Supreme Court Upholds Puerto Rico Financial Oversight Board Appointments

The U.S. Supreme Court has been very busy lately despite dealing with the coronavirus pandemic.

This week, the nation’s highest court delivered a 9-0 ruling to uphold appointments to Puerto Rico’s federally created financial oversight board.

Congress created the board in 2016 to address the Caribbean island territory’s fiscal crisis.

The board had been challenged by creditors in a ruling that avoids disruption to the panel’s restructuring of about $120 billion of the bankrupt U.S. territory’s debt.

The justices concluded that the 2016 appointment of seven board members did not violate the U.S. Constitution’s so-called appointments clause as the challengers had argued.

Reuters reported:

The outcome hinged on the court’s conclusion that the board has control primarily over local issues, meaning the appointments were valid under the Constitution’s language regarding naming officials to certain government posts.

The board appealed after the Boston-based 1st U.S. Circuit Court of Appeals ruled in 2019 that the appointments were unlawful because the members had not been confirmed by the U.S. Senate.

The legal challenge was brought in 2017 by Puerto Rico creditors including Aurelius Investment, LLC, a hedge fund that holds Puerto Rico bonds, and Unión de Trabajadores de la Industria Eléctrica y Riego, Inc, a labor group that represents workers at Puerto Rico’s government-owned electricity utility.

Bondholders face losses as a result of debt restructuring while the labor group has said the board’s proposed restructuring of the utility’s debt would lead to its members having worse working conditions.

Even though Puerto Rico is a U.S. territory, the justices essentially ruled that the oversight board is a territorial entity and that members should decide the powers and duties.

The High Court has already handed down several major rulings.

Last week, the Supreme Court ruled to temporarily block House Democrats from obtaining ex-special counsel Robert Mueller’s secret grand jury testimony.

Before that, the Supreme Court issued an 8-1 decision in favor of Obamacare, ruling that the federal government must pay out $12 billion to insurers who had enrolled in the Affordable Care Act’s “risk corridor” program.

The SCOTUS delivered a 5-4 ruling last month permitting a “public charge” rule that allows the Trump administration to screen out green card applicants. The rule makes it more difficult for immigrants to receive legal status should they be expected to become dependent on government benefits.

The Supreme Court ruled last week that defendants in criminal trials can only be convicted by a unanimous jury, striking down a previous law that has been rejected by every state except one.

The SCOTUS recently ruled that the Trump administration can enforce the “remain in Mexico” policy.

Before that, the High Court ruled 5-4 in favor of tossing a lawsuit filed against a Texas border agent for shooting and killing a Mexican teenager.