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Lawsuits and the PROMESA Board

Earlier this month, the Supreme Court upheld the legality of the PROMESA Fiscal Oversight and Management Board in a ruling in which the Court concluded that the members of the Board are not “officers of the United States.”

“Officers of the United States” are, according to the Appointments Clause of the U.S. Constitution, to be chosen by the President of the United States and approved by Congress. Other kinds of officers don’t have to be approved by Congress.

The Supreme Court determined that the Board members were dealing simply with local issues and were not officers of the United States. “The government of Puerto Rico pays the board’s expenses, including the salaries of its employees,” wrote Justice Breyer.

Justice Sotomayor, whose parents were born in Puerto Rico, agreed with the ruling, but wrote a 24-page brief expressing discomfort with some of the conclusions drawn “I am skeptical that the Constitution countenances this freewheeling exercise of control over a population that the federal government has explicitly agreed to recognize as operating under a government of their own choosing, pursuant to a constitution of their own choosing,” she wrote.

The Board is now able to continue its work without interruption.

Puerto Rico sues the board

Almost as soon as the Supreme Court decision took the heat off the Board, Governor Wanda Vazquez Garced filed lawsuits questioning the Board’s decisions to reject six territory laws. The laws increased pay for fire fighters, regulated pharmacies and medical practices, offered incentives to keep healthcare workers on the Islands, set drug prices, and extended workers’ vacation and sick time accumulation.

The governor held that these actions by the board constituted “micromanagement” and were outside the proper purview of the Board.

Oversight Board Executive Director Natalie Jaresko responded by stating that “[t]he government has repeatedly tried to redefine and limit the oversight board’s authority and narrow its mandate under PROMESA.”

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