The Trump administration appears ready to seek an alternate route to dismissing at least three members of the Puerto Rico Oversight Board.
Department of Justice attorneys told the U.S. District Court they were OK with it making permanent an earlier temporary restoration of Trump-dismissed board members as long as it relates only to the previous firing attempt.
"The United States defendants do not understand the court's opinion and order to preclude any further removals of plaintiffs [i.e., the three Trump-removed board members] consistent with law," the Department of Justice attorneys told U.S. District Court Judge María Antongiorgi-Jordan.
"The motion gives the impression that at some future time, President Trump will fire the present board members and provide them the due process he thinks is necessary," said John Mudd, an attorney based in Puerto Rico. "In practical terms, there will be no end in sight to the [Puerto Rico Electric Power Authority (PREPA)] Title III [bankruptcy] since this will give bondholders an incentive to hold out for a better offer, which has not been forthcoming from the [Oversight Board]."
In summer 2025,
The U.S. Supreme Court ruled in late June in a separate case the U.S.
The only Trump appointee to the board, Justin Peterson, was its most pro-bondholder member, and some analysts see the potential for a very different approach if Trump were to get to name six or seven members.
Currently, the board consists of Gonzalez, Rosa, Biggs and John Nixon.
The Puerto Rico Oversight, Management and Economic Stability Act specifies the U.S. Senate Majority Leader and the Speaker of the House nominate candidates for four seats and the minority party leaders nominate candidates for two seats, leaving the final seat at the president's discretion. PROMESA requires the leaders to suggest candidates for six of the seats and the president selects from the lists.
Trump named Peterson as his discretionary choice in his first term.
PROMESA, by specifying terminations from the board would be for "cause," imposes limits on the president's removal power, Antongiorgi-Jordan said last October. The reasons provided in an email several weeks after the dismissals didn't satisfy the standard, she said. The board members were entitled to a pre-termination notice and an opportunity for a hearing, she said.
