Puerto Rico Board seeks Supreme Court review on constitutionality of appointments

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The Puerto Rico Oversight Board said that it would seek U.S. Supreme Court review of an appeals court ruling that its appointment procedure was unconstitutional.

The board also said in a press statement Thursday that it would also ask the Supreme Court to stay the First Circuit Court’s 90-day period in which the board members could continue to legally act as the Oversight Board.

The First Circuit released its decision on Feb. 15, ruling in favor of investors who were dissatisfied by the board's fiscal plans, which contemplate slashing the amount available for debt service. The court didn't overturn the board's actions so far, and gave the president and U.S. Senate 90 days to name members to the board.

A stay on the lower court’s ruling would allow the members to continue to act as the board until the Supreme Court ruled on the matter.

A panel of three judges in the First Circuit unanimously found earlier this month that the Oversight Board members are “federal officers” who have to be appointed following the Appointments Clause of the U.S. Constitution.

The Puerto Rico Oversight, Management, and Economic Stability Act, which led to the board’s appointment, said that the board would be part of Puerto Rico’s government. This would mean the board members are not federal officers. The First Circuit rejected the act’s treatment of the board as part of the local government rather than a part of the federal government.

The board says it will argue to the Supreme Court that it is part of Puerto Rico’s government.

The current board members appointment procedure didn't follow the Appointment Clause's provisions.

On Monday Puerto Rico attorney John Mudd wrote in his Control Board Watch blog that the Supreme Court accepts less than 1% of the cases sent to it for review. He also noted that the Supreme Court issued a decision on the Appointments Clause. Accordingly, the court may feel “there is no real need to discuss this again.”

The current Supreme Court term ends June 30 and the next one starts on Oct. 7. It may be difficult for the court to issue a decision before the end of this year, Mudd said.

U.S. House Natural Resources Committee Ranking Republican Rob Bishop, R-Utah, said that the board should appeal the First Circuit decision. Bishop was central to the drafting and passage of PROMESA. This committee is the main committee that oversees U.S. territories like Puerto Rico.

“I have serious questions whether the judge actually understood what we did,” Bishop said. “They gave credit for a whole lot of things that we had allegedly given as powers to the PROMESA board that really aren’t there. So it should be appealed. It should go to a higher court and let the board go on to try to save the economy of Puerto Rico.”

Brian Tumulty contributed to this story.

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