Wednesday, May 22, 2019

Court of Appeals denies electric utility union request to invalidate actions of Puerto Rico fiscal board

By on March 7, 2019

Utier attorneys argued the board continued to make budgetary decisions while its legality was questioned

(Screen capture of www.ca1.uscourts.gov)

SAN JUAN – The U.S. First Circuit Court of Appeals denied Thursday a request by the Irrigation and Electric Workers Union (Utier by its Spanish acronym) that would have eliminated bankruptcy-like protection established by the Puerto Rico Oversight, Management, and Economic Stability Act (Promesa).

In a request for reconsideration of its Feb. 15 ruling, Utier sought to invalidate the actions undertaken over the past few years by the Promesa-created Financial Oversight and Management Board.

The Boston court ruled then that the board was unconstitutionally appointed because its members are federal officers that should have been approved as per the Appointments Clause, which stipulated that the president appoint officials with the advice and consent of the Senate.

The Appeals Court validated the rest of Promesa and gave the White House 90 days to correct the problem. After Thursday’s ruling, the 90-day period starts again and ends on June 5, attorney John Mudd said. President Trump has yet to reappoint the current or appoint new board members.

The effect of the Appeals Court denial of UTIER’s petition was to reaffirm the court’s own earlier holding that all actions taken, and decisions made by the Oversight Board since its inception stand valid and in full force and effect, notwithstanding the court’s holding regarding the constitutionality of the appointments of the members of the Oversight Board. The Oversight Board announced in February that it will ask the Supreme Court of the United States to review that case,” the board said in a statement.

Lawyers Rolando Emanuelli and Jessica Méndez noted that the board continued to make budgetary decisions even though it was aware that the union and other claimants were questioning its legality. Utier President Ángel Figueroa Jaramillo had said that if the board was illegal then its actions were illegal, too.

“It is ordered that a petition for rehearing and the petition for rehearing en banc be denied,” the court said.

Court gives Trump, Senate 90 days to validate Puerto Rico fiscal board

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