enterprises v. Apfel, wrote that a law requiring a coal company
to make significant cash payments to plans for the benefit of
certain retirees was not a taking because though the law
required the payment of money, it “neither target[ed] a specific
property interest nor depend[ed] upon any particular property
for the operation of its statutory mechanisms.” 524 U.S. 498,
543 (1998) (Kennedy, J., concurring).9
Several courts of appeals, including the en banc Federal
Circuit, have interpreted Eastern Enterprises as holding that
“the Takings Clause does not apply to legislation requiring the

9.

The Eastern Enterprises court did not produce a majority opinion, but
more recent Supreme Court precedent suggests that Kennedy’s
concurrence is controlling on this point. See Koontz v. St. Johns River
Water Mgmt. Dist., 133 S. Ct. 2586 (2013) (focusing on Kennedy’s Eastern
Enterprises concurrence); see also Am. Council of Life Insurers v. Dist. of
Columbia Health Benefit Exchange Auth., — F. Supp. 3d —, 2014 WL
5893464, at *19 (D.D.C. 2014) (“[T]he majority of the Koontz Court left
intact the plurality view reflected in Eastern Enterprises . . . .”).

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payment of money”—at least where that money does not
constitute an identifiable fund and is not tied to a specific piece
of property. Commonwealth Edison Co. v. United States, 271 F.3d
1327, 1329, 1338 (Fed. Cir. 2001) (en banc); see also W. Va. CWP
Fund v. Stacy, 671 F.3d 378, 386–87 (4th Cir. 2011) (collecting
cases and holding that “a monetary obligation does not
implicate the Takings Clause”); McCarthy v. City of Cleveland,
626 F.3d 280, 285 (6th Cir. 2010) (“[A]ll circuits that have
addressed the issue have uniformly found that a taking does
not occur when the statute in question imposes a monetary
assessment that does not affect a specific interest in property.”);
Parella v. Ret. Bd. of R.I. Employees’ Ret. Sys., 173 F.3d 46, 58 (1st
Cir. 1999) (“[A] Takings Clause issue can arise only after a
plaintiff’s property right has been independently established.”
(citing E. Enters., 524 U.S. at 539–47 (Kennedy, J., concurring)).
The Supreme Court’s opinion in Koontz v. St. Johns River
Water Mgmt. Dist., 133 S. Ct. 2586 (2013), confirms that these
cases are correct in general principle. Koontz concerned
whether a taking occurred when the government conditioned
the approval of a land-use permit on the payment of a fee. See
id. at 2591. Focusing on the fact that the exaction “burdened
petitioner’s ownership of a specific parcel of land,” the Su-

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preme Court held that the exaction was qualitatively different
than the payment of money demanded in Eastern Enterprises.
Id. at 2599. Because it was tied to a specific property interest
apart from the money itself, the Court explained that the
exaction in Koontz was unlike typical taxes and fees, which the
Court affirmed were not takings. Id. at 2600–01. Another court
has thus interpreted Koontz as holding that “a general monetary exaction does not qualify as ‘a specific, identifiable
property interest’ . . . to serve as a predicate for a takings
claim.” Am. Council of Life Insurers v. D.C. Health Benefit
Exchange Auth., — F. Supp. 3d —, 2014 WL 5893464, at *20
(D.D.C. 2014) (quoting Koontz, 133 S. Ct. at 2600).
Here, the funds in which Plaintiffs claim a putative property interest are simply the fees that they pay for a service.
They are not tied to any specific fund, nor are they related to
any other particular property. Plaintiffs interest in these funds
may not, therefore, serve as the basis for a takings claim. Cf.
Dudley v. United States, 61 Fed. Cl. 685, 689 (2004) (“It is wellsettled that the government may require fees for public use of
certain services without causing a taking.” (citing Sperry, 493
U.S. at 63)).

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B. There was no physical or per se taking.10
As explained above, I do not think that Plaintiffs point to a
property interest sufficient to form the basis for a takings claim.
Even if they did, however, their physical takings claims would
fail for other reasons.
Plaintiffs first argue that their property has been unconstitutionally taken for a private use. AEE is tax-exempt, but in
exchange for that exemption it must contribute 11% of its gross
income, derived from the sale of electric power to consumers
like Plaintiffs, to pay for certain statutory subsidies. See P.R.
LAWS ANN. tit. 22, § 212(b). Among these subsidies is a contribution to the municipalities. Id. § 212(b)(2). According to

10. The doctrinal categorization of takings claims is somewhat murky.
Generally, physical takings claims refer to cases where physical
property is invaded by the government. Regulatory claims, by contrast,
were traditionally divided into two categories: per se takings, where
non-tangible things were taken in a way that resembled physical
takings; and claims governed by Penn Central’s ad hoc balancing. See
Lingle v. Chevron U.S.A. Inc., 544 U.S. 528, 539 (2005). Some recent cases,
however, seem to distinguish between per se and regulatory takings as
if they belong to different categories. See, e.g., Brown v. Legal Found. of
Wash., 538 U.S. 216, 235 (holding that there was a per se taking and not
a regulatory taking); Koontz, 133 S. Ct. at 2600 (differentiating between
regulatory and per se takings). Because the analytical frameworks are
similar, I will refer to per se and physical takings together, and I will use
“regulatory taking” to refer to claims governed by Penn Central.

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Plaintiffs, the municipalities have effectively passed on these
subsidies to private entities that rent space in municipalityowned buildings.11 Docket No. 155, at 13.
Putting aside Plaintiffs’ inability to show a taking in the first
place, Plaintiffs’ “private use” claim founders because it fails to
show that any taking would not have been in the public
interest. The Supreme Court has held that “review of whether
a taking is for public use is necessarily deferential.” Fideicomiso
de la Tierra del Cano Martin Pena v. Fortuño, 604 F.3d 7, 18 (1st
Cir. 2010) (internal quotations omitted). Put simply, the
government may, consistent with the Constitution, take
property from one private person and give it to another private
person, so long as its “purpose is legitimate and its means are
not irrational.” Hawaii Housing Auth. v. Midkiff, 467 U.S. 229,
242–43 (1984); see also Kelo v. City of New London, Conn., 545 U.S.
469, 483 (2005) (“For more than a century, our public use
jurisprudence has wisely eschewed rigid formulas and intrusive scrutiny in favor of affording legislatures broad latitude in

11. It is not entirely clear whether Plaintiffs are saying that the
municipalities, the businesses, or both benefit from this arrangement.
See Docket No. 155, at 13. However, I do not think that this difference,
to the extent that there is a difference, is relevant to the above analysis.

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determining what public needs justify the use of the takings
power.”). Here, Plaintiffs have not even tried to meet their
heavy burden of showing that the municipalities’ use of the
funds was irrational or illegitimate. Instead, they have simply
asserted it, Docket No. 155, at 13–14, and in doing so they have
waived their arguments.12 Cf. United States v. Nieves-Velez, 28 F.
Supp. 3d 131, 133 n.1 (D.P.R. 2014) (“Because we find his
argument was perfunctory, at best, the court shall deem it
waived.” (citing United States v. Zannino, 895 F.2d 1, 17 (1st Cir.
1990))).
Plaintiffs’ other physical-taking theory is that the
municipalities’ use of their credits violated Law 233 of 2011 and
Law 57 of 2014, effecting a taking of Plaintiffs’ property. Once
again putting aside the lack of a property interest, this theory
fails because it misunderstands the nature of a taking claim.
Fundamentally, the takings clause is concerned with “otherwise
proper” governmental interference with property rights. First

12. Much of Plaintiffs’ “private use” argument seems to bleed into
allegations that the municipalities’ use of the funds was illegal. See
Docket No. 155, at 13 (referring to the municipalities’ “unauthorized
use and . . . unjustified use of the credit”). I deal with that
contention—which has nothing to do with whether there was a taking
for private use—below.

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English, 482 U.S. at 315 (emphasis added). That is, the Takings
Clause presupposes that the government may take the property and is doing so for a legitimate reason, and it simply
ensures that the property’s owner is compensated. But where
the government’s purpose is impermissible, the Takings Clause
is not implicated, because “[n]o amount of compensation can
authorize such action.” Lingle, 544 U.S. at 543. It should be
obvious, then, that a takings claim premised on the government’s allegedly illegal use of the seized property is not a
takings claim at all; it is a due process claim. See id. (explaining
that a due process claim is “logically prior to and distinct from
the question” of whether a taking occurred); Garcia-Rubiera II,
665 F.3d at 277 (“Plaintiffs’ argument that the Commonwealth’s purpose in collecting and retaining custody over the
duplicative payments ‘is not legitimate’ is an argument that
goes to the core of substantive due process law.”).
C. There was no regulatory taking.
In addition to the lack of a property interest, which applies
to Plaintiffs’ regulatory taking claim just as it does their
physical takings claim, there is a threshold question of whether
a regulatory-takings framework is appropriate for consideration of a claim concerning the taking of money. In Brown v.

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Legal Foundation of Washington, for example, the Supreme Court
held that a per se taking analysis—rather than a regulatory
taking analysis—was proper in considering the alleged taking
of small amounts of interest accruing to the plaintiffs’ funds
held in IOLTA accounts.13 538 U.S. 216, 235 (2003). Likewise, in
Koontz, the Supreme Court held that an exaction related to a
specific property “would amount to a per se taking similar to
the taking of an easement or a lien.” 133 S. Ct. at 2600. It would
seem, then, that a regulatory-takings approach would be
inconsistent with Supreme Court precedent. Cf. Am. Council of
Life Insurers, 2014 WL 5893464, at *20–21 (holding that no
regulatory taking occurred where the claim regarded the
payment of money); Levin v. City & Cnty. of San Francisco, — F.
Supp. 3d —, Civ. No. 14-3352, 2014 WL 5355088, at *9 (N.D.

13. Interest on Lawyers Trust Accounts programs are used throughout the
United States to fund indigent legal services. See Phillips v. Wash. Legal
Found., 524 U.S. 156, 161–62 (1998). When attorneys receive client funds
in nominal amounts, they place them in so-called IOLTA accounts, and
the interest that accrues in such accounts is given to state legal services
funds. See id. at 162. In Phillips, the Supreme Court held that the interest
on a client’s money accrued while in an IOLTA account is
unquestionably the property of the client. Id. at 172. In Brown, the Court
held that the taking of this interest by the state is a per se taking, but it
clarified that compensation is not due if the taking resulted in no
pecuniary loss. 538 U.S. at 235–37.

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Cal. Oct. 21, 2014) (following Koontz and applying a per se
approach to a claim for the taking of money).
And even if that were not true, Plaintiffs’ regulatory claim
would fail if considered on its merits. Challenges to regulatory
takings are governed by a set of standards first enumerated in
Penn Central Transportation Co. v. New York City, 438 U.S. 104
(1978). Though application of these factors can be difficult, they
all “share a common touchstone”: each “focuses directly upon
the severity of the burden that the government imposes upon
private property rights.”14 Lingle, 544 U.S. at 539. But the
government regularly adjusts private parties’ rights and
relationships, and each such adjustment cannot be considered
a taking. Id. at 538. The question is thus whether the government’s regulation “forc[es] some people alone to bear public
burdens which, in all fairness and justice, should be borne by
the public as a whole.” Armstrong v. United States, 364 U.S. 40,
49 (1960); cf. P.R. Tel. Co. v. Telecomms. Regulatory Bd. of P.R.,
189 F.3d 1, 18 (1st Cir. 1999) (rejecting takings claim where the

14. My analysis does not depend upon the specific Penn Central factors, and
so I do not enumerate them. I note, however, that an especially
thorough treatment of the factors can be found in Maine Education
Association Benefits Trust v. Cioppa, 695 F.3d 145 (1st Cir. 2012).

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government’ “action [was] ‘a public program that adjusts the
benefits and burdens of economic life to promote the common
good’ in a highly regulated context” (quoting McAndrews v.
Fleet Bank of Mass., N.A., 989 F.2d 13, 19 (1st Cir. 1993))).
Plaintiffs’ allegations reveal that what they are challenging
is the legislature’s broad-scale decision about how the burdens
of paying for electric power should be distributed.15 Referring
to the supposedly confiscatory subsidies, Plaintiffs complain
that “around 33% of [AEE’s] clients enjoy a much lower cost of
electricity consumption that is being subsidized by 67% of its
clients.” Docket No. 155, at 15. This simply cannot be construed
as a few individuals being forced to shoulder the costs of a
public good benefitting the minority. To the contrary—the
precise contrary, really—this is a case of the majority bearing
some of the costs associated with assisting a minority that the
legislature has decided needs special assistance. This is not
unlike Medicare, Medicaid, Social Security, or progressive
income taxation. It is, in short, not a taking at all. See, e.g.,

15. For example, in their second amended complaint, Plaintiffs complain
about subsidies to public housing facilities, which, in Plaintiffs’ words,
“ha[ve] traditionally become zest [sic] pools of crime and violence.”
Docket No. 41, at 15.

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Mathews v. De Castro, 429 U.S. 181, 185 (“Governmental
decisions to spend money to improve the general public
welfare in one way and not another are not confided to the
courts. The discretion belongs to Congress unless the choice is
clearly wrong, a display of arbitrary power, [or] not an exercise
of judgment.” (internal quotations omitted)).
II. Due Process
Plaintiffs also bring a procedural due process claim, though
its specifics are hard to follow. Simplified, Plaintiffs complain
that their property—the same interests identified above—has
been taken and put to illegitimate or illegal uses. They further
complain that these deprivations have been procedurally
improper, lacking notice and a pre- or post-deprivation
hearing. See Docket No. 155, at 19–22. Fundamentally, Plaintiffs’ due process claim fails because of their inability to locate
a valid property interest. On this point, my analysis above
suffices:16 Plaintiffs have no property interest in electricity
power as such, and they have no property interest in money

16. See Garcia-Rubiera v. Calderon (“Garcia-Rubiera I”), 570 F.3d 443, 457 (1st
Cir. 2009) (“In general, we perform the same analysis in determining
whether a property interest is sufficient under both the Takings Clause
and the Due Process Clause.”).

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paid to AEE for purchase of a service, see Roedler II, 255 F.3d at
1355–56. Plaintiffs do, of course, have a property interest in
their own money before they pay it, but this money is not taken;
it is paid to purchase electricity. See Roedler I, 1999 WL 1627346,
at *10.
Furthermore, there is no deprivation. Garcia-Rubiera I, 570
F.3d at 457 (“Once a property interest is established, Plaintiffs
must then show that the defendants, acting under color of state
law, deprived [them] of that property interest without constitutionally adequate process.” (internal quotations omitted)). If
Plaintiffs’ property interest is in electricity services, their claim
fails because there are no allegations that such service has been
lost. And if it is in their pre-payment funds, Plaintiffs are
paying for services, not having their money taken by the
government. But reading Plaintiffs’ opposition to the motion
for summary judgment carefully, it is clear that what they are
really complaining about is the uses to which their postpayment funds are put, though they attempt to frame this in
terms of procedural rights.17 A challenge to the underlying use

17. So, for example, Plaintiffs seek a hearing in which they can challenge
the allegedly illegal way AEE spends its revenues, but they do so
without first showing that they have a property interest in those

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of AEE’s revenues implicates substantive, not procedural, due
process. See Garcia-Rubiera II, 665 F.3d at 277; see also Roedler II,
255 F.3d at 1355–56 (citing Ben Oehrleins, 115 F.3d at 1379–81).
But Plaintiffs’ substantive due process claims were dismissed
more than two years ago. Docket No. 28, at 18–19.
Defendants’ motion for summary judgment should be
granted as to Plaintiffs’ procedural due process claims.
III.

First Amendment

Finally, Plaintiffs bring claims under the First Amendment’s
Establishment and Free Association clauses. AEE moved for
summary judgment on these claims, and in response Plaintiffs
“voluntarily move[d] for [their] dismissal.” Docket No. 155, at
1. It is not clear under what procedural mechanism Plaintiffs
make this motion, however, nor is it clear whether they are
seeking dismissal with or without prejudice. At this stage in
the proceedings, Rule 41 would not permit Plaintiffs to dismiss
without Court approval. See FED. R. CIV. P. 41(a)(2). And given
the age of this case and the amount of effort that has gone into
litigating these particular claims, I would only permit dismissal
with prejudice. See id.; cf. Lindell v. O’Donnell, No. 05-C-04, 2005
revenues being spent legally. Cf. Coleman, 2014 WL 705322, at *6; Crosby,
813 F. Supp. at 480.

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WL 1190023, at *1 (W.D. Wis. May 18, 2005) (“Because defendant has been required to defend this action, plaintiff’s motion
for voluntary dismissal is proper only on the condition that the
dismissal is with prejudice.”). Furthermore, as AEE points out,
Rule 41 is not the right mechanism by which to dismiss fewer
than all of a plaintiff’s claims against a defendant. See, e.g.,
Bailey v. Shell Western E&P, Inc., 609 F.3d 710, 720 (5th Cir.
2010) (“Rule 41(a) dismissal only applies to the dismissal of an
entire action—not particular claims.”). Instead, seeking
amendment of the complaint under Rule 15 is proper. See 9
WRIGHT & MILLER, FED. PRAC. & PROC. § 2362 (3d ed.) (“A
plaintiff who wishes to drop some claims but not others should
do so by amending his complaint pursuant to Rule 15.”).
Plaintiffs have sought no amendment, and even if their
motion to dismiss were treated as a motion to amend, cf. Loutfy
v. R.R. Donnelley & Sons, Co., 148 F.R.D. 599, 602 (N.D. Ill. 1993)
(treating motion to dismiss a single claim as a motion to
dismiss), the motion would be denied for the same reason that
a motion to dismiss voluntarily would be: it would leave the
defendant at risk of future litigation on this matter despite
having expended substantial time and resources in defending
the claim. This would be especially prejudicial given the

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frankly weak nature of Plaintiffs’ First Amendment challenges.
Thus, AEE deserves a ruling on the merits, and Plaintiffs
cannot be permitted skirt that ruling through a last-minute
amendment.
The Court has previously put Plaintiffs on notice of what it
thinks are the infirmities in their First Amendment claims. In
light of that notice, AEE has asked for summary judgment on
those claims and Plaintiffs have failed to point to any issues of
material fact that would preclude their dismissal; to the
contrary, Plaintiffs have effectively abandoned them. As such,
I recommend that AEE’s motion for summary judgment be
granted and that Plaintiffs’ First Amendment claims be
dismissed.
IV.

Conclusion

Plaintiffs takings claims must be dismissed because they
have failed to identify a valid property interest—and have not,
in fact, had anything taken from them. Their procedural due
process claims fail for similar reasons. And they have abandoned their First Amendment claims. For these reasons, I
RECOMMEND that the motion for summary judgment,
Docket No. 139, be GRANTED and these claims be DISMISSED
WITH PREJUDICE.

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IT IS SO RECOMMENDED.
The parties have fourteen days to file any objections to this
report and recommendation. Failure to file the same within the
specified time waives the right to appeal this report and
recommendation. Henley Drilling Co. v. McGee, 36 F.3d 143, 15051 (1st Cir. 1994); United States v. Valencia-Copete, 792 F.2d 4 (1st
Cir. 1986).
In San Juan, Puerto Rico, this 26th day of February, 2015.
S/ SILVIA CARREÑO-COLL
UNITED STATES MAGISTRATE JUDGE