Colón-Rivera v. Asociación de Suscripción Conjunta del Seguro de Responsabilidad Obligatorio

451 F. App'x 5
CourtCourt of Appeals for the First Circuit
DecidedDecember 13, 2011
DocketNo. 11-1148
StatusPublished

This text of 451 F. App'x 5 (Colón-Rivera v. Asociación de Suscripción Conjunta del Seguro de Responsabilidad Obligatorio) is published on Counsel Stack Legal Research, covering Court of Appeals for the First Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Colón-Rivera v. Asociación de Suscripción Conjunta del Seguro de Responsabilidad Obligatorio, 451 F. App'x 5 (1st Cir. 2011).

Opinion

LYNCH, Chief Judge.

A group of privately-insured motor vehicle owners have sued the Asociación de Suscripción Conjunta del Seguro de Res-ponsabilidad Obligatorio (“JUA”) under 42 U.S.C. § 1983, seeking as relief only damages for alleged violations of their constitutional rights under the Takings and Due [6]*6Process Clauses. In light of this court’s decision in García-Rubiera v. Fortuño, 665 F.3d 261 (1st Cir.2011), in which plaintiffs raised similar claims against officials of the Commonwealth of Puerto Rico, we direct entry of judgment for defendant.

The underlying facts are described in our decision in García-Rubiera, 665 F.3d 261. We summarize those facts here.

In 1995, Puerto Rico passed Law 253, which requires all motor vehicles traveling on public roads to obtain compulsory liability insurance. P.R. Laws Ann. tit. 26, § 8051 et seq. Pursuant to Law 253, the owners of such vehicles are required to: (1) either pay premiums (of $99 for private or $148 for commercial vehicles) to the Commonwealth at the time they acquire, and each subsequent year when they renew, their vehicle registration, id. § 8053(a), or (2) opt-out of the Commonwealth’s insurance plan by purchasing private insurance with comparable or better liability coverage, id. § 8061(a).

Law 253 also created JUA to administer the Commonwealth’s insurance plan. Id. § 8055. JUA is composed of and operated by Puerto Rico’s largest private insurance companies, and exists to insure vehicle owners who participate in the Commonwealth’s insurance plan. Id. § 8055(a), (b). It has responsibility for insuring Puerto Rico’s “high-risk” drivers, who cannot obtain insurance through private insurers, but who are nonetheless required to obtain compulsory insurance under Law 253. Id. § 8055(b).

JUA’s funding comes from the compulsory premiums paid to the Commonwealth by vehicle owners every year when they renew their vehicle registrations. The Commonwealth periodically remits these premium payments to JUA, which then distributes the funds among its member companies. Id. § 8055(c), (e), amended by Act 201 of Dec. 29, 2009, art. 4.

The Commonwealth’s insurance option provides only minimal coverage to vehicle owners; thus, many drivers obtain private liability insurance for more complete coverage. Id. § 8052(j), amended by Act 201 of Dec. 29, 2009, art. 2. Under Law 253, drivers who obtain a specified amount of private insurance are not required to pay for state insurance on top of their private insurance and may opt out of the state insurance program. Id. § 8061. Although Puerto Rico’s Insurance Commissioner has enacted various procedures over the years designed to help these privately-insured vehicle owners opt out of the state insurance program, these procedures have been under-utilized, and a substantial percentage of privately-insured vehicle owners (“insureds”) have been required to pay for both state and private insurance.

When an insured is required to pay for state insurance on top of his or her private insurance, he or she is entitled to full reimbursement of the state purchase price. However, for a variety of reasons described more fully in García-Rubiera, 665 F.3d 261, many insureds — in some years, a majority of insureds — are not reimbursed for their duplicate premiums. As a consequence, their duplicate payments remain, initially, in the custody of JUA.

At the heart of plaintiffs’ claims is Puer-to Rico’s Law 230. In 2002, Puerto Rico enacted Law 230, which directs JUA to transfer all the accumulated unreimbursed premium payments — as of December 31, 2001, a sum of approximately $73 million— to Puerto Rico’s Secretary of the Treasury, and, thereafter, to repeat this transfer of funds every two years. Act No. 230 of Sept. 11, 2002, § 2 (codified at P.R. Laws Ann. tit. 26, § 8055(i)); see also id. Statement of Motives (“[D]uring the existence of [JUA], certain funds have been accumulated to it that do not belong to [7]*7it.... [I]t is of greater benefit to the public interest in general to immediately transfer those funds to the ... custody of the Department of the Treasury.”). Law 230 also requires the Secretary of the Treasury to hold the transferred premiums “as trustee” for five years, and to establish a claims process for refunding the premiums to insureds. P.R. Laws Ann. tit. 26, § 8055(l). After five years any remaining unreimbursed funds escheat to the Commonwealth. Id. Although the Secretary of the Treasury established a procedure for reimbursement, relatively few insureds have successfully utilized this procedure, perhaps because, as we held in García-Rubiera, 665 F.3d 261, the Secretary failed to give adequate notice of these procedures.1

Plaintiffs filed their complaint in this case on September 20, 2007, seeking legal and punitive damages under 42 U.S.C. § 1983, alleging that JUA violated their constitutional rights under the Takings and Due Process Clauses through conduct tantamount to state action. Plaintiffs argue that by transferring the duplicate premium funds to the Secretary of the Treasury as required by Law 230 (alleged to be unconstitutional), JUA committed a taking and violated plaintiffs’ substantive and procedural due process rights. Plaintiffs additionally argue that JUA violated its duty under Puerto Rico law to distribute the funds directly to individual insureds.2

What is at issue here is the district court’s grant of defendant’s motion for summary judgment as to all of plaintiffs’ federal law claims, its denial of plaintiffs’ motion for summary judgment, and its dismissal of plaintiffs’ Puerto Rico law claims without prejudice. Colón-Rivera v. Asociación de Suscripción Conjunta del Seguro de Responsabilidad Obligatorio, No. 07-1875, 2010 WL 5376116 (D.P.R. Dec.27, 2010). The district court held that although plaintiffs had demonstrated a property interest in their duplicate payments, plaintiffs did not suffer any deprivation of that interest as a result of Law 230 and its companion regulations. Therefore, the court concluded, JUA’s actions pursuant to those laws could not violate plaintiffs’ constitutional rights under the Takings or Due Process Clauses. The court did not reach the question of whether JUA’s actions constituted state action for purposes of plaintiffs’ constitutional claims.

In García-Rubiera, 665 F.3d 261, we held that insureds “have a sufficient property interest in the duplicate premiums,” [8]*8id. at 269 (citing García-Rubiera v. Calderón, 570 F.3d 443, 455 (1st Cir.2009)), that Law 230 and its companion regulations effect a deprivation of insureds’ property for purposes of procedural due process, id.

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451 F. App'x 5, Counsel Stack Legal Research, https://law.counselstack.com/opinion/colon-rivera-v-asociacion-de-suscripcion-conjunta-del-seguro-de-ca1-2011.