Esso Standard Oil Co. v. Freytes

• Decision Date: 07 November 2006
• Docket Number: No. CIV. 03-2319(CCC).,CIV. 03-2319(CCC).
• Citation: 467 F.Supp.2d 156
• Parties: ESSO STANDARD OIL COMPANY (Puerto Rico), Plaintiff v. Carlos W. López FREYTES, President of the Puerto Rico Environmental Board, in his official capacity; Flor L. Del Valle López and Ángel Berríos Silvestre, Associate Members of the Puerto Rico Environmental Quality Board, in their official and personal capacities; and Norman Velázquez Torres, attorney for the Puerto Rico Environmental Quality Board, in his official and personal capacities, Defendants
• Court: U.S. District Court — District of Puerto Rico

467 F.Supp.2d 156

ESSO STANDARD OIL COMPANY (Puerto Rico), Plaintiff v. Carlos W. López FREYTES, President of the Puerto Rico Environmental Board, in his official capacity; Flor L. Del Valle López and Ángel Berríos Silvestre, Associate Members of the Puerto Rico Environmental Quality Board, in their official and personal capacities; and Norman Velázquez Torres, attorney for the Puerto Rico Environmental Quality Board, in his official and personal capacities, Defendants

No. CIV. 03-2319(CCC).

United States District Court, D. Puerto Rico.

November 7, 2006.

Appeal from the Puerto Rico Environmental Quality Board.

Lawrence P. Riff, Jason Levin, Steptoe & Johnson LLP, Los Angeles, CA, John F. Nevares, John F. Nevares & Assoc. PSC, San Juan, for plaintiff Esso Standard Oil Co. (Puerto Rico).

Eduardo A. Vera-Ramirez, Maria L. Santiago-Ramos, Luis A. Rodriguez-Munoz, Landron & Vera, San Juan, for the defendants.

OPINION AND ORDER

ARENAS, Chief United States Magistrate Judge.

This matter is before the court on plaintiff Esso Standard Oil Company (Puerto Rico)'s (hereinafter "Esso") motion for summary judgment. (Docket No. 160, May 27, 2005.) Plaintiffs seek a declaratory judgment granting permanent injunction to end proceedings through which the Environmental Quality Board (hereinafter "EQB") seeks to prosecute a $75,960,000 fine against Esso.

After consideration of the factual and procedural posture of this case, the applicable law and for the reasons set forth below, Esso's motion for summary judgment will be GRANTED, accompanied by an order for permanent injunction.

I. PROCEDURAL BACKGROUND

Esso filed this action against defendants Esteban Mujica Cato,¹ Flor del Valle López, Ángel Berríos Silvestre and Norman Velázquez Torreson (hereinafter collectively "the defendants") on December 11, 2003 pursuant to 42 U.S.C. § 1983. Esso sought declaratory relief and an injunction to remedy the constitutional injury to which it was subjected as a result of having to defend itself against the proposed imposition of a $75,960,000 fine before a severely biased administrative tribunal. (See Docket Nos. 1, 10 & 13.) The defendants are members and officials of the EQB, who proposed and seek to prosecute the fine in response to a gasoline spill which occurred in a single service station in Barranquitas, Puerto Rico. Esso contends that due to the several allegations of actual and structural bias within the EQB, their right to a fair and impartial tribunal, as protected by the Due Process Clause of the Fourteenth Amendment of the United States Constitution, has been violated, meriting federal intervention and protection.

On March 3, 2004, Esso filed a motion for preliminary injunction, which I denied in my opinion and order of July 28, 2004. The basis for my decision was that abstention was required under the principles of comity and federalism, as set forth in Younger v. Harris, 401 U.S. 37, 44, 91 S.Ct. 746, 27 L.Ed.2d 669 (1971), cited in ESSO Standard Oil Co. (P.R.) v. Mujica Cotto, 327 F.Supp.2d 110, 129 (D.P.R.), aff'd, 389 F.3d 212 (1st Cir.2004). I reasoned that the administrative proceedings had not yet concluded, the fine had not yet been imposed, and the EQB may yet have fairly adjudicated the case. I found for those reasons that Esso had failed to show irreparable harm. Further, I noted that there was the availability of recourse under the state judicial review process which could provide the necessary protections, in the event that Esso ultimately did receive an unfavorable decision before the EQB.

Esso appealed my decision (Docket No. 122), and on November 16, 2004, the First Circuit affirmed based on different reasoning. See Esso Standard Oil Co. (P.R.) v. Mujica Cotto, 389 F.3d 212, 213 (1st Cir. 2004). Although the First Circuit found that the overwhelming appearance of bias throughout the EQB proceedings, if they were to continue, fundamentally constituted a violation of due process, they agreed with my decision that Esso had failed to make a showing of irreparable harm. They concluded that Puerto Rico law allowed for the possibility of interlocutory review within the state system, that this availability ruled out a showing of irreparable harm, and that abstention was therefore required. Id. at 224-25.

Following the decision by the First Circuit, Esso followed the recommended course of action and sought interlocutory review within the Puerto Rico courts. (Docket No. 131-4, Ex, A.) The action was denied, on the basis that the court lacked jurisdiction to consider Esso's interlocutory appeal. (Docket No. 131-5, Ex. B, at 12.) The lack of irreparable harm as found and defined by the First Circuit was thereby obliterated.

Esso then filed a renewed motion for preliminary injunction with this court, which was unopposed by the defendants. I granted the motion on March 11, 2005, and included an order to show cause why the preliminary injunction should not be transformed into a permanent injunction. (Docket 148.) On April 27, 2005, I followed with another opinion and order (Docket No. 159.), finding that it was inappropriate at that time to convert the injunction from preliminary to permanent, due to the lack of "clear and unambiguous notice" to the defendants of my intention to do so. Further, due to the fact that. only the plaintiffs had presented factual evidence at that time, I found it was appropriate to provide defendants with the opportunity to controvert Esso's allegations of bias. (Id. at 21.)

Following the abandonment of the show cause order, plaintiffs filed the instant motion for summary judgment on May 27, 2005, (Docket No. 160), seeking final declaratory and injunctive relief (hereinafter "the motion" or "plaintiffs motion"). Plaintiffs argue in the motion that no disputed issues of material fact exist and that they are therefore entitled to judgment as a matter of law. Defendants filed their response in opposition to plaintiffs motion (hereinafter "opposition brief') on December 30, 2005. (Docket No. 199.) The plaintiffs Reply to the Response in Opposition (hereinafter "Reply") was filed on January 17, 2006. (Docket No. 205.) The defense submitted the final brief on this matter, the Sur—Reply to the Reply to the Response in Opposition (hereinafter "Surreply") on February 11, 2006. (Docket No. 213.)

II. FACTUAL BACKGROUND

In my July 28, 2004 opinion and order, after considering the evidence presented at the hearing held before me, I enumerated my detailed findings of fact. Therefore, I adopt the findings of fact of that opinion and order. ESSO Standard Oil Co. (P.R.) v. Mujica Cotto, 327 F.Supp.2d at 119-24.

III. RULES OF LAW

In analyzing the present motion I must consider and apply the standards for Permanent Injunction and Summary Judgment.

A. Permanent Injunction Standard

"Where a plaintiff seeks permanent injunctive relief, the test is the same [as for preliminary injunctive relief], except that the movant must show actual success on the merits of the claim, rather than a mere likelihood of success.'" Caroline T. v. Hudson School Dist., 915 F.2d 752, 755 (1st Cir.1990) (quoting K-Mart Corp. v. Oriental Plaza, Inc., 875 F.2d 907, [915] (1st Cir.1989)). "In order to issue a permanent injunction, a district court typically must find that (1) the plaintiff has demonstrated actual success on the merits of its claims; (2) the plaintiff would be irreparably injured in the absence of injunctive relief; (3) the harm to the plaintiff from defendant's conduct would exceed the harm to the defendant accruing from the issuance of an injunction; and (4) the public interest would not be adversely affected by an injunction." United States v. Mass. Water Res. Auth., 256 F.3d 36, 51 n. 15 (1st Cir.2001) (citing A.W. Chesterton Co. v. Chesterton, 128 F.3d 1,5 (1st Cir.1997)).

B. Summary Judgment Standard

1. Federal Rule of Civil Procedure 56

Summary judgment is appropriate when "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 a judgment as a matter of law." Fed.R.Civ.P. 56(c). To succeed on a motion for summary judgment, the moving party must show that there is an absence of evidence to support the nonmoving party's position. Celotex Corp. v. Catrett, 477 U.S. 317, 325, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). Once the moving party has properly supported its motion, the burden shifts to the nonmoving party to set forth specific facts showing there is a genuine issue for trial and that a trier of fact could reasonably find in its favor. Santiago-Ramos v. Centennial P.R. Wireless Corp., 217 F.3d 46, 52 (1st Cir.2000). The party opposing summary judgment must produce "specific facts, in suitable evidentiary form," to counter the evidence presented by the movant. López-Carrasquillo v. Rubianes, 230 F.3d 409, 413 (1st Cir.2000) (quoting Morris v. Government Dev. Bank of P.R., 27 F.3d 746, 748 (1st Cir.1994)). A party cannot discharge said burden by relying upon. "conclusory allegations, improbable inferences, and unsupportable speculation." Id.; see also Carroll v. Xerox Corp., 294 F.3d 231, 236-37 (1st Cir.2002) (quoting J. Geils Band Employee Benefit Plan v. Smith Barney Shearson, Inc., 76 F.3d 1245, 1251 (1st Cir.1996)) ("`neither conclusory allegations [nor] improbable inferences' are sufficient to defeat summary judgment.").

The court must view the facts in a light most hospitable to the nonmoving party, drawing all reasonable inferences in that party's favor. See Patterson v. Patterson, 306 F.3d 1156, 1157 (1st Cir.2002) (citing Griggs-Ryan v. Smith, 904 F.2d 112, 115 (1st Cir.1990)). "In this context; `genuine' means that the evidence about the fact is such that a reasonable jury could resolve the point in favor of the nonmoving party; `material' means that the fact is one `that might affect the outcome of the suit under the...