Opinion ID: 203894
Heading Depth: 3
Heading Rank: 2

Heading: The Just Compensation Prong

Text: Consequently, at issue is whether Plaintiffs have satisfied the second, just compensation prong. The just compensation prong presents some difficulty for Plaintiffs, since Procedure No. 96 provides a procedure to reimburse the duplicate premiums, and Plaintiffs refuse to avail themselves of it. By their own admission, Plaintiffs have not sought compensation through the procedures the State has provided for doing so. Id. at 14 (citations omitted); see also Williamson County, 473 U.S. at 197, 105 S.Ct. 3108 (holding that the takings claim in that case was unripe until [the plaintiff] has utilized th[e] procedure for just compensation provided by the state). For that reason, the district court dismissed Plaintiffs' claim as unripe. See García-Rubiera, 516 F.Supp.2d at 190. However, we have recognized exceptions to the just compensation prong. We have noted that facial challenges to a regulation are generally ripe the moment the challenged regulation or ordinance is passed. Flores Galarza, 484 F.3d at 14 (quoting Suitum, 520 U.S. at 736 n. 10, 117 S.Ct. 1659). Moreover, we have held that a plaintiff is relieved of the second prong if the procedure is unavailable, inadequate, or futile. See id. (noting that second prong does not apply when a procedure is unavailable or inadequate (quoting Williamson County, 473 U.S. at 197, 105 S.Ct. 3108)); see also Pascoag, 337 F.3d at 92-93 (noting that futility is an exception to this prong). Finally, we noted in Flores Galarza that the just compensation prong may not apply in certain circumstances to a taking that involves the direct appropriation of funds. See 484 F.3d at 19. On appeal, Plaintiffs argue that all three categories of exceptions apply. [10] We agree as to the third category, and conclude that Plaintiffs' claim for declaratory and injunctive relief is ripe because their claim involves the direct appropriation of funds. In Flores Galarza, we noted that the Supreme Court expressed doubt that a federal takings claim seeking declaratory and injunctive relief would require individuals to first seek compensation under the Tucker Act, which is usually ... a step in a takings action against the federal government. Id. (citing the plurality opinion in Eastern Enters. v. Apfel, 524 U.S. 498, 118 S.Ct. 2131, 141 L.Ed.2d 451 (1998)). Apfel concerned a challenge to the Coal Act, which established a mechanism for funding health care benefits for coal industry retirees, and which required private coal operators to contribute to the payment of premiums to fund such benefits. Id. (citing Apfel, 524 U.S. at 504, 118 S.Ct. 2131). Eastern, one such private coal operator, brought both facial and as-applied takings challenges, and sought a declaratory judgment and an injunction against enforcement of the act by the Commissioner of Social Security. Apfel, 524 U.S. at 520, 118 S.Ct. 2131. Eastern did not seek compensation. Id. A plurality concluded that the availability of Tucker Act compensation did not prevent Eastern from asserting its takings claim. It did so because to require Eastern to assert its claim would result in an utterly pointless set of exercises, since Congress could not have contemplated that the Treasury would compensate coal operators for their liability under the Act, for `[e]very dollar paid pursuant to a statute would be presumed to generate a dollar of Tucker Act compensation.' Id. at 521, 118 S.Ct. 2131 (quoting In re Chateaugay Corp., 53 F.3d 478, 493 (2d Cir. 1995)). Instead, the Declaratory Judgment Act allows individuals threatened with a taking to seek a declaration of the constitutionality of the disputed governmental action before potentially uncompensable damages are sustained. Id. (quotation marks omitted). In Flores Galarza, we analogized the takings claim raised by JUA to the claim raised in Apfel. Although we recognized differences between the two contexts, we stated that the nature of [JUA's] claim that Puerto Rico's Secretary of the Treasury improperly withheld money belonging to the JUA so that it may be used for public purposesstrikes us as equivalent to the complaints against the `direct transfer of funds' at issue in Apfel and the decisions its cites. See Flores Galarza, 484 F.3d at 20. Here, even before the passage of Law 230, Plaintiffs have sought to enjoin the transfer of the duplicate premiums to the Secretary and a declaratory judgment that such a transfer was unlawful. In other words, Plaintiffs have consistently sought a declaration of the constitutionality of the disputed governmental action before potentially uncompensable damages are sustained. Apfel, 524 U.S. at 521, 118 S.Ct. 2131. Thus, to require Plaintiffs to seek compensation for property taken when it has continually sought to enjoin such takings in the first place would entail an utterly pointless set of activities. Flores Galarza, 484 F.3d at 20 (citations and quotation marks omitted). Since Plaintiffs' takings claim for declaratory and injunctive relief mirrors the claims in Flores Galarza and Apfel in this crucial respect, we hold that they are ripe. For the above reasons, we reverse the district court and hold that Plaintiffs' takings claim is ripe with respect to their requests for declaratory and injunctive relief.