Court Opinion

ID: 2966289
Source: CourtListenerOpinion
Date Created: 2015-09-21 23:53:36.641581+00
Date Added: 2024-06-11T11:43:09.021101
License: Public Domain

United States Court of Appeals
                      For the First Circuit

No. 10-2507

  GLADYS GARCÍA-RUBIERA; DOMINGO A. CORPORAN-SUÁREZ; ADALBERTO
RODRÍGUEZ; LOURDES MATOS; JOSÉ R. MALDONADO; JOSÉ PÉREZ-CANABAL;
  MANUEL MOLINA-GODÍNEZ; DAVID CASTRO; ADALBERTO AVILÉS; JORGE
     PLARD; LAURA PLARD-OCASIO; GINOVA TORO-MORALES; NOEMÍ
                        VALENTÍN-MARRERO,

                      Plaintiffs, Appellants,

                                v.

      LUIS G. FORTUÑO, Governor; JUAN CARLOS PUIG-MORALES,
                       Treasury Secretary,

                      Defendants, Appellees,

        JUAN ANTONIO FLORES-GALARZA; SILA MARÍA CALDERÓN,

                            Defendants.

          APPEAL FROM THE UNITED STATES DISTRICT COURT
                 FOR THE DISTRICT OF PUERTO RICO

          [Hon. Gustavo A. Gelpí, U.S. District Judge]

                              Before

                        Lynch, Chief Judge,
              Torruella and Thompson, Circuit Judges.

          A.J. Amadeo Murga for appellants.
          Miguel A. Rangel-Rosas, with whom Angel E. Rotger-Sabat,
and Maymí, Rivera & Rotger, P.S.C., were on brief, for appellees.

                         December 2, 2011
            LYNCH, Chief Judge.       At stake in this case are the due

process rights of privately-insured motor vehicle owners in Puerto

Rico to over $100 million in insurance payments, which have been

collected by the Commonwealth, and are owed back as reimbursement

to these vehicle owners, but which have not been repaid and have

been used instead for the Commonwealth's general budget.

            Puerto Rico law requires all motor vehicle owners to pay

for   compulsory,      state-issued    automobile     insurance   when   they

purchase or renew their vehicle registrations, even if they have

obtained equivalent private insurance, with limited exceptions.

P.R. Laws Ann. tit. 26, § 8051 et seq.         As a result, many vehicle

owners who have already paid for private insurance must pay again

for the same coverage through the Commonwealth.               By law, these

privately-insured vehicle owners ("insureds") who pay twice for

insurance coverage are entitled to reimbursements of the duplicate,

state payments.     Id. § 8055(n).       For two years after the date of

payment,    insureds    may   seek    reimbursement    from   their   private

insurers.    However, a great deal of the money owed to insureds is

not returned during this two-year period.             Although there is no

doubt that insureds have a property interest in the duplicate

payments, no statute or regulation provides notice to insureds of

how to obtain reimbursement during this two-year period from their

respective insurers, and apparently only some insurers provide

their insureds with notice of how to obtain reimbursements.

                                      -2-
          By statute, every two years the Commonwealth transfers

to itself the large pool of unreimbursed duplicate payments that

have accumulated to the private insurers.          Act No. 230 of Sept. 11,

2002, § 2 (codified at P.R. Laws Ann. tit 26, § 8055(l)).                  The

Commonwealth holds this money in trust for the insureds for another

five years, during which insureds can seek reimbursement directly

from Puerto Rico's Treasury Department.            Id.    At the end of the

five year period "these funds . . . become property of the

Commonwealth of Puerto Rico and . . . pass to the General Fund of

the Commonwealth Treasury."         Id.    However, the governing statute

does not itself set up a procedure for reimbursement or tell

insureds where or how to find such procedures.             The statute only

requires Puerto     Rico's     Secretary    of   the   Treasury   to   issue   a

procedure for reimbursement.

          The Secretary of the Treasury has established such a

procedure, but has failed to give insureds notice of the contents

of that procedure or where to find it.           In fact, insureds will not

find it unless they go in person to the proper office of government

and make an "appropriate request" for a copy of the regulation.

          In     addition      to   receiving     no     notice   about    the

Commonwealth's procedures for reimbursement, insureds receive no

individual     notice   that    their     duplicate    payments    have   been

transferred from their private insurers to the Commonwealth, or

that they may apply directly to the Secretary of the Treasury for

                                     -3-
reimbursement after this transfer. They also receive no individual

notice   that   their   duplicate     payments   will    escheat    to    the

Commonwealth after five years, and so be permanently lost to them.

          A class of insureds owed reimbursement challenged the

Commonwealth's compulsory insurance scheme in both Puerto Rico's

courts and federal court.        In this federal suit, the insureds

claim, inter alia, that the compulsory insurance scheme violates

the fundamental requirements of procedural due process. The Puerto

Rico suit, which has been stayed in favor of this suit, makes the

additional claim that the Commonwealth has breached its fiduciary

duties as trustee of the duplicate premiums on behalf of insureds.

          We    agree   that   the   Commonwealth   of   Puerto    Rico   has

violated the notice requirements of the Due Process Clause and

direct entry of a declaratory judgment and injunctive relief to

that effect.    We reject plaintiffs' remaining federal claims.           The

question of whether the Commonwealth has violated its fiduciary

duties to plaintiffs under Puerto Rico trust law remains before the

Puerto Rico courts.

                                     I.

A.        Background

          In 1995, Puerto Rico passed Law 253, which requires all

motor vehicles traveling on public roads to obtain liability

insurance.   P.R. Laws Ann. tit. 26, § 8051 et seq.       Pursuant to Law

253, the owners of such vehicles are required to purchase either

                                     -4-
the   Commonwealth's      liability     insurance      plan   or    an    equivalent

private insurance plan.          Thus, at the time they acquire and each

subsequent      year   when   they   renew    their    vehicle     registrations,

vehicle owners must either pay premiums (of $99 for private and

$148 for commercial vehicles) to the Commonwealth, id. § 8053(a),

or opt-out of the Commonwealth's insurance plan by using the

appropriate procedures to present proof of private insurance, id.

§ 8061(a).

            Law    253   also    created    the   Asociación       de    Suscripción

Conjunta del Seguro de Responsabilidad Obligatorio ("JUA") to

administer      the    Commonwealth's      insurance    plan.           Id.    §   8055.

Composed of and operated by Puerto Rico's largest private insurance

companies, JUA insures vehicle owners who buy the Commonwealth's

insurance product.       Id. § 8055(b).       Periodically, the Commonwealth

remits to JUA the insurance premiums paid in by vehicle owners,

which JUA then uses or distributes among its member companies. Id.

§ 8055(c), (e), amended by Act 201 of Dec. 29, 2009, art. 4.

            The Commonwealth insurance option provides only minimal

coverage to vehicle owners (initially $3,000, but later increased

to    $4,000,    worth   of     coverage   for    property    damage          to   other

vehicles); thus, many drivers obtain private liability insurance

for more complete coverage.          Id. § 8052(j), amended by Act 201 of

Dec. 29, 2009, art. 2.          Under Law 253, drivers who obtain private

insurance with coverage "similar to or greater than that of the

                                        -5-
compulsory liability insurance" are not required to pay for state

insurance on top of their private insurance, and may opt out of the

state insurance option.      Id. § 8061.

           Puerto Rico's Insurance Commissioner has enacted varying

procedures over the years designed to help these privately-insured

vehicle owners avoid paying for both private and state insurance,

but, in fact, a substantial percentage of privately-insured vehicle

owners have not utilized these procedures successfully and so have

been required to pay the state premium on top of their private

insurance.1   In 2000, for example, only one-third of privately-

insured   vehicle   owners   successfully   avoided   paying   the   state

     1
          In the first year of the scheme's operation, every
vehicle owner was required to purchase state insurance regardless
of whether he or she had also purchased adequate private insurance.
In later years, millions of privately-insured vehicle owners have
purchased both options.      A variety of reasons exist for why
privately-insured vehicle owners also purchase the state option.
          Initially, the Insurance Commissioner required JUA to
issue to these insureds a check in the amount of the requisite
state premium made payable to the Secretary of the Treasury. See
P.R. Ins. Comm'r, Regulation No. 5737 (Dec. 30, 1997). However,
this process was rescinded in favor of the current method, by which
insureds are automatically charged for the state insurance when
they renew their registration unless they present a JUA-issued
Certificate of Compliance certifying their private insurance. See
Amendment to Regulation No. 5737 (Sept. 14, 2000).            These
certificates must be ordered from one's private insurance company
after the purchase of private insurance but well in advance of the
state registration or renewal date. Id. This timing is critical:
if an insured's private policy is up for renewal too close to or
after the insured's vehicle registration date, he or she will not
be able to obtain a certificate and will be forced to pay the state
premium. Similarly, if an insured is late in paying his or her
private insurance premium or makes any changes to the policy, he or
she may be required to pay the state premium.

                                   -6-
premium, and the remaining two-thirds had to pay for both private

and state insurance.

           By law, when an insured pays twice, he or she is entitled

to a reimbursement of the state premium fee.                  The Insurance

Commissioner has promulgated regulations to this effect which

direct private insurers to first reimburse their insureds who pay

twice, and then seek their own reimbursement from JUA.                However,

the Commissioner's regulations do not establish a uniform procedure

for reimbursement or instruct insureds on precisely how to obtain

reimbursement, but merely indicate that the insurance companies may

establish their own internal reimbursement procedures.

           These internal procedures for reimbursement vary from one

insurer to the next.     Significantly, the Insurance Commissioner's

regulations instruct insurers to reimburse insureds where "the

insured provides   evidence     that    the   payment   was   made    [to   the

Commonwealth]," Amendment to Regulation No. 5737, art. 5(a) (Sept.

14, 2000), but do not further delineate what constitutes this

evidence of payment, and do not require insurers to notify their

insureds of the proper procedures for proving payment or for

obtaining reimbursements in general.            As a consequence, many

insureds (in some years, a majority of insureds) do not receive

their   reimbursements   from   their    insurers   and   their      duplicate

payments simply remain in the custody of JUA.

                                   -7-
            The sums JUA has accumulated from this state of affairs

are truly enormous.      By 2000, just three years after Law 253 went

into    effect,   see   Act   253   of     Dec.   27,    1995,   §   16,    JUA   had

accumulated $72 million worth of duplicate premiums which had not

been reimbursed, a figure representing 42% of the total amount that

should have been reimbursed by insurers to their insureds. Of this

$72    million,   $24   million     was    owed   to    insureds     who    had   made

duplicate    payments    that     year,     but   the   remaining     $42    million

represented a backlog of unreimbursed payments from the previous

two years.    By 2001, this sum had grown to almost $92 million.

            By law, JUA is required to keep all duplicate premium

payments separate from other funds in a special "Reserve" account.

Each year, JUA calculates how much money to place in this Reserve

account by estimating what percentage of the total number of

premium payments received will be "claimed" as duplicate payments

by vehicle owners who are privately insured but who end up paying

twice.     Typically, JUA estimates that 13% to 15% of the total

number of premium payments received each year are in fact duplicate

payments made by privately-insured vehicle owners.

            In most years, fewer insureds claim reimbursements than

expected.    JUA thus designates some portion of the Reserve account

as "excess," or money that will never be claimed by insureds.                       In

2001, for example, JUA estimated that of the $73 million in the

                                          -8-
Reserve account, somewhere between $8 and $10 million would never

be claimed by insureds and thus constituted "excess" funds.

             JUA's accumulation of these large, unreimbursed sums did

not go unnoticed.        In 2002, the Legislature of Puerto Rico enacted

Law   230,   which   directed     JUA    to   transfer    all   of   the    funds

accumulated in the Reserve account as of December 31, 2001 -- a sum

of approximately $73 million -- to the Secretary of the Treasury,

and to repeat this transfer every two years thereafter.                Act No.

230 of Sept. 11, 2002, § 2.              The Law's Statement of Motives

explained, "during the existence of [JUA], certain funds have been

accumulated to it that do not belong to it. . . . [I]t is of

greater benefit to the public interest in general to immediately

transfer those funds to the . . . custody of the Department of the

Treasury."     Id., Statement of Motives (emphasis added).

             Pursuant to Law 230, the Secretary of the Treasury is

required to hold the transferred funds "as trustee" for five years,

after which, any remaining funds that have not been reimbursed to

insureds escheat to the Commonwealth.2            P.R. Laws Ann. tit. 26,

§ 8055(l).    Law 230 also states, without elaborating further: "The

Secretary     of   the    Treasury   shall    establish    a    procedure    for

processing the reimbursement request from any person alleging a

      2
          Under a provision of Law 230 challenged by plaintiffs in
an earlier phase of this case, the Commonwealth also gained
immediate title over any interest accrued to those funds
transferred from JUA to the Treasury Department. García-Rubiera v.
Flores-Galarza, 516 F. Supp. 2d 180, 197 (D.P.R. 2007).

                                        -9-
right to the retained funds."        Id.      Law 230 does not require the

Secretary of the Treasury to give notice of that procedure to the

insureds.

            In   2003,   the   Secretary      of    the   Treasury     formulated

Procedure 96, under which insureds may seek reimbursement directly

from the Treasury Department once JUA has transferred the funds

there.    Thus, after making a duplicate payment, an insured has two

years in which to submit a reimbursement request directly to his or

her   insurer;    if     the   insured   is        unsuccessful   in    securing

reimbursement during this period, he or she has five years in which

to seek reimbursement from the Treasury Department.3

            Under Procedure 96, a claimant must obtain and fill out

various forms and send these, as well as the following attachments,

to the Secretary of the Treasury: (1) a copy of the motor vehicle

license for which the reimbursement is being claimed; (2) a copy of

the insurance policy for each year claimed; (3) certification from

      3
          Intervenor Attorney General of Puerto Rico argued on
appeal that the Insurance Commissioner's regulations should be
interpreted to permit insureds to obtain reimbursements directly
from their private insurers even after their duplicate payments
have been transferred by JUA to the Treasury Department.      The
Attorney General's stated position in this case is vigorously
disputed by the parties and was the subject of much confusion at
oral argument. Our conclusion does not turn on this point, but we
note that the Attorney General's interpretation is not the only
interpretation   --  and  not   necessarily   the  most   natural
interpretation -- of the regulations. The inordinate confusion
over this point is further evidence of the inadequacy of the
Commonwealth's notice to insureds of the procedures for
reimbursement.

                                    -10-
the insurance company of payment of the policy for each year

claimed;    (4)    certification      that    the     claimant   has   not   been

reimbursed; and finally, (5) verification that the applicant does

not have any tax debts with the Treasury Department.              P.R. Dep't of

Treasury, Procedure 96 (Apr. 1, 2003).                  If the claimant is a

private    insurance        company   seeking       reimbursement,      it   must

additionally attach certified copies of each insurance policy for

which it is claiming, certification that it has not yet received

reimbursement from JUA for each policy claimed, and verification

that it does not have any tax debts outstanding with the Treasury

Department.      Id.

            The parties have not disputed that Procedure 96 was

promulgated      pursuant    to   Puerto     Rico's    Uniform   Administrative

Procedure Act (UAPA). Under the UAPA, once the Treasury Department

finalizes Procedure 96, it is required to forward the regulation to

the Secretary of State for approval.                  P.R. Laws Ann. tit. 3,

§§ 2128(a), 2131.           If approved, the Secretary of State must

"publish in two newspapers of general circulation a summary of [the

regulation]," which includes "its number, effective date and the

agency    that    approved    it."    Id.     §   2128(d)   (emphasis    added).

Subsequently, the Secretary of State must keep in his office "a

                                      -11-
permanent file of [the regulation] for public inspection."4 Id. § 2130.

          Thus, unlike federal regulations, which are published in

multiple legal databases available both in print and for free

online, under the Commonwealth's application of the UAPA in this

case, the only way to obtain a full copy of Procedure 96 is to go

to the Secretary of State's office, in person, and place a request

to inspect the specific regulation.     Even the UAPA's "publication"

requirement, as applied to Procedure 96 in this case, requires only

that a summary be published one time in two newspapers, a summary

which need only include the regulation's number, date, and agency

of issuance.    Id. § 2128(d).

          Under    the   Treasury's   trusteeship,   reimbursements   to

insureds slowed to a trickle.         The Secretary of the Treasury

reimbursed just $500,000 in the first year of the administration of

the trust.     By the summer of 2010, the Secretary of the Treasury

     4
          Under the original UAPA, enacted August 12, 1988, the
requirement that the Secretary of State retain a copy of each
regulation in his or her office for public inspection was the
extent of the Act's filing requirement.      In 2008, the Act was
amended to additionally require the Secretary of State to
"establish and keep, permanently, in the webpage of the Department
of State over the Internet, a copy of all regulations filed
therewith for public access and inspection . . . free of charge and
available in a format easily accessible for the public." P.R. Laws
Ann. tit. 3, § 2130 (2009). The law is unclear as to whether the
internet publication requirement is retroactive to regulations
issued prior to July 16, 2008; however, the Attorney General of
Puerto Rico has represented in its brief -- and a search of the
Secretary of State's online collection of regulations confirms --
that Procedure 96 is available only in hard copy in the Secretary
of State's office.

                                 -12-
had reimbursed     a   total of     $9   million in        duplicate     payments.

Meanwhile,   as   of   the   last   accounting        in   2009,   the    Treasury

Department has received approximately $157 million in duplicate

payments from JUA.

          The     difference    has      been   used       to    supplement     the

Commonwealth's    general    budget,     and    the    Commonwealth       has   not

hesitated to use the funds for its own purposes both before and

after the funds have officially escheated.             As early as 2002, when

the Department of the Treasury acquired the first installment of

$73 million in duplicate payments, it estimated that of this

amount, only $20 million would ever be claimed by insureds in

reimbursements (JUA had assessed this sum at $63 million), and

promptly transferred the balance of $53 million in "excess" funds

to the Commonwealth's budget for fiscal year 2001-2002, which, at

that time, was running a deficit of approximately $200 million.

          Two years later, with the Treasury having reimbursed just

$500,000 of the $20 million initially reserved for reimbursements,

the Legislature passed Act 414, which permitted the Secretary of

the Treasury to transfer the remainder of that $20 million to the

Commonwealth's    2004-2005     budget,     less       another     $500,000     for

reimbursements.    Act 414 of Sept. 22, 2004 (codified at P.R. Laws

Ann. tit. 26, § 8055(l)).       Act 414 required that in the case the

sum of $500,000 proved insufficient to cover reimbursement claims

made prior to the next transfer from JUA, funds for reimbursement

                                     -13-
should   be    taken      out    of   the    Commonwealth's    General   Fund   and

Budgetary Fund.        Id.

              In 2007, the first of the duplicate premiums transferred

by JUA to the Treasury escheated to the Commonwealth; additional

funds escheated in 2009, and more are scheduled to escheat at the

end of this year. All told, the Commonwealth has obtained title by

escheat to almost 95 percent of the duplicate premiums transferred

under Law 230.

B.            Procedural History

              Law   253    and    its   amendments   have     produced   extensive

litigation.     This court has heard three other cases5 concerning the

Law and its amendments in addition to the present litigation and

its companion case,6 and the courts of Puerto Rico have heard

additional cases.         In the present case, plaintiffs appeal to this

court from the district court's grant of defendant's motion for

summary judgment, entry of judgment for defendant, and denial of

plaintiffs' summary judgment motion.                García-Rubiera v. Fortuño,

752 F. Supp. 2d 180 (D.P.R. 2010).

     5
          See Asociación de Suscripción Conjunta del Seguro de
Responsabilidad Obligatorio v. Juarbe-Jiménez, 659 F.3d 42 (1st
Cir. 2011); Asociación de Suscripción Conjunta del Seguro de
Responsabilidad Obligatorio v. Flores-Galarza, 484 F.3d 1 (1st Cir.
2007); Arroyo-Melecio v. Puerto Rican Am. Ins. Co., 398 F.3d 56
(1st Cir. 2005).
     6
           Colón-Rivera v. Asociación de Suscripción Conjunta del
Seguro de Responsabilidad Obligatorio, No. 11-1148 (1st Cir. argued
Sept. 8, 2011).

                                            -14-
               Plaintiffs       filed    their       complaint    in    this     case    in

February, 2002 as an action under 42 U.S.C. § 1983.                         As amended,

plaintiffs'          complaint    sought       the     following       relief:    (1)     a

declaratory          judgment    that    Law     230    and    its     amendments       are

unconstitutional under the Takings and Due Process Clauses, (2)

reimbursement from the Commonwealth of their duplicate premiums

with       accrued    interest,    (3)   injunctive       relief       to   prevent     the

continued transfer and escheat of funds to the Commonwealth, and

(4) damages from the Governor of Puerto Rico and the Secretary of

the Treasury in their personal capacities.7

               The district court entered an order dismissing the case

without prejudice as premature in 2004.                       See García-Rubiera v.

Fortuño, No. 3:02-cv-01179 (D.P.R. Feb. 11, 2004). On a Rule 60(b)

motion, the court heard additional motions in the case, at which

time plaintiffs moved for class certification and for a preliminary

injunction, and defendants moved to dismiss.                     On August 30, 2007,

the district court granted the defendants' motion to dismiss with

respect to plaintiffs' individual capacity claims for damages, and

denied plaintiffs' motions with respect to all their claims, with

the exception of their request for a preliminary injunction against

any further deposit into Puerto Rico's General Fund of the interest

       7
          In 2001, plaintiffs filed a similar, but broader, action
in the Puerto Rico court of first instance, which has been stayed
pending the resolution of this case. García-Rubiera v. Asociación
de Suscriptores Conjunta del Seguro de Responsabilidad Obligatorio,
No. KDP01-1441 (P.R. Gen. Ct. of J. Cir. Mar. 16, 2011).

                                          -15-
accrued    to     the    duplicate        premiums,     which       the    court   granted.

García-Rubiera v. Flores-Galarza, 516 F. Supp. 2d 180, 197-98 &

n.20 (D.P.R. 2007).

            The         district     court        rejected      all       of   plaintiffs'

constitutional claims on their motion for a preliminary injunction

with respect to the duplicate premiums themselves.                          The court held

that plaintiffs' takings claim for the duplicate payments was not

ripe because plaintiffs had failed to utilize Procedure 96 to

retrieve their money, and that, while ripe, plaintiffs' due process

claims failed because plaintiffs did not demonstrate either that

"available      remedies       under      Commonwealth        law    are    inadequate   to

redress    any     deprivation         resulting       from    the    transfer      of   the

Duplicate Premiums to the Secretary," or that Procedure No. 96 is

"onerous."       Id. at 196.

            In 2009, this court reversed the district court in part,

affirmed     in       part,    and      remanded        for    further         proceedings.

García-Rubiera v. Calderón, 570 F.3d 443 (1st Cir. 2009). We held,

under our circuit precedent, that plaintiffs' takings claims were

ripe despite their failure to utilize state procedures to reclaim

their money, id. at 453-54 (citing Asociación de Suscripción

Conjunta        del      Seguro      de        Responsabilidad            Obligatorio     v.

Flores-Galarza,          484   F.3d       1,    19    (1st    Cir.    2007)),      but   see

Downing/Salt Pond Partners v. R.I. & Providence Plantations, 643

F.3d 16, 26 (1st Cir. 2011), cert. denied, 2011 WL 3794357 (Oct.

                                               -16-
31, 2011), and remanded for further consideration of plaintiffs'

takings claims.

            We also held that plaintiffs retained a property interest

in the transferred duplicate premiums sufficient for purposes of

procedural due process.         Id. at 455.           Finding the district court

had failed to directly address plaintiffs' due process claim, id.,

we remanded for further consideration of their claim, and for a

specific    determination       as   to    whether      the   transfer    of   funds

constituted a "deprivation" sufficient to require notice under the

Due Process Clause, id. at 458.8

            On remand, plaintiffs moved for summary judgment on their

constitutional claims.      The district court denied their motion in

full,    holding   that   Law    230      did   not    constitute   a    sufficient

deprivation as to require notice under the Due Process Clause,

García-Rubiera, 752 F. Supp. 2d at 186-88, and further, that the

transfer of funds did not amount to a taking for which insureds

were entitled to just compensation, id. at 188-89.                       The court

denied plaintiffs relief under substantive due process, finding

that Law 230 easily passed muster under rational basis review, id.

     8
          This court also affirmed the district court's holding
that the Secretary of the Treasury and Governor were entitled to
qualified immunity in their personal capacities and affirmed the
district court's rejection of various of plaintiffs' other claims,
including its equal protection claim. García-Rubiera v. Calderón,
570 F.3d 443, 461 (1st Cir. 2009). We ordered certification of
plaintiffs' class action. Id.

                                       -17-
at 186, and additionally denied plaintiffs' evidentiary requests.

The court granted defendants' motion for summary judgment.

                                       II.

          Plaintiffs appeal the district court's decision as to all

their claims.    Our review of the district court's disposition of

plaintiffs' legal claims is de novo, Rodriguez v. Am. Int'l Ins.

Co. of P.R., 402 F.3d 45, 46-47 (1st Cir. 2005); our review of the

court's denial of plaintiffs' evidentiary requests is for abuse of

discretion, Doe v. Solvay Pharm., Inc., 153 Fed. App'x 1, 1-2 (1st

Cir. 2005) (per curiam).

A.        Procedural Due Process Claim

          Plaintiffs     argue        that    Law   230   and   its   companion

regulations    deprive   them    of    their    property   interests    in   the

duplicate premiums without constitutionally adequate process.                 To

establish a procedural due process claim under § 1983, plaintiffs

must demonstrate that they have "a property interest as defined by

state law" and that the defendants deprived them of this property

interest without constitutionally adequate process.               SFW Arecibo,

Ltd. v. Rodríguez, 415 F.3d 135, 139 (1st Cir. 2005) (quoting PFZ

Properties, Inc. v. Rodriguez, 928 F.2d 28, 30 (1st Cir. 1991)).

          1.       Deprivation of a Property Interest

          In García-Rubiera v. Calderón, 570 F.3d 443, this court

held that plaintiffs have a property interest in their duplicate

premiums both before and after the premiums are transferred from

                                       -18-
JUA to the Treasury Department, id. at 455, and remanded for a

determination as to whether Law 230 and its companion regulations

effect a deprivation of plaintiffs' property for purposes of the

Due Process Clause, id. at 458.

            The district court held that because Law 230 and its

amendments      merely    substitute       one    custodian   of   the   duplicate

payments for another, and replace one reimbursement procedure with

another, they do not "deprive" plaintiffs of any property interests

in the funds.      García-Rubiera v. Fortuño, 752 F. Supp. 2d at 187.

The     court     also        rejected    plaintiffs'      argument      that    the

Commonwealth's reimbursement procedure is too burdensome.                  Id.   We

disagree with the first holding, and agree as to the second.

            Law 230 and its companion regulations, viewed in the full

context of the Commonwealth's compulsory insurance scheme, clearly

effect a deprivation of property for purposes of due process

analysis.

            Law    253        contemplates       and   empowers    the   Insurance

Commissioner to establish a system to exempt privately-insured

vehicle owners from paying duplicate state fees for insurance.

P.R. Laws Ann. tit. 26, § 8061(b); see also Act No. 94 of Aug. 20,

1997,    Statement       of    Motives,    §   12.     However,    the   Insurance

Commissioner has chosen not to establish a reliable method for

exempting insureds from the fees up front, but has chosen to rely

on a reimbursement scheme, at least as to some insureds.

                                          -19-
            Specifically,        the     Commissioner      has   instituted       a

"Certificate    of    Compliance"      process    for     avoiding    payment    of

duplicate fees.       See Amendment to Regulation No. 5737 (Sept. 14,

2000).   However, by the Commonwealth's own admission, this process

is not available to all insureds,9 and plaintiffs have presented

evidence that many, if not most, insureds pay twice.                 Insureds who

do not obtain a Certificate of Compliance are forced to pay the

Commonwealth's       duplicate    fees     or    suffer    serious    sanctions,

including the impounding of their license plate, revocation of

their    driving     privileges    for    the    vehicle    in   question,      and

imposition of a misdemeanor charge and fine.               P.R. Laws Ann., tit.

26, §§ 8053, 8060.

            Thus, instead of determining whether insureds actually

owe the state fees, in many cases the Commissioner simply charges

insureds automatically for the state insurance product, and relies

on a refund process for returning moneys paid but not actually owed

to the state.

     9
          As discussed above, whether an insured can obtain a
certificate depends on, among other things, his or her timing in
purchasing or renewing his or her insurance policy.          If an
insurance policy is altered or renewed within one and a half months
of an insured's vehicle registration renewal date, JUA will not
issue a certificate at all. See Amendment to Regulation No. 5737
(Sept. 14, 2000).    Further, the record reveals that even when
Certificates of Compliance are issued, only a fraction of these are
successfully redeemed. In 2000, for example, approximately 33% of
issued certificates were successfully redeemed by insureds. The
Commonwealth does not currently provide any pre-payment procedures
other than the certificate of compliance for avoiding the duplicate
fees.

                                       -20-
             Although    the       Commissioner      could    have    established     a

broader     pre-payment        exemption        process,      or     given     insureds

information about the refund process at the time they make the

duplicate payments, the Commissioner has chosen to rely on a post-

payment refund application process for returning plaintiffs' money.

Under these conditions, the Commonwealth has an obligation to set

up    a   meaningful    procedure       for    reimbursement,        which     includes

adequate notice of the procedure.

             The Commonwealth does not contest its obligation to

return plaintiffs' money upon a proper application for refund. The

lawfulness of the Commonwealth's initial duplicate collection of

the   payments   does        not   insulate     it   from    providing       meaningful

procedures     for     the     return    of     property      that    is     rightfully

plaintiffs', and as to which the Commonwealth has no valid claim

prior to escheat.        See City of West Covina v. Perkins, 525 U.S.

234, 240 (1999) ("At this stage, no one contests the right of the

State to have seized the property in the first instance or its

ultimate obligation           to   return     it.    So     rules    restricting    the

substantive power of the State to take property are not implicated

by this case.").

             The Supreme Court has held in the tax context that "[i]f

a State places a taxpayer under duress promptly to pay a tax when

due and relegates him to a postpayment refund action in which he

can challenge the tax's legality, the Due Process Clause . . .

                                         -21-
obligates the State to provide meaningful backward-looking relief."

McKesson Corp. v. Div. of Alcoholic Beverages & Tobacco, 496 U.S.

18, 31 (1990).   In such circumstances, a state must ensure that its

tax scheme comports with due process.

          The right focal point for the due process deprivation

analysis is thus not on the moment of transfer of funds from the

custody of JUA to that of the Commonwealth, but on the overriding

obligation of the Commonwealth, throughout the total process, to

provide notice and a meaningful procedure to return to plaintiffs

the property that is rightfully theirs.             That plaintiffs have two

years in which to seek a refund from JUA before the funds are

transferred    does     not    obviate     the   Commonwealth's    independent

obligation to provide a meaningful refund procedure after the funds

have been transferred and before their final escheat. See Jones v.

Flowers, 547 U.S. 220, 232-33 (2006).

          2.          What Process is Due?

          Plaintiffs          make   two   basic   procedural     due   process

arguments that the refund process provided by the Commonwealth is

inadequate under the Due Process Clause.             The first is that they

have not been given adequate notice as to what procedures are

available or from whom they should obtain reimbursement.                  This

encompasses the argument that they have not been given notice that

the funds have been transferred from JUA to the Commonwealth.              The

second argument is that the Commonwealth's application process for

                                       -22-
reimbursement of individual requests is too burdensome.         We take

each argument in turn.

            As to plaintiffs' first argument, it is true that the

requirements of due process vary with the particulars of the

circumstance at issue.    See Morrissey v. Brewer, 408 U.S. 471, 481

(1972); Boddie v. Connecticut, 401 U.S. 371, 378 (1971).        One such

variation turns on whether the government conduct affecting the

protected property interest is legislative or adjudicative in

nature.    This is often put in terms of two poles, with a continuum

in between.     At one end is legislative action.     Where property is

affected   by   generally-applicable    legislative   action,   property

owners are not entitled to notice above and beyond the notice

provided by the enactment and publication of the statute.          See,

e.g., United States v. Locke, 471 U.S. 84, 108 (1985); Bi-Metallic

Inv. Co. v. State Bd. of Equalization, 239 U.S. 441, 445 (1915).

At the other end are individual adjudications, which require more

specific procedures, see, e.g., Mathews v. Eldridge, 424 U.S. 319,

335 (1976), as well as more specific notice, see Dusenbery v.

United States, 534 U.S. 161, 167-68 (2002); Mullane v. Cent.

Hanover Bank & Trust Co., 339 U.S. 306, 314 (1950).              In our

previous opinion in this case, we cited to Mullane for the scope of

due process notice guarantees, implicitly recognizing that this

case is not at the legislative end.       García-Rubiera v. Calderón,

570 F.3d at 456-57.

                                 -23-
          The Commonwealth argues that this is a case of clear

statutory notice.    That is plainly not so, since Law 230 gives no

notice to insureds of how to obtain reimbursement; it merely

directs the Secretary of the Treasury to "establish a procedure for

processing the reimbursement request from any person."     P.R. Laws

Ann. tit. 26,   § 8055(l).   This administrative procedure, in turn,

cannot be found in any readily available publication or online, and

even if insureds go to the Treasury Department in person, they will

not find the regulations.    This is not the notice due insureds, and

on this basis alone, this scheme is constitutionally deficient.

          However, plaintiffs' argument that Procedure 96 is like

a full adjudicatory hearing is also not fully accurate.          But

plaintiffs are not entirely off the mark. Procedure 96 falls along

the continuum between legislative and adjudicative action.     Thus,

we do not say that the procedural due process inquiry ends if the

Commonwealth, today, were to publish the terms of Procedure 96

online and/or in some other publically available source.     Rather,

we turn to useful analogies for guidance on what form of notice

will satisfy the Commonwealth's obligations under the Due Process

Clause to give notice to insureds of the administrative procedure

for reimbursement.

                                 -24-
           i.       The Commonwealth Has Not Established Legislative
                    Notice

           We explain why we reject the Commonwealth's argument that

plaintiffs have been provided with adequate legislative notice of

the procedures for reimbursement.

           In     some   circumstances,    the   publication   of     clear,

reasonably comprehensible regulations publically available in hard

copy and/or online may suffice to provide adequate notice of the

procedures for reclaiming property.          In City of West Covina v.

Perkins,   for    example,   the   Supreme   Court   held   that    although

government agents must give notice to property owners that their

property has been taken "so that the owner[s] can pursue available

remedies for [the] return" of their property, individualized notice

of the remedies for return is not required where those remedies are

"established by published, generally available state statutes and

case law."       525 U.S. at 240-41.       The Court held that property

owners can turn to these readily available "public sources" for

specific instructions on how to reclaim their property.              Id. at

241; see also Reetz v. Michigan, 188 U.S. 505, 509 (1903) (holding

that when a statute clearly fixes the time and place of meeting of

a permitting board or tribunal, additional notice to persons

wishing to attain a permit may not be required).

           However, the principle of legislative notice does not

extend to regulations that are not publically available.                See,

e.g., City of West Covina, 525 U.S. at 242 ("[N]otice of the

                                    -25-
procedures for protecting one's property interests may be required

when those procedures are arcane and are not set forth in documents

accessible to the public." (discussing Memphis Light, Gas & Water

Div. v. Craft, 436 U.S. 1 (1978))); Butler v. Castro, 896 F.2d 698,

703 (2d Cir. 1990) (holding that where New York City's procedures

for returning seized property were contained in an unpublished

judicial order, and not reflected in the most updated version of

the municipal code, the City failed to demonstrate legislative

notice and the administrative scheme violated the basic notice

requirements of the Due Process Clause).

            In the present case, the Commonwealth's notice falls

below the     standard    for    legislative   notice.      The    Puerto   Rico

statutes do not give any notice of the Commonwealth's reimbursement

procedures.    Law 230 merely directs the Secretary of the Treasury

to "establish a procedure for processing the reimbursement request

from any person."        P.R. Laws Ann. tit. 26, § 8055(l) (emphasis

added).     The   Treasury      Department's   "procedure    for    processing

reimbursement," Procedure 96, has not been published in hard copy

or online and is not readily available to the public.

            As the Attorney General of Puerto Rico has admitted, once

the   Secretary   of     the    Treasury   formulated    Procedure    96,   the

Commonwealth took only the following two actions.                   First, the

Secretary of the Treasury submitted the regulation to the Secretary

of State, who published a "summary" of the regulation "in two

                                     -26-
newspapers of general circulation", "including its number, its

effective date and the agency that approved it."               No information

has   been   provided   as   to    when   or   where   these   summaries   were

published, their content, or where an insured might search to

obtain this information.          Second, the Secretary of State retained

a copy of the regulation in an office, for public inspection upon

a proper request.       The regulation is thus not readily available

online or in other publically accessible hard copy sources or

databases.    Nor would insureds know to look for the regulation at

the office of the Secretary of State instead of the Treasury

Department.

             Moreover, neither Law 230 nor any of its companion

regulations require private insurance companies or JUA to provide

insureds with notice of the Commonwealth's reimbursement process.

Although there is evidence that some private insurance companies

may have informed insureds of the proper procedures for obtaining

reimbursement through the Treasury Department, there is ample

evidence that many insurance companies have not provided their

insureds with any information whatsoever concerning the existence

or particulars of Procedure 96.

             Absent a trip, in person, to the appropriate office of

government and a proper request to inspect the regulation, the

Commonwealth has left plaintiffs in the dark as to every aspect of

                                      -27-
Procedure 96.     The Commonwealth's statutory notice argument thus

fails.

            ii.      What Notice Is Required?

            Plaintiffs argue that the Commonwealth's reimbursement

procedure constitutes an individual adjudication to which the full

array of procedural due process protections attach.              This is not

entirely accurate either.      The Commonwealth's reimbursement scheme

falls    somewhere   in   between   legislative   action   and    individual

adjudications.

            As courts have recognized, the line between legislative

and adjudicative action for purposes of procedural due process

analysis is not always easy to draw.       See United States v. Fla. E.

Coast Ry. Co., 410 U.S. 224, 245 (1973) ("[T]he line dividing them

may not always be a bright one . . . ."); L C & S, Inc. v. Warren

Cnty. Area Plan Comm'n, 244 F.3d 601, 603 (7th Cir. 2001) ("[T]he

line between legislation and adjudication is not always easy to

draw . . . ."); Thomas v. City of New York, 143 F.3d 31, 36 n.7 (2d

Cir. 1998) (examining whether the government action at issue "[is],

in fact, fully legislative or, at least in part, adjudicative");

see also Gallo v. U.S. Dist. Court For The Dist. of Ariz., 349 F.3d

1169, 1182 (9th Cir. 2003); 75 Acres, LLC v. Miami-Dade Cnty.,

Fla., 338 F.3d 1288, 1296 (11th Cir. 2003).

            More importantly, not all government actions fall neatly

into these polar categories.          As with the requirements of due

                                    -28-
process    in   general,    the    "'notice     required     will    vary     with

circumstances and conditions.'"            Jones, 547 U.S. at 226 (quoting

Walker v. City of Hutchinson, 352 U.S. 112, 115 (1956)).               A complex

administrative scheme, like the one challenged in this case, may

contain both legislative elements -- the application of a general

rule to a large number of people -- as well as adjudicative

elements -- fact-specific determinations of rule compliance in

individual instances.       See Texaco, Inc. v. Short, 454 U.S. 516,

534-36 (1982) (contrasting the lapse of a mineral interest as

provided for by statute with an adjudicative determination as to

whether that interest has in fact lapsed and if so, to whom, which

requires individualized notice).

           In   this     case,    the    Secretary    of   the   Treasury     has

instituted an individualized process for evaluating and processing

specific   claims   for    reimbursement.        Under     Procedure    96,   the

Treasury Department must grant or deny individual claims for

reimbursement     from     both    individuals       and   private     insurance

companies, verifying in each instance that the claimant has paid

the compulsory premium, has purchased valid alternative insurance

for the coverage period, has not been reimbursed by a private

insurer or by the Treasury Department, and has submitted proper

documentation for each claim.           Where the claimant is an insurance

company, the Treasury Department must verify additional facts,

                                        -29-
including that the company has not yet received reimbursement from

JUA.

          Significantly,    all      claimants   must   additionally

demonstrate that they do not owe any taxes to the Commonwealth.

The regulation provides that if a claimant has any tax debts, the

Treasury Department "shall inform the Collections Bureau to apply

this amount to the debt."    P.R. Dep't of Treasury, Procedure 96

(Apr. 1, 2003).     This appears to be an attempt to give the

Commonwealth a priority right to set off any purported tax debt

against the reimbursement owed. Further, there are no instructions

as to what an insured should do if he or she disputes the tax debt.

There is, moreover, no mention of further steps that may be taken

when claims generally are denied by the Treasury Department.

However, plaintiffs do not specifically complain about the tax set

off procedure or the absence of an appeals process.

          Procedure 96 thus has elements of an individualized

adjudicative process. As a consequence, more than statutory notice

is required.   We have found no Supreme Court case on point, but we

do find useful analogies in a variety of other contexts, including

seizure and forfeiture, unclaimed property laws, and tax refund

laws, in which courts have analyzed what process is required when,

after taking property belonging to others, the government sets up

some form of claims process for returning that property to its

rightful owners.

                                  -30-
               In one analogous situation, the Second Circuit has held

in a series of cases that New York City's procedure for returning

property seized from arrestees failed to meet the minimum due

process   requirements      for    notice.       Under    the    City's       original

forfeiture procedure, property seized from arrestees could be

disposed of without any individualized notice to the property

owners.   In McClendon v. Rosetti, 460 F.2d 111 (2d Cir. 1972), the

Second Circuit struck down this procedure for the first time,

holding   that     the   City's    practice     of   releasing       or   forfeiting

property seized from arrestees without providing any meaningful

individualized notice to the owners of that property violated the

notice requirements of the Due Process Clause.                   Id. at 114-115.

Later, in Alexandre v. Cortes, 140 F.3d 406 (2d Cir. 1998), the

court held that the City's procedures continued to violate due

process where they failed to provide any notice or procedure for

resolution of disputes concerning the ownership of property prior

to releasing the property to a lienholder.             See also Frith v. Hill,

No. 07-5899, 2009 WL 3073716, at *5 (S.D.N.Y. Sept. 23, 2009)

(rejecting      City's   argument    that      arrestee   had        notice    of   the

procedures for recovery of his property).

               In these cases, although the plaintiffs typically knew

that their property had been seized, the City did not provide any

notice    to    the   plaintiffs    of   the    existence       or    specifics      of

procedures for reclaiming property.             The Second Circuit held that

                                      -31-
the City must provide the plaintiffs with that information, on an

individualized basis, to meet the basic notice requirements of due

process.    See Alexandre, 140 F.3d at 412-13; cf. United States v.

James Daniel Good Real Prop., 510 U.S. 43, 53 (1993) (requiring

notice and a hearing before proceedings for forfeiture of real

property in order "to protect [the individual's] use and possession

of   property      from     arbitrary   encroachment       --     to    minimize

substantively      unfair    or   mistaken    deprivations       of    property")

(quoting Fuentes v. Shevin, 407 U.S. 67, 81 (1972)).

            Courts have also required individualized notice in the

context of unclaimed property laws. See Taylor v. Westly, 488 F.3d

1197 (9th Cir. 2007) (issuing preliminary injunction against the

operation of California's Unclaimed Property Law, under which

California seized dormant property from known persons and then

placed that property in a custodial trust ad infinitum or until the

property was reclaimed by owners without individualized notice at

any point, and holding that California must provide individualized

notice of seizure to property owners); Taylor v. Westly, 402 F.3d

924 (9th Cir.       2005)    (finding   Eleventh     Amendment    did    not   bar

plaintiffs' claims).

            The Supreme Court has also held in the due process notice

context that "a party's ability to take steps to safeguard its

interests   does    not     relieve   the    State   of   its   constitutional

obligation." Mennonite Bd. of Missions v. Adams, 462 U.S. 791, 799

                                      -32-
(1983).   Significantly, in Jones v. Flowers, the state argued that

an owner has "inquiry" notice that her property may be subject to

forfeiture if she fails to receive a property tax bill and fails to

pay property taxes.       547 U.S. at 231-32.            Recognizing that it is

"common knowledge that property may become subject to government

taking when taxes are not paid," the Supreme Court nevertheless

held that "inquiry" notice "does not excuse the government from

complying with its constitutional obligation of notice."                    Id. at

232.   Where a state affords a person "the right to settle accounts

with the State and redeem his property," the state must provide

constitutionally adequate notice even to citizens who fail to take

the initiative to inquire about their property.                   Id. at 233.     In

Jones, the Court held that adequate notice for the tax forfeiture

of a person's home required personalized notice mailed to the

homeowner's last known address, and additional reasonable steps

toward    notification    where     this        mailed   notice     was    returned

unclaimed.   Id. at 234.

           These cases have all required the government to provide

some form of individualized notice where the government has in its

possession   property     belonging        to    others,    and    where    it   has

instituted   a   claims   process     or    other    form    of    individualized

adjudication for returning or disposing of this property.                   In some

cases, the property owners knew or should have known that the state

had possession of their property, see, e.g., Jones, 547 U.S. at

                                     -33-
231-32; Butler, 896 F.2d at 699, and in all of the cases, the

government placed the impetus upon the property owners to reclaim

their property, see, e.g., Jones, 547 U.S. at 233; Taylor, 402 F.3d

at 927; Butler, 896 F.2d at 699.

          In the present case, much like in the cases described

above, the Commonwealth has set up a claims process for property

that it has exacted from insureds, but provides individual insureds

with no information about how to reclaim their property.

          We hold that under these conditions the Commonwealth is

required to give individual notice to insureds owed reimbursement

to the maximum extent feasible.    On remand, the district court can

resolve any factual issues as to feasibility.

          Plaintiffs   have     produced   some   evidence   that   the

Commonwealth keeps current a list of the names of insureds, their

addresses, and other identifying information, and thus, could

easily provide individualized notice.      The Commonwealth disputes

this, at least in part.       If, in fact, the Commonwealth has the

names and addresses of those insureds owed reimbursement, or can

obtain that information readily, then it must send individualized

notice.   If it has in its possession, or can readily obtain, only

the names, but not addresses, of insureds owed reimbursement, it

must publish that list of names online and in other places readily

accessible by the public.     If the Commonwealth does not have any

way to determine the identities or addresses of those insureds owed

                                 -34-
reimbursement, it must arrange to obtain this information -- either

from JUA or from the private insurance companies -- and must

subsequently provide individualized or publication notice.

          This notice must include notice of the transfer of funds

from JUA to the Commonwealth, of Procedure 96, and of Law 230's

escheat provisions, and must be provided either individually or via

publication,   to   those   insureds   whose   duplicate   premiums   are

currently or will be in the possession of the Commonwealth.           In

addition, the Commonwealth must publish Procedure 96, in full,

online and in other places readily accessible by the public.

B.        Plaintiffs' Other Federal Claims Fail

          Plaintiffs raise three additional constitutional claims,

all of which fail. First, plaintiffs argue that the Takings Clause

prohibits the Commonwealth from collecting and asserting custody

over the duplicate payments because no legitimate purpose is

fulfilled by the Commonwealth's scheme.        Plaintiffs characterize

Law 230 and its Amendments as a "forced loan" imposed on plaintiffs

by the Commonwealth in "an illegitimate use of government powers"

to "cover[] its budget shortfall."

          Although plaintiffs raise this claim under the Takings

Clause, and rely on the Supreme Court's decision in Lingle v.

Chevron U.S.A. Inc., 544 U.S. 528 (2005), as the Court explained in

that case, such a challenge to the underlying validity of a

regulation "is logically prior to and distinct from the question

                                 -35-
whether a regulation effects a taking."      Id. at 543.        The Takings

Clause does not prohibit government from interfering with property

rights, but rather requires just compensation for an "otherwise

proper interference amounting to a taking."         Id. (emphasis added)

(quoting First English Evangelical Lutheran Church of Glendale v.

Cnty. of Los Angeles, 482 U.S. 304, 315 (1987)).

           Plaintiffs' grievance is with what they characterize as

the Commonwealth's "misuse" of governmental powers.             They argue

that "[t]he takings clause cannot be used to obtain forced loans

from citizens even if the government institutes a fair repayment

procedure."   (Emphasis added).

           Plaintiffs thus have mischaracterized what is in fact a

substantive due process claim as a takings claim.               Plaintiffs'

argument   that   the   Commonwealth's    purpose    in    collecting   and

retaining custody over the duplicate payments "is not legitimate"

is an argument that goes to the core of substantive due process

law. See Cnty. of Sacramento v. Lewis, 523 U.S. 833, 845-46 (1998)

("We have emphasized time and again that '[t]he touchstone of due

process is protection of the individual against arbitrary action of

government,' whether the fault lies in a denial of fundamental

procedural fairness, or in the exercise of power without any

reasonable    justification   in    the   service     of    a   legitimate

governmental objective." (internal citations omitted)). Plaintiffs

                                   -36-
concede as much at points in their "takings" argument, in which

they rely heavily on substantive due process law.

            We reject this attempt by plaintiff to cast their due

process claim as an independent takings claim.              If plaintiffs have

another theory of takings, they have not clearly articulated it and

we deem their takings claim waived.

            However, plaintiffs do raise an independent substantive

due process challenge to the compulsory insurance reimbursement

scheme, which we now address.           Plaintiffs argue that Law 230 and

its amendments are so arbitrary and illegitimate as to violate the

substantive component of the Due Process Clause.

            We reject this challenge to the underlying validity of

the compulsory insurance scheme.              It is not unconstitutional for

the Commonwealth to charge plaintiffs the duplicate fees upfront in

order to guarantee coverage, and thereafter take custody of the

payments,    provided    that   the     Commonwealth       also   implements    a

meaningful   notice     and   refund    process     that   complies   with     due

process.

            Plaintiffs also argue that the burdens Procedure 96

imposes on individual claimants constitutes a separate violation of

procedural due process.       The district court rejected this argument

finding that plaintiffs failed to demonstrate on the facts that

Procedure 96 was excessively burdensome under the Due Process

                                       -37-
Clause.    García-Rubiera v. Fortuño, 752 F. Supp. 2d at 187.                     We

agree with the district court.

           We      also   reject      plaintiffs'     remaining    claims    and,

reviewing for abuse of discretion, Mack v. Great Atl. & Pac. Tea

Co., 871 F.2d 179, 186 (1st Cir. 1989), affirm the district court's

decisions denying plaintiffs' request for disclosure of a sealed

agreement between JUA and the Commonwealth and request to deem

certain    facts     presented     by   plaintiffs      as   conceded   by    the

Commonwealth.      García-Rubiera v. Fortuño, No. 3:02-cv-01179 (Sept.

14, 2010).

C.         The Puerto Rico Litigation Concerning the Commonwealth's
           Fiduciary Duties

           Law 230 directs the Commonwealth to take into trust

property belonging to plaintiffs for a statutorily prescribed

period, during which it is required to administer that trust. P.R.

Laws Ann. tit. 26, § 8055(l). The Commonwealth's status as trustee

over the funds was conceded by all the parties in this case, and

has been recognized repeatedly by both the district court and this

court over the course of this litigation, see García-Rubiera, 570

F.3d at 452 ("Furthermore, upon transfer to the Secretary, Law 230

requires   the     Secretary     to   hold     the   duplicate   premiums    in    a

fiduciary capacity." (citing P.R. Laws Ann. tit. 26, § 8055(1)

("The Secretary of the Treasury shall retain these funds as trustee

. . . ."))); id. (comparing the funds entrusted to the Commonwealth

to "funds held in trust in an IOLTA account or an interpleader

                                        -38-
account");    García-Rubiera,         752   F.    Supp.    2d   at     184,   188-89;

García-Rubiera, 516 F. Supp. 2d at 191 n.14 ("Therefore, it appears

that the trust continues even after the Secretary has transferred

the money to the General Fund."); id. at 198 (directing the

Commonwealth to cease its acquisition of any interest accrued on

the duplicate payments).

             The fact that the Commonwealth holds the funds in trust

presents several important questions of the possible breach of

fiduciary duties under Puerto Rico trust law, as to the notice

requirements for fiduciaries, the complexity and burdens of the

refund procedure, and its tax set off provision.                  We leave to the

Puerto Rico courts the question of whether the particulars of

Procedure    96     violate   the   Commonwealth's         fiduciary      duties   to

plaintiffs under Puerto Rico trust law.

                                       III.

             In summary, we affirm the district court's rejection of

plaintiffs'       substantive   due    process     claim    and      procedural    due

process burdensomeness claim and reject plaintiffs' takings claim.

We   also    affirm    the    district      court's   denial      of    plaintiffs'

evidentiary requests.

             We reverse the district court's rejection of plaintiffs'

notice claim, and direct the court to enter a declaratory judgment

in   favor   of    plaintiffs   that     the     Commonwealth's       reimbursement

scheme, as embodied in Law 230 and its companion amendments and

                                       -39-
regulations, violates the notice requirements of the Due Process

Clause.    We further direct the district court to enter injunctive

relief    requiring   the   Commonwealth   to   provide   adequate   public

notice, as well as individualized notice to those insureds owed

reimbursement, of the Commonwealth's procedures for reimbursement,

consistent with this opinion.

            We remand to the district court for entry of declaratory

and injunctive relief consistent with this opinion.

             So ordered.    Costs are awarded to plaintiffs.

                                   -40-