USCA1 Opinion
UNITED STATES COURT OF APPEALS
FOR THE FIRST CIRCUIT
____________________
No. 93-2098
FRANCISCA MARRERO-GARCIA, THE
OTHER PLAINTIFFS THAT APPEAR
IN ADDENDUM NUMBER I ATTACHED
TO THE COMPLAINT WHICH
NUMBER 367 PERSONS,
Plaintiffs - Appellants,
v.
MARIA MARGARITA IRIZARRY, ENGINEER
AND EXECUTIVE DIRECTOR OF THE
PUERTO RICO ACUEDUCT AND
SEWAGE AUTHORITY IN HER PERSONAL
AND OFFICIAL CAPACITY, ET AL.,
Defendants - Appellees.
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APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF PUERTO RICO
[Hon. Jaime Pieras, Jr., Senior U.S. District Judge]
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Before
Breyer,* Chief Judge,
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Torruella and Selya, Circuit Judges.
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Jes s Hern ndez S nchez, with whom Hern ndez S nchez Law
________________________ ______________________
Firm, Ariel O. Caro P rez and Law Offices of Alvaro R. Calder n,
____ ____________________ __________________________________
Jr., were on brief for appellants.
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* Chief Judge Stephen Breyer heard oral argument in this matter,
but did not participate in the drafting or the issuance of the
panel's opinion. The remaining two panelists therefore issue
this opinion pursuant to 28 U.S.C. 46(d).
Georgiana S. Col n, with whom Edgardo Col n Arrar s, Goldman
__________________ _____________________ _______
Antonetti C rdova & Axtmayer, Enrique J. Mendoza-M ndez, Law
______________________________ __________________________ ___
Offices of Enrique J. Mendoza M ndez, Mirta E. Rodr guez Mora,
______________________________________ ________________________
Department of Justice, Federal Litigation Division, Manuel E.
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Izquierdo, Arturo Tr as, and Tr as, Acevedo & D az, were on brief
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for appellees.
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August 24, 1994
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TORRUELLA, Circuit Judge. Plaintiffs-appellants are a
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group of residents of Condominium Bah a-A, located at Calle Las
Palmas in Santurce, Puerto Rico ("the residents"). The residents
brought this 42 U.S.C. 1983 action for injunctive relief and
damages after the defendants-appellees, the Puerto Rico Aqueduct
and Sewer Authority ("PRASA") and its officers, suspended water
services to the Condominium for a period of ten days. Plaintiffs
allege that by suspending water services, PRASA deprived them of
their property without due process of law.
The district court found that under the circumstances
of this case, the residents did not have a protected property
interest in continued water service and, therefore, dismissed the
suit on summary judgment. This appeal followed. We affirm the
district court's decision.
I.
I.
STANDARD OF REVIEW
STANDARD OF REVIEW
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Federal Rule of Civil Procedure 56(c) provides for
entry of summary judgment 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
judgment as a matter of law." A party opposing a motion for
summary judgment "must set forth specific facts showing that
there is a genuine issue for trial." Fed. R. Civ. P. 56(e); Mack
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v. Great Atlantic & Pacific Tea Co., 871 F.2d 179, 181 (1st Cir.
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1989).
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We review a district court's grant of summary judgment
de novo, viewing the record in the light most favorable to the
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nonmoving party and drawing all reasonable inferences in the
nonmoving party's favor. LeBlanc v. Great American Ins. Co., 6
_______ ________________________
F.3d 836, 841 (1st Cir. 1993). "[W]e must reverse if we find
that issues of fact which were adequately raised below need to be
resolved before the related legal issues can be decided." Mack,
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871 F.2d at 181.
II.
II.
BACKGROUND
BACKGROUND
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The facts of this case are set forth in the district
court's opinion, Garc a v. Irizarry, 829 F. Supp. 523, 525
______ ________
(D.P.R. 1993). Here, we quote only those facts relevant to this
appeal.
Condominium Bah a-A (hereinafter "the
Condominium") is a 234-unit housing
project which was originally owned and
developed by the Corporaci n de
Renovaci n Urbana y Vivienda ("CRUV"), a
now-defunct public housing agency of the
Puerto Rican Government. On November 11,
1972, CRUV opened an account with the
Puerto Rico Aqueduct and Sewer Authority
("PRASA") for water and sewer services
for the Condominium.1 The PRASA account
served all of the units of the
Condominium through a single meter.
PRASA thereafter billed and collected
from CRUV for water and sewer services
provided to the Condominium.
In early 1973, ownership of the
Condominium was passed to its residents.
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1 PRASA is the sole provider of water services within Puerto
Rico. It is a public corporation created by virtue of Law No.
33, of June 27, 1985, P.R. Laws Ann. tit. 27, 262 et seq.
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A Council of Owners of the Condominium
Bah a-A ("the Council") was constituted
to, among other things, "administer all
phases and aspects" of the Condominium
including "contract[ing] all necessary
services." On February 14, 1973, the
Council and the Board of Directors of the
Condominium notified Banco de Vivienda,
the mortgagor of the property, that they
had taken over the administration of the
Condominium.
[The residents] have alleged that
when they purchased their properties from
CRUV they were told, as an incentive,
that CRUV would continue to pay for all
water and sewer services. CRUV in fact
continued to be billed and to pay for
these services until October 1, 1981, at
which time CRUV requested to [sic] PRASA
that it cancel the account for the
Condominium.
For almost four years after the CRUV
account for the Condominium was canceled,
PRASA made no effort to collect from the
Condominium's residents for water and
sewer services provided. No explanation
has been provided for this situation. On
July 12, 1985, PRASA requested in writing
that the Condominium, through its Board
of Directors, place a bond with PRASA to
register an account in its name. PRASA
warned that the failure to register an
account could lead to suspension of water
services. On July 22, 1985, the Council
answered PRASA's request by refusing to
pay for any water and sewer services
unless individual meters were installed
for each of the apartments." (citations
omitted).
829 F. Supp. at 524-25.
Between September of 1985 and December of 1989, PRASA
officials had several meetings with representatives of the
Council and at least one meeting with the residents of the
Condominium to discuss the situation. See id. at 525. PRASA
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repeatedly "requested that the Condominium register an account
and place the required bond for the water and sewer services.
PRASA proposed a plan whereby the pending debt could be paid in
installments. The residents rejected PRASA's proposals and again
insisted on the installation of individual meters, to be paid for
by PRASA or CRUV." Id.
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On July 24, 1990, PRASA unilaterally
opened an account on behalf of the
Condominium and began issuing monthly
bills. The account was not requested by
the Condominium and the Condominium did
not place a bond with PRASA. None of
these bills were paid or responded to in
any fashion by the Condominium. On
April 3, 1991, through a letter
personally delivered to Francisca
Marrero, the new President of the Board
of Directors of the Condominium, PRASA
requested a payment in the amount of
$448,872.08 for services rendered under
the account. PRASA stated that the
failure to pay or submit a proposal for
payment would result in the suspension of
the water services after 20 days. A copy
of the letter to Marrero was delivered to
each unit along with another letter
urging the residents to take action to
avoid suspension of services.
[The residents] have alleged that
Marrero requested on several occasions
that a meeting be arranged with the
Executive Director of PRASA, defendant
Mar a Margarita Irizarry, to discuss the
situation and that her requests were
refused. [The residents] charge that the
failure to grant the requests for such a
hearing violated their due process rights
as established under Puerto Rico law.2
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2 Under the Act to Establish Procedural Requirements for the
Suspension of Essential Public Services, P.R. Laws Ann. tit. 27,
262, all public agencies providing essential services must have
an administrative procedure for the suspension of such services
for nonpayment. PRASA is one of the agencies which must comply
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On April 24, 1991, 21 days after the
delivery of the Marrero letter, water
service to the Condominium was suspended.
On May 3, 1991, after the Condominium
agreed to place a bond in the amount of
$5,000.00 to cover current monthly bills,
the service was reinstated. Two months
later, PRASA filed a complaint in the
Superior Court of Puerto Rico for the
collection of the amounts owed for water
and sewer services since 1981. This
complaint was thereafter filed seeking
relief based on the allegedly
unconstitutional 10-day deprivation of
water and sewer services.
Id. at 525-26.
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The only issue before the district court was "whether
[the residents] suffered a deprivation of their procedural due
process rights resulting from PRASA's 10-day suspension of water
service to the Condominium Bah a-A." Id. at 527. The district
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court stated that "[t]he procedural due process clause of the
Fourteenth Amendment guarantees citizens with a protected
property interest the right to notice and an opportunity to be
heard prior to a deprivation of such a property interest by the
government" and that "[a] threshold issue in this case is whether
[the residents] enjoyed a protectable 'property' interest in the
water service which was suspended." Id. The district court
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with this statute. P.R. Laws Ann. tit. 2, 262a. The statute
requires that the agency allow a consumer, upon receiving an
adverse decision by a regional official within the agency, the
opportunity to have a hearing before the executive director of
the agency. P.R. Laws Ann. tit. 27, 262b(c); see also P.R.
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Laws Ann. tit. 27, 262b(e)(if such a hearing is requested, the
consumer must pay an amount equal to his average monthly bill
before the hearing is held). In addition, at no time while such
administrative procedures are being developed may the agency
suspend the service. P.R. Laws Ann. tit. 27, 262b(d).
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indicated that "if such a property interest does not exist, the
due process clause provides no protection." Id. Finding that
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"plaintiffs had no property interest in the continued receipt of
water services for which they never contracted," the district
court dismissed the case. Id. at 529.
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III.
III.
DISCUSSION
DISCUSSION
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A. Issues of Material Fact
A. Issues of Material Fact
The residents first argue that this case presented
unresolved issues of material fact, which rendered the district
court's grant of summary judgment erroneous. A fact is
"material" when it has "the potential to affect the outcome of
the suit under the applicable law." Nereida-Gonz lez v. Tirado-
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Delgado, 990 F.2d 701, 703 (1st Cir. 1993). While this case may
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present unresolved issues of fact, we disagree with the
residents' contention that these disputes are material to the
resolution of this action. In particular, the residents contend
that a determination of whether CRUV owed the residents a
contractual duty to pay the water services is material to this
dispute. The residents also contend that the issue of whether
the residents were "clandestine users" of the water services was
an unresolved issue of material fact.
We disagree with the residents' conclusion that these
matters are material to the resolution of this dispute. The
existence of any contractual agreement between CRUV and the
residents is irrelevant to the issue before us, that is, whether
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at the time PRASA disconnected the water service, the residents
had a protected property interest in the continued receipt of
water services. A determination of whether the residents were
"clandestine users" is also unnecessary to the resolution of this
case as regardless of whether or not they were "clandestine
users," they still have not claimed any facts that, if taken as
true, would establish that they had a property interest in the
continued service of water. Other allegedly unresolved issues of
fact raised by the residents are equally immaterial to this
dispute.
B. Protected Property Interest
B. Protected Property Interest
"The Fourteenth Amendment places procedural constraints
on the actions of government that work a deprivation of interests
enjoying the stature of 'property' within the meaning of the Due
Process Clause." Memphis Light Gas & Water Division v. Craft,
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436 U.S. 1, 9 (1978). In Board of Regents, the Supreme Court of
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the United States held that:
To have a property interest in a benefit,
a person clearly must have more than an
abstract need for it. He must have more
than a unilateral expectation of it. He
must, instead, have a legitimate claim of
entitlement to it. . . . Property
interests . . . are not created by the
Constitution. Rather they are created
and their dimensions are defined by
existing rules or understanding that stem
from an independent source such as state-
law rules or understandings that secure
certain benefits and that support claims
of entitlement to those benefits.
Board of Regents v. Roth, 408 U.S. 564, 577 (1972).
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An interest becomes a protected property interest when
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recognized by state statute or a legal contract, express or
implied, between the state agency and the individual. Id. The
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residents contend that the district court erred in concluding
that they "never entered into a contract with PRASA, for the
provision of water and sewer services." They argue that an
implied contractual arrangement existed between PRASA and the
residents by virtue of PRASA's action of opening an account on
behalf of the residents, or in the alternative, as a consequence
of the provision of water services by PRASA to plaintiffs for
more than 20 years. Plaintiffs do not cite any provisions of
Puerto Rico law nor any cases to support their position.3
Applying basic principles of contract law, we find their position
untenable. Because Puerto Rico is a civil law jurisdiction we
also look to its substantive law to determine whether a different
outcome is forthcoming.
Assuming, for purposes of this appeal, that PRASA's
action of opening an account and its continued rendition of water
services to the residents were valid offers to contract, the
residents would still be unable to establish the existence of a
contract. See Farnsworth at 135-136 ("One who begins to perform
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3 In many jurisdictions an offer does not require formalities
and can be made by either written words or other conduct. E.
Allen Farnsworth, Contracts 3.10, at 135 (2d ed. 1990). A
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contract "implied in fact" is one that results from conduct alone
and is distinguished from an "express" contract which results
from words. Id. 3.10, at 135. The residents in the present
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case have cited to no authority establishing that contracts
"implied in fact" are valid and binding under Puerto Rico law.
See infra note 4.
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services for another in apparent expectation of payment may be
taken to be offering to furnish them for reasonable
compensation."). Under Puerto Rico law, the consent of the
contracting parties is an essential element of a contract.4
P.R. Laws Ann., tit. 31, 3391. "Consent is shown by the
concurrence of the offer and acceptance of the thing and the
cause which are to constitute the contract." P.R. Laws Ann. tit.
31, 3401. Hence, an offer standing by itself will not
establish the presence of a binding contract. Gonz lez Rodr guez
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v. Fumero, 38 P.R.R. 497, 504, 507-08 (1928). Rather, in order
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to have a contract, acceptance must be made of that offer. P.R.
Laws Ann. tit. 31, 3401; see also Jos R. V lez-Torres, Los
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Contratos at 45-47 (1986). PRASA repeatedly requested the
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Condominium to place a bond and to register an account. PRASA
also made it clear to the residents that in order to be
considered "registered users" with PRASA, they had to apply for
water service and place a bond in accordance with the
requirements set forth in PRASA's rules and regulations. The
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4 Puerto Rico law establishes that:
There is no contract unless the following requisites
exist:
(1) The consent of the contracting
parties.
(2) A definite object which may be the
subject of the contract.
(3) The cause for the obligation which
may be established.
P.R. Laws Ann. tit. 31, 3391.
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residents refused to do so, thereby rejecting PRASA's offer. See
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V lez-Torres at 48-49 (an acceptance should be immediate and
definitive, should coincide in all its terms with the offer, and
should be made in the manner required by the offerer). An
offeree's inaction or "silence in the face of the offer to sell
goods is not ordinarily an acceptance, because the offeror has no
reason to believe from the offeree's silence that the offeree
promises to buy." Farnsworth 3.15, at 155; see also V lez-
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Torres at 56-57 (silence ordinarily cannot constitute acceptance
of an offer); Coghlan v. Starkey, 845 F.2d 566, 570 (5th Cir.
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1988) (neither the mere receipt of water nor the carrying of
plaintiff's name on waterworks rolls as user created a
contractual relationship, either express or implied, where
plaintiff refused to apply for water service).
The residents also argue that the fact that PRASA was
having meetings and conversations with the residents in relation
to the water and sewer services being rendered evidences an
implied contract. We disagree with plaintiffs' contention that
those meetings suggested the existence of such a contract. These
meetings were merely discussions or negotiations regarding who
should pay for the installation of individual water meters in the
Condominium, whether the residents were required to pay for past
services rendered, and conditions for future water service. See
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Coghlan at 570 (negotiations over backbill and billing errors
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alone could not establish the type of property interests required
to raise disconnection of water service to a deprivation of a
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valuable property right).
The residents next contend that the district court
erred in concluding that Puerto Rico law did not confer on the
residents a property interest in continued water service.
We look to Puerto Rico statutes to determine whether
Puerto Rico law conferred such a property interest. See Coghlan,
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845 F.2d at 569. Plaintiffs argue that Section 159 of the
Aqueduct and Sewer Act of Puerto Rico, P.R. Laws Ann. tit. 22,
141 et seq., establishes a property interest in continued water
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services. Section 159 authorizes PRASA to establish rules and
regulations concerning the use and conservation of water and
provides, in relevant part, that the purpose for which PRASA is
created is:
that the health of the inhabitants of the
Island of Puerto Rico shall be attained,
that the health of the inhabitants of the
Island shall be protected, that the
water available shall be utilized in the
fullest measure possible and that it
shall be made available to the consumers
with the greatest possible regularity and
continuity.
P.R. Laws Ann. tit. 22, 159 (1989).
The residents contend that they are "consumers" within
the meaning of Section 159 and as such have a state created
property interest in regular and continuous water services. We
need not determine whether Section 159 creates a property
interest in consumers because we do not believe that plaintiffs
are "consumers." The Aqueduct and Sewer Act does not define the
term "consumer." Neither do the Regulations issued by PRASA
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provide a definition of the term. The residents have not
proffered any other authoritative interpretation of the term
"consumer" which would indicate they were included within the
meaning of the word. We interpret the term "consumer" in this
context to be limited to persons who pay or otherwise give
consideration for goods or services rendered. We believe this
interpretation is consistent with the common understanding of the
term. It is also consistent with a basic tenet of the Aqueduct
and Sewer Authority, namely that "[t]he Authority shall render no
free Services." P.R. Laws Ann. tit. 22, 158. In the present
case, the residents refused to comply with the procedures
established by PRASA that would give them consumer status with
respect to PRASA. They refused to register an account, place a
bond or pay for water services. Therefore, they were not
"consumers" as we interpret that term under Section 159.
In the alternative, the residents contend that they are
"users"5 of the aqueduct and sewer services, as that term is
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5 In its definition section, the Regulations for Administrative-
Legal Procedures of PRASA provides the following definitions of
"users":
User - Person who enjoys the services of
User
aqueducts and/or sewer including any
person or entity who discharges in the
sanitary system, whether said person is a
subscriber or not.
(a) Subscriber user - Person who enjoys the aqueduct
Subscriber user
and sewer services registered in the name of the
Authority.
(b) Non-subscriber user - Person who enjoys the
Non-subscriber user
aqueduct and sewer services registered in the name of
another person.
(c) Clandestine user - Person who enjoys
Clandestine user
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defined in PRASA regulations and as such, have a property
interest in continued services. The residents have not pointed
to any legal authority which indicates that "users" have a
property interest in water services. Rather,the residents merely
argue that somehow PRASA's regulations defining "user" to include
"non-subscriber-users" and "clandestine-users" give them a
property interest in water services. They rely on the regulatory
definition of "Aqueduct Service" as "water supply for the benefit
of a subscriber or user" as a basis for this proposition.
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Regulation for Administrative-Legal Procedures of the Puerto Rico
Aqueducts and Sewer Authority, Chap. II (emphasis added).
The residents have cited no authority, and we are
unable to find any, indicating that regulatory definitions alone
are sufficient to establish a property interest. The relevant
case-law is to the contrary and suggests that these regulatory
definitions cannot establish a constitutional right to receive
water services. See Coghlan, 845 F.2d at 570 n.3 (examination of
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charter creating waterworks and other sub-statutory sources
including regulatory statements, for a provision establishing a
right to water services is unnecessary and improper); Gorham v.
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Hutto, 667 F.2d 1146 (4th Cir. 1981) (administrative guidelines
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are not a sufficient basis for the creation of a due process
interest); Bills v. Henderson, 631 F.2d 1287 (6th Cir. 1980)
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the aqueduct and/or sewer services
without being authorized for it.
Regulation for Administrative-Legal Procedures of the Puerto Rico
Aqueducts and Sewer Authority, Chap. II (1989).
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(procedural rules created by state administrative bodies cannot
serve as a basis for a separate protected liberty interest);
Sterling v. Maywood, 579 F.2d 1350, 1354 (7th Cir. 1978) (where
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"plaintiff has neither a contractual nor a statutory basis to
support her claim, . . . [she] was not deprived of a due process
right by defendants [sic] termination of her water service"). We
therefore conclude that the regulatory definitions on which the
residents rely do not provide a sufficient basis for finding a
property interest.
Finally, even if the residents were able to establish
that they had a protected property interest in continued water
service, they were not deprived of due process. The question of
what process is due is a question of federal constitutional law.
Cleveland Brd. of Educ. v. Loudermill, 470 U.S. 532, 541 (1985).
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Due process generally requires "that a deprivation of life,
liberty, or property be preceded by notice and opportunity for
hearing appropriate to the nature of the case." Id. at 542
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(internal citation and quotations omitted). "[T]o determine
whether a constitutional violation has occurred, it is necessary
to ask what process the State provided, and whether it was
constitutionally adequate." Zinermon v. Burch, 494 U.S. 113, 126
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(1990).
First, we summarize the procedures provided. In 1986,
PRASA began sending the Board of Directors of the Condominium
notices warning that failure to place a bond and to register an
account on behalf of the Condominium could lead to the suspension
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of water services. PRASA officials also met with the Board of
Directors and with the residents of the Condominium to discuss
the situation and proposed a plan whereby the Condominium could
pay the pending debt in installments. The residents rejected
the proposed plan. In 1990, PRASA unilaterally opened an account
on behalf of the Condominium and began issuing monthly bills.
The Condominium neither paid these bills nor responded to them in
any fashion. On April 3, 1991, PRASA delivered a letter to the
President of the Board of Directors of the Condominium requesting
a payment in the amount of $448,872.08 for services rendered
under the account. PRASA stated that the failure to pay or
submit a proposal for payments would result in the suspension of
water services after twenty days. A copy of the letter was
delivered to each unit along with another letter urging the
residents to take action to avoid the suspension of services.
In determining the adequacy of the procedures afforded
the residents we balance the competing interests at stake. Id.
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These are the residents' private interest in continued water
service, PRASA's interest in receiving payment for its services
and the avoidance of administrative burdens, and the risk of an
erroneous deprivation of water services. See Mathews v.
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Eldridge, 424 U.S. 319, 335 (1976). The receipt of utility
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services is a necessity of modern day life and undoubtedly an
important interest, however, PRASA's interest in receiving
payment for its services is also significant. It would be
unreasonable to expect PRASA to continue providing free services
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to the residents indefinitely. PRASA gave the residents notice
on several occasions of its intention to discontinue services if
the residents did not comply with PRASA's administrative
requirements. PRASA officials also held meetings with the
residents and the Board of Directors of the Condominium and
discussed with them alternative solutions to the problem. Thus,
the residents were given notice of PRASA's intended action, they
were informed of how to resolve the situation and given several
opportunities to be heard on the matter. We do not see how any
additional procedures could better safeguard the residents'
interests so as to justify the additional administrative burden
of such procedures. We have no doubt that the residents were
given more than adequate due process.
The residents were not entitled to additional
procedures set forth in the Puerto Rico Act to Establish Minimum
Procedural Requirements for the Suspension of Essential Public
Services because this Act affords such protections only to
"subscribers" of utility services. See P.R. Laws Ann. tit. 27,
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262b(a), 262b(b), 262b(c), 262b(e), 262b(g) and 262b(h); see
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also infra note 2. By failing to contract with PRASA for the
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provision of water and sewer services, the residents failed to
achieve subscriber status. The residents' failure to comply with
PRASA's administrative requirements prevents them from now
claiming an entitlement to PRASA's administrative procedures.
See United States v. Charles George Trucking Co., 823 F.2d 685,
___ _____________ ___________________________
690-91 (1st Cir. 1987) ("A party who is aware of, and chooses to
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ignore, an available avenue for redress cannot later be allowed
to characterize his refusal to travel the road as tantamount to
the road being closed -- or to no road being in existence");
Coghlan, 845 F.2d at 569 (there is no support for the proposition
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that there is a constitutional right to receive utilities when
the applicant refuses to comply with reasonable administrative
procedures) (internal quotation and citation omitted).
C. Motion for Sanctions
C. Motion for Sanctions
Defendants have asked this court to impose double costs
and attorney's fees as a sanction for pursuing this action and
further filing this appeal. Their request is denied.
Affirmed.
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