Three Puerto Rico Oversight Board members were fired illegally by President Donald Trump and can resume their roles immediately, a federal judge ruled.
Puerto Rico District Court Judge Maria Antongiorgi-Jordan granted a preliminary injunction Friday in favor of board members Andrew Biggs and Betsy Rosa and board President Arthur Gonzalez.
Trump, through members of the Presidential Personnel Office, had
"This opens a big can of worms," said John Mudd, an attorney in Puerto Rico.
Trump will ask for a stay, said Mudd, adding that he thinks the judge will deny it unless the Supreme Court decides clearly in favor of a stay in the case of Federal Reserve Governor Lisa Cook.
Trump tried to fire her but she remains in office until the Supreme Court hears the full case, after the justices
"This will mean further delays in the Puerto Rico Electric Power Authority [bankruptcy] case," Mudd said.
University of Puerto Rico Professor Jose Garriga Pico said the case "illustrates how legal proceedings, even if justified, can delay essential executive action and ultimately work to the disadvantage of the people."
The outcome of the case might not be reached for a year or more and no one can know how the Supreme Court, which will probably ultimately review the case, will rule, he said.
"In the meantime, the [Oversight Board] will remain not properly constituted, creating institutional uncertainty…. This uncertainty may delay critical negotiations and Title III proceedings – most notably those involving the Puerto Rico Electric Power Authority and the University of Puerto Rico," Garriga Pico said.
The confrontation between the board and the president will lead to a perception of instability in Puerto Rico that will "likely increase borrowing costs and deter private investment," Garriga Pico said. "The current board is not only discredited but has also proven ineffective…. Congress, exercising its oversight authority, in consultation with the White House and the territorial government, should amend PROMESA to facilitate the swift conclusion of Puerto Rico's debt-restructuring process."
In her ruling Judge Antongiorgi-Jordan said because Trump attempted to remove the three from the board in a way contrary to the Puerto Rico Oversight, Management and Economic Stability Act, the removal should be treated as improper.
The judge found "Upon careful review of all relevant factors, the court has found that plaintiffs have demonstrated (1) that they are likely to succeed on the merits, (2) that they will suffer irreparable harm absent a temporary restraining order, and (3) the balance of equities and the public interest weigh in favor of the issuing of a temporary restraining order."
PROMESA, by specifying terminations from the board would be for "cause," imposes limits on the president's removal power and the reasons the president's subordinate provided in an email sent several weeks after the board members were dismissed didn't satisfy the standard. The board members were entitled to a pre-termination notice and an opportunity for a hearing.
The judge said Trump's action breached the plaintiffs' rights under the Constitution's Fifth Amendment not be deprived of life, property or liberty without due process. Their positions should be considered a form of property.
A preliminary injunction is necessary because long-term relief may be impossible if the three members are replaced, the judge said.
"When the president disregards the law, the very foundations of our democracy begin to crack," Antongiorgi-Jordan said.
The members had
The U.S. Department of Justice couldn't be reached for a comment because of the U.S. government shutdown.
