Puerto Rico oversight board to appeal appointments ruling
SAN JUAN (Reuters) – A recent U.S. Appeals Court ruling that found Puerto Rico’s federally created fiscal oversight board was unconstitutionally appointed will be appealed to the Supreme Court, the board announced on Thursday.
The board, which was authorized under a 2016 federal law known as PROMESA, also said it is seeking to put on hold the 1st Circuit U.S. Court of Appeals’ decision to set a 90-day period to allow President Donald Trump and the Senate to constitutionally validate the appointments or reconstitute the board.
In a Feb. 15 ruling, the Boston-based appeals court said oversight board members are principal U.S. officers and should have been appointed by the president “with the advice and consent of the Senate.”
The board said it was established “as an entity within the government of Puerto Rico and not the federal government” and that the U.S. Constitution’s Appointments Clause does not apply to its members.
“PROMESA’s appointment process has established a bipartisan board, ensuring balanced decisions to help Puerto Rico recover and prosper,” a statement from the board said, adding that a majority of its members voted for the appeal.
The litigation, which was filed by creditors of the U.S. commonwealth, including Aurelius Investment LLC and bond insurer Assured Guaranty Corp, also sought a dismissal of Puerto Rico’s Title III bankruptcy cases – a move the appeals court rejected. The island is trying to restructure about $120 billion of debt and pension obligations in federal court.
U.S. District Court Judge Laura Taylor Swain, who is hearing the island’s bankruptcy, ruled in July that the appointment of the board’s members did not violate the U.S. Constitution.
John Elwood, a partner at law firm Vinson & Elkins, said the case is a credible candidate for review “because a court has held that an act of Congress is unconstitutional.”
“It’s just not clear to me how broadly important this ruling is,” he added.
The Supreme Court hears less than 100 of the thousands of appeals filed each year. If it were to take up the Puerto Rico case, it would likely be decided in its next term, which starts in October and ends in June 2020.
(Reporting by Luis Valentin Ortiz in San Juan and Karen Pierog in Chicago, Additional reporting by Lawrence Hurley in Washington; Editing by Matthew Lewis)
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