Santiago-Ramos v. Autoridad De Energía Eléctrica De Puerto Rico, 834 F.3d 103

Background

PREPA charges a base rate plus monthly adjustment fees; Puerto Rico law requires PREPA to allocate 11% of overall revenue to subsidies, including municipal CILTs (post-2011/2014 amendments changed calculation rules).
Plaintiffs (Santiago et al.) filed a class action on behalf of ~1.5 million PREPA customers, alleging PREPA used customer-paid revenue to subsidize municipal private use and seeking ~$360 million in just compensation.
Plaintiffs asserted property interests in (a) electricity as a movable good and (b) the funds they paid to PREPA, and claimed both a Fifth Amendment taking and a procedural due process violation.
The district court granted summary judgment for PREPA, adopting a magistrate judge’s recommendation that plaintiffs failed to identify a valid property interest and therefore lacked viable takings or due process claims.
The First Circuit affirmed, holding plaintiffs lack standing because they did not establish a protected property interest in electricity or in funds once paid to PREPA; the court explained consumers paid only for the electricity they received and ownership of paid funds transferred to PREPA.
Two concurring opinions: Chief Judge Howard would treat the property-interest issue as merits (not standing) and would affirm on the merits; Judge Lynch concurred in the judgment and noted standing questions were difficult and not fully briefed.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Valid property interest in electricity (movable good)	Plaintiffs: PREPA regulations and PR law recognize electricity as movable property, creating a protected property interest.	PREPA: Regulations do not create a constitutional property interest; customers only have an interest in continued service, not in discrete units of electricity.	Held: No protected property interest established in electricity for purposes of takings; even if assumed, no actual physical taking occurred.
Property interest in funds paid to PREPA	Plaintiffs: Money paid for electricity remains their property and PREPA’s use to subsidize municipalities effects a taking.	PREPA: Once customers pay for service, ownership of those funds transfers to PREPA; fees do not implicate the Takings Clause.	Held: No property interest in funds after payment; fees do not trigger Takings Clause.
Whether PREPA’s subsidy practice effects a taking	Plaintiffs: PREPA redirects value paid by customers to municipalities (private use) without compensation or procedure.	PREPA: Consumers receive the electricity they pay for; subsidies are allocated from PREPA revenue, not by redirecting specific customer electricity.	Held: No taking—there is no diversion of identifiable electricity from plaintiffs or deprivation of a cognizable property interest.
Procedural due process claim	Plaintiffs: No adequate procedure exists to resolve disputes about the alleged taking of electricity/fees.	PREPA: Without a protected property interest, no due process claim exists; regulatory procedures apply to service suspension but not the alleged theory here.	Held: Because plaintiffs failed to identify a protected property interest, procedural due process claim fails.

Key Cases Cited

Lujan v. Defenders of Wildlife, 504 U.S. 555 (standing requires injury in fact, traceability, redressability)
Memphis Light, Gas & Water Div. v. Craft, 436 U.S. 1 (utility customers may have property interest in continued service in limited circumstances)
Koontz v. St. Johns River Water Mgmt. Dist., 133 S. Ct. 2586 (fees generally do not implicate the Takings Clause)
Bingham v. Massachusetts, 616 F.3d 1 (1st Cir.) (plaintiff must have a personal stake in alleged property rights for takings claims)
Marrero-García v. Irizarry, 33 F.3d 117 (1st Cir.) (regulatory definitions ordinarily do not create constitutional property interests)
Sun Capital Partners III, LP v. New Eng. Teamsters & Trucking Indus. Pension Fund, 724 F.3d 129 (standard of review for summary judgment)