Antilles Cement Corp. v. Calderon

• Decision Date: 16 October 2003
• Docket Number: No. CIV. 02-1643(JP).,CIV. 02-1643(JP).
• Parties: ANTILLES CEMENT CORPORATION, Plaintiff v. Sila M. CALDERON, et al., Defendants
• Court: U.S. District Court — District of Puerto Rico

288 F.Supp.2d 187

ANTILLES CEMENT CORPORATION, Plaintiff v. Sila M. CALDERON, et al., Defendants

No. CIV. 02-1643(JP).

United States District Court, D. Puerto Rico.

October 16, 2003.

COPYRIGHT MATERIAL OMITTED

Lino J. Saldaña, Saldaña, Saldaña-Egozcue & Vallecillo, PSC, Santurce, PR, for Plaintiff.

Salvador J. Antonetti-Stutts, Pietrantoni Méndez & Alvarez, Gerardo De Jesús Annoni, Sánchez Betances & Sifre, P.S.C., Mariana Negrón Vargas, Commonwealth Department of Justice, Federal Litigation Division, San Juan, PR, for Defendant.

OPINION AND ORDER

PIERAS, Senior District Judge.

I. INTRODUCTION

The Court has before it Plaintiff's "Motion for Summary Judgment" (docket No. 7), Defendants' opposition thereto (docket No. 15), Defendants' "Motion to Dismiss" (docket No. 14), and Plaintiff's opposition thereto (docket No. 21).

Plaintiff brings the instant action seeking declaratory judgment stating that Puerto Rico Laws 109, 3 P.R. Stat. Ann. §§ 927-927h and 132, 10 P.R. Stat. Ann. § 167e(a),(b), which prohibit the use of non-Puerto Rican cement in construction projects funded by the Commonwealth of Puerto Rico or the United States, violate the Dormant Foreign Commerce Clause of the United States Constitution. In addition, Plaintiff seeks a declaratory judgment stating that the laws violate the Supremacy Clause of the U.S. Constitution, as they allege that they conflict with the Surface Transportation Assistance Act of 1982, 23 U.S.C. §§ 101-161, as implemented by federal regulations 23 C.F.R. 635.409 and 635.410, which Plaintiff claims prohibit states using federal funds for highway construction from imposing requirements that discriminate against materials from other states.

II. FACTS

On July 12, 1985, the Puerto Rico Legislature enacted "Law 109", which requires that construction projects funded by the Government of Puerto Rico or the United States use only cement manufactured in Puerto Rico. The law applies to the government itself and to entities that contract with the government to complete government-funded projects. The types of cement covered by the law are premixed concrete, cement blocks, concrete mixed at the work site, and the mixture used for plastering. The law provides exceptions that permit covered entities to use imported cement where there is a breakdown or equipment failure in Puerto Rico cement plants, where Puerto Rican cement is not available in sufficient quantities or is not of a satisfactory quality, and where the use of Puerto Rican cement would exceed the maximum percent of funding allowed by the government for cement in a given state-funded project. See Law 109, 3 P.R. Stat. Ann. §§ 927-927h.

According to the "Guide for Interpretation and Application of the Laws," approved by the Association of Preference for Government Purchases in April, 2002, the law was passed in reaction to a crisis confronting the Puerto Rican construction industry. The law was designed to create jobs and to help local businesses by substituting imports with Puerto Rican products.

On September 17, 2001, the Puerto Rico Legislature enacted Law 132, which states that bags of cement manufactured outside Puerto Rico must contain a written warning stating the cement contained in the bag may not be used for construction work for the government of the United States and of Puerto Rico. See Law 132, Articles 9(a) and 9(b).

Plaintiff Antilles Cement Corporation imports cement manufactured in foreign countries to Puerto Rico then sells the cement to various enterprises in Puerto Rico, including manufacturers of premixed concrete. Plaintiff has imported cement manufactured in Denmark, China, and Columbia for sale and distribution in Puerto Rico.

Plaintiff now moves for summary judgment, alleging that Law 109 and Law 132 violate the Dormant Foreign Commerce Clause of the U.S. Constitution by discriminating against cement manufactured outside Puerto Rico. Plaintiff states that, as an importer of foreign cement, it has suffered economic injury as a result of both Law 109 and Law 132. Plaintiff also alleges that Law 109 directly conflicts with the regulations interpreting the Surface Transportation Assistance Act ("STAA") of 1982, 23 U.S.C. §§ 101-161, which prohibit states using federal funds for highway construction from imposing requirements that discriminate against materials from other states. According to Plaintiff, Law 109 violates the Supremacy Clause of the U.S. Constitution, in that it conflicts with these federal regulations.¹

Defendants raise the following arguments in response to Plaintiff's allegations. First, Defendants assert that Plaintiff lacks standing to contest any aspect of Laws 109 and 132 that may violate the domestic Commerce Clause because Plaintiff is an importer of foreign cement. Therefore, Plaintiff did not sustain any injury related to the domestic commerce restrictions imposed by the law and accordingly lacks standing to contest them. According to Defendant, Plaintiff's lack of standing also prevents it from arguing that laws 109 and 132 conflict with the STAA in violation of the Supremacy Clause. In addition, Defendants state that Laws 109 and 132 do not violate the Commerce Clause because Congress has "sanctioned" laws of this type by not passing legislation invalidating existing "Buy American" legislation passed in various states. According to Defendants, Congress is aware of state efforts to restrict procurement of foreign goods in state-funded construction projects and has yet to impose a policy of national uniformity. They allege that this inaction constitutes Congressional approval. Finally, Defendants argue that, even without this tacit approval, Laws 109 and 132 are not unconstitutional under the Commerce Clause.

Defendants argue that summary judgment is not appropriate at this stage in the proceedings because the parties have yet to begin the discovery process. However, the Court finds that there are no material facts in dispute in the instant case. The content of the law at issue is clear, as is the status of Plaintiff as an importer of foreign cement. Accordingly, the Court DENIES Defendant's request to deny Plaintiff's motion for summary judgment without prejudice (docket No. 15) and will proceed with the analysis of Plaintiff's motion for summary judgment.

III. SUMMARY JUDGMENT STANDARD

Rule 56(c) of the Federal Rules of Civil Procedure provides for the entry of summary judgment where "the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(c); Pagano v. Frank, 983 F.2d 343, 347 (1st Cir.1993); Lipsett v. University of Puerto Rico, 864 F.2d 881, 894 (1st Cir.1988). Summary judgment is appropriate where, after drawing all reasonable inferences in favor of the non-moving party, there is no genuine issue of material fact for trial. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). A fact is material if, based on the substantive law at issue, it might affect the outcome of the case. Id. at 248; Mack v. Great Atl. & Pac. Tea Co., Inc., 871 F.2d 179, 181 (1st Cir.1989). A material issue is "genuine" if there is sufficient evidence to permit a reasonable trier of fact to resolve the issue in the non-moving party's favor. See Anderson, 477 U.S. at 248, 106 S.Ct. at 2510; Boston Athletic Ass'n v. Sullivan, 867 F.2d 22, 24 (1st Cir.1989).

The party filing a motion for summary judgment bears the initial burden of proof to show "that there is an absence of evidence to support the non-moving party's case." Celotex Corp. v. Catrett, 477 U.S. 317, 325, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). The burden then shifts to the non-movant to show that "sufficient evidence supporting the claimed factual dispute [exists] to require a jury or judge to resolve the parties' differing versions of truth at trial." See First Nat'l Bank of Ariz. v. Cities Serv. Co., 391 U.S. 253, 288-89, 88 S.Ct. 1575, 1592-93, 20 L.Ed.2d 569 (1968). The party opposing summary judgment may not rest upon mere allegations or denials of the pleadings, but must affirmatively show, through filing of supporting affidavits or otherwise, that there is a genuine issue for trial. See id.; see also Goldman v. First Nat'l Bank of Boston, 985 F.2d 1113, 1116 (1st Cir.1993). On issues where the non-movant bears the ultimate burden of proof, he must present definite, competent evidence to rebut the motion. See Anderson, 477 U.S. at 256-57, 106 S.Ct. at 2514-15.

IV. CONCLUSIONS OF LAW

A. Does Plaintiff have Standing to Challenge the Aspects of Law 109, Law 132, and the Surface Transportation Assistance Act that impact solely Domestic Commerce?

Article III of the Constitution of the United States limits the jurisdiction of federal courts to "Cases" and "Controversies". The doctrine of standing has developed to identify those disputes which are appropriately resolved through the judicial process. See Whitmore v. Arkansas, 495 U.S. 149, 155, 110 S.Ct. 1717, 1722, 109 L.Ed.2d 135 (1990).

In order to have standing to challenge a law, a Plaintiff must establish the following three factors. First, the Plaintiff must have suffered an "injury in fact"—an invasion of a legally protected interest that is (a) concrete and particularized and (b) actual and imminent, as opposed to conjectural or hypothetical. Second, there must be a causal connection between the injury and the conduct complained of. Finally, it must be "likely," as opposed to merely "speculative," that the injury claimed will be redressed by a favorable decision. See Luján v. Defenders of Wildlife, 504 U.S. 555, 560, 112 S.Ct. 2130, 2136, 119 L.Ed.2d 351 (1992).

The party invoking federal jurisdiction bears the burden of establishing these elements. See id., 504 U.S. at 561, 112 S.Ct. at 2136. These elements are "an...