Opinion ID: 202647
Heading Depth: 2
Heading Rank: 2

Heading: Second Prong: Constitutional Right was Clearly Established at Time of Violation

Text: 98 The second question [of the qualified immunity analysis] deals with fair warning; it asks whether the law was clearly established at the time of the constitutional violation. Savard v. Rhode Island, 338 F.3d 23, 27 (1st Cir.2003) (en banc). This requirement ensures that officers are on notice that their conduct is unlawful before subjecting them to suit. Saucier, 533 U.S. at 206, 121 S.Ct. 2151. One way of determining whether a constitutional right was clearly established at the time of the alleged violation is to ask whether existing case law gave the defendants fair warning that their conduct violated the plaintiff's constitutional rights. Suboh v. Dist. Attorney's Office of Suffolk, 298 F.3d 81, 93 (1st Cir.2002). In conducting this inquiry, [t]he court must canvass controlling authority in its own jurisdiction and, if none exists, attempt to fathom whether there is a consensus of persuasive authority elsewhere. Savard, 338 F.3d at 28. 99 Significantly, [t]his inquiry `must be undertaken in light of the specific context of the case, not as a broad general proposition.' Wilson, 421 F.3d at 56 (quoting Saucier, 533 U.S. at 201, 121 S.Ct. 2151). As we have noted, [c]ourts must be careful not to permit an artful pleader to convert the doctrine of qualified immunity into a hollow safeguard simply by alleging a violation of an exceedingly nebulous right. 33 Limone v. Condon, 372 F.3d 39, 46 (1st Cir.2004). 100 On the other hand, [t]his exploration is not limited to cases directly on point.... `[O]fficials can still be on notice that their conduct violates established law even in novel factual circumstances'.... Savard, 338 F.3d at 28 (quoting Hope v. Pelzer, 536 U.S. 730, 741, 122 S.Ct. 2508, 153 L.Ed.2d 666 (2002)). In striking this balance, we have noted that 101 the relevant legal rights and obligations must be particularized enough that a reasonable official can be expected to extrapolate from them and conclude that a certain course of conduct will violate the law. Consequently, if the operative legal principles are clearly established only at a level of generality so high that officials cannot fairly anticipate the legal consequences of specific actions, then the requisite notice is lacking. The bottom line is that the qualified immunity defense prevails unless the unlawfulness of the challenged conduct is apparent. 102 Savard, 338 F.3d at 28 (citation omitted) (quoting Anderson v. Creighton, 483 U.S. 635, 640, 107 S.Ct. 3034, 97 L.Ed.2d 523 (1987)). 103 The JUA argues that [t]he contours of the Takings Clause . . . are very straightforward in the case where the government takes property from an individual for public use, as alleged here. Relying upon cases which hold that uncompensated physical appropriations of private property—including interest—are unconstitutional under the Fifth Amendment, the JUA contends that its right to be justly compensated for the taking of its property was clearly established at the time of the challenged conduct. 104 Not surprisingly, Flores Galarza disagrees. While it [i]s clearly established that the taking of a property interest without just compensation [i]s unconstitutional, he argues that this proposition is too broad to satisfy the second prong of the qualified immunity analysis. The property rights claimed by the JUA, Flores Galarza contends, cannot be easily read into the law enabling the JUA and the Compulsory Liability Insurance, and, therefore, are not clearly established. We now test that proposition.
105 We already have concluded that the JUA, under Law 253, alleges a property interest in the Earned Premiums and the interest generated by those premiums. Because Law 253 was on the books at the time Flores Galarza withheld the Earned Premiums and interest, we conclude that the JUA's alleged property interest in those funds was clearly established. Flores Galarza essentially acknowledged as much (at least with respect to the Earned Premiums) by returning the Earned Premiums to the JUA pursuant to the 2002 Settlement. 106 The law was not so clear, however, that Flores Galarza's alleged withholding of the Earned Premiums and interest was a taking. Law 253 does not establish when the Secretary must transfer the premiums to the JUA. As noted by Flores Galarza, 107 [t]he compulsory insurance law is completely devoid of a timetable that controls the transfer of the premiums collected by the Secretary of the Treasury to the JUA. The statute simply states that the transfers must be made. However, when these transfers must be made is an entirely different question. The JUA has never pointed to any substantive source that establishes its entitlement to a prompt transfer of the premiums. 108 (Citation omitted.) Under the second prong of the qualified immunity analysis, it is not enough for the JUA to argue that Flores Galarza physically took the Earned Premiums to which the JUA was entitled under Law 253. Here, the JUA must demonstrate that Law 253 entitled the JUA to the Earned Premiums within a specified amount of time, such that the unlawfulness of Flores Galarza's temporary withholding of the premiums was apparent. This it cannot do. Indeed, even if we imported into Law 253 a requirement that the Secretary transfer the premiums to the JUA within a reasonable period of time, that reasonableness requirement would be too indefinite to allow us to conclude that the alleged taking was clearly established. The unlawfulness of Flores Galarza's temporary withholding of the Earned Premiums, therefore, was not apparent under the statute. The right to interest inescapably is tied to the JUA's entitlement to the premiums and therefore also was not clearly established.
109 The lack of clarity is even more apparent with respect to the Overstated Reserve Funds, which was the portion of the Reserve in excess of the amount necessary to reimburse insureds or insurers who already had paid for coverage. Certainly after enactment of the 2002 Amendment to the compulsory insurance law, which specifically required the JUA to transfer to the Secretary all funds held in the Reserve as of December 31, 2001, the law did not clearly establish that the JUA had a property right in the $10 million of Overstated Reserve Funds or, indeed, that withholding any of the designated Reserve of $73 million was an unconstitutional taking. Whether, and how much, of that $10 million is in fact excess remains a matter of debate. 110 Although the Secretary began withholding the Overstated Reserve Funds in 2000, along with the Earned and Duplicate Premiums, the alleged $10 million excess was undifferentiated from the balance of the Earned Premiums. As noted earlier, the JUA essentially claims that the $10 million should be considered Earned Premiums in which it holds a property right, and as such that money is encompassed within our prior discussion. Therefore, the law was not clearly established either before or after the 2002 Amendment that the Secretary's retention of the Overstated Reserve Funds was an unconstitutional taking.
111 The JUA argues that it has a clearly established right to the $13.6 million in Out-of-Pocket Funds, which Flores Galarza allegedly should have deducted from the $73 million Reserve he took on behalf of the Commonwealth. Since it is undisputed that the Out-of-Pocket funds belong to the JUA, the JUA's alleged property right in the Out-of-Pocket Funds is clearly established. It also was clearly established that the physical taking of property, without compensation, violated the Constitution. See Tahoe-Sierra, 535 U.S. at 322-23, 122 S.Ct. 1465 (noting that the Supreme Court's jurisprudence involving condemnations and physical takings is as old as the Republic). We therefore conclude that Flores Galarza's alleged physical taking of the Out-of-Pocket Funds alleged a violation of clearly established law. 35 112
113 The JUA has successfully alleged that Flores Galarza's taking of the Out-of-Pocket Funds violated clearly established constitutional law. The JUA has failed to allege a clearly established violation of law with respect to the Earned Premiums, the interest generated by those premiums, or the Overstated Reserve Funds. Therefore, as we turn to the third prong of the qualified immunity analysis (whether a reasonable officer would have believed that the alleged conduct violated clearly established law), we focus only on the alleged taking of the Out-of-Pocket Funds. 114