San Gerónimo Caribe Project, Inc. v. Acevedo–Vil

• Decision Date: 24 July 2012
• Docket Number: No. 09–2566.,09–2566.
• Citation: 687 F.3d 465
• Parties: SAN GERÓNIMO CARIBE PROJECT, INC., Plaintiff, Appellant, v. Hon. Aníbal ACEVEDO–VILÁ, in his individual and personal capacity; Hon. Roberto Sánchez–Ramos, in his individual and personal capacity; Luis A. Vélez–Roche, P.E., in his individual and personal capacity; John Doe; Jane Doe, Defendants, Appellees.
• Court: U.S. Court of Appeals — First Circuit

687 F.3d 465

SAN GERÓNIMO CARIBE PROJECT, INC., Plaintiff, Appellant,

v.Hon. Aníbal ACEVEDO–VILÁ, in his individual and personal capacity; Hon. Roberto Sánchez–Ramos, in his individual and personal capacity; Luis A. Vélez–Roche, P.E., in his individual and personal capacity; John Doe; Jane Doe, Defendants, Appellees.

No. 09–2566.

United States Court of Appeals, First Circuit.

Heard April 3, 2012.

Decided July 24, 2012.

Richard H. Fallon, Jr., with whom John M. García, García & Fernandez, and Orlando Fernández were on brief, for appellant.

Susana I. Peñagarícano–Brown, Assistant Solicitor General, Department of Justice, with whom Luis R. Román–Negrón, Solicitor General, was on brief, for appellees.

Sookyoung Shin, Assistant Attorney General, with whom Martha Coakley, Attorney General of Massachusetts, William J. Schneider, Attorney General of Maine, and Michael A. Delaney, Attorney General of New Hampshire, were on brief, for the Commonwealth of Massachusetts and the States of Maine and New Hampshire, amici curiae.

Before LYNCH, Chief Judge, BOUDIN, LIPEZ, HOWARD and THOMPSON, Circuit Judges.

En Banc

LYNCH, Chief Judge.

This en banc opinion addresses whether the mistaken invocation by state officials of emergency powers granted by state law to stay a major construction project gives rise to a federal claim of denial of procedural due process under the Parratt–Hudson doctrine, as developed in Parratt v. Taylor, 451 U.S. 527, 101 S.Ct. 1908, 68 L.Ed.2d 420 (1981), Hudson v. Palmer, 468 U.S. 517, 104 S.Ct. 3194, 82 L.Ed.2d 393 (1984), and Zinermon v. Burch, 494 U.S. 113, 110 S.Ct. 975, 108 L.Ed.2d 100 (1990). We hold that the Parratt–Hudson doctrine applies, so no federal procedural due process claim is stated.

The San Gerónimo Caribe Project, Inc. (SGCP) appeals from the dismissal of its federal procedural due process claims. On December 27, 2007, the Regulations and Permits Administration (ARPE), a Puerto Rico agency, acting under a statute authorizing summary process in emergency situations presenting an imminent danger to the public health, safety, and welfare, issued a temporary emergency stay of SGCP's ongoing multi-million dollar construction project. A state intermediate appellate court upheld the exercise of emergency powers. The stay lasted sixty-three days, until the Puerto Rico Supreme Court vacated it. That court issued an opinion on July 31, 2008, disagreeing that there had been any imminent danger warranting invocation of the emergency procedure statute and concluding that the stay was issued in error and in violation of Puerto Rico law.

On October 24, 2008, SGCP filed a federal suit against the Governor of Puerto Rico, the Secretary of Justice, and individual members of ARPE asserting, among other claims, that ARPE violated the Due Process Clause of the Fourteenth Amendment by failing to hold a predeprivation hearing before temporarily suspending the construction permits. SGCP sought $38 million in compensatory damages, as well as other relief. The district court rejected SGCP's claims at the motion to dismiss stage, holding that no predeprivation process was required under the Parratt–Hudson doctrine. San Gerónimo Caribe Project, Inc. v. Vila, 663 F.Supp.2d 54, 65 (D.P.R.2009).

A panel of this court held that there was a due process violation but still affirmed the judgment of the district court, on only qualified immunity grounds. San Gerónimo Caribe Project, Inc. v. Acevedo–Vilá, 650 F.3d 826 (1st Cir.2011). The panel held that under Zinermon, 494 U.S. 113, 110 S.Ct. 975, ARPE was required to provide predeprivation process before suspending SGCP's permits and the Parratt–Hudson doctrine was inapplicable. San Gerónimo, 650 F.3d at 836–38. However, the panel also found that some of this court's past precedent on the matter could have reasonably supported ARPE's determination and affirmed dismissal on the grounds that the defendants were entitled to qualified immunity. Id. at 838–39.

A majority of active judges of this court voted to grant rehearing en banc and issued an order vacating the panel opinion.¹San Geronimo Caribe Project, Inc. v. Acevedo Vila, 665 F.3d 350 (1st Cir.2011).

We conclude that the mistake made by ARPE (as found by the Puerto Rico Supreme Court) fits within the “random and unauthorized” prong of the Parratt–Hudson doctrine, and that Zinermon does not apply. As a result, plaintiff's federal procedural due process claim was properly dismissed.

I.

We assume as true the plaintiff's “well-pleaded factual allegations” contained in the complaint. Ashcroft v. Iqbal, 556 U.S. 662, 129 S.Ct. 1937, 1950, 173 L.Ed.2d 868 (2009). We draw all reasonable inferences in favor of the plaintiff. Hill v. Gozani, 638 F.3d 40, 55 (1st Cir.2011). However, we “are not bound to accept as true a legal conclusion couched as a factual allegation,” Iqbal, 129 S.Ct. at 1950 (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007)) (internal quotation marks omitted), nor do we consider “naked assertion [s] devoid of further factual enhancement,” id. at 1949 (alteration in original) (quoting Twombly, 550 U.S. at 557, 127 S.Ct. 1955) (internal quotation marks omitted). See also Soto–Torres v. Fraticelli, 654 F.3d 153, 156 (1st Cir.2011). We also consider the various state decisions of public record giving rise to this claim.² The facts are not in dispute; the legal conclusions from the facts are.

A. Factual Background

In January 2000, the Planning Board of Puerto Rico ³ approved the development of a mixed residential, commercial, and tourism project, known as the Paseo Caribe Project, to be developed under the auspices of SGCP, a privately held corporation.

Upon approval of the project, SGCP acquired several parcels of land for the project from Hilton International of Puerto Rico, Inc. Hilton, in turn, had acquired these parcels from the Hotel Development Corporation, a subsidiary of the Tourism Company of Puerto Rico, in 1998. These parcels of land are located near the Fortín San Gerónimo del Boquerón, the San Gerónimo Fortress, a historic structure built in the late 16th century, which is listed on the National Register of Historic Places.

As to the legality of the sale of some of the lands to SGCP, in 2002 the Puerto Rico Department of Justice (PRDOJ) issued an opinion concluding that, while some of the lands within the boundaries of the Paseo Caribe Project had emerged from the sea, they were nevertheless not part of the public domain and could be sold, as they were, without legislative action. This opinion was consistent with a previous opinion of the Justice Department from 1970.

Beginning in December 2000, ARPE ⁴ issued all of the permits necessary for SGCP's development of the project. Construction, to be conducted in several stages, began in August 2002. Starting in 2002, SGCP and the Puerto Rico Institute of Culture entered into unsuccessful negotiations over public access to the Fortín San Gerónimo, which had been adversely affected by the construction. Public controversy had developed over this access issue, and by 2006 active public protests, requiring police intercession, had begun to occur at the site. The Puerto Rico Senate in June 2006 authorized a Senate Commission to conduct an investigation.⁵ In February 2007, the PRDOJ began its own investigation and developed concerns not only about public access to the Fortín, but also about the ownership of some of the land on which SGCP's construction had been taking place.

During that investigation, on December 11, 2007, the PRDOJ Secretary issued an advisory opinion which concluded that SGCP was not the rightful owner of certain portions of the land on which the project had been built, because that land was gained from the sea and no appropriate legislation transferring ownership to a private party had ever been passed. The opinion found that the two previous PRDOJ opinions were erroneous and should be disregarded.

The opinion “recommend[ed] that the concerned executive governmental entities reevaluate all the administrative decisions already taken” in light of the new opinion, which was “the official interpretation of the Executive Branch of the Commonwealth of Puerto Rico.” The opinion noted that it was only “advisory” and did not constitute a final determination of the ownership of the land in question, as only the courts had the authority to pronounce such a judgment. The opinion characterized itself as “in the public interest,” given “that controversies related with the Paseo Caribe Project have captured the attention of our people,” resulting in “public outcry.” The opinion also made clear that it did not pass judgment on “whether a permit ... was either correct or wrong.”

The opinion “recommend[ed]” that other agencies “perform an exhaustive reevaluation of all the permits ... and other determinations” regarding the project, and made clear that it did not “dictate the precise method through which the different governmental entities concerned should proceed with their reevaluation and with any possible stay of the construction still ongoing.” It stressed that the agencies should act pursuant to applicable laws and “safeguard[ ] any procedural and substantive law or rights the affected parties may have,” including ensuring that all proceedings comported with “due process of law.” It noted that ARPE “has ample power to set aside permits,” quoting the relevant regulations. This included the power to revoke permits that were “granted by fraud or error.” No specific mention was made of the “[e]mergency adjudicatory procedure” of P.R. Laws Ann. tit. 3, § 2167. ⁶

The next day, December 12, 2007, the Governor publicly ordered all administrative agencies to suspend all permits for the project and freeze all construction for an initial period of sixty days. This appears to have been an unusual step.

On December 14, 2007, the Planning Board issued a resolution which, among other things, (1)...