AES Puerto Rico, L.P. v. Trujillo-Panisse et al
Filing
144
OPINION AND ORDER. The Court GRANTS AES-PR's motion for judicial notice, (Docket No. 86), GRANTS IN PART and DENIES IN PART defendants' motion for judicial notice, (Docket No. 90), DENIES AES-PR's motion to strike, (Docket No. 111), a nd DENIES AES-PR's motion for partial summary judgment, (Docket No. 84). The Court GRANTS defendants' motion for summary judgment, (Docket No. 88), on all federal claims. Accordingly, plaintiff AES-PR's federal law claims are DISMISS ED WITH PREJUDICE and its Puerto Rico law claims are DISMISSED WITHOUT PREJUDICE. Judgment shall be entered according to this order and the Court's prior order at Docket No. 60. Signed by Judge Francisco A. Besosa on 07/27/2016. (brc)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF PUERTO RICO
AES PUERTO RICO, L.P.,
Plaintiff,
v.
MARCELO
al.,
Civil No. 14-1767 (FAB)
TRUJILLO-PANISSE,
et
Defendants.
OPINION AND ORDER
BESOSA, District Judge.
Two Puerto Rican municipalities, Humacao and Peñuelas, passed
ordinances restricting the use of ash derived from coal combustion
within their territorial borders.
AES Puerto Rico, L.P. (“AES-
PR”), a coal-fired power plant owner, filed suit against the
municipalities
to
challenge
the
legality
of
the
ordinances.
(Docket No. 1.)
Before the Court are AES-PR’s second motion for partial
summary judgment, (Docket No. 84), related statement of undisputed
facts, (Docket No. 85), and related motion for judicial notice,
(Docket No. 86).
Defendants, the municipalities and their mayors,
opposed plaintiff’s motion for partial summary judgment, (Docket
No. 107), and plaintiff replied, (Docket Nos. 115, 117).
Also before the Court are defendants’ motion for summary
judgment, (Docket No. 88), related statement of uncontested facts,
(Docket No. 89), and motion for judicial notice, (Docket No. 90).
Civil No. 14-1767 (FAB)
2
Plaintiff opposed defendants’ motion for summary judgment, (Docket
No. 108), responded to their request for judicial notice, (Docket
No. 110), and responded and moved to strike exhibits attached to
defendants’ statement of uncontested facts, (Docket Nos. 109, 111).
Defendants opposed plaintiff’s motion to strike. (Docket No. 118.)
The Court has already ruled on a partial motion for summary
judgment and judgment on the pleadings filed by AES-PR addressing
the federal and Commonwealth preemption claims.
I.
(Docket No. 60.)
REQUESTS FOR JUDICIAL NOTICE AND MOTION TO STRIKE EXHIBITS
Before reviewing the facts underlying the parties’ motions for
summary judgment, the Court first evaluates the admissibility of
the documents presenting those facts.
Thus, the Court reviews the
parties’ requests for judicial notice, (Docket Nos. 86, 90), and
plaintiff’s motion to strike, (Docket No. 111).
A.
Requests for Judicial Notice
Both parties request that the Court take judicial notice of
several documents. (Docket Nos. 86, 90). Federal Rule of Evidence
201(b) allows a court to take judicial notice of “a fact that is
not subject to reasonable dispute because it:
(1) is generally
known within the trial court’s territorial jurisdiction; or (2) can
be accurately and readily determined from sources whose accuracy
cannot reasonably be questioned.”
Fed. R. Evid. 201(b).
Thus, to
be reasonably indisputable in order to qualify for judicial notice,
a fact must meet at least one of those two prongs.
“[The] party
Civil No. 14-1767 (FAB)
3
requesting judicial notice bears the burden of persuading the trial
judge that the fact is a proper matter for judicial notice.”
In re
Tyrone F. Conner Corp., Inc., 140 B.R. 771, 781 (Bankr. E.D. Cal.
1992) (citing In re Blumer, 95 B.R. 143 (9th Cir. BAP 1988)).
1.
Plaintiff’s Request for Judicial Notice
AES-PR requests that the Court take judicial notice of
the following documents as exhibits to its motion for partial
summary judgment:
(1)
(2)
Municipality of Peñuelas Ordinance Number 13, Series
2012-2013 (the “Peñuelas Ordinance”) (Docket No. 86-2);
(3)
AES-PR Guayama facility’s Puerto Rico Environmental
Quality Board (“EQB”) Operating Permit (Docket No. 86-3);
(4)
El Coqui Landfill’s EQB Permit to Operate a Facility for
Final Disposal of Non-Hazardous Solid Waste (Docket
No. 86-4);
(5)
Peñuelas Valley Landfill’s EQB Permit to Operate a
Facility for Final Disposal of Non-Hazardous Solid Waste
(Docket No. 86-5);
(6)
the Environmental Protection Agency (“EPA”)’s August 14,
2014 letter to the EQB (Docket No. 86-6);
(7)
the EQB’s August 27, 2014, Resolution No. R-14-27-20
(Docket No. 86-7);
(8)
1
Municipality of Humacao Ordinance Number 21, Series
2013-2014 (the “Humacao Ordinance”) (Docket No. 86-1)1;
the EQB’s October 15, 2015, Resolution No. R-15-23-1
(Docket No. 86-8);
The Court uses the page and document numbers generated by the
electronic case filing system, not document references submitted by
the parties.
Civil No. 14-1767 (FAB)
(9)
4
Ecosystems Landfill’s EQB Permit to Operate a Facility
for Final Disposal of Non-Hazardous Solid Waste (Docket
No. 86-9); and
(10) the English translation of Puerto Rico Tourism Co. v.
Municipality of Vieques, 179 P.R. Dec. 578 (2010) (Docket
No. 86-10).
(Docket No. 86 at pp. 1-2.)
Defendants do not challenge AES-PR’s
requests for judicial notice.
Pursuant to Federal Rule of Evidence 201, the Court
already took notice of documents 1, 2, 3, 4, and 7 as authentic
public records.
(Docket No. 60 at pp. 9-11.)
Pursuant to the same
authority, the Court takes judicial notice of the existence of
documents 5, 6, 8, 9, and 10 as public records whose authenticity
is not disputed.
Document 6, the EPA letter, is “relevant not for
the truth of anything asserted in it but simply as a legally
significant event . . . .”
See Torrens v. Lockheed Martin Servs.
Grp., Inc., 396 F.3d 468, 473 (1st Cir. 2005).
Taking judicial
notice of the existence of document 10, the Puerto Rico Tourism Co.
order,2 not its content, does not elevate it from a source of
persuasive authority to one of binding authority.
See Peviani v.
Hostess Brands, Inc., 750 F. Supp. 2d 1111, 1117 (C.D. Cal. 2010).
Accordingly,
the
Court
appropriate for judicial notice.
finds
the
above
documents
AES-PR’s request for judicial
notice, (Docket No. 86), is GRANTED.
2
The Court considers all citations to P.R. Tourism Co. v. Mun. of
Vieques, 179 P.R. Dec. 578 (P.R. 2010) as referring to the English
translation submitted by plaintiff.
Civil No. 14-1767 (FAB)
2.
5
Defendants’ Request for Judicial Notice
Defendants request that the Court take notice of nineteen
documents,
(Docket No. 90), and plaintiff opposes this request on
numerous grounds, (Docket No. 110).
Defendants request that the
Court take judicial notice of the following documents:
(1)
the publication by Alan H. Lockwood and Lisa Evans titled
Ash in Lungs: How Breathing Coal Ash is Hazardous to
Your Health (Docket No. 90-1);
(2)
the EPA’s November 7, 2011, letter to the EQB (Docket
No. 90-2);
(3)
the publication by B. Gottlieb, et al., Coal Ash: The
Toxic Threat to Our Health and Environment (Sept.
2010) (Docket No. 90-3);
(4)
the EPA publication 600/R.-12/724 by A.C. Garrabrants, et
al., titled Leaching Behavior of “AGREMAX” Collected from
a Coal-Fired Power Plant in Puerto Rico (Dec. 2012)
(Docket No. 90-4);
(5)
the Puerto Rico Senate Report on Bill 340 (Oct. 2013)
(Docket No. 103-1);
(6)
the Test America, Inc. Analytical Report by S. Hoffman
titled Summary of Analysis of a Coal Ash Sample Taken in
Salinas, Puerto Rico (Sept. 28, 2010) (Docket No. 90-6);
(7)
the El Nuevo Día newspaper article by G. Cordero, titled
Bill for Regulation of Toxic Coal Ash (Sept. 11, 2013)
(Docket No. 103-2);3
(8)
the Peñuelas Ordinance (Docket No. 90-8);
(9)
the Humacao Environmental Quality and Natural Resources
Commission Report (Oct. 10, 2013) (Docket No. 90-9);
(10) the Humacao Ordinance (Docket No. 90-10);
3
Because page 2 of defendants’ document 7 is not part of the
newspaper article, the Court declines to consider it.
Civil No. 14-1767 (FAB)
6
(11) the Puerto Rico Senate Resolution 1158 (May 13, 2015)
(Docket No. 103-4);
(12) the Puerto Rico House of Representatives Tenth Partial
Joint Report on Resolution No. 305 (Feb. 13, 2007)
(Docket No. 103-10);
(13) the El Nuevo Día newspaper article by G. Alvarado-Leon
titled AES Coal Ash Toxic (Mar. 14, 2013) (Docket
No. 103-5);
(14) the El Nuevo Día newspaper article by G. Alvarado-Leon
titled AES Ashes in Arduous Debate (Docket No. 103-6);
(15) the El Nuevo Día newspaper article by R. Tellado-Domenech
titled House of Representatives Hones in Aim on AES
(July 12, 2015) (Docket No. 103-7);
(16) the El Nuevo Día newspaper article by C. Quiles titled
Firmly Against Coal Ash Disposal (Docket No. 103-8);
(17) the EPA’s July 16, 2012 letter to the EQB (Docket No. 9017);
(18) the EPA publication titled Soil Screen Guidance:
Sheet (July 1996) (Docket No. 90-18);
Fact
(19) the University of Puerto Rico Department of Chemistry
Resolution (May 13, 2015) (Docket No. 103-9).
(Docket No. 90 at pp. 2-4.)
Despite uncertainty regarding the
relevance of these documents,4 the Court will review defendants’
documents to determine their appropriateness for judicial notice.
4
The relevance of the documents that defendants seek to have
noticed is unclear because, apart from quoting the text of the
Ordinances, (Docket No. 88 at pp. 7-9), defendants have not cited
to these documents in either their motion for summary judgment,
(Docket No. 88), statement of uncontested facts, (Docket No. 89),
or response in opposition to plaintiff’s motion for partial summary
judgment, (Docket No. 107). See Walker v. Woodford, 454 F. Supp.
2d 1007, 1022-23 (S.D. Cal. 2006) (declining to judicially notice
documents whose relevance was indiscernible).
Civil No. 14-1767 (FAB)
a.
7
Undisputed Public Records
Pursuant to Federal Rule of Evidence 201, the Court
already took notice of documents 8 and 10 as authentic public
records.
See Docket No. 60 at pp. 9-11.
Pursuant to the same
authority, the Court takes judicial notice of the existence of
documents 2, 5, 11, 12, and 17 as public records whose authenticity
is not questioned.
As with the EPA letter noticed for plaintiff
above, defendants’ EPA letters, documents 2 and 17, are relevant
only as “legally significant event[s],” not for the truth of the
statements contained within them.
See Torrens, 396 F.3d at 473.
Defendants also request that the Court take judicial
notice of document 6, a report by a private company.
No. 90 at p. 3.)
The Court declines to do so.
(Docket
Document 6 is
produced by a private company, Test America, Inc., not by a
government
agency
or
office,
and
thus, does not
qualify
for
judicial notice as a public or government document.
b.
Newspaper Articles
Defendants’ documents 7, 13, 14, 15, and 16 are
newspaper
articles published
in
El
Nuevo
Dia, a
Puerto
Rico
newspaper. Newspaper articles, as inadmissible hearsay, are not
suitable for judicial notice to establish the truth of the matter
asserted, but may be noticed to show that an event was publicized.
See U.S. ex rel. Osheroff v. Humana Inc., 776 F.3d 805, 811 n.4
(11th Cir. 2015) (“[C]ourts may take judicial notice of documents
Civil No. 14-1767 (FAB)
8
such as the newspaper articles at issue here for the limited
purpose of determining which statements the documents contain (but
not for determining the truth of those statements).”); United
States v. Griffin, 525 F.2d 710, 711, (1st Cir. 1975) (taking
judicial notice of newspaper files to establish that an ongoing
event received substantial publicity); People v. McKinney, 670 N.W.
2d 254, 258 n.4 (Mich. Ct. App. 2003) (excluding newspaper articles
as
inadmissable
hearsay);
see
also
U.S.
ex
rel.
Hagerty
v.
Cyberonics, Inc., 95 F. Supp. 3d 240, 256 (D. Mass. 2015) (noticing
news articles in order to analyze whether facts had been publicly
disclosed prior to employee’s whistle-blowing).
But see Pearce v.
Faurecia Exhaust Sys., Inc., 529 F. App’x 454, 459 (6th Cir. 2013)
(noting that a newspaper may be an acceptable source to establish
that a fact is “common knowledge” appropriate for judicial review).
Therefore, the Court takes judicial notice of the fact that El
Nuevo Dia printed several articles regarding the use of coal ash by
AES-PR in Humacao and Peñuelas, but does not take judicial notice
of the contents of those articles.
c.
Scholarly Research Publications
Defendants’
documents
1,
3,
4,
18
and 195
are
scholarly research publications. The content of scholarly articles
may not be judicially noted because facts within scholarly articles
are prohibited legislative facts because they apply beyond the
5
The scholarly nature of document 19 is debatable.
Civil No. 14-1767 (FAB)
9
facts of a particular case.
Fed. R. Evid. 201 (noting that
“legislative facts” may not be noted judicially); Fed. R. Evid. 201
advisory committee’s note to Rule 201 (defining “adjudicative
facts”
as
“simply
“legislative
facts”
the
as
facts
facts
of
the
“that
particular
have
case”
relevance
to
and
legal
reasoning and the lawmaking process”).
Due to the structure of academia, facts in scholarly
articles are often developing concepts that are vigorously debated
and thus are “hardly sources ‘whose accuracy cannot reasonably be
questioned.’”
United States v. Simon, 842 F.2d 552, 555 (1st Cir.
1988); see Ctr. for Biological Diversity v. Morgenweck, 351 F.
Supp. 2d 1137, 1144 (D. Colo. 2004) (admitting scholarly articles
to show defect in rule-making procedure, but not as proof of the
truth
of
the
“universally
201(b)(2)).
matters
known”
asserted
pursuant
because
to
their
Federal
facts
Rule
were
of
not
Evidence
Accordingly, the Court does not take judicial notice
of defendants’ documents 1, 3, 4, 18, and 19.
d.
Municipal Reports
Defendants’
document
9
is
a
municipal
report.
Although there is a trend away from the old rule of excluding
municipal ordinances due to an increase in the ability to obtain
and authenticate copies of these ordinances, Getty Petroleum Mktg.,
Inc. v. Capital Terminal Co., 391 F.3d 312, 322-24 (1st Cir. 2004)
(Lipez, J. concurring), this trend has not extended to allow for
Civil No. 14-1767 (FAB)
10
inclusion of municipal reports through the mechanism of judicial
notice. Accordingly, the Court declines to take judicial notice of
document 9.
In summary, the Court GRANTS IN PART and DENIES IN
PART defendants’ request for judicial notice, (Docket No. 90). The
Court takes judicial notice of one fact, that El Nuevo Dia printed
several articles regarding the use of coal ash by AES-PR in Humacao
and Peñuelas, and of the following documents:
(2)
the EPA’s November 7, 2011, letter to the EQB (Docket
No. 90-2);
(5)
the Puerto Rico Senate Report on Bill 340 (October 2013)
(Docket No. 103-1);
(8)
the Peñuelas Ordinance (Docket No. 90-8);
(10) the Humacao Ordinance (Docket No. 90-10);
(11) the Puerto Rico Senate Resolution 1158 (May 13, 2015)
(Docket No. 103-4);
(12) the Puerto Rico House of Representatives Tenth Partial
Report on Resolution No. 305 (February 13, 2017) (Docket
No. 103-10);
(17) the EPA’s July 16, 2012 letter to the EQB (Docket No. 9017);
The
Court
declines
to
take
judicial
notice
of
documents 1, 3, 4, 6, 7, 9, 13, 14, 15, 16, 18, and 19, because
they
do
not
“fall
into
the
limited
category
of
appropriate for judicial notice pursuant to Rule 201.
F. Supp. 2d at 1024.
documents”
Walker, 454
Civil No. 14-1767 (FAB)
B.
11
Motion to Strike Exhibits
Plaintiff
defendants’
seeks
to
statement
of
strike
all
uncontested
exhibits
facts,
that
(Docket
support
No.
89),
challenging the admissibility of defendants’ use of their own
30(b)(6) witnesses testimony, the statements within the “whereas
clauses” of the municipal Ordinances, defendants’ lay witness
testimony,
No. 111.)
and
defendants’
interrogatory
responses.
(Docket
District courts do “not, however, have the authority to
strike information from a party’s memorandum of law [or attached
exhibits].” McGrath v. Town of Sandwich, No. 13-12381-NMG, 2015 WL
5722728, at *7 (D. Mass. Sept. 29, 2015); see also Judson v.
Midland Credit Mgmt., Inc., No. 13-11435-TSH, 2014 WL 4965944, at
*3 (D. Mass. Oct. 1, 2014).
Federal Rule of Civil Procedure 12(f) authorizes a court to
“strike from a pleading an insufficient defense or any redundant,
immaterial, impertinent, or scandalous matter.”
12(f).
7(a),
Fed. R. Civ. P.
“Pleading,” as defined in Federal Rule of Civil Procedure
“does
memoranda.”
not
encompass
motions,
memoranda
or
exhibits
to
McGrath, 2015 WL 5722728, at *7; see also Marcello v.
Maine, 489 F. Supp. 2d 82, 85–86 (D. Me. 2007).
Accordingly, the
First Circuit Court of Appeals has refused to strike motions and
supporting exhibits pursuant to Rule 12(f).
See, e.g., Pilgrim v.
Trs. of Tufts Coll., 118 F.3d 864, 868 (1st Cir. 1997), abrogated
on other grounds, 303 F.3d 387 (1st Cir. 2002) (stating that a
Civil No. 14-1767 (FAB)
12
motion to strike “has no applicability to motions made in pursuit
of or in opposition to summary judgment”).
The Court, therefore,
DENIES plaintiff AES-PR’s motion to strike, (Docket No. 111.)
II.
A.
MOTIONS FOR SUMMARY JUDGMENT
Background6
1.
AES
AES-PR owns and operates a coal-fired power plant in
Guayama, Puerto Rico, supplied by coal imported from Colombia.
(Docket No. 85 at pp. 1-2.)
Pursuant to a twenty-five year Power
Purchase and Operating Agreement (“PPA”) with the Puerto Rico
Electric Power Authority (“PREPA”), AES-PR burns coal at the
Guayama plant to create electricity, supplying 15% of Puerto Rico’s
daily electricity consumption and creating 200,000-250,000 tons of
ash each year.
Id.; Docket No. 109 at p. 32.
The by-product of
burning the coal is ash called coal combustion residuals (“CCRs”),
which come in two forms – fly ash and bottom ash – and when mixed
with water, solidify into rock ash.
(Docket No. 85 at p. 2.)
According to the federal EPA and the Puerto Rico EQB, CCRs are not
hazardous waste, a fact confirmed through monthly monitoring tests
performed by an independent laboratory on behalf of AES-PR. Id. at
pp. 3-4.
AES-PR markets its rock ash under the name AGREMAX
(“Agremax”) and sells it to landfills for use in solidifying liquid
6
For additional background information, see Docket 60 at pp. 2-9.
Civil No. 14-1767 (FAB)
13
waste before the liquid waste is deposited into the landfill.
(Docket No.
85
at
pp. 2-3.)
AES-PR
also sells
alternative daily cover7 for solid waste.
Id.
CCRs
as
an
Disposal of CCRs
not used for these purposes also occurs in sanitary landfills. Id.
at p. 3.
An amendment to the PPA approves use or disposal of CCRs
if that action is authorized by the Commonwealth. (Docket Nos. 109
at p. 32; 109-5 at pp. 171-172.)
AES-PR
currently
has
contracts
to
dispose
of
CCRs,
including Agremax, at El Coqui Landfill in Humacao, Puerto Rico
(“El Coqui Landfill”), Ecosystems Peñuelas Landfill in Peñuelas,
Puerto Rico (“Ecosystems Landfill”), and Peñuelas Valley Landfill,
LLC (“Peñuelas Valley Landfill”). (Docket No. 85 at pp. 4-5.) AESPR also has contracts for use of CCRs as daily cover at Peñuelas
Valley and Ecosystems Landfills.
Id.
Additionally, CCRs are used
as liquid waste solidification at Peñuelas Valley Landfill.
Id.
El Coqui Landfill and Ecosystems Landfill are lined, sanitary
landfills in compliance with the federal Resource Conservation and
Recovery Act (“RCRA”) subtitle D, which regulates non-hazardous
waste.
Id.
Both landfills have “an engineered liner system with
an impermeable synthetic liner . . . and other measures to protect
the environment, such as a storm-water management system to control
7
Daily cover at a landfill, typically comprised of uncultivated
soil, “helps control disease, prevent fires, minimize odors,
prevent blowing litter, and reduce scavenging.” (Docket No. 85 at
p. 3.) Native, or undisturbed, soil is often used as daily cover.
Id.
Civil No. 14-1767 (FAB)
14
run-off and sprinklers and water trucks to prevent the spread of
dust.” Id. If prohibited from acting pursuant to these contracts,
AES-PR
would
incur
significant
costs
in
securing
alternative
outlets for disposal and use of the ash created at its power
generating facility.
2.
(Docket No. 85 at p. 21.)
The Puerto Rico EQB and Federal EPA
The
EPA,
the
agency
responsible
for
monitoring
and
regulating solid waste throughout the United States, RCRA, 42
U.S.C. § 6912(a)(1), notes that it is possible to use or dispose of
CCRs in a RCRA Subtitle D-compliant sanitary landfill “in a manner
that does not present a health risk to the public.”8
No. 85 at p. 12.)
(Docket
The EPA does not believe that a total ban of CCR
disposal in Puerto Rico is necessary.
Id. at p. 7; see also Docket
86-6 at p. 2.
The EQB was created by the Puerto Rico Legislative
Assembly with various powers and duties, including “adopt[ing],
promulgat[ing], amend[ing] and repeal[ing] rules and regulations
for solid waste disposal and establish[ing] the sites and methods
to
dispose
of
such
§ 8002c(b)(4)(A).
necessary
and
solid
waste.”
P.R.
Law
Ann.
tit.
12
The EQB is also tasked with “discharg[ing]
reasonable
functions
as
to
the
planning
and
development of the public policy concerning the problems posed by
8
AES’s expert, Dr. Brent Finley, agrees that “using or disposing
of Agremax in a lined, sanitary landfill does not present a risk to
public health.” (Docket No. 109 at p. 6.)
Civil No. 14-1767 (FAB)
15
solid waste in Puerto Rico,”
“[c]onducting
research,
id. § 8002c(b)(1)(J), which includes
studies,
inspections,
and
analyses
to
verify compliance with [the EQB Act] and the regulations approved
thereunder by the Governing Board of the Environmental Quality
Board,” id. § 8002c(a)(4).
agency
responsible
for
Accordingly, the EQB is the expert
conducting
environment
regulating landfill operations in Puerto Rico.
p.6.)
studies
and
(Docket No. 85 at
Municipalities lack resources and expertise to do this
testing and monitoring at the municipal level.
(Docket No. 85 at
pp. 6-7.)
The EPQ agrees with the EPA that it is possible to use or
dispose of CCRs in a way that is not hazardous to human health as
long as CCRs are used or disposed of in sanitary landfills that
comply with RCRA Subtitle D.
EQB Resolution R-14-27-20).)
(Docket No. 85 at pp. 7-8 (quoting
The EQB has issued resolutions
regarding the steps necessary to obtain authorization to use CCRs
in subtitle-D compliant sanitary landfills.
See, e.g., Docket
Civil No. 14-1767 (FAB)
16
Nos. 86-7 (R-14-27-20); 86-8 (R-15-23-1).9
Currently, the EQB has
approved disposal of CCRs and rock ash (Agremax) at Ecosystems
Landfill, a subtitle D-compliant landfill.10
See Docket No. 86-9.
The EQB has also authorized the use of CCRs to solidify liquid
waste at Peñuelas Valley Landfill.
3.
(Docket No. 85 at p. 5.)
The Municipal Ordinances
Two municipalities in Puerto Rico, Humacao and Peñuelas,
enacted Ordinances restricting the use of coal ash within their
territorial borders.
Both Ordinances reference AES as a producer
9
R-15-23-1, when read in conjunction with R-14-27-20, details the
processes for obtaining EQB approval for disposal of CCRs and for
use of CCRs and rock ash (Agremax) as alternative daily cover. See
Docket Nos. 86-7, 86-8. According to R-14-27-20, to dispose of
CCRs and rock ash or to use CCRs and rock ash as alternative daily
cover, the subtitle D-compliant sanitary landfill must obtain an
amended EQB operating permit that includes CCRs in the landfill’s
list of non-hazardous solid waste. (Docket No. 86-7 at pp. 14-15.)
According to R-15-23-1, a subtitle D-compliant sanitary landfill
that seeks to use CCRs or rock ash as alternative daily cover must
also obtain a waiver from the EQB in addition to amending its
operating permit. (Docket No. 86-8 at pp. 4-6.)
10
EQB Resolution R-15-23-1 authorizes the amendment of Peñuelas
Valley and El Coqui Landfills’ operating permits to include CCRs
and rock ash in the list of non-hazardous solid waste that may be
disposed of in those landfills. (Docket No. 86-8 at p. 8.) In
January 2016, the EQB approved an amended operating permit for
Ecosystems Landfill, which includes “coal combustion residues
[CCRs]; fly, light or top ash and bed, heavy or bottom ash; [and]
mixed coal combustion residues (dry ash and rock ash)” in the list
of non-hazardous solid waste authorized for disposal in that
landfill. (Docket No. 86-9 at p. 3.) The Court has received no
evidence that the EQB has approved an amended operating permit for
the Peñuelas Valley and El Coqui Landfills.
Additionally, no
waiver has been submitted to the EQB to request use of CCRs or rock
ash (Agremax) as alternative daily cover.
(Docket No. 86-6 at
pp. 6.)
Civil No. 14-1767 (FAB)
17
of coal ash in Puerto Rico and Agremax as an AES-PR product.
(Docket Nos. 86-1 at pp. 8-9; 86-2 at pp. 6, 8.)
On April 10, 2013, the Municipality of Peñuelas adopted
the Peñuelas Ordinance, which provides:
The use of ashes coming from the burning of coal, in
energy generating plants, as landfill material and its
depositing on lands within the territorial limits of the
Municipality of Peñuelas is forbidden.
(Docket No. 86-2 at pp. 8, 10.)
On February 10, 2014, the Municipality of Humacao adopted
the Humacao Ordinance, which provides:
Any kind of use of the ash derived from coal combustion
in electric power generating plants or any other
industrial or commercial activity as filler material,
whether to level the terrain, for landfills, or in any
other kind of filler, is hereby prohibited within the
territorial limits of the Autonomous Municipality of
Humacao.
(Docket No. 86-1 at pp. 9-10.) The Humacao and Peñuelas Ordinances
prohibit
depositing
CCRs
municipalities’ limits.
pp. 1-2.)11
11
in
the
ground
anywhere
within
the
(Docket Nos. 85 at pp. 14, 17; 89 at
Thus, these Ordinances prohibit the beneficial use of
Despite AES-PR’s argument, (Docket No. 111 at p. 2), Federal Rule
of Civil Procedure 32 does not preclude defendants from using their
own Rule 30(b)(6) witnesses’ testimony to support their motion for
summary judgment. See Re-Ace, Inc. v. Wheeled Coach Indus., Inc.,
364 F. Supp. 2d 163, 164 (D.P.R. 2005) (Gelpi, J.) (considering
deposition testimony of plaintiff-company’s own chief executive
officer on a motion for summary judgment) (citing Cadle Co. v.
Hayes, 116 F.3d 957, 961 n.5 (1st Cir. 1997)); Plumley v. S.
Container, Inc., No. 00-140-P-C, 2001 WL 1188469, at *2, 4-5 (D.
Me. Oct. 9, 2001) (considering deposition testimony of defendant’s
own plant manager in support of its motion for summary judgment.)
Civil No. 14-1767 (FAB)
18
CCRs, disposal of CCRs, and use of CCRs as daily cover to the
extent that those activities involve depositing CCRs in the ground
within the municipal limits.
(Docket Nos. 85 at p. 14; 89 at pp.
1-2.) Additionally, the Peñuelas Ordinance prohibits the use of
CCRs to solidify liquid waste if doing so involves putting CCRs on
the ground within the municipal limits.
89 at p. 1.)
(Docket Nos. 85 at p. 18;
The Ordinances do not prohibit all uses of CCRs, only
those that involve depositing CCRs on the ground.
(Docket No. 89
at pp. 2-3.)
The purpose of these Ordinances is to protect the wellbeing of the people and environment of Humacao and Peñuelas.
(Docket No. 89 at pp. 1-3.)
municipality
conducted
In passing these Ordinances, neither
studies
or
gathered
data
to
determine
whether depositing CCRs in sanitary landfills poses a risk to
public health, (Docket No. 85 at pp. 15, 19), but instead relied on
studies conducted by others, including a 2012 Vanderbilt University
Report, (Docket No. 90-4), a 2012 Puerto Rico Senate Report, an EPA
study, a case in the Dominican Republic, and a 2010 study conducted
in Parque Gabriela Development in Salinas, Puerto Rico.
(Docket
No. 89 at pp. 3-4.)
Humacao does not want [CCRs] anywhere within
[its]
area
geographical
and
Peñuelas
wants
CCRs
deposited
[a]nywhere else in Puerto Rico or outside of Puerto Rico.
No. 85 at pp. 16, 20.)
(Docket
Civil No. 14-1767 (FAB)
19
It is defendant municipalities’ position that when rock
ash is transported or dumped on the ground, dust is created which
spreads to surrounding areas in the air, and in the water through
run-off.
(Docket No. 89 at p. 5.)
As a result, residents breathe
the ash dust and consume it in drinking water.
Id.
AES-PR sprays
Agremax with water prior to transporting it and transports coal ash
in “totally enclosed tanker[s].”
(Docket No. 109 at pp. 33-34.)
Pursuant to the Humacao Ordinance, the Municipality of
Humacao fined El Coqui Landfill for accepting Agremex.
No. 109 at p. 35.)
(Docket
Humacao has also threatened to terminate its
municipal waste contracts with El Coqui Landfill if it continues to
receive Agremax.
Id.
Pursuant to the Peñuelas Ordinance, the
Municipality of Peñuelas has physically blocked the entrance to
Peñuelas Valley Landfill to prevent AES-PR from delivering CCRs to
the landfill.
4.
Donato-Ramos and the Cloud
In
observed,
Humacao.
Id.
June
2015,
while driving,
Zugeily
a
dense
(Docket No. 89 at p. 4.)
the cloud with her cellular phone.
Donato-Ramos
(“Donato-Ramos”)
cloud near the
landfill
in
She took photos and video of
Id. at pp. 4-5.
In her sworn
statement, Donato-Ramos states that the cloud was composed of ash
coming from the landfill.
Id. at p. 4.
The sworn statements of
AES-PR’s lay and expert witnesses refute that the cloud was made of
ash and that visibility was possible at the time Donato-Ramos took
Civil No. 14-1767 (FAB)
the pictures.
20
(Docket No. 109 at p. 28.) Additionally, no Agremax
was delivered to El Coqui Landfill in June, but other earthmoving
work and odor control operations occurred.
(Docket No. 109 at
pp. 36-37.)
B.
Summary Judgment Standard
Viewing the facts in the light most favorable to the nonmoving
party, “[t]he court shall grant summary judgment if the movant
shows that there is no genuine dispute as to any material fact and
the movant is entitled to judgment as a matter of law.”
Fed. R.
Civ. P. 56; Friends of Merrymeeting Bay v. Hydro Kennebec, LLC, 759
F.3d 30, 33-34 (1st Cir. 2014).
The role of summary judgment is to
“pierce the boilerplate of the pleadings and assay the parties’
proof in order to determine whether trial is actually required.”
Tobin v. Fed. Express Corp., 775 F.3d 448, 450 (1st Cir. 2014)
(quoting Wynne v. Tufts Univ. Sch. of Med., 976 F.2d 791, 794 (1st
Cir. 1992)).
particular
“When the nonmovant bears the burden of proof on a
issue,
she
can
thwart
summary
judgment
only
by
identifying competent evidence in the record sufficient to create
a jury question.” Id. at 450-51. The Court disregards unsupported
and conclusory allegations.
McGrath, 757 F.3d 20, 25 (1st Cir.
2014).
“Cross-motions for summary judgment do not alter the summary
judgment standard, but instead simply require [the court] to
determine whether either of the parties deserves judgment as a
Civil No. 14-1767 (FAB)
21
matter of law on the facts that are not disputed.”
Wells Real
Estate Inv. Trust II, Inc. v. Chardon/Hato Rey P’ship, S.E., 615
F.3d 45, 51 (1st Cir. 2010) (internal quotation marks omitted).
For cross-motions for summary judgment that are filed within a few
days of each other, courts “should consider the two motions at the
same time, applying the same standards to each motion.”
Id. at 51
(quoting P.R. Am. Ins. Co. v. Rivera–Vázquez, 603 F.3d 125, 133
(1st Cir. 2010) (noting that the requirement to decide each motion
separately does not require that “each motion must be considered in
a vacuum.”))
C.
Preemption
Plaintiff and defendants both move for summary judgment on the
issue of preemption.
Plaintiff argues that the Court’s previous
decision on the issue of preemption, (Docket No. 60), is no longer
correct because subsequent EQB actions have created a direct
conflict between Commonwealth and municipal law.
at p. 1; 84-1 at pp. 6-7; 108 at pp. 21-22.)
(Docket Nos. 84
Specifically,
plaintiff highlights the EQB action of “issu[ing] resolution [R-1523-1] on October 15, 2015[, which] authorizes the use and disposal
of AES-PR’s CCRs, including Agremax, at El Coquí Landfill in
Humacao and Peñuelas Valley Landfill in Peñuelas.” (Docket No. 841 at pp. 6-7.) Defendants rebut plaintiff’s argument claiming that
the Court’s previous decision should stand and requesting that the
Civil No. 14-1767 (FAB)
22
Court dismiss plaintiff’s Supremacy Clause claim.
(Docket Nos. 88
at pp. 13-14; 107 at pp. 12-14.)12
Plaintiff does not allege any changes in federal law that
would affect the Court’s previous federal preemption analysis.
Because EQB resolutions pertain to the intersection of state and
local governance, the issuance of an EQB resolution has no effect
on the Court’s federal preemption analysis.
See Docket 60 at
pp. 21-39. Accordingly, the Court AFFIRMS its previous decision to
DENY
plaintiff
summary
judgment
and
to
dismiss
the
federal
preemption claim because the municipal Ordinances do not frustrate
the purpose of the RCRA, 42 U.S.C. §§ 6901 et seq.
Id. at 39.
Also, because the language of the municipal Ordinances has not
changed since the Court’s prior decision, the Court AFFIRMS its
view that the municipal Ordinances are not complete bans on the
beneficial use of CCRs.
Id. at 36-39.
Building off of the Court’s previous analysis, see Docket
No. 60 at pp. 40-44, the Court considers the impact of the EQB’s
October 2015 resolution on plaintiff’s Puerto Rico law preemption
12
Additionally, defendants argue that the Court’s prior decision
on the issue of federal preemption, see Docket No. 60, should stand
because the “law of the case” doctrine applies because plaintiff
has not challenged the Court’s prior decision on appeal. (Docket
No. 107 at pp. 13-14.) The “law of the case” doctrine does not
apply because an interlocutory decision denying a motion for
summary judgment remains open to trial court reconsideration. See
Bethlehem Steel Exp. Corp. v Redondo Constr. Corp., 140 F. 3d 319,
321 (1st Cir. 1998) (“[D]enial of summary judgment motions do not
constitute the law of the case.”); Perez-Ruiz v. Cresop-Guillen, 25
F. 3d 40, 42 (1st Cir. 1994).
Civil No. 14-1767 (FAB)
claim.
23
Pursuant to Puerto Rico’s Autonomous Municipalities Act
(“AMA”), P.R. Laws Ann. tit. 21 §§ 4001 et seq., each municipality
has the power to “[e]xercise its legislative and executive powers
in any matter of a municipal nature, which will bring about the
welfare of the community and its economic, social[,] and cultural
development [and] in the protection of the health and safety of the
people . . . .”
P.R. Laws Ann. tit. 21 § 4051(o).
Specifically,
the AMA “vest[s municipalities] with the powers that are necessary
and convenient to . . . [e]stablish solid waste collection services
and programs and public sanitation programs in general, and adopt
the standards and measures that are necessary for [the improvement]
and adequate control and disposal of waste.”
P.R. Laws Ann.
tit. 21 § 4054 (last alteration in original); see also id. § 4055.
Neither party disputes that the structure of the Puerto Rico waste
management system involves both state and municipal regulation in
the area of non-hazardous solid waste.
The municipalities’ power, however, is not unlimited but is
instead “subordinate[] to the Constitution of the Commonwealth of
Puerto Rico and to its laws.”
Id. § 4003; see also id. § 4055
(declaring that municipal regulation of solid waste collection
management must be “in harmony with the environmental public policy
of the Commonwealth of Puerto Rico”); Plaza Carolina Mall, L.P. v.
Mun. of Barceloneta, 91 F. Supp. 3d 267, 288-90 (D.P.R. 2015)
(Gelpi, J.) (finding that three municipal ordinances supporting a
Civil No. 14-1767 (FAB)
24
municipal contract were invalid because they conflicted with the
Commonwealth’s law governing the expenditure of tax revenue).
Because
“municipalities
possess
no
inherent
powers”
but
only
exercise those powers “derived” from the state, “‘every municipal
ordinance must be in harmony with [state] government law, which
prevails in conflicting situations.’” Liberty Cablevision of P.R.,
Inc. v. Mun. of Caguas, 417 F.3d 216, 221-22 (1st Cir. 2005)
(quoting Lopez v. Mun. de San Juan, 21 P.R. Offic. Trans. 71, 84
(P.R. 1988)); see also Velez v. Mun. de Toa Baja, 9 P.R. Offic.
Trans. 486, 492 (1980) (“[I]n no circumstances can a municipality
prohibit what the Legislature expressly authorizes, or authorize
what the Legislature prohibits; but, following the line of conduct
marked out by the Legislature, it may forbid . . . the commission
of
acts
of
the
Legislature.”).
same
character
as
those
prohibited
by
the
“[E]ven in matters of a municipal nature, the
Municipal Assembly has no authority to intervene when the [Puerto
Rico] Legislative Assembly has preempted that particular field.”
Liberty Cablevision, 417 F.3d at 222 (quoting Lopez, 21 P.R. Offic.
Trans. at 84) (finding that municipal law creating access fees was
preempted when the Puerto Rico Legislative Assembly created the
Telecommunication Regulatory Board of Puerto Rico as its sole
franchising, and franchise-fee creating, authority); see also Mun.
of Caguas v. Telecomms. Regulatory Bd. of P.R., No. 08-2048(SEC),
2010 WL 1328974, at *4 (D.P.R. 2010) (Casellas, J.) (“Therefore, if
Civil No. 14-1767 (FAB)
25
the Commonwealth has set up a state-wide structure regulated by the
Board, the individual municipalities are bound by its decisions.”).
A
municipal
ordinance
that
regulates
in
the
same
area
as
a
Commonwealth law, however, will not be preempted “unless it is
impossible to harmonize it with the [Commonwealth] law.” Lopez, 21
P.R. Offic. Trans. at 72.
The Puerto Rico Supreme Court determines whether a municipal
ordinance is “in harmony” with Commonwealth law on a case-by-case
basis, P.R. Tourism Co., 179 P.R. Dec. at 585, and considers:
First, where the state law expressly provides that the
state’s authority to regulate in a specified area of the
law is to be exclusive, there is no doubt that municipal
regulation is preempted. [Citations omitted.]
Second, preemption of a field of regulation may be
implied upon an examination of legislative history.
[Citations omitted.]
Third, the pervasiveness of the state regulatory scheme
may support a finding of preemption.
[Citations
omitted.]
While the pervasiveness of the state
regulatory scheme is not generally sufficient by itself
to infer preemption, it is a factor which should be
considered as evidence of preemption.
Fourth, the nature of the regulated subject matter may
demand exclusive state regulation to achieve the
uniformity necessary to serve the state’s purpose or
interest.
Lopez, 21 P.R. Offic. Trans. at 84 (quoting People v. Llewellyn,
527 N.W. 2d 902, 905 (Mich. 1977); Velez, 9 P.R. Offic. Trans. at
492-93.
The Puerto Rico Supreme Court also considers if the state
and municipal tax are activated by the same activity. P.R. Tourism
Co., 179 P.R. Dec. at 591-92 (finding that the municipal law was
Civil No. 14-1767 (FAB)
26
“contrary to” Puerto Rico Law 272 because both were activated by
the event of a guest occupying a hotel room).
Applying these factors, the Puerto Rico Supreme Court and this
district court have found preemption of municipal ordinances by
laws passed by the Puerto Rico Legislative Assembly.
See, e.g.,
Plaza Carolina, 91 F. Supp. 3d at 290 (invalidating as preempted
three municipal ordinances that violated the Puerto Rico Internal
Revenue Code); Lopez, 21 P.R. Offic. Trans. at 87-89 (holding that
Puerto Rico Law 8 partially preempted a municipal ordinance); P.R.
Tourism Co., 179 P.R. Dec. at 585 (finding a tax pursuant to
municipal law was preempted by a Commonwealth law taxing the same
action); see also Velez 9 P.R. Offic. Trans. at 492-97 (utilizing
the four factors to compare Commonwealth law and municipal law, but
finding the municipal law was not preempted).
The Puerto Rico
Supreme Court has not, however, resolved whether resolutions of
executive agencies carry the same power to preempt as laws passed
by the Puerto Rico Legislative Assembly.13 Pursuant to federal law,
the preemptive power of agency actions depends on a myriad of
13
In Lopez v. Mun. of San Juan, the Puerto Rico Supreme Court noted
actions by a Commonwealth planning board that supported the
Commonwealth’s preemption of the field of preserving Puerto Rico’s
historic zones, but did not address whether the board’s actions
alone would have been sufficient to preempt the municipal
ordinance. 21 P.R. Offic. Trans. 71, 85-86 (P.R. 1988) (discussing
in dicta the legal structure that was replaced by Law 8).
Civil No. 14-1767 (FAB)
27
factors and is a developing area of jurisprudence.14
The Puerto
Rico Uniform Administrative Procedures Act is similar to the
federal Administrative Procedures Act and therefore raises similar
issues regarding the preemptive effect of agency actions.
Compare
P.R. Laws Ann. tit. 3 §§ 2101 et seq. (governing Puerto Rico agency
procedures including formal rulemaking and adjudication), with
Administrative
(establishing
Procedures
procedures
Act,
for
5
U.S.C.
federal
administrative adjudicative procedures).
§§
formal
501
et
rulemaking
seq.
and
See also Judith Berkan,
La Nueva Ley de Procedimiento Administrativo Uniforme de Puerto
Rico:
Una Comparación con Administrative Procedure Act 106-07
(1989) (comparing these laws).
Here, AES-PR argues that a Puerto Rico agency resolution, EQB
resolution
14
R-15-23-1,
and
an
amended
operating
permit
for
Federal statutes and federal agency action promulgated through
formal note-and-comment rulemaking have preemptive effect over
state law. Wyeth v. Levine, 555 U.S. 555, 576 (2009) (“Th[e United
States Supreme] Court has recognized that an agency regulation with
the
force
of
law
can
pre-empt
conflicting
state
requirements.”).
Less formal agency actions, such as agency
letters and policy statements, however, may not meet the criteria
to be considered federal law for the purpose of preempting state
laws. Holk v. Snapple Beverage Corp., 575 F.3d 329, 342 (3rd Cir.
2009) (finding an agency policy statement and letter did not have
the power to preempt state law); see also Barnhart v. Walton, 535
U.S. 212, 221-22 (2002) (listing factors for courts to consider in
determining the force of law of an agency action); United States v.
Mead Corp., 533 U.S. 218, 234 (2001) (considering deference due to
agency’s tax classification); Skidmore v. Swift & Co., 323 U.S.
134, 140 (1944) (agency’s interpretation of term did not amount to
law); Perez-Olivo v. Chavez, 394 F.3d 45, 52 n.6 (1st Cir.
2005)(considering deference due to agency program statement).
Civil No. 14-1767 (FAB)
28
Ecosystems Landfill preempt the municipal Ordinances.
No. 84-1 at pp. 6-7.)
Commonwealth
agency,
(Docket
If these EQB documents, promulgated by a
carry
the
full
force
of
law,
then
the
municipal Ordinances would likely be preempted to the extent that
they conflict.
The Court, however, finds that the issue of
determining the preemptive power of a Puerto Rico agency resolution
has not been resolved by the Puerto Rico Supreme Court.
District courts may certify a question of state law to the
state’s supreme court when the state issue is determinative and
there is no controlling precedent from the state court on the
issue.
Easthampton Sav. Bank v. Springfield, 736 F.3d 46, 50-51,
53 (1st Cir. 2013) (certifying a question of state law when the
state supreme court had not yet interpreted its provisions because
balancing the laws competing policy interests was a job best suited
for the state government).
Alternatively, “[t]he district courts may decline to exercise
supplemental jurisdiction over a claim . . . if[] the claim raises
a novel or complex issue of State law.” 28 U.S.C. § 1367(c)(1); see
also
Carver v. Nassau Cty. Interim Fin. Auth., 730 F.3d 150, 154-
55 (2nd Cir. 2013) (declining to exercise supplemental jurisdiction
when there exists “an unresolved
issue of state law – the
interpretation of a poorly drawn statute”); Rodriguez v. Doral
Mortg. Corp., 57 F.3d 1168, 1177 (1st Cir. 1995) (“Another factor
to be weighed is the clarity of the law that governs a pendent
Civil No. 14-1767 (FAB)
29
claim, for a federal court may be wise to forgo the exercise of
supplemental jurisdiction when the state law that undergirds the
nonfederal claim is of dubious scope and application.”); Castellano
v. Bd. of Tr. of Police Officers’ Variable Supplements Fund, 937
F.2d
752,
758-59
(2nd
Cir.
1991)
(declining
to
exercise
supplemental jurisdiction over state constitutional law claims
challenging pension fund statute because “[i]t would be . . .
imprudent for us to determine a state constitutional claim of first
impression.”).
state law
.
“Where a decision is to be made on the basis of
. .
the
Supreme Court
has
long
shown
a strong
preference that the controlling interpretation of the relevant
[law] be given by state, rather than federal, courts.”
Allstate
Ins. Co. v. Serio, 261 F.3d 143, 150 (2d Cir. 2001).
Here, plaintiff’s preemption claim based on the Supremacy
Clause of the Commonwealth Constitution is an unresolved state
constitutional claim.
action
has
wide
Deciding the preemptive power of an agency
implications
on
the
Commonwealth
government.
Deciding whether a certain agency action has preemptive power
affects the extent to which the agency functions through formal
rulemaking or through informal methods and affects the division of
power between the Commonwealth and its autonomous municipalities.
Because the Puerto Rico Supreme Court has given little attention to
the constitutional issue of the preemptive power of Commonwealth
agency actions, and because this issue impacts the actions of
Civil No. 14-1767 (FAB)
30
Puerto Rico agencies and municipalities, the Court finds that this
is an issue best resolved by the Puerto Rico Supreme Court.
Accordingly, the Court declines to exercise jurisdiction over
plaintiff’s Puerto Rico preemption claim because it contains a
novel and complex issue of state law.
Additionally, as stated
above, the Court AFFIRMS its previous decision to DENY plaintiff
summary judgment and to dismiss the federal preemption claim
because the municipal Ordinances do not frustrate the purpose of
the RCRA, 42 U.S.C. §§ 6901 et seq.
D.
Id. at 39.
Dormant Commerce Clause
Both parties also move for summary judgment on plaintiff’s
dormant Commerce Clause claim.
Article I, section 8 of the United States Constitution gives
Congress the power to regulate interstate commerce, see U.S. Const.
art. I, § 8, cl. 3, and has been interpreted as also containing a
negative component called the dormant Commerce Clause.
Walgreen
Co. v. Rullan, 405 F.3d 50, 55 (1st Cir. 2005) (citing Laurence H.
Tribe, 1 American Constitutional Law 1030 (3d ed. 2000)).
The
justification for the dormant Commerce Clause is “that this Nation
is a common market in which state lines cannot be made barriers to
the free flow of both raw materials and finished goods in response
to the economic laws of supply and demand,” Hughes v. Alexandria
Scrap Corp., 426 U.S. 794, 803 (1976), and its core purpose is “to
prevent states and their political subdivisions from promulgating
Civil No. 14-1767 (FAB)
31
[economic] protectionist policies.”
Houlton Citizens’ Coal. v.
Town of Houlton, 175 F.3d 178, 188 (1st Cir. 1999).
The dormant Commerce Clause doctrine applies equally to Puerto
Rico as it does to the states.
Walgreen, 405 F. 3d at 55 (citing
United Egg Producers v. Dep’t of Agric. of P.R., 77 F.3d 567, 569
(1st Cir. 1996)).
Additionally, solid waste is an “article of
commerce” protected by the dormant Commerce Clause.
Fort Gratiot
Sanitary Landfill, Inc. v. Mich. Dep’t of Nat. Res., 504 U.S. 353,
359 (1992).
1.
Legislative Deference and the Dormant Commerce Clause
Defendants contend that this Court should defer wholly to
the legislative process and uphold the Ordinances because they were
passed after much deliberation and consideration by the municipal
governments.
(Docket Nos. 88 at pp. 9-13; 107 at pp. 9-12 (citing
Ferguson
Skrupa,
v.
372
U.S.
726,
730
(1963)
(noting
that
legislatures have the right to pass wise and unwise laws alike))).
Defendants’
contentions
do
not
cover
enough
ground
to
fully
preclude all judicial review in this area.
The Court is aware of the deference due to state and
local legislatures, especially in areas that are traditionally
local concerns.
See United Haulers Ass’n, Inc. v. Oneida-Herkimer
Solid Waste Mgmt. Auth., 550 U.S. 330, 332 (2007) (“The Court is
particularly hesitant to interfere here because waste disposal is
typically
and
traditionally
a
function
of
local
government
Civil No. 14-1767 (FAB)
32
exercising its police power.”).
The Court, however, also notes
that this deference is tempered by the Court’s duty to review laws
to ensure that they comply with the United States Constitution.
See S. Pac. Co. v. State of Ariz. ex rel. Sullivan, 325 U.S. 761,
769 (1945) (“[W]here Congress has not acted, this Court, and not
the state legislature, is under the commerce clause the final
arbiter
of
the
competing
demands
of
state
and
national
interests.”); see, e.g., United Haulers, 550 U.S. at 338-347
(reviewing municipal ordinances for compliance with the dormant
Commerce Clause); Houlton, 175 F.3d at 178, 184 (reviewing town’s
solid waste management ordinance for compliance with the dormant
Commerce Clause, Takings Clause, and Contract Clause and noting
that the dormant Commerce Clause “acts as a brake on the states’
authority to regulate”).
Accordingly, the Court reviews the
municipal Ordinances to ensure their compliance with the dormant
Commerce Clause of the United States Constitution.
2.
Dormant Commerce Clause Standard
Dormant Commerce Clause analysis requires a two-part
inquiry.
First, “if a state [or municipal] law has either the
purpose or effect of significantly favoring in-state commercial
interests over out-of-state interests,” it is per se invalid.
Walgreen, 405 F. 3d at 55-56, 60 (holding that a law requiring new
pharmacies
to
obtain
“certificates
of
need,”
but
exempting
existing, local businesses from that requirement discriminated in
Civil No. 14-1767 (FAB)
33
violation of the dormant Commerce Clause in its effect).
The law
is invalid unless the state or municipality has “no other means to
advance a legitimate local interest.”
Houlton, 175 F.3d at 185.
“Plaintiffs bear the initial burden of showing discrimination[,] .
. . [and t]he state bears the burden of showing legitimate local
purposes and the lack of non-discriminatory alternatives . . . .”
Family Winemakers of Cal. v. Jenkins, 592 F.3d 1, 9 (1st Cir.
2010).
Second, a state or municipal law that does not facially
discriminate against out-of-state interests may still be invalid if
“the burden imposed on such commerce is clearly excessive in
relation
to
the
putative
local
benefits.”
Industria
y
Distribuction de Alimentos v. Trailer Bridge, 797 F.3d 141, 146
(1st Cir. 2015) (quoting Pike v. Bruce Church, Inc., 397 U.S. 137,
142 (1970)).
For example, The United States Supreme Court found
that a law that limited the length of trains was a substantial
burden on interstate commerce because “breaking up and remaking
long trains upon entering and leaving the state in order to comply
with the law[] delays the traffic” and increases operating costs.
S. Pac. Co., 325 U.S. at 761.
3.
Step 1:
Regarding
Facial or Effect-Based Discrimination
the
first
step,
facial
or
effect-based
discrimination, plaintiff argues that the Ordinances violate the
dormant Commerce Clause by favoring local substitutes to AES-PR’s
Civil No. 14-1767 (FAB)
34
CCRs, which are created using foreign, imported coal.
(Docket
Nos. 84-1 at pp. 7-8; 108 at pp. 16-18; 115 at pp. 10-13.)
Defendants contend that because the Ordinances ban all CCRs,
without consideration or mention of their origin, the Ordinances
regulate even-handedly and thus, do not discriminate on their face.
(Docket Nos. 88 at pp. 14-15; 107 at pp. 5-7.)
In
United
Haulers,
the
United
States
Supreme
Court
examined municipal ordinances in New York that required all solid
waste to be processed by a state-owned facility.
550 U.S. at 334.
The Supreme Court held that the counties’ ordinances “treat instate private business interests exactly the same as out-of-state
ones, [and therefore,] do not ‘discriminate against interstate
commerce’ for purposes of the dormant Commerce Clause.”
at 345.
Id.
In reaching this decision, the Supreme Court considered
the text of the ordinances, which favored local government but
treated all private industry equally.
Id. at 334, 337; see also
Walgreen, 405 F.3d at 55, 60 (finding a Puerto Rico law facially
neutral when its language required all new pharmacies to obtain a
certificate regardless of their origin).
The First Circuit Court
of Appeals has also found that statutes regulate evenhandedly when
no product in the affected market was manufactured domestically
because such statutes do not create an effect of benefitting local
commerce.
Used Tire Int’l, Inc. v. Diaz-Saldana, 155 F.3d 1, 5
(1st Cir. 1998) (citing Pike, 397 U.S. at 142).
Civil No. 14-1767 (FAB)
Courts
35
have
also
considered
ordinances
that
deny
competitors access to a local market to be discriminatory.
C & A
Carbone, Inc. v. Town of Clarkstown, 511 U.S. 383, 386 (1994)
(finding that town flow-control ordinance facially discriminated by
forcing all waste within its borders to be processed through its
designated private transfer station); cf. Houlton, 175 F.3d at 188
(“It follows, therefore, that if local legislation leaves all
comers with equal access to the local market, it does not offend
the dormant Commerce Clause.”).
“A state law is discriminatory in
effect when, in practice, it affects similarly situated entities in
a market by imposing disproportionate burdens on out-of-state
interests
and conferring
advantages
upon
in-state
interests.”
Family Winemakers, 592 F.3d at 10.
Here, the Ordinances do not facially discriminate because
neither the text nor the effect of the Ordinances distinguishes
between
in-state
and
out-of-state
products,
but
rather
the
Ordinances ban all uses of CCRs that involve depositing them on the
ground.
(Docket Nos. 86-1 at p. 9; 86-2 at p. 8.)
Ordinance
bans
ashes
from
any
“burning
of
The Peñuelas
coal[]
in
energy
generating plants,” (Docket No. 86-2 at p. 8), and the Humacao
Ordinance bans “[a]ny kind of use of the ash derived from coal
combustion
in
electric
power
generating
plants
or
any
other
industrial or commercial activity,” (Docket No. 86-1 at p. 9).
Like the neutral language of the statute in United Haulers, 550
Civil No. 14-1767 (FAB)
U.S.
at
334,
the
36
Humacao
and
Peñuelas
Ordinances
regulate
evenhandedly because their texts do not distinguish based on the
product’s origin.
Additionally, the Ordinances here do not deny access to
local markets because they place no limitations on coal trade and
still allow CCRs to be bought, sold, and transported in the
municipalities so long as they are not deposited on the ground in
the process.
See C & A Carbone, 511 U.S. at 386.
The Humacao and
Peñuelas Ordinances do not “attempt[] to hoard solid waste . . .
[or] other commodities for processing by local, as opposed to outof-state, interests,” see Houlton, 175 F.3d at 185, but rather, ban
deposit of all CCRs in the ground, thereby eliminating the market
for uses of CCRs that involve deposit in the ground for foreign and
domestic companies alike.
Upon review of the Ordinances’ text and
effect, plaintiff’s arguments are left in ashes.
because
the
Ordinances
are
not
facially
Accordingly,
discriminatory
or
discriminatory in their effect, the Court need not consider whether
the Ordinances are the only “means to accomplish a legitimate local
interest.”15
15
If the Court had reached this second step, it would consider that
the municipalities have a “strong local interest in efficient and
effective waste management.” See Houlton, 175 F.3d at 189.
Civil No. 14-1767 (FAB)
4.
Step 2:
a.
37
Pike Balancing Test
Burden on Interstate Commerce
Plaintiff
argues
that
the
Humacao
and
Peñuelas
Ordinances discriminate against a foreign product because all CCRs
are created from burning foreign coal and no coal mines exist in
Puerto Rico.
(Docket No. 108 at pp. 13-15).
In support of this
argument, plaintiff cites Bacchus Imps. v. Dias, in which the
United States Supreme Court found that the ordinance at issue was
invalid
because
it
discriminated
against
foreign
commerce
by
creating a tax exemption for a brandy made from a root indigenous
to Hawaii.
468 U.S. 263, 270-71 (1984).
Plaintiff compares the
fact that the root in Bacchus was grown only in Hawaii with the
fact that coal is not mined in Puerto Rico.
focuses on the wrong asset.
Plaintiff, however,
In Bacchus, the okolehao brandy
derived from the root was also made locally.
Id. at 265.
The tax
was on the brandy itself, not on the root used to make it.
Id.
at 271 (finding that “the effect of the exemption is clearly
discriminatory,
in
that
it
applies
only
to
locally
produced
beverages”). Additionally, in solid waste management cases, courts
focus on the origin of the item of commerce, the solid waste, not
on the origin of the individual items that compose the waste.
See
generally United Haulers, 550 U.S. 330; Houlton, 175 F.3d 178.
Here, the Ordinances focus on CCRs, which are produced domestically
at the Guayama plant, not on the imported coal used to create CCRs.
Civil No. 14-1767 (FAB)
38
Whether focusing on coal or CCRs, the burden of the
Ordinances on interstate commerce is slight.
Focusing on CCRs,
which are produced in Guayama, Puerto Rico, (Docket No. 85 at
pp. 1-2), the Ordinances do not burden interstate commerce because
the AES-PR CCRs are both produced and sold in Puerto Rico.
If the
Ordinances did create a burden on CCRs, it would be slight because
the Ordinances limit only one of several uses for CCRs.
CCRs may
still be bought, sold, transported, or used in any way that does
not require depositing them on the ground.
Focusing on coal, the Ordinances make no mention of
coal and place no direct restrictions on transport or use of coal.
Plaintiff argues, and supports with expert testimony, that the
Ordinances’ prohibition on the disposal and use of CCRs, will cause
plaintiff to incur large costs to ship CCRs to the continental
United States for disposal.
p. 19; 115 at p. 10.)
(Docket Nos. 84-1 at p. 8; 108 at
Because the burden aspect of dormant
Commerce Clause analysis pursuant to the Pike balancing test is
focused on the burden to interstate commerce, and because the only
interstate
product
mentioned
by
plaintiff
is
foreign
coal,
plaintiff must connect the burden of the increased cost of disposal
or use of CCRs to the import of foreign coal.
While plaintiff’s
argument connecting the two is hazy at best, the Court reads
plaintiff’s argument as implying that the additional shipping costs
to dispose of CCRs would impact the interstate market for coal by
Civil No. 14-1767 (FAB)
39
increasing the cost of the overall process of importing foreign
coal, burning it to produce electricity, and disposing of its
byproduct, CCRs.
This argument fails in two regards.
First, AES-PR
has not demonstrated how the increased cost of disposing of CCRs
from coal-based electricity generation will impact its purchase of
coal, production of electricity, or production of CCRs – let alone
the overall markets for these goods.
Perfect Puppy, Inc. v. City
of E. Providence, 98 F. Supp. 3d 408, 418 (D.R.I. 2015) (“Even
having
‘devastating
interstate
firm’
does
economic
not
consequences
constitute
a
on
burden
a
particular
on
interstate
commerce under the Pike analysis.” (quoting Pharm. Research Mfrs.
v. Concannon, 249 F.3d 66, 84 (1st Cir. 2001)).
Second,
plaintiff’s
argument
fails
because
any
increase in price due to the Ordinances will likely be felt by
Puerto Rico residents, and thus will be a local burden, not a
burden on “interests outside the state.”
See United Haulers, 550
U.S. at 345; see also Grant’s Dairy v. Comm’r of Maine Dep’t of
Agric., Food, and Rural Res., 232 F.3d 8, 21-22 (1st Cir. 2000)
(finding that the burden of the law fell on Maine handlers, who
passed it on to Maine consumers, and therefore the law dealt with
intrastate commerce, an area not regulated by the dormant Commerce
Clause).
In United Haulers, the Supreme Court found that the
burden of the ordinances – “more expensive trash removal – will
Civil No. 14-1767 (FAB)
40
likely fall upon the very people who voted for the laws,” the local
citizens
and
businesses,
and
thus,
any
harm
created
by
the
ordinances was a burden on local interests and not out-of-state
interests.
550 U.S. at 345.
The Supreme Court expressed that any
discriminatory effect of the ordinances could be addressed through
the political process and should not be remedied through the
Court’s review on a dormant Commerce Clause claim.
Id.; see
Grant’s Dairy, 232 F.3d at 22 (“Th[e consumers’] lament should be
addressed to the Maine legislature, not to the federal courts.”).
Similarly here, the increased cost of the coal burning and disposal
process will be passed on to Puerto Rico residents in the form of
higher
electricity
prices,
because
electricity
inelastic good, or higher waste disposal fees.
is
a
largely
Thus, the burden
will be on local residents and businesses, not on interstate
commerce.
Therefore, whether focusing on coal or CCRs, the
burden
of
the
Humacao
and
Peñuelas
Ordinances
on
interstate
commerce is either nonexistent or slight.
b.
Benefit to Putative Local Interest
Defendants assert that the benefit of the Ordinances
is to protect human health and the environment. (Docket Nos. 88 at
p. 16; 107 at p. 9.)
The affidavits, interrogatory answers, and
depositions that defendants have submitted in support of their
motion for summary judgment establish that the municipalities
Civil No. 14-1767 (FAB)
41
considered the health and environmental implications of CCRs in
adopting the Ordinances.
(Docket No. 89 at pp. 3-4.)
Defendants
have not, through documents supporting their motion for summary
judgment, proven that CCRs are harmful to human health or the
environment.
“[U]nder Pike, [however,] it is the putative local
benefits that matter.
It matters not whether these benefits
actually come into being at the end of the day.”
Pharm. Care Mgmt.
Ass’n v. Rowe, 429 F.3d 294, 313 (1st Cir. 2005); see also United
Haulers, 550 U.S. at 346 (noting that the standards to be a benefit
under the Pike test are lower than to be a legitimate local
interest); Perfect Puppy, 98 F. Supp. 3d at 417 (stating that a
putative benefit need not even be mentioned in the text of the law
to be considered for Pike balancing); Zogenix, Inc. v. Baker, Civ.
No. 14-11689-RWZ, 2015 WL 1206354, at *8 (D. Mass. Mar. 17, 2015)
(finding that even though party failed to factually support their
claim that the drug was dangerous, the putative benefit asserted by
the legislature – promoting health and safety – was a sufficient
benefit to outweigh burden).
Here, the putative local benefits, human health and
environmental
protection,
legislative findings.
are
established
in
the
Ordinances’
See Docket Nos. 86-1 at p. 9; 86-2 at p. 8;
see also Houlton, 175 F.3d at 191 (finding that the legislative
purpose of protecting public health and safety, which was stated in
the ordinance’s preamble, was sufficient to establish a legitimate
Civil No. 14-1767 (FAB)
public purpose).
42
Additionally, the First Circuit Court of Appeals
previously found that there is a “mounting problem of solid waste
disposal” in Puerto Rico and disposal of that solid waste16 creates
“health and environmental consequences.” Used Tire, 155 F.3d at 2.
The extent of the benefit to human health and the
environment from banning CCRs is debated by the parties, but that
debate is immaterial because the extent of the very slight burden
that the Ordinances place on interstate commerce in the markets for
coal or CCRs cannot “clearly exceed” the Ordinances’ putative
benefits of promoting human health and environmental protection.
Thus, because the Ordinances do not discriminate on
their face or in their effect and because the Ordinances are not
discriminatory pursuant to the Pike balancing test, the Court
GRANTS defendants’ motion for summary judgment on plaintiff’s
dormant Commerce Clause claim.
E.
Contract Clause
Defendants argue, pursuant to the Contract Clause, that the
Court should defer to the legislative branch and leave undisturbed
the Humacao and Peñuelas Ordinances.
The
Contract
Clause
of
the
(Docket No. 88 at pp. 9-13.)
United
States
Constitution
prohibits any state from passing a “Law impairing the Obligations
of Contracts.”
U.S. Const. art. 1, § 10, cl. 1.
“The Contract
Clause protects individuals and legal entities who have freely
16
CCRs are non-hazardous solid waste.
(Docket No. 85 at pp. 3-4.)
Civil No. 14-1767 (FAB)
43
entered into contracts from legislative action that impairs the
obligations under those contracts.” Universal Ins. Co. v. Dep’t of
Justice, 866 F. Supp. 2d 49, 67 (D.P.R. 2012) (Besosa, J.).
“Despite its unequivocal language, [the Contract Clause] does not
make unlawful every state law that conflicts with any contract . .
. . A Court’s task is to reconcile the strictures of the Contract
Clause with the essential attributes of sovereign power necessarily
reserved by the States to safeguard welfare of their citizens.”
United Auto., Aerospace, Agric. Implement Workers of Am. Int’l
Union v. Fortuño, 633 F.3d 37, 41 (1st Cir. 2011) [hereinafter UAW]
(internal citations and quotation marks omitted).
The court’s Contract Clause analysis is a two-part inquiry.
Parella v. Ret. Bd. of the R.I. Emps.’ Ret. Sys., 173 F.3d 46, 59
(1st Cir. 1999).
.
.
operated
relationship”
‘reasonable
purpose.’”
The court asks (1) “whether the state law has .
as
a
and
and
substantial
if
so,
necessary
(2)
to
impairment
“whether
serve
an
of
the
a
contractual
impairment
important
was
government
UAW, 633 F.3d at 41; see also Houlton, 175 F.3d at 191
(“[E]ven a state law that creates a substantial impairment does not
transgress the Contract Clause as long as it is appropriate for,
and
necessary
to,
the
accomplishment
of
a
legitimate
public
purpose.”).
To constitute a substantial impairment pursuant to the first
inquiry, three
elements
must
be
present:
(a)
a contractual
Civil No. 14-1767 (FAB)
44
relationship must exist, (b) the law must impair that relationship,
and (c) the impairment must be substantial.
Houlton, 175 F.3d at
191 (citing Gen. Motors Corp. v. Romein, 503 U.S. 181, 186 (1991)).
In evaluating the substantiality of an impairment, courts consider
the parties expectations in entering into the contract.
UAW, 633
F.3d at 46 (“[P]arties in a highly regulated industry have a
diminished expectation that their contracts will not be impaired by
the government.”).
Pursuant to the second inquiry, courts first identify a
legitimate public purpose and then assess whether the government’s
actions in achieving that purpose were reasonable.
F.3d at 191.
Houlton, 175
When reviewing a contract between two private
parties, where there is a minimal chance that the state is “using
its regulatory power to profiteer or otherwise serve its own
pecuniary interests,” Houlton, 175 F.3d at 191, the court “may
defer to the legislature’s judgment’ and need not assess the
reasonableness
Universal
omitted).
Ins.,
and
866
necessity
F.
Supp.
of
the
2d
at
impairing
69
regulation.”
(internal
quotations
Courts also determine the parties’ main purpose for
entering into the contract and whether the law “totally eliminated”
or “merely modified” the parties’ ability to accomplish that main
purpose.
Franklin Cal. Tax-Free Tr. v. P.R., 85 F. Supp. 3d 577,
607 (D.P.R. 2015) (Besosa, J.).
Civil No. 14-1767 (FAB)
45
Here, plaintiff argues that the PPA with PREPA grants it a
contractual right to use and dispose of CCRs and that the Humacao
and Peñuelas Ordinances substantially impair that contractual right
by prohibiting use and disposal of CCRs which results in increased
costs to AES-PR from transporting CCRs to the continental United
States for use and disposal.
Plaintiff
then
argues
that
(Docket No. 108 at pp. 23-25.)
any
substantial
impairment
is
unreasonable and unnecessary because it does not serve the asserted
purpose of protecting human health and the environment because CCRs
used or deposited in a Subtitle D-compliant landfill do not pose a
risk to human health or the environment.
Id. at p. 25 n.13.
Neither party contests that the PPA creates contractual rights
between PREPA and AES-PR. The parties do disagree, however, on the
extent of those contractual rights and whether the Ordinances
impair them.
(Docket Nos. 88 at pp. 18-20; 108 at pp. 23-25.)
The Supreme Court in Texaco, Inc. v. Short found that a
“statute cannot be said to impair a contract that did not exist at
the time of its enactment.”
454 U.S. 516, 517 (1982); see also Me.
Educ. Ass’n Benefits Tr. v. Cioppa, 842 F. Supp. 2d 373, 384 (D.
Me. 2012) (holding a law enacted in June 2011 did not substantially
impair an existing contractual relationship when the contract was
signed in August 2011 and was effective from July 2011 because no
contractual rights existed at the time that the law was passed.)
Civil No. 14-1767 (FAB)
46
Here, the Humacao and Peñuelas Ordinances were passed in 2014
and 2013 respectively.
Although
the
PPA
was
(Docket Nos. 86-1 at p. 10, 86-2 at p. 10.)
originally
signed
in
1994,
the
second
amendment, which addresses the issue of CCRs, was not added until
July 17, 2015.
(Docket No. 109-5 at pp. 169, 171-72 (replacing the
existing section 6.6 of the PPA with language that specifically
addresses the use and disposal of CCRs).) Prior to this amendment,
PPA section 6.6 provided:
[T]hat any combustion waste or by-product produced by the
operation of the Facility, which cannot be used for
beneficial commercial uses,17 will not be stored anywhere
in the Commonwealth of Puerto Rico for a period in excess
of one hundred eighty (180) days and that it will not be
disposed anywhere in the Commonwealth of Puerto Rico or
its neighboring waters.
Id. at 33.
Thus, at the time that the Ordinances were enacted, the
PPA did not create a contractual right in AES-PR to use or dispose
of CCRs, but rather, prohibited AES-PR from disposing of CCRs in
Puerto Rico. Because, at the time that the Ordinances were passed,
AES-PR had no contractual right to dispose of or use CCRs in Puerto
Rico pursuant to the PPA, the Ordinances did not substantially
impair any existing contractual right in violation of the Contract
Clause.
Because the Court finds that the Ordinances do not impair
any contractual right under the PPA, the Court need not analyze the
17
EQB does not classify disposal or use
beneficial use. (Docket No. 86-8 at p. 7.)
as
daily
cover
as
Civil No. 14-1767 (FAB)
47
substantiality of the impairment18 or the reasonableness of the
government action.19 Accordingly, the Court GRANTS summary judgment
to defendants on plaintiff’s federal Contract Clause claims.
F.
Procedural Due Process Clause
AES-PR asserts that its PPA with PREPA grants it a property
interest to use or dispose of CCRs in Puerto Rico and that the
Ordinances deprive it of this property interest in violation of the
Due Process Clause.
(Docket No. 108 at pp. 25-28.)
The Due
Process Clause provides that “[n]o person shall be . . . deprived
of life, liberty, or property, without due process of law.”
U.S.
18
Had the Court reached analysis of this prong, it would have noted
that the heavily regulated nature of the waste collection and
disposal industry puts companies functioning in that industry on
notice that additional regulation is likely and may interfere with
their contracts. Houlton, 175 F.3d at 190 (finding that “the waste
collection and disposal industry is subject to fairly pervasive
regulation”).
19
If the Court had reached this prong, it would have considered the
fact that the municipalities are not parties to the PPA and thus
not likely seeking to “profiteer” by passing the Ordinances. See
Houlton, 175 F.3d at 191. The Court would have also considered
that the asserted purpose of protecting human health and the
environment is a legitimate public purpose. Id. (finding that
public health, safety, and economies of scales for the citizens are
all legitimate public purposes). Finally, the Court would have
considered that the main purpose of the PPA is for AES-PR to
produce electricity and supply it to PREPA, not the use or disposal
of CCRs, and that while accomplishing the purpose of producing
electricity is likely more expensive to perform after passage of
the Ordinances, it is not impeded. Perfect Puppy, 98 F. Supp. 3d
at 424 (finding that any impact that the town’s ordinance had on
the
parties’
lease
contract
“consist[ed]
of
‘diminished
profitability and therefore diminished ability to keep up
obligations,’ which does not constitute a Contract Clause
violation” (quoting S. Terminal Corp. v. E.P.A., 504 F.2d 646, 680
(1st Cir. 1974))).
Civil No. 14-1767 (FAB)
48
Const. amend. 5; see also U.S. Const amend. 14 § 1 (establishing a
due
process
procedural
requirement
due
process
for
the
claims
in
states).
“Courts
approach
two
steps:
(1)
major
the
existence of an interest protected by the due process clauses
[i.e., life, liberty, or property]; and (2) the inadequacy of the
procedures provided.”
32 Charles Alan Wright & Charles H Koch,
Jr., Federal Practice & Procedure § 8126 (1st ed. 2016).
first inquiry
in
every due
process
challenge
is
whether
“The
the
plaintiff has been deprived of a protected interest in ‘property’
or ‘liberty.’ Only after finding the deprivation of a protected
interest do we look to see if the State’s procedures comport with
due process.”
Am. Mfrs. Mut. Ins. Co. v. Sullivan, 526 U.S. 40, 59
(1999) (internal citations omitted).
Here, the PPA does not create a property right for AES-PR to
dispose of its CCRs because PREPA’s enabling statute,20 the Puerto
Rico Electric Power Authority Act (“PREPA Act”), does not grant it
power to regulate waste disposal.
tit. 22 §§ 191 et seq.
See generally P.R. Laws Ann.
Instead, the Puerto Rico Legislative
Assembly has granted this power to the Solid Waste Authority, see
P.R. Laws Ann. tit. 12 § 1305, the autonomous municipalities of
Puerto Rico, see id. § 4054(a), and the EQB, see id. tit. 12
§ 8002b.
20
Thus, because the text of the PREPA Act unambiguously
An enabling statute is “a congressional statute conferring powers
on an executive agency to carry out various delegated tasks.”
Enabling Statute, Black’s Law Dictionary (10th ed. 2014).
Civil No. 14-1767 (FAB)
refrains from
49
granting
PREPA
authority
in
the
area
of waste
management, any contractual grant of such power is invalid because
it falls outside of the scope of PREPA’s enabling statute.
See
Chevron, U.S.A., Inc. v. Nat. Res. Def. Council, Inc., 467 U.S. 837
(1984) (citing United States v. Shimer, 367 U.S. 374, 382-83
(1961)) (noting that deference should not be given to agency’s
actions that depart from the reasonable interpretation of the
powers that Congress conferred upon the agency).
The text of the PPA, as amended, supports this conclusion by
indicating that any use or disposal of CCRs in Puerto Rico is
contingent upon “authori[zation] by any applicable environmental
.
.
.
resolution
.
.
.
governing
the
handling,
storage,
transportation, disposal and use of any CCR and/or . . . Agremax.”
(Docket No. 109-5 at p. 172.)
By indicating that additional
authorization is required, the PPA acknowledges that it is not
authorizing
use
or
disposal
of
CCRs,
but
instead
that
PREPA
supports any use or disposal that is authorized by the proper
authority, here the EQB.
Because the PPA does not grant AES-PR a property interest to
use or dispose of CCRs in Puerto Rico, the Court need not reach the
second step of the Due Process Clause analysis and thus, need not
consider the process due or the process actually afforded.
The
lack of property interest is sufficient to defeat AES-PR’s Due
Civil No. 14-1767 (FAB)
50
Accordingly, the Court GRANTS summary
Process Clause claim.
judgment to defendants on AES-PR’s Due Process Clause claim.
G.
Commonwealth Claims
Having argued for dismissal of all of the federal claims,
defendants argue that the Court should dismiss the remaining
Commonwealth claims because the Puerto Rico Supreme Court is the
proper court to hear claims regarding the Puerto Rico Constitution
and Commonwealth preemption of municipal laws.
pp. 22-25.)
(Docket No. 88 at
Plaintiff contends that even if no federal claims
remain, the advanced stage of the litigation supports the Court
exercising supplemental jurisdiction over the Puerto Rico law
claims.
(Docket No. 108 at pp. 28-31.)
“[I]n any civil action of which the district courts have
original jurisdiction, the district courts shall have supplemental
jurisdiction over all other claims that are so related to claims in
the action within such original jurisdiction that they form part of
the same case or controversy . . . .” 28 U.S.C. § 1367(a).
district
court
has
discretion
in
exercising
The
supplemental
jurisdiction and may decline to do so if “the claim raises a novel
or complex issue of State law” or “the district court has dismissed
all claims over which it has original jurisdiction.”
§ 1367(c).
28 U.S.C.
“[I]n the usual case in which all federal-law claims
are eliminated before trial, the balance of factors . . . will
point toward declining to exercise jurisdiction over the remaining
Civil No. 14-1767 (FAB)
51
state-law claims.”
Carnegie–Mellon Univ. v. Cohill, 484 U.S. 343,
350
superseded
n.
7
(1988)
on
other
grounds
by
statute
as
recognized in Fent v. Okla. Water Res. Bd., 235 F.3d 553, 557 (10th
Cir. 2000); see also Rivera-Diaz v. Humana Ins. of P.R., Inc., 748
F.3d 387, 392 (1st Cir. 2014) (upholding district court’s decision
not to exercise supplemental jurisdiction when all federal-law
claims were dismissed); Lucas v. Twp. of Bethel, 137 Fed. App’x
450, 452 (3rd Cir. 2005) (“[W]hen original jurisdiction claims are
dismissed before trial, the district court must decline to exercise
jurisdiction
over
pendent
state
claims
unless
there
is
an
affirmative justification for doing so.”); Ticket Center, Inc. v.
Banco Popular de P.R., 613 F. Supp. 2d 162, 180-81 (D.P.R. 2008)
(McGiverin, J.) (declining to exercise supplemental jurisdiction
over remaining Commonwealth law claims after granting summary
judgment on all federal claims).
In deciding to exercise supplemental jurisdiction, district
courts
consider
concerns
convenience, and comity.
F.3d 42,
49
(1st Cir.
of
fairness,
judicial
economy,
Redondo Constr. Corp. v. Izquierdo, 662
2011)
(reviewing
the
district
court’s
consideration of these factors and giving great credit to the
length of the federal litigation and the proximity to trial).
Plaintiff argues that it would be unfair, inconvenient, and a
waste of judicial resources to start anew at the state level when
the parties here have already conducted discovery, obtained expert
Civil No. 14-1767 (FAB)
52
reports, filed for summary judgment, and prepared for trial.
(Docket No. 108 at pp. 29-30.)
Plaintiff compares this litigation
to the litigation in Redondo, where the First Circuit Court of
Appeals
found
that
the
district
court
should
have
exercised
supplemental jurisdiction over Commonwealth law claims because the
“[t]he litigation had matured well beyond its nascent stages,
discovery had closed, the summary judgment record was complete, the
federal
and
state
claims
were
interconnected,
and
powerful
interests in both judicial economy and fairness tugged in favor of
retaining jurisdiction”.
662 F.3d at 49.
In Redondo, the First
Circuit Court of Appeals also considered the cost of translating
documents and other discovery items from English to Spanish for use
in the Commonwealth courts.
Redondo,
the
First
662 F.3d at 49-50.
Circuit
Court
of
Appeals
Finally, in
noted
that
considerations of comity did not offset the factors weighing in
favor of exercising supplemental jurisdiction because “[f]ederal
courts in Puerto Rico exercising diversity jurisdiction routinely
apply the well-established principles of contract law” at issue in
that case.
Id. at 50.
Here, as in Redondo, it would be inconvenient and unfair to
require the parties to start anew in Commonwealth court because
discovery has closed, several motions for summary judgment have
been filed, and the parties have filed a proposed pretrial order.
See Docket Nos. 84, 88, 127.
An advanced stage of litigation and
Civil No. 14-1767 (FAB)
53
need to translate documents, however, does not require the court to
exercise supplemental jurisdiction.
See, e.g., Ticket Center, 613
F. Supp. 2d at 180-81 (dismissing federal claims on motion for
summary
judgment
and
declining
to
exercise
supplemental
jurisdiction even though any subsequent Commonwealth claim would be
litigated in Spanish).
Unlike in Redondo, less judicial resources are wasted here
because several of the Commonwealth law issues presented are
already being litigated in related cases in Commonwealth courts.
See, e.g., Mun. of Peñuelas v. Ecosystems, Inc., No. J PE2014-0457,
2015 WL 1565878, at *2 (P.R. Cir. Feb. 25, 2015) (analyzing ultra
vires claims and whether Peñuelas satisfied Puerto Rico Due Process
requirements in passing Ordinance 13); Docket No. 132-1 (Mun. of
Peñuelas v. Peñuelas Valley Landfill, Inc., No. J PE2015-0415 (P.R.
Court of First Instance - Ponce Superior Division, June 24, 2016)
(ruling on issues of preemption and whether Peñuelas acted ultra
vires in passing Ordinance 13)); see also Lucas, 137 Fed. App’x
at
453
(finding
that
declining
to
exercise
supplemental
jurisdiction promoted judicial economy when related state court
cases
existed).
Commonwealth
law,
Additionally,
specifically
several
the
Puerto
of
the
Rico
issues
ultra
of
vires,
Contract Clause, and Due Process Clause claims, have not yet been
fully briefed or argued to this Court.
Civil No. 14-1767 (FAB)
54
Also, unlike Redondo, the issue of comity weighs heavily in
favor of dismissing the claims to the Commonwealth courts because
the
principles
of
preemption
pursuant
to
the
Puerto
constitution are not well-established principles of law.
Rico
As
discussed above, the preemptive power of a Puerto Rico agency
resolution over a municipal ordinance is a developing issue of
administrative law best addressed by the Puerto Rico Supreme Court.
Supra Part II.C.
Therefore, even though the advanced stage of the litigation
and the costs of translating documents into English weigh in favor
of the Court exercising supplemental jurisdiction, those concerns
are minimized by the litigation of similar issues in related cases
in Commonwealth courts and offset by the comity concerns presented
by the unsettled nature of the law relating to the Puerto Rico
preemption claim.
Accordingly, the Court DECLINES to exercise
supplemental jurisdiction over AES-PR’s Commonwealth claims.
III.
CONCLUSION
For the above reasons, the Court GRANTS AES-PR’s motion for
judicial notice, (Docket No. 86), GRANTS IN PART and DENIES IN PART
defendants’ motion for judicial notice, (Docket No. 90), DENIES
AES-PR’s motion to strike, (Docket No. 111), and DENIES AES-PR’s
motion for partial summary judgment, (Docket No. 84).
The Court
GRANTS defendants’ motion for summary judgment, (Docket No. 88), on
all federal claims.
Accordingly, plaintiff AES-PR’s federal law
Civil No. 14-1767 (FAB)
55
claims are DISMISSED WITH PREJUDICE and its Puerto Rico law claims
are DISMISSED WITHOUT PREJUDICE.
Judgment shall be entered according to this order and the
Court’s prior order at Docket No. 60.
IT IS SO ORDERED.
San Juan, Puerto Rico, July 27, 2016.
s/ Francisco A. Besosa
FRANCISCO A. BESOSA
UNITED STATES DISTRICT JUDGE
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