604 F.3d 7 (1st Cir. 2010), 09-2569, Fideicomiso De La Tierra Del Cano Martin Pena v. Fortuno

Docket Nº:09-2569.
Citation:604 F.3d 7
Opinion Judge:LYNCH, Chief Judge.
Attorney:Judith Berkan, with whom Mary Jo M
Judge Panel:Before LYNCH, Chief Judge, TORRUELLA and LIPEZ, Circuit Judges. TORRUELLA, Circuit Judge (Concurring).
Case Date:April 28, 2010
Court:United States Courts of Appeals, Court of Appeals for the First Circuit

Page 7

604 F.3d 7 (1st Cir. 2010)



Luis G. FORTUÑO, in his official capacity as Governor of the Commonwealth of Puerto Rico; Antonio M. Sagardía-De Jesús, in his official capacity as Secretary of Justice of the Commonwealth of Puerto Rico; Municipality of San Juan; Jorge Santini in his official capacity as the Mayor of the Municipality of San Juan; Autoridad de Energía Eléctrica; Autoridad de Carreteras; and Administracion de Terrenos, Defendants, Appellees.

No. 09-2569.

United States Court of Appeals, First Circuit.

April 28, 2010

Heard March 2, 2010.

Page 8

[Copyrighted Material Omitted]

Page 9

[Copyrighted Material Omitted]

Page 10

Judith Berkan, with whom Mary Jo Méndez, Berkan/Méndez, Pedro J. Saade, and the Clínica de Asistencia Legal Escuela de Derecho, Universidad de Puerto Rico, were on brief for appellant.

Eliezer Aldarondo-Ortiz, with whom Eliezer A. Aldarondo-López, Aldarondo & López Bras, Guillermo Somoza-Colombani, Attorney General, Mercado & Soto Law Offices, Maymí, Rivera & Rotger, P.S.C., Angel Rotger Sabat, and Francisco J. Amundaray were on brief for appellees.

Before LYNCH, Chief Judge, TORRUELLA and LIPEZ, Circuit Judges.

LYNCH, Chief Judge.

Plaintiff, Fideicomiso de la Tierra del Caño Martin Peña (Land Trust of the Martin Peña Canal, hereinafter " Fideicomiso" ), an entity created by legislation, brings an unusual Takings Clause claim. The Fideicomiso does not attack the exercise of government condemnation or eminent domain powers. Rather, the challenge is to Law 32, a legislative amendment to an earlier statute enacted in 2004. That earlier statute is Law 489, which the Fideicomiso correctly admits serves a number of public purposes and which created the Fideicomiso. Law 489 was implemented by, inter alia, transferring to the Fideicomiso title to certain lands that had originally belonged to public agencies of the Commonwealth of Puerto Rico and the Municipality of San Juan when Law 489 was enacted. Law 32 revoked the Fideicomiso's title to those lands and returned title to those Commonwealth and municipal public agencies.

The essence of the Fideicomiso's claim is that if it is stripped of title to these lands and public agencies are reinvested with title, those agencies cannot be trusted to carry out the public purposes embodied in Law 489. The Fideicomiso styles this as a claim that the transfer of lands back to public agencies does not meet the " public use" requirement of the Takings Clause.

We order dismissal of the complaint.

In 2004, Puerto Rico enacted Law 489, the Martin Peña Canal Special Planning District Integrated Development Act. See P.R. Laws Ann. tit. 23, § 5031-5066. Law 489's stated public purpose is " to give priority attention to the environmental restoration

Page 11

of the Martin Peña Canal and to rehabilitate and revitalize the communities along its north and south banks" and to thereby " promote a healthy relationship between the natural environment and its surrounding city and communities, with a vision of integrated development based on community empowerment." Id. § 5032.

The more specific purposes of the Martin Peña Canal ENLACE (LIAISON) Project, as embodied in Law 489, include:

Environmental. To enable the rehabilitation of the San Juan Bay Estuary, improve the quality of its waters and the habitat of its fauna and wildlife by broadening and dredging of the Martin Peña Canal and a conservation strip along both banks thereof.

Socio-economic. To improve the living conditions of the approximately thirty thousand (30,000) residents of the eight communities located along both sides of the Canal in the areas of public sanitation, housing, ordinance and quality of the urban spaces and the infrastructure.

Id. These stated purposes make it clear that one of the explicit intentions of the Martin Peña ENLACE Project is to remove conditions harmful to the public. Another explicit intention of the project is " to foster an integrated community development spearheaded by the members of the communities themselves." Id.

To implement these policy goals, Law 489 created two entities, the Martin Peña ENLACE Project Corporation (" Corporation" ), id. § 5033, and the Fideicomiso, id. § 5048. The Fideicomiso, as a land trust, was charged with administering and developing certain lands in the canal area for the benefit of the communities there. Id. One of its key goals was " [t]o contribute toward the solution of the ownership rights problem of many District residents through collective land-holding." Id.

The Corporation's mandate made it " responsible for coordinating the implementation of all aspects of the ENLACE Project; including ... housing development, infrastructure, the dredging and canalization of the Canal, as well as urban and socio-economic development," and " [t]o guarantee mechanisms for citizen participation in the planning and execution of the ENLACE Project and promote community empowerment." See id. § 5033.

Toward those ends, Law 489 provided that title to any lands in the canal area owned by the Commonwealth of Puerto Rico and the Municipality of San Juan would automatically transfer to the Corporation 160 days after the act became effective. Id. § 5045.1 The Corporation would then transfer these lands to the Fideicomiso after regulations governing the Fideicomiso's operations were established. Id. §§ 5046, 5048. Those regulations were promulgated on October 21, 2008. See General Regulations for the Operation of the Caño Martin Peña Land Trust (hereinafter " Land Trust Regulations" ). The land transfer to the Fideicomiso was completed with a formal deed on May 14, 2009, nearly five years after Law 489 was enacted.

One month later, on June 18, 2009, Puerto Rico enacted Law 32, a law which retroactively revoked only article 16 of Law 489, the article which had provided for the transfer of lands from the Commonwealth and Municipality to the Corporation and ultimately to the Fideicomiso. See Act of June 23, 2009, No. 32. Under Law 32, title to those lands was to revert back to the Commonwealth and Municipality

Page 12

immediately. Id. art. 1. Law 32's stated purpose was " [t]o amend Article 16 of Act No. 489 ... to make viable that its provisions be harmonized with other laws, and to clarify that public domain lands are not transferrable." Id. pmbl. Most pertinent to this case are these provisions:

Should the Corporation or the Fideicomiso, by virtue of the Act, have attempted to or have registered any Municipal property to its name, the same is by the present revoked and without effect and the title will immediately revert to the Municipality of San Juan.

The properties of the Commonwealth of Puerto Rico will be studied and evaluated by its title holding dependencies to determine if these remain titled to the agency....

Any of these properties which have been transferred to the Corporation or Fideicomiso will revert to the original Agency or Titleholder in order to follow the legal process previously mentioned.

Id. art 1. The only lands the Corporation transferred to the Fideicomiso came from the public agencies of the Commonwealth and Municipality. Accordingly, the provision as to the reversion to the original titleholder is inapplicable. Law 32 does provide that public agencies may, under certain conditions, transfer title to lands in the canal district to the Corporation. Id.

Two days after Law 32's enactment, the Fideicomiso brought a civil rights suit in the federal district court of Puerto Rico against various entities and officials of the Commonwealth and the Municipality. The Fideicomiso primarily seeks to invalidate Law 32 under the Takings Clause, though it also makes claims under the Due Process Clause, the Contracts Clause, and the Ex Post Facto Clause of the United States Constitution.2 Implementation of Law 32 has been stayed by this court in order to maintain the status quo while the constitutional issues are addressed.

The Takings Clause of the Fifth Amendment applies to the states and to Puerto Rico through the Fourteenth Amendment. See Tenoco Oil Co., Inc. v. Dep't of Consumer Affairs, 876 F.2d 1013, 1017 n. 9 (1st Cir.1989). The Takings Clause sets two conditions on the government's constitutional authority to take private property: the government may take private property for " public use," but it must provide just compensation when it does so. U.S. Const. amend. V.

The Fideicomiso says that Puerto Rico lacks authority to retake title to property recently transferred to the Fideicomiso, and that the federal courts should enjoin defendants from implementing Law 32 to do so, because any taking would not be for " public use." 3 It does not seek just compensation.

I. Facts

The events leading up to Law 32's enactment are undisputed.

For centuries, water from the San JoséLagoon emptied into the ocean by way of

Page 13

the Martin Peña Canal, a shallow, narrow, three-mile-long channel surrounded by mangrove swamps that runs through the heart of the city of San Juan.

Until the mid-twentieth century, the area around the canal was unsettled and undeveloped. The Great Depression hit Puerto Rico's agricultural economy especially hard, and Hurricanes San Felipe and San Ciprian, two of the worst in Puerto Rican history, destroyed agricultural production and left hundreds of thousands of people homeless. See Carlos Marquez, What If? Puerto Rico's Economy: It's a Matter of Status, P.R. Herald, Aug. 5, 2004. Migrants fled ravaged rural communities for San Juan, and there, lacking the resources for anything else, they began settling the swampland around the Martin Peña Canal.

Generations of Puerto Ricans have since migrated from the countryside to the city, and the canal area is now home to some 30,000 residents in eight distinct communities spanning hundreds of acres. See P.R. Laws Ann. tit. 23, §...

To continue reading