Asociacion De Suscripcion Conj v. Juarbe-Jimenez

United States Court of Appeals
For the First Circuit
No. 10-2167
ASOCIACIÓN DE SUSCRIPCIÓN CONJUNTA DEL SEGURO DE
RESPONSABILIDAD OBLIGATORIO,
Plaintiff, Appellant,
v.
DORELISSE JUARBE-JIMÉNEZ, in her official capacity as the
Insurance Commissioner of the Commonwealth of Puerto Rico,
Defendant, Appellee.
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF PUERTO RICO
[Hon. Jaime Pieras, Jr., U.S. District Judge]
Before
Lynch, Chief Judge,
Boudin and Thompson, Circuit Judges.
Veronica Ferraiuoli Hornedo, with whom Nigaglioni and
Ferraiuoli were on brief, for appellant.
Susana I. Peñagaricano-Brown, Assistant Solicitor
General, with whom Irene S. Soroeta-Kodesh, Solicitor General,
Leticia Casalduc-Rabell, Acting Deputy Solicitor General, and Zaira
Z. Girón-Anadón, Acting Deputy Solicitor General, were on brief,
for appellee.
September 29, 2011
LYNCH, Chief Judge. At issue is when a facial Takings
Clause claim attacking a statute and regulations accrues for
statute of limitations purposes. The district court concluded that
the claim here was untimely. Asociación de Suscripción Conjunta
del Seguro de Responabilidad Obligatorio v. Juarbe-Jiménez, 720 F.
Supp. 2d 152 (D.P.R. 2010). We agree and affirm the dismissal of
this case.
I.
This case arises out of Puerto Rico's compulsory
automobile liability insurance scheme. In December of 1995 the
Commonwealth of Puerto Rico enacted Act 253, which required all
motor vehicles to be covered by certain minimum automobile
liability insurance. The purpose of the insurance is to cover
"damages caused to motor vehicles of third parties as a result of
a traffic accident, for which the owner of the vehicle covered by
this insurance is legally liable and which, through its use, has
caused said damages." P.R. Laws Ann. tit. 26, § 8051.
At the same time, the Commonwealth created the Asociación
de Suscripción Conjunta del Seguro de Responsabilidad Obligatorio
(the Association) to provide compulsory liability insurance to
those vehicle owners rejected by private insurers or who have opted
out of purchasing liability insurance. We have held that the
Association, while it was created "under some direction by the
commonwealth," is "private in nature." Associación de Suscripción
-2-
Conjunta del Seguro de Responsabilidad Obligatorio v. Flores
Galarza, 484 F.3d 1, 20 (1st Cir. 2007) (quoting Arroyo-Melecio v.
P.R. Am. Ins. Co., 398 F.3d 56, 62 (1st Cir. 2005)) (internal
quotation marks omitted). This conclusion has since been
reinforced by the passage of Act 201, in December 2009, which
amends Act 253 and defines the Association as a "private
Association." P.R. Laws Ann. tit. 26, §§ 8052(c), 8055(a), amended
by Act 201 of Dec. 29, 2009, arts. 3(c), 6(a). At present, the
Association provides compulsory insurance for over 80 percent of
the vehicles in Puerto Rico.1
1
The compulsory insurance scheme has spawned a great deal of
local and federal litigation.
The payment scheme under the Compulsory Liability Insurance
Act is chronologically ordered as follows: (1) motorists pay
insurance premiums to the Secretary of the Treasury pursuant to
P.R. Laws Ann. tit. 26, § 8053(a); (2) the Secretary then transfers
those premiums to the Association pursuant to P.R. Laws Ann. tit.
26, § 8055(c); and (3) the Association then places 95 percent of
the profits from those premiums in a Special Reserve for the
benefit of the public under the Insurance Commissioner's Rule LXX.
In this case, the Association alleges that step (3) above effects
a regulatory taking.
The Association has also sued the Secretary of the
Treasury, challenging another portion of the legislation.
Asociación de Suscripción Conjunta del Seguro de Responsabilidad
Obligatorio v. Flores Galarza, 484 F.3d 1 (1st Cir. 2007). In that
suit, the Association alleged a taking under step (2) above because
the Secretary withheld certain insurance premiums that it was
required to transfer to the Association pursuant to § 8055(c). Id.
at 11.
In addition, insured automobile owners who have paid for
both the compulsory insurance and private insurance have sued the
Association, bringing constitutional challenges to the scheme under
which they may obtain reimbursement of the double premium. Colón-
Rivera v. Asociación de Suscripción Conjunta del Seguro de
Responsabilidad Obligatorio, No. 07-1875, 2010 WL 5376116 (D.P.R.
-3-
The legislation which created the Association also gave
the defendant Insurance Commissioner the power to regulate it. See
P.R. Laws Ann. tit. 26, § 8055(c), (f). In 1996, through
Regulation 5493, called Rule LXIX, the Commissioner set up a scheme
which required the Association to annually determine its profits
and losses in the same manner as in the Annual Statement required
by the Insurance Code. More pertinently, that Rule also provided:
The Members shall share in the annual profits
and losses of the Association in the
proportional participation of each of the
Members for the year for which such profit or
losses are determined.
The "members" are all of the insurance carriers who are licensed to
offer automobile insurance in Puerto Rico and underwrite more than
one percent of the total volume of such premiums in Puerto Rico.
P.R. Laws Ann. tit. 26, §§ 8052(b), 8055(a).
That allocation of profit was changed by the Commissioner
in December 2000, by revisions contained in Regulation 6254, Rule
LXX, as follows:
The members shall share in the annual profits
or losses of the Association in the
proportional participation of each of the
members for the year for which such profits or
losses are determined. With regards to the
Dec. 27, 2010), appeal docketed, No. 11-1148 (1st Cir. Feb. 10,
2011). In a separate case, a group of insured automobile owners
who have paid for both types of insurance have brought similar
claims against the Governor and Secretary of the Treasury of Puerto
Rico. Garcia-Rubiera v. Fortuño, 752 F. Supp. 2d 180 (D.P.R.
2010), appeal docketed, No. 10-2507 (1st Cir. Dec. 22, 2010).
-4-
participation in the profits, the same shall
not exceed the maximum percentage established
in the premium dollar for the profit, applying
the earned premiums for said year.
The profit for each year in excess of the
amounts distributed due to the participation
provided for in this paragraph shall be
accumulated in a special reserve that shall be
exclusively used for the future stabilization
of the premiums of the compulsory liability
insurance and the future expansion of the
benefits provided there under. Under no
circumstance shall the excess accumulated in
this reserve be used for the distribution of
profits provided for in the previous
paragraph.
Pursuant to this December 2000 regulation, which is
located in Article 20(e) of Rule LXX, the Commissioner established
that the Association's members may receive a distribution of up to
a maximum of five percent of the annual premium profits.2 The
remaining 95 percent of the profits must be placed in the Special
Reserve, where they must remain until the Association chooses to
use them to stabilize premiums or expand benefits. Neither the
2
It is unclear from where this five percent limit
originated. In 1999, the Association's board approved a five
percent distribution, and stated in a letter to the Commissioner
that this distribution was "for an amount equal to the portion of
each premium dollar earmarked as profits during said period, which
we understand is five percent (5%)." The Commissioner approved of
the distribution, noting that it "corresponds to the underlying
premium dollar distribution . . . [a]s presented to the Government
Commission of the Puerto Rico Senate, on July 15, 1995, and to the
Consumer Affairs Commission of the Puerto Rico House of
Representatives on July 19, 1995, in corresponding requests." The
complaint does allege that the Commissioner sets the percentage,
and the defendant's brief agrees.
-5-
Association, nor its members, challenged this rule when it was
enacted.
Eventually, the Commissioner required an audit of these
distributions and the Special Reserve fund. On June 12, 2008, the
Commissioner issued a resolution resulting from an audit of the
Association for the period from July 1, 2001 to December 31, 2004.
In the resolution, the Commissioner stated that distributions to
members were capped at five percent of the annual premium profits
and could not include any distribution of investment income3 or
"other" income.4 All investment and "other" income must be placed
in the Special Reserve.
The resolution also indicated that distributions to
members in any given year could not exceed the net underwriting
gain for that year. Based on the audit findings, the resolution
ordered the Association to recover $8,266,767 in non-complying
distributions issued to members for the 2001-2004 audit period.
3
The Association's investment income is generated by the
investment of Association assets in bonds, stocks and other
investment vehicles. It is unclear whether the investment income
at issue is derived solely from investments of Special Reserve
funds, or whether it also includes investments of other Association
funds.
4
The Association's "other" income accounts for all income of
the Association derived from sources other than the insurance
business or investments. Examples of the Association's "other"
income include legal settlements or judgments, and income from the
sale or decommissioning of Association assets such as furniture or
Association cars.
-6-
Additionally, because the Association realized a net underwriting
loss in 2005, the Association was directed to recover the full
distribution to members in that year, amounting to $7,593,556.5
The Puerto Rico Court of Appeals upheld these portions of
the audit against claims by the Association that the Commissioner
lacked statutory authority to impose restrictions on the
distribution of investment and other income.6 Comm'r of Ins. v.
5
Before the audit, the Association itself had interpreted
Rule LXX as requiring that its distribution not exceed five percent
of the earned underwriting premiums, but permitting distribution of
income earned from investments and other sources up to this limit.
Thus, even if the net result of the insurance business (the earned
premiums minus the benefits paid out and operating costs) was
negative, the Association would pay distributions out of profits
from investment and other income, up to the cap of five percent of
the gross premiums. There is no claim that the Insurance
Commissioner knew of or acceded to the Association's
interpretation.
6
The current statutory authority of the Commissioner to
regulate the Association's distribution of profits, and thus the
validity of Article 20(e) of Rule LXX, is disputed. In December
2009, Puerto Rico passed Act 201, which amends Act 253 in a variety
of ways. As is relevant here, Act 201 removes the portion of Act
253 which stated that the Commissioner "shall provide through
regulations the manner and form in which the distribution" shall
take place, and the portion providing the Commissioner authority to
"establish through regulations the structure and operation of the
Joint Underwriting Association." P.R. Laws Ann. tit. 26,
§ 8055(c), (f). Instead, under Act 201, "[t]he operational plan of
the Joint Underwriting Association shall provide the form and
manner in which the distribution of the amount of the premiums
received by the Joint Underwriting Association will be carried
out." P.R. Laws Ann. tit. 26, § 8055(c), amended by Act 201 of
Dec. 29, 2009, art. 6(c). The operational plan is to be
established by the Association; the Commissioner is only to be
"notified" of the plan. P.R. Laws Ann. tit. 26, § 8055(f), amended
-7-
Compulsory Liab. Ins. Joint Underwriting Ass'n, No. E-2005-62,
KLRA200801403 (P.R. Cir. May 19, 2009).7
The Association asserts that it has complied with these
requirements in the sense that it has put into the Special Reserve
all income in excess of the amount it was allowed to distribute to
its members. It is unclear whether the Association has complied
with the audit resolution. As of December 31, 2008, the Special
Reserve contained $159,267,250 in undistributed profits.
The Association protests that it cannot be made to place
all of the profits (aside from the five percent distribution to its
members) into the Special Reserve fund, to be used only for the
benefit of the consumer insureds, because these restrictions amount
to an unconstitutional taking. It also makes on appeal a related
argument that it cannot be forced to include in this Reserve its
investment income and its other income, as is required by the 2008
audit resolution.
II.
by Act 201 of Dec. 29, 2009, art. 6(f).
A Puerto Rico court of first instance has held that, given
Act 201, the Commissioner no longer has authority to regulate the
distribution of the Association. See Asociación Suscripción
Conjunta del Seguro de Responsabilidad Obligatorio v. Juarbe
Jiménez, No. K PE 2008-3826 (P.R. Gen. Ct. of J. Mar. 16, 2011).
7
We are told that decision has been appealed to the Puerto
Rico Supreme Court.
-8-
On November 4, 2008, the Association brought suit against
Puerto Rico Insurance Commissioner Dorelisse Juarbe-Jiménez
pursuant to 42 U.S.C. § 1983, arguing that the Insurance
Commissioner's limitation on the distribution of profits to the
Association's members, in conjunction with the restrictions placed
on the use of the Special Reserve funds, constituted a taking
without just compensation in violation of the Fifth Amendment's
Takings Clause. The complaint requested a declaration that Article
20(e)(2) of Rule LXX was unconstitutional under the Takings Clause
and that the Commissioner be enjoined from enforcing that
provision.
The Commissioner filed a motion to dismiss under Federal
Rule of Civil Procedure 12(b)(6) on the basis that the
Association's claim was unripe because the Association had failed
to seek compensation through Puerto Rico's inverse condemnation
procedures. See Williamson Cnty. Reg'l Planning Comm'n v. Hamilton
Bank, 473 U.S. 172 (1985); Downing/Salt Pond Partners, L.P. v.
Rhode Island, 643 F.3d 16 (1st Cir. 2011).
Attempting to avoid this ripeness problem, the
Association conceded, in its "Opposition to Motion to Dismiss,"
that its claim "would be unripe" if the claim were an as-applied
claim, but asserted that because what it had "mount[ed] [was] a
facial challenge to the regulation," its claim was ripe the moment
that Rule LXX was issued.
-9-
On November 16, 2009, the Association and the
Commissioner filed cross-motions for summary judgment. On June 25,
2010, the district court granted the Commissioner's motion for
summary judgment and denied the Association's motion because it
determined that the Association's facial challenge to Rule LXX was
time-barred by the statute of limitations. Asociación de
Suscripción, 720 F. Supp. 2d at 159. The district court reasoned
that because the Association was bringing a facial challenge to
Rule LXX, the statute of limitations accrued when Rule LXX was
enacted on December 28, 2000. Id. at 157. Further, the district
court explained, § 1983 claims in Puerto Rico carry a one-year
statute of limitations. Id. (citing Morán-Vega v. Cruz-Burgos, 537
F.3d 14, 20 (1st Cir. 2008)). Because the Association did not file
its complaint until November 4, 2008, the district court determined
that its claim was time-barred. Id. at 157, 159.
III.
"Our review of the grant of summary judgment is de novo,
taking all facts and reasonable inferences in the light most
favorable to [the Association], the nonmoving party." Sterling
Merch., Inc. v. Nestlé, S.A., No. 10-1925, 2011 WL 3849828, at *6
(1st Cir. Sept. 1, 2011).
As filed, the Association's suit raised a claim that Rule
LXX, on its face, constitutes a taking. At times it appeared the
Association was also asserting a claim that Rule LXX, as applied
-10-
each year to the Association, constitutes a taking. Later during
the litigation, the Association's briefing mentioned that the 2008
audit, specifically the audit resolution's interpretation that
investment income and other income must be placed in the Special
Reserve, constitutes a separate taking.
A. The Association's Facial Challenge to Rule LXX
The Association raised only a facial challenge to Rule
LXX. The complaint, which was never amended, states only one cause
of action: "Violations of the Taking Clause of the U.S.
Constitution." The factual allegations underpinning this claim
focus entirely on Rule LXX — the Association contends that because
"Rule LXX provides that the funds accumulated in the Special
Reserve are to be used exclusively for a public purpose and only
for the benefit of the public in general," the Rule "provides for
a taking of [the Association's] private property by denying [the
Association] of any beneficial use of its property."
The relief sought is also relevant to whether the claim
is a facial claim. Here, the relief requested is a declaration
that Article 20(e)(2) of Rule LXX is unconstitutional, and an
injunction prohibiting its enforcement, rather than a request for
a declaration that a particular interpretation or application of
Rule LXX effects a taking. This requested relief also indicates
that the Association mounts a facial, rather than an as-applied,
attack on the Rule. See Doe v. Reed, 130 S. Ct. 2811, 2817 (2010)
-11-
(noting that when the "relief that would follow" from a claim
"reach[es] beyond the particular circumstances of these
plaintiffs," the plaintiffs must "satisfy our standards for a
facial challenge to the extent of that reach").
This attack on Rule LXX falls squarely within the Supreme
Court's definition of a facial taking: "a claim that the mere
enactment of a statute constitutes a taking," as opposed to an
as-applied claim that "the particular impact of government action
on a specific piece of property requires the payment of just
compensation." Keystone Bituminous Coal Ass'n v. DeBenedictis, 480
U.S. 470, 494 (1987). It is clear that facial challenges may be
mounted on regulations; Keystone Bituminous itself involved an
assessment of whether certain regulations constituted a taking.
Id. at 474, 493.
More recent cases also distinguish facial from as-applied
takings claims. In Tahoe-Sierra Preservation Council, Inc. v.
Tahoe Regional Planning Agency, 535 U.S. 302 (2002), the Court
noted that "[p]etitioners make only a facial attack on Ordinance
81-5 and Resolution 83-21. They contend that the mere enactment of
a temporary regulation that, while in effect, denies a property
owner all viable economic use of her property gives rise to an
unqualified constitutional obligation to compensate her for the
value of its use during that period." Id. at 320; see also Suitum
v. Tahoe Reg'l Planning Agency, 520 U.S. 725, 736 & n.10 (1997)
-12-
("[T]he only issue justiciable at that point was whether mere
enactment of the statute amounted to a taking. . . . Such facial
challenges to regulation are generally ripe the moment the
challenged regulation or ordinance is passed, but face an uphill
battle, since it is difficult to demonstrate that mere enactment of
a piece of legislation deprived [the owner] of economically viable
use of [his] property." (alterations in original) (internal
quotation marks and citations omitted)).
Beyond that, the Association's position, for strategic
reasons, has been that it is mounting a facial attack, and we
consider it bound by this position. It took this position in order
to argue it did not need to comply with Williamson County's
ripeness requirements. The district court relied on this
distinction in denying the Commissioner's motion to dismiss, and
explained that "[g]iven that Plaintiff is mounting a facial
challenge to Rule LXX, the Court finds that Plaintiff's claims are
ripe for review and that the Court's subject matter jurisdiction is
not foreclosed by the Williamson County requirements."8
8
In response to a motion to dismiss arguing that the
Association had failed to satisfy Williamson County's ripeness
requirements, the Association argued that "[w]hile the Insurance
Commissioner is correct that a claim that Rule LXX affects a
regulatory taking as applied to the [Association's] property would
be unripe for this reason, the [Association] mounts a facial
challenge to the regulation." The Association further clarified
that "[i]n this case, the [Association] has alleged a facial
challenge to the section of Rule LXX which establishes the Special
Reserve."
The Association's opposition to the Commissioner's motion
-13-
Nevertheless, the Association now argues that it should
be permitted to change its position based on an intervening Supreme
Court decision, and that its case should not be treated as solely
a facial attack. It argues that Citizens United v. Federal
Election Commission, 130 S. Ct. 876 (2010), has relaxed the
distinction between facial and as-applied claims. The Association
points to the majority's statement that "the distinction between
facial and as-applied challenges is not so well defined that it has
some automatic effect or that it must always control the pleadings
and disposition in every case involving a constitutional
challenge." Id. at 893.
Even aside from whether the Association is judicially
estopped from changing its position, the argument fails. Whatever
merit the Association's argument might have in the First Amendment
context, Citizens United did not purport to change the well-
established rules as to facial challenges under the Takings
Clause.9
for summary judgment further reinforces that the Association's
challenge to Rule LXX was facial, rather than as-applied.
9
Cf. Metzger, Facial and As-Applied Challenges Under The
Roberts Court, 36 Fordham Urb. L.J. 773, 798 (2009) ("[S]ubstantive
constitutional law drives the Court's approach to facial and
as-applied challenges. That substantive constitutional law
determines the availability of facial challenges has long been
acknowledged, and is not a new development with the Roberts
Court."); Fallon, As-Applied And Facial Challenges And Third-Party
Standing, 113 Harv. L. Rev. 1321, 1324 (2000) ("[T]he availability
of facial challenges varies on a doctrine-by-doctrine basis and is
a function of the applicable substantive tests of constitutional
-14-
The Supreme Court has explained that there is "an
important distinction between a claim that the mere enactment of a
statute constitutes a taking and a claim that the particular impact
of government action on a specific piece of property requires the
payment of just compensation." Keystone Bituminous, 480 U.S. at
494 (emphasis added); see also Brubaker Amusement Co. v. United
States, 304 F.3d 1349, 1356 (Fed. Cir. 2002) ("The Supreme Court
has repeatedly emphasized a distinction between takings claims that
arise in the context of facial challenges and those that arise in
the context of challenges to the application of a statute or
regulation to a particular piece of property."). Not only has the
Court outlined the appropriate test to be used in a facial Takings
Clause challenge — whether the passage of the statute "denies an
owner economically viable use of his land," Keystone Bituminous,
480 U.S. at 495, but it has also explained that facial challenges
are not subject to the second portion of Williamson County's
ripeness analysis, San Remo Hotel v. City & Cnty. of S.F., 545 U.S.
323, 345-46 (2005); Yee v. City of Escondido, 503 U.S. 519, 533-34
(1992); see also Levald, Inc. v. City of Palm Desert, 998 F.2d 680,
686 (9th Cir. 1993) (noting that facial and as-applied takings
claims "raise[] different ripeness and statute of limitations
issues"). As a result, it is clear that the Association raised
only a facial challenge with respect to Rule LXX.
validity.").
-15-
This facial challenge was barred by the statute of
limitations.10
The Association's takings claim was brought under 42
U.S.C. § 1983. Section 1983 does not contain its own statute of
limitations; instead, the courts apply the state's personal injury
statute of limitations to all § 1983 claims, regardless of the
underlying law on which the claim is based. Owens v. Okure, 488
U.S. 235, 240-41 (1989). In Puerto Rico, the relevant limitations
period is one year. P.R. Laws Ann. tit. 31, § 5298(2);
Perez-Sanchez v. Pub. Bldg. Auth., 531 F.3d 104, 107 (1st Cir.
2008) ("In Puerto Rico, the limitations period for personal
injuries is one year."). Further, "[i]t is federal law" that
governs "when the statute of limitations begins to run." Gorelick
v. Costin, 605 F.3d 118, 121 (1st Cir. 2010). Section 1983 claims
accrue "when the plaintiff knows, or has reason to know of the
10
The Commissioner timely raised the statute of limitations
defense in both the answer and motion for summary judgment.
Because the statute of limitations is an affirmative defense, see
Fed. R. Civ. P. 8(c)(1), "the defendant bears the burden of
establishing its applicability. The party who has the burden of
proof on a dispositive issue cannot attain summary judgment unless
the evidence he provides on that issue is conclusive." Torres
Vargas v. Santiago Cummings, 149 F.3d 29, 36 (1st Cir. 1998)
(internal citations omitted). Once the defendant produces such
evidence, the burden shifts to the plaintiff to establish that the
statute of limitations does not apply. See Fed. R. Civ. P. 56(c),
(e); Citigroup Inc. v. Fed. Ins. Co., No. 10-20445, 2011 WL
3422073, at *3 (5th Cir. Aug. 5, 2011); Campbell v. Grand Trunk W.
R.R. Co., 238 F.3d 772, 775 (6th Cir. 2001); Blue Cross & Blue
Shield of Ala. v. Weitz, 913 F.2d 1544, 1552 (11th Cir. 1990).
-16-
injury on which the action is based, and a plaintiff is deemed to
know or have reason to know at the time of the act itself and not
at the point that the harmful consequences are felt." Id. at 122
(quoting Morán-Vega, 537 F.3d at 20) (internal quotation marks
omitted).
In the context of a facial takings challenge, the
limitations period accrues when the purportedly unconstitutional
statute or regulation is enacted or becomes effective. This is so
because, in such cases, the plaintiff alleges that the "mere
enactment of a statute constitutes a taking." Keystone Bituminous,
480 U.S. at 494.
It is true that the question of "ripeness" of a takings
claim is analytically distinct from the question of when a takings
claim accrues for statute of limitations purposes. See
Downing/Salt Pond, 643 F.3d at 20-22 (explaining Takings Clause
ripeness requirements); Addington v. U.S. Airline Pilots Ass'n, 606
F.3d 1174, 1182 n.6 (9th Cir. 2010) (explaining, in a non-takings
case, that while ripeness and accrual are related, "there are key
differences in the posture of a case that presents a statute of
limitations issue and one that presents a ripeness issue"). And
none of the Supreme Court takings cases we have cited are concerned
with the accrual of claims for statute of limitations purposes.
Nevertheless, it is clear that a facial takings challenge
accrues at the time the offending statute or regulation is enacted
-17-
or becomes effective.11 A facial challenge also becomes ripe at
that time. The courts that have considered the relationship
between ripeness and accrual in the takings context have reached
this conclusion, reasoning that because the constitutional injury
is not complete until the claim becomes ripe, the statute of
limitations cannot accrue before that point in time. Norco
Constr., Inc. v. King Cnty., 801 F.2d 1143, 1146 (9th Cir. 1986)
(Kennedy, J.) (holding, in the takings context, that "[t]he
conclusion that a claim is premature for adjudication controls as
well the determination that the claim has not accrued for purposes
of limitations" because "[c]ourts have held consistently that a
cause of action does not accrue until a party has a right to
enforce the claim"); Hensley v. City of Columbus, 557 F.3d 693,
696-97 (6th Cir. 2009) (holding that the statute of limitations
accrues when the takings claim becomes ripe); New Port Largo, Inc.
v. Monroe Cnty., 985 F.2d 1488, 1496-97 (11th Cir. 1993) ("When
Williamson's two-prong test is met, the injury is complete, and the
claim accrues for purposes of the statute of limitations.");
Biddison v. City of Chicago, 921 F.2d 724, 728 (7th Cir. 1991)
(following Norco)
We agree with this conclusion. While the ripeness and
accrual questions are conceptually distinct, as a functional
11
This case does not require us to assess the precise moment
of accrual when the date of enactment differs from the date the
statute or regulation becomes effective.
-18-
matter, given the way the Court has formulated the Williamson
County ripeness requirements, and the takings law on facial
attacks, a facial takings challenge generally both ripens and
accrues for statute of limitations purposes at the same moment in
time. See, e.g., Suitum, 520 U.S. at 736 n.10 (noting that
"'facial' challenges to regulation are generally ripe the moment
the challenged regulation or ordinance is passed" (quoting Keystone
Bituminous, 480 U.S. at 495)).
Here, Rule LXX was promulgated, in its current form, on
December 28, 2000. The Association was on notice, as of that date,
of the supposed taking of what it considers to be its property. As
a result, the Association's claim that Rule LXX is an
unconstitutional taking accrued on that date, and the statute of
limitations ran one year later. The Association did not file suit
until November 4, 2008 and its suit is time-barred.
The Association's arguments based on analogy to the
continuing violation doctrine in employment fail and miss the
point. Even under that doctrine, the "ongoing injuries" or harmful
"effects" of a single unlawful act do not extend the limitations
period. Jensen v. Frank, 912 F.2d 517, 523 (1st Cir. 1990); see
also Gilbert v. City of Cambridge, 932 F.2d 51, 58-59 (1st Cir.
1991) (noting the "'critical distinction' between a continuing act
and a singular act that brings continuing consequences in its
-19-
roiled wake" (quoting Altair Corp. v. Pesquera de Busquets, 769
F.2d 30, 32 (1st Cir. 1985))).
A complaint about the ongoing effects of the 2000
amendment to Rule LXX is not a continuing violation. Indeed, the
very concept of a facial takings challenge is that the "mere
enactment of the statute amounted to a taking." Suitum, 520 U.S.
at 736. This reasoning also requires rejecting the application of
the continuing violation doctrine to facial takings claims, as
several circuits have held. See, e.g., Colony Cove Props., LLC v.
City of Carson, 640 F.3d 948, 956 (9th Cir. 2011) ("[I]n the
takings context, the basis of a facial challenge is that the very
enactment of the statute has reduced the value of the property or
has effected a transfer of a property interest. This is a single
harm, measurable and compensable when the statute is passed."
(quoting Guggenheim v. City of Goleta, 638 F.3d 1111, 1119 (9th
Cir. 2010))); New Pulaski Co. v. Mayor & City Council of Balt.,
Nos. 97-2118, 97-2204, 2000 WL 1005207, at *6 (4th Cir. July 20,
2000) (rejecting continuing violation theory in the context of a
facial challenge to an ordinance, holding that "any taking occurred
at the time of the Moratorium's enactment"); Kuhnle Bros., Inc. v.
Cnty. of Geauga, 103 F.3d 516, 521 (6th Cir. 1997) ("Any
deprivation of property that [plaintiff] suffered was fully
effectuated when Resolution 91-87 was enacted, and the statute of
limitations began to run at that time.").
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This is so despite the fact that the Association did not
know the precise dollar amount that would be subject to Rule LXX in
future years. The Association was aware that the Rule would
operate automatically on all profits earned after the Rule came
into effect. Its application to future earnings was mechanical and
automatic. The transfer of funds into the Special Reserve each
year is simply a harmful effect of the passage of Rule LXX, the
underlying source of the Association's complaint. Thus, the
continuing violation doctrine is inapposite. Cf. Gilbert, 932 F.2d
at 59 (rejecting continuing violation theory in the context of an
as-applied takings challenge to a permit denial, explaining that
"[w]hatever harms were suffered add up to nothing more than the
predictable, albeit painful, consequences of the permit denial").
The facial takings claims regarding Rule LXX are time-
barred.12
B. The Audit and the Interpretation
The Association never articulated a clear, distinct
claim regarding the audit, the repayment orders, and the
Commissioner's interpretation that other property was subject to
12
The Association also argues, for the first time on appeal,
that its claims were brought directly under the Constitution, and
thus subject to a different statute of limitations, and that
statutes of limitations are inapplicable to claims for prospective
relief for constitutional violations. As neither argument was
raised before the district court, they are waived. Chiang v.
Verizon New Eng. Inc., 595 F.3d 26, 42 (1st Cir. 2010)
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the Special Reserve requirements in the district court, and so has
waived any such claim. We do not decide whether such a claim would
have been timely, whether there is a takings claim, or whether, if
so, it would be a facial or an as-applied challenge.
The complaint does not contain any mention of the audit,
nor did the Association request any relief regarding the audit,
despite the fact that the complaint was filed on November 4, 2008
- nearly five months after the audit resolution was issued on June
12, 2008. Similarly, the opposition to the motion to dismiss makes
no claim regarding the audit; it explains that the Association
raises only "a facial challenge to the section of Rule LXX which
establishes the Special Reserve." The Association did not argue
the effects of the audit should be viewed differently than its
challenge to Rule LXX until its opposition to the Commissioner's
motion for summary judgment, where the Association stated, without
analysis, that "this announcement of a new official policy
constitutes an additional violation of the Association's
constitutional rights under the Fifth Amendment which would entitle
the Association to seek judicial redress."
The district court did not assess the timeliness of any
claim regarding the audit, because it found the belated assertion
was "in the nature of an as-applied takings challenge."
Asociación de Suscripción, 720 F. Supp. 2d at 158. The district
court determined that such a claim was not before it, because the
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Association had stated it was "bringing only a facial challenge to
the regulation in question." Id.
Given the Association's failure to raise the issue of the
audit resolution in the complaint or at any time before its
response to the Commissioner's summary judgment motion, or even to
assert it was a separate facial claim, this determination was not
error. See Gilmour v. Gates, McDonald & Co., 382 F.3d 1312, 1315
(11th Cir. 2004) ("At the summary judgment stage, the proper
procedure for plaintiffs to assert a new claim is to amend the
complaint in accordance with Fed. R. Civ. P. 15(a). A plaintiff
may not amend her complaint through argument in a brief opposing
summary judgment."); see also Wahi v. Charleston Area Med. Ctr.,
Inc., 562 F.3d 599, 617 (4th Cir. 2009) (collecting cases).
IV.
We affirm dismissal of the action.
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