Of the Eighth Circuit, sitting by designation. *

United States Court of Appeals

For the First Circuit

No. 05-2607

COUNCIL OF INSURANCE AGENTS & BROKERS,

Plaintiff, Appellee,

v.

DORELISSE JUARBE-JIMÉNEZ, in her official capacity 

as the Puerto Rico Commissioner of Insurance,

Defendant, Appellant.

APPEAL FROM THE UNITED STATES DISTRICT COURT 

FOR THE DISTRICT OF PUERTO RICO

[Hon. José Antonio Fusté, U.S. District Judge]

Before

 Selya, Circuit Judge,

Hansen, Senior Circuit Judge, *

and Lynch, Circuit Judge

Rosa Elena Pérez-Agosto, Assistant Solicitor General, Office

of the Solicitor General, Department of Justice, Commonwealth of

Puerto Rico, with whom Salvador Antonetti-Stutts, Solicitor

General, and Mariana D. Negrón-Vargas, Deputy Solicitor General,

were on brief, for appellant.

Scott A. Sinder, with whom Alysa N. Zeltzer, Daniel S. Blynn,

Collier Shannon Scott, PLLC, and Guillermo Ramos Luiña were on

brief, for appellee.

March 30, 2006
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LYNCH, Circuit Judge. This appeal arises from the entry

of an injunction based on a finding of facial unconstitutionality

of provisions of the Puerto Rico Insurance Code which impose

restrictions on the ability of nonresident licensed insurance

agents and brokers to participate in the Puerto Rico insurance

market, thus advantaging resident agents and brokers.

The suit was brought by the Council of Insurance Agents

and Brokers, an association. The defendant Puerto Rico

Commissioner of Insurance moved for summary judgment on the ground

that the Council lacked standing, and the Council filed a crossmotion for summary judgment. The district court, in a thoughtful

opinion, denied the Commissioner's motion and granted the

Council's, holding that the Council had standing, that the

challenged provisions were unconstitutional, and that declaratory

and injunctive relief were warranted. See Council of Ins. Agents

& Brokers v. Juarbe-Jiménez, 363 F. Supp. 2d 47 (D.P.R. 2005).

On appeal, the Commissioner does not challenge the ruling

that the statutes are unconstitutional under the Privileges and

Immunities Clause (although she does question the language of the

injunction). At the heart of her appeal is her argument that the

Council lacked standing to raise its challenge in the first place.

We disagree, and we affirm.
 In addition, "[i]f the insured is represented by a licensed 1

broker resident in Puerto Rico, such insurance may be effectuated

through the insurer's manager, general agent, or licensed agent,

resident in Puerto Rico." P.R. Laws Ann. tit. 26, § 329(1).

 Moreover, "[i]f any person, property or other material 2

object subject to insurance that resides, is located in, or is to

be carried out in Puerto Rico is also covered by an insurance

policy placed or issued outside of Puerto Rico, the same must be

countersigned" by a Puerto Rico resident. P.R. Laws Ann. tit. 26,

§ 329(2).

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I.

The provisions challenged in this case are P.R. Laws Ann.

tit. 26, §§ 329 and 927 (2003), which have the effect of requiring

the business of insurance in Puerto Rico to be done by using agents

resident in Puerto Rico. Section 329 provides that "[n]o insurer

shall effectuate any direct insurance upon or relative to any

person, property, or other subject of insurance resident, located,

or to be performed in Puerto Rico, except through a licensed agent

of such insurer residing in Puerto Rico." P.R. Laws Ann. tit. 26, 1

§ 329(1). Furthermore, under § 329(2), all such policies and

contracts must be countersigned by the insurer's manager, general

agent, or authorized agent, who must reside in Puerto Rico.2

Section 927 prohibits nonresident agents and brokers from

soliciting insurance and inspecting risks in Puerto Rico. Id.

§ 927(1). It allows nonresident agents and brokers to place

insurance upon subjects located or to be performed in Puerto Rico

only if the insurance was "directly procured from the insured

outside of Puerto Rico," id., or if the nonresident agent or broker
 We refer to the officers, directors, principals, and 3

employees of the Council's members as "individual associates."

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places the insurance "through a resident agent or broker of Puerto

Rico, and in an insurer authorized to transact insurance in Puerto

Rico," id. § 927(2). Countersigning can be done only by resident

agents authorized by the insurer. Id. § 927(3).

The Council filed suit, arguing that these provisions

violated both the Privileges and Immunities Clause, U.S. Const.

art. IV, § 2, cl. 1, and the Equal Protection Clause, id. amend.

XIV, § 1, because they gave local insurance agents and brokers an

unfair competitive advantage over nonresident agents and brokers

(even though the nonresident agents and brokers are licensed to

sell insurance in Puerto Rico). The Council alleged that it

represents hundreds of insurance agencies and brokerage firms; that

its "member agencies and brokerages and their officers, directors,

principals, and employees are located/reside outside of Puerto Rico

but sell insurance in . . . the Commonwealth"; that its members and

their individual associates, some of whom are licensed in Puerto 3

Rico, "are suffering immediate injury and are being deprived of

significant rights" because of the challenged laws; and that one of

the Council's central purposes is to protect the interests of its

members and their individual associates. The Council sought

declaratory and injunctive relief.
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The Commissioner alleged in her answer that the Council

lacked standing. She later moved for summary judgment on the same

ground. Her argument was that the Council had not demonstrated

that any of its members had suffered an injury in fact, which meant

it had not shown that at least one of its members would otherwise

have standing to sue in its own right, which meant the Council's

claim of associational standing must fail.

The Council then filed a cross-motion for summary

judgment and submitted a memorandum in opposition to the

Commissioner's motion for summary judgment. The Council asserted

that at least some of its entity members had standing to sue in

their own right, on the ground that entity employers may assert the

constitutional rights of their employees where violation of those

rights adversely affects the financial interests or patronage of

the business. The Council attached a declaration by Ken A. Crerar,

the Council's President, which we describe in more detail below. 

The Commissioner replied, arguing, inter alia, that the

Council had not shown that any one of its members "as such" was

licensed as a nonresident agent or broker in Puerto Rico.

Therefore, she argued, none of the entity members could engage in

the insurance business in Puerto Rico through its individual

associates (even if the individual associates were licensed and

could have acted in Puerto Rico on their own behalf), and none

could have suffered any injury as a result of the challenged laws.
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The Commissioner did not argue that she needed discovery on this

matter. See Fed. R. Civ. P. 56(f). Nor did she argue that she had

proof that none of the Council's members could have suffered

injury.

The Council responded, attaching a supplemental

declaration of Crerar, also described below.

The district court denied the Commissioner's motion and

granted the Council's cross-motion for summary judgment. See

Council of Ins., 363 F. Supp. 2d at 56. The court determined that

the Council's members had third-party standing to assert the claims

of their individual associates, reasoning that "the employers have

suffered injury in fact of thousands of dollars in lost revenues,"

the employers' relationship with their employees made them

effective advocates of the employees' interests, and the employees

were ill-situated to press their own rights here. Id. at 53. The

court concluded that the Council had associational standing to

assert the rights of its members, and since the members had

standing to assert the rights of their individual associates, the

Council had standing to assert the individual associates' rights.

Id. at 54.

As to the constitutionality of the challenged provisions,

the district court determined that "the countersignature

requirement for nonresidents" violated the Privileges and

Immunities Clause. Id. at 55. It did not reach the equal
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protection question. Id. at 56. The judgment repeated the final

language of the court's opinion and order:

[T]he countersignature requirements of . . .

§§ 329 and 927 are unconstitutional to the

extent that they deny Puerto Rico-licensed

nonresident insurance agents the same rights

and privileges that they afford Puerto Ricolicensed resident agents. The . . .

Commissioner . . . is enjoined from denying to

Puerto Rico-licensed nonresident agents the

same rights and privileges possessed by Puerto

Rico-licensed resident agents under the

governing statutes. 

Id.

The Commissioner moved for reconsideration of the

standing issue and for clarification of the judgment. The Council

opposed this motion, and it was denied.

II.

We review de novo a district court's rulings on

cross-motions for summary judgment, see Calero-Cerezo v. U.S.

Dep't. of Justice, 355 F.3d 6, 19 (1st Cir. 2004), and (usually)

its conclusions about standing, see Donahue v. City of Boston, 304

F.3d 110, 115 (1st Cir. 2002). We may affirm the summary judgment

order on any ground justified in the record, even if our rationale

differs from the district court's. Houlton Citizens' Coal. v. Town

of Houlton, 175 F.3d 178, 184 (1st Cir. 1999).

The litany on summary judgment is familiar. Summary

judgment is appropriate "if the pleadings, depositions, answers to

interrogatories, and admissions on file, together with the
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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). Once the party moving

for summary judgment "has asserted that no genuine issue of

material fact exists," the party opposing summary judgment has the

burden of pointing to "specific facts demonstrating that there is,

indeed, a trialworthy issue." Calero-Cerezo, 355 F.3d at 19. We

agree with the district court that the Commissioner not only failed

to justify her own motion, but also failed to oppose adequately the

Council's motion.

The general standing inquiry involving any plaintiff

focuses on "whether the litigant is entitled to have the court

decide the merits of the dispute or of particular issues"; it

involves both "constitutional limitations on federal-court

jurisdiction and prudential limitations on its exercise." Warth v.

Seldin, 422 U.S. 490, 498 (1975). The constitutional constraints

are designed to ensure compliance with Article III's "case or

controversy" requirement; they require that the plaintiff allege a

sufficient personal stake in the outcome of the controversy. See

id.

The Supreme Court has outlined a three-part test for

Article III standing to ensure that these constitutional limits are

observed. "First, the plaintiff must have suffered an injury in

fact -- an invasion of a legally protected interest which is (a)
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concrete and particularized, and (b) actual or imminent, not

conjectural or hypothetical[.]" Lujan v. Defenders of Wildlife,

504 U.S. 555, 560 (1992) (footnote, citations, and internal

quotation marks omitted) (quoting Whitmore v. Arkansas, 495 U.S.

149, 155 (1990)). "Second, there must be a causal connection

between the injury and the conduct complained of"; in other words,

the injury must be fairly traceable to the defendant's challenged

action rather than to some third party's independent action. Id.

And third, it must be likely that a favorable decision will redress

the injury. Id.

The question of standing of plaintiff associations, while

within the general rule, is subject to its own subset of rules.

"Even in the absence of injury to itself, an association may have

standing solely as the representative of its members." Warth, 422

U.S. at 511; see also Rumsfeld v. Forum for Academic &

Institutional Rights, Inc., 126 S. Ct. 1297, No. 04-1152, 2006 U.S.

LEXIS 2025, at *10 n.2 (March 6, 2006) (association of law schools

and law faculties had associational standing to bring suit on

behalf of its members). There are three requirements for an

association, which has not itself suffered injury, to have standing

to bring suit on behalf of its members: "(a) its members would

otherwise have standing to sue in their own right; (b) the

interests it seeks to protect are germane to the organization's

purpose; and (c) neither the claim asserted nor the relief
 The Commissioner does not argue on appeal that the 4

germaneness requirement is not satisfied or that individual

members' participation is necessary. In any event, it is clear

that Hunt's second and third prongs are satisfied.

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requested requires the participation of individual members in the

lawsuit." Hunt v. Wash. State Apple Adver. Comm'n, 432 U.S. 333,

343 (1977).

The dispute on appeal is whether the Council has met its

burden of showing associational standing, see Lujan, 504 U.S. at

561 (burden of establishing elements of standing is on party

invoking federal jurisdiction), to challenge the Puerto Rico

Insurance Code provisions on behalf of its entity members. Even

more narrowly, the dispute is whether the first prong of the Hunt

test is satisfied, that is, whether "at least some members of the 4

[Council] would have had standing to bring this suit in their own

right." UAW v. Brock, 477 U.S. 274, 286 (1986); see also United

States v. AVX Corp., 962 F.2d 108, 116 (1st Cir. 1992) (noting that

if "at least one" member "possesses standing to sue in [its] own

right," first prong is satisfied).

As to the standing of the association's entity members to

raise the rights of their individual associates, there is yet

another three-part test. In addition to showing that the thirdparty claim satisfies the three basic Article III requirements, the

litigant asserting third-party standing must show the following:

first, "that the litigant personally has suffered an injury in fact
 The Commissioner's only challenge to the standing of the 5

individual associates is that they are free to act on their own

behalf and that they cannot be harmed by the challenged laws when

they are unable to act on their employers' behalf, since the

employers are not licensed to participate in the Puerto Rico market

anyway. This final proposition fails, as explained in the text.

The Commissioner does not otherwise challenge injury in fact,

causation, and redressability, as to the individual associates.

Nor does she dispute that the Council's members have sufficiently

close relationships with their employees, and that the members are

far better situated than the employees to protect the employees'

interests.

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that gives rise to a sufficiently concrete interest in the

adjudication of the third party's rights"; second, "that the

litigant has a close relationship to the third party"; and third,

"that some hindrance exists that prevents the third party from

protecting its own interests." Eulitt v. Me., Dep't of Educ., 386

F.3d 344, 351 (1st Cir. 2004).

The Council says its licensed members have standing to

challenge the laws on behalf of their individual associates, and so

the Council has standing. The Commissioner argues that the Council

failed to carry its burden of proof to establish standing. See

Lujan, 504 U.S. at 561 ("[E]ach element [of standing] must be

supported in the same way as any other matter on which the

plaintiff bears the burden of proof, i.e., with the manner and

degree of evidence required at the successive stages of the

litigation."). The Commissioner has two main theories.

She argues first her theory that the Council has no

standing unless its entity members have suffered injury in their 5
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own right, and that the entities cannot gain standing through their

employees. She argues that a peculiarity of Puerto Rico law

permits her to make the argument. As a matter of federal law, the

theory itself is questionable. The Council's entity members

ordinarily would have third-party standing to represent the

interests of their individual associates, and the Council has

associational standing on behalf of its members. See N.Y. State

Club Ass'n v. City of New York, 487 U.S. 1, 9-10 (1988)

(undertaking a similar analysis).

The Commissioner's argument is based on the Puerto Rico

law requirement that entities and not just individuals must be

licensed to engage in the insurance industry in Puerto Rico. See

P.R. Laws Ann. tit. 26, § 926. Misreading the record, she contends

that it is an uncontested fact that none of the Council's members

has a license to operate in the Puerto Rico market. That means,

she argues, that none of the Council's members can compete in that

market, nor can their individual associates compete there on the

members' behalf, even if the individual associates are licensed.

Because of the total inability to compete created by the members'

lack of licenses, she says, the members cannot be harmed by the

challenged provisions, which at best make it more difficult or

expensive for licensed nonresident insurance agencies and

brokerages to compete in Puerto Rico. The fact that none of the

Council's members has suffered an injury in fact, she says,
 During discovery, in responding to the Commissioner's 6

interrogatories, the Council had stated that "[a]ll nonresident

agents and brokers, some of whom are Council members and their

[individual associates], are subject to the burdens and injuries

caused by complying with the challenged countersignature laws."

The Council later submitted the first Crerar declaration, which

stated that "[t]he Council's members include insurance agencies and

brokerage firms that are based outside of Puerto Rico" and that

"[t]he Council also represents its members' [individual associates]

who are licensed [in Puerto Rico] and act as licensed nonresident

insurance agents and brokers selling insurance services and

products, currently through countersigning resident agents, in

Puerto Rico, but who reside outside of that Commonwealth." The

supplemental Crerar declaration clarified that "[t]he Council's

membership includes insurance agencies and brokerages -- all

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vitiates any possibility that the members could have third-party

standing to raise the rights of the members' individual associates

and destroys the Council's claim of associational standing.

The Commissioner's factual assertion is squarely refuted

by the record, and she has offered no contrary evidence to create

a dispute of material fact on this or any other point. The

supplemental Crerar declaration clearly states that "[s]ome Council

members that are based outside of Puerto Rico are licensed as

nonresident agents and brokers by the Insurance Commissioner of

Puerto Rico . . . and sell insurance services and products,

currently through unaffiliated countersigning resident agents, in

Puerto Rico." (Emphases added.) The Commissioner argues this

Crerar declaration must be disregarded because it was filed too

late and without the court's permission. But the district court

was clearly entitled to and did consider the declaration, which

only clarified evidence that was proffered earlier.6
corporations, limited liability companies, and partnerships; its

membership does not include any individuals."

The Commissioner also argues that the Council failed to 7

specify which of the members' individual associates were licensed.

This argument fails for the reasons stated in the text.

 Indeed, the Council had offered to make its confidential 8

membership list available, if certain reasonable conditions were

met, so that the Commissioner could check that list against her own

records to determine which members and individual associates were

licensed in Puerto Rico.

 We emphasize that the Commissioner could have sought 9

additional time to conduct more pointed discovery on this issue

before she responded to the Council's cross-motion for summary

judgment. See Fed. R. Civ. P. 56(f) (providing that if it appears

from the affidavits of the party opposing summary judgment that the

party "cannot for reasons stated present by affidavit facts

essential to justify the party's opposition," then the court may,

among other things, "order a continuance to permit affidavits to be

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The Commissioner next objects that the declaration failed

to "particularize or specify" who the licensed nonresident members

were. But the Council was not obliged to provide specific names 7

absent some contest by the Commissioner of the accuracy of the

representation by the Council. What was important was that the 8

Council's President declared, under penalty of perjury, that such

members existed. This declaration was facially sufficient. Had it

been called into question by competent evidence from the

Commissioner, there would have been a genuine factual dispute, but

it was not; the only facts on the record were those put there by

the Council. The Commissioner's failure to controvert the

Council's version of the facts with her own evidence is fatal to

her appeal. See Fed. R. Civ. P. 56(e) (providing that party 9
obtained or depositions to be taken or discovery to be had"). She

did not do so.

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opposing adequately supported summary judgment motion may not rest

upon "mere allegations or denials," but must, by affidavit or

otherwise, "set forth specific facts showing that there is a

genuine issue for trial").

The Commissioner's second theory is that, licensure

aside, the Council's allegations regarding its members' injury in

fact were not sufficiently concrete and specific. Again, the

argument misrepresents the record. The Council, in answering an

interrogatory, identified numerous specific injuries suffered by

its members and their individual associates, including: losing

business because of the total prohibition on certain activities,

having to engage in burdensome administrative efforts to arrange

for resident countersigning agents for permitted transactions (and

losing clients unhappy with these transaction costs), and, in some

cases, foregoing participation in the Puerto Rico market

altogether. The first Crerar declaration described these and other

burdens, such as interference with individual associates'

relationships with their clients, and stated that annual costs of

compliance were in the hundreds of thousands of dollars in lost

business. This evidence, unrebutted by any factual proffer from
 The Commissioner also argues that the Crerar declarations 10

were insufficient because they were not based on personal

knowledge. The declarations and the Council's answers to the

Commissioner's interrogatories, also supplied by Crerar, were

adequate; as stated, Crerar was the President of the Council.

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the Commissioner, was enough to support summary judgment for the

Council.10

In the end, this appeal involves the Commissioner's

attempt to preserve in place an unconstitutional statutory scheme

on the flimsy basis that the wrong plaintiff sued, when in fact the

plaintiff has asserted all of the elements needed for standing and

the Commissioner has never contested the accuracy of those

assertions.

III.

The Commissioner also appeals the district court's denial

of her motion for reconsideration and clarification, which was

brought under Federal Rule of Civil Procedure 59(e). See Fed. R.

Civ. P. 59(e) (providing for motions to alter or amend the

judgment). We normally review the district court's denial of such

motions for "manifest abuse of discretion." Binkley Co. v. E.

Tank, Inc., 831 F.2d 333, 337 (1st Cir. 1987).

The Commissioner sought from the district court

clarification of whether the judgment declared unconstitutional

those provisions of §§ 329 and 927, especially § 927(1) and (2),

that are not technically "countersignature" provisions, and whether

it applies to brokers (as distinct from agents).
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The motion for clarification as presented to the district

court appeared to seek to undo the declaration of

unconstitutionality. It is no surprise the Council opposed it and

the court rejected it without opinion. To the extent the

"clarification" sought was merely technical, as the Commissioner

now suggests on appeal, we note that the Commissioner made no

attempt to work with the Council to agree on substitute language

until prompted by us at oral argument.

After we raised this issue at oral argument, the parties

agreed to work together, and they have jointly submitted a proposed

modified judgment. They have agreed that the judgment extends to

all provisions of §§ 329 and 927, including § 927(1) and (2), that

deny Puerto Rico-licensed nonresident agents and brokers the same

rights and privileges that they afford Puerto Rico-licensed

resident agents and brokers. They also have agreed that the

judgment should be modified to make this meaning clearer by

deleting the one instance of the word "countersignature" and by

adding the words "and brokers" after each of the four references to

"agents."

The parties' proposal reflects our understanding of the

district court's intended meaning. In light of the parties'

agreement, we remand with instructions for the district court to

enter a modified judgment with the clarifications described above.
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IV.

The judgment is remanded for modification and, as

modified, is affirmed. Costs are awarded to the Council.