Court grants cert in PROMESA case

I’m a bit late to this, but during its last week of the term, the Supreme Court granted cert in five petitions seeking to review the First Circuit’s decision striking down PROMESA, the Puerto Rico Oversight, Management, and Economic Stability Act. The First Circuit held that the members of the Oversight Board created by the Act were “Officers of the United States” and that the scheme for appointing said officers violated the Appointments Clause of Article II. Specifically, it held that they were principle officers, subject to appointment by the President and confirmation by the Senate.

This decision appears to fly in the face of the text of the statute. First, Congress notes that it is exercisign its power under Article IV, Sec. 3, to make needful rules for the territories of the United States. Second, Section 101(b) expressly declares that the Oversight Board is created as an entity within the territorial government and shall not be considered to be a federal entity. It is funded entirely from territorial funds.

Furthermore, the implications of the holding are quite sweeping. If the members of the Oversight Board are Officers of the United States, it is hard to understand why the Governor of Puerto Rico would not be. Thus, under the First Circuit’s argument, he or she could not be popularly elected, but would have to be appointed by the President and confirmed by the Senate. (In fact, prior to 1947 this is precisely how the Governor was selected).

The First Circuit also relies on the argument that PROMESA is a federal law. It attempts to distinguish between the Governor and the Oversight Board by arguing that the Governor exercises authority arising from the laws of the territory, specifically the Puerto Rican Constitution. However, it rightfully acknowledges that the Constituton itself stems from a congressional grant of power from the federal government, citing the Supreme Court’s recent double jeopardy decision, Puerto Rico v. Sanchez-Valle, 136 S. Ct. 1863 (2016). It’s only answer is that if all Puerto Rican laws were federal laws, then every claim brought under Puerto Rico’s laws would pose a federal question, and that can’t possibly be right. Color me unconvinced by this argument, which the Court spends only one paragraph on.

There is truly no cabining the First Circuit’s decision to just the Oversight Board. If allowed to stand, it creates truly grave questions for the future of self-government not just in Puerto Rico, but in all of the territories currently governed by Congress under Article IV.