Professional Documents
Culture Documents
No. 18-1773
Debtors.
Plaintiff, Appellant,
Plaintiff,
v.
Defendants, Appellees,
Debtors, Appellees.
No. 18-1777
Debtors.
Plaintiff, Appellant,
Plaintiff,
v.
Defendants, Appellees,
Debtors, Appellees.
Before
and its executive director after the Board developed and certified
a Fiscal Plan and a Territory Budget for Fiscal Year 2019. The
for P.R. (In re Fin. Oversight & Mgmt. Bd. for P.R.), 327 F. Supp.
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I.
§ 405(m)(1), 130 Stat. 549, 591 (2016); see also Aurelius Inv.,
WL 642328, at *1-2 (1st Cir. Feb. 15, 2019) (recounting the origins
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Board).
see Act of July 3, 1952, Pub. L. No. 447, ch. 567, 66 Stat. 327;
see also Puerto Rico v. Sanchez Valle, 136 S. Ct. 1863, 1875 (2016)
Constitution).
Burgos, 844 F.3d 339, 346 (1st Cir. 2016) (citing United States v.
Quinones, 758 F.2d 40 (1st Cir. 1985) and then citing United States
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PROMESA's Title III. See Fin. Oversight & Mgmt. Bd. for P.R. v.
Ad Hoc Grp. of PREPA Bondholders (In re Fin. Oversight & Mgmt. Bd.
for P.R.), 899 F.3d 13, 18 (1st Cir. 2018); Peaje Invs. LLC v.
García-Padilla, 845 F.3d 505, 511 (1st Cir. 2017); Lex Claims, LLC
v. Fin. Oversight & Mgmt. Bd., 853 F.3d 548, 552 (1st Cir. 2017);
see also Altair Glob. Credit Opportunities Fund, LLC v. The Emps.
Ret. Sys. (In re Fin. Oversight & Mgmt. Bd. for P.R.), 914 F.3d
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process, involving only the Governor and the Board, for development
2 PROMESA does provide one path for the Governor and the
Board to jointly develop and certify Fiscal Plans "that meet[] the
requirements under [§ 201]." 48 U.S.C. § 2141(f). The full
provision reads:
(f) Joint development of Fiscal Plan
Notwithstanding any other provision of this
section, if the Governor and the Oversight
Board jointly develop a Fiscal Plan for the
fiscal year that meets the requirements under
this section, and that the Governor and the
Oversight Board certify that the fiscal plan
reflects a consensus between the Governor and
the Oversight Board, then such Fiscal Plan
shall serve as the Fiscal Plan for the
territory or territorial instrumentality for
that fiscal year.
Id.
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1. Initial Development
set by the Board, id. § 2141(c); see id. § 2141(a), and begins
any proposed Fiscal Plan . . . ."). For 2019, the Governor sent
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48 U.S.C. § 2141(b)(1).
4 If the Board had determined that one of the Fiscal Plans
proposed by the Governor did "satisf[y] such requirements, the
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Fiscal Plan had passed. Under such circumstances (that is, when
2019 Fiscal Plan that it had developed. That Fiscal Plan was
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package not proposed by the Governor. This was one among a set of
trend [of economic] growth over the last 10 years and enabl[e] the
mandated paid leave, including sick leave and vacation pay;" and
80 of May 30, 1976, P.R. Laws Ann. tit 29 §§ 185a-185m, which bars
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Puerto Rico would have a $39 billion cumulative surplus over that
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between $23.6 and $25 million per year for the next five years.
the labor reform package and other matters after the April Fiscal
2018. Two aspects of the Board's May Fiscal Plan are relevant to
these appeals.
That is, the government of Puerto Rico would repeal Law 80 and
Plan were "reduced by half each year" in the May version, a change
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year over what had been budgeted in the April version. According
with the then-applicable fiscal plan." That is, the May Fiscal
Plan stated that the allocations for the Legislative Assembly and
the judiciary
the day the Board certified the May Fiscal Plan, May 30, Puerto
employment the rule for employees hired after the date of the
bill's enactment, while retaining Law 80's for-cause rule for those
already employed.6
considering Senate Bill 1011. Recognizing that the bill did not
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fully repeal Law 80, the President of the House Government Affairs
Oversight Board" were the House to pass Senate Bill 1011. The
with the Oversight Board concerning the repeal of Law 80, the
Oversight Board will amend the Fiscal Plan and Budget to," among
Ten days later, on June 14, the House passed Senate Bill 1011.
The parties agree that Senate Bill 1011 never became law; the
Fiscal Plan. As had been promised in the May Fiscal Plan and in
the Board's June 4 letter, the Board's June Fiscal Plan funded the
that the Government of Puerto Rico will not implement the [May]
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jurisdiction."
June Fiscal Plan, certified June 29, 2018. On that subject, the
2018, the day before the start of the Fiscal Year. Earlier that
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budget for the Legislative Assembly under the Board's May Fiscal
provides:
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D. Procedural History
certified by the Board "is null and void;" and (3) an injunction
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327 F. Supp. 3d at 369-71. The court first held that the request
claims, the district court gave two reasons. To the extent those
II.
F.3d 160, 162 (1st Cir. 2018). In doing so, we analyze the issues
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First, the federal courts lack Article III jurisdiction over the
Board exceeded its authority under PROMESA during the 2019 Fiscal
that topic.
did just that, the complaint asserts, "when it tried to force the
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79's request.
(citing Aetna Life Ins. Co. v. Haworth, 300 U.S. 227, 240 (1937)).
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judgment," Maryland Cas. Co. v. Pac. Coal & Oil Co., 312 U.S. 270,
273 (1941).
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his brief. Under this reading of Paragraph 79, the dispute lacks
and the ensuing actions of the Legislative Assembly and the Board.
300 U.S. at 241; cf. Hall v. Beals, 396 U.S. 45, 48 (1969) (holding
advisory opinions").
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See Aetna, 300 U.S. at 240. That is not this request. Whatever
future disputes may arise have not yet been and may never be
States, 523 U.S. 296, 300 (1998) (stating that a dispute is not
Thomas v. Union Carbide Agric. Prods. Co., 473 U.S. 568, 580-81
facts "involves too remote and abstract an inquiry for the proper
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Budget certified by the Board "is null and void" and an injunction
that Senate Bill 1011 did not conform with the May Fiscal Plan.
Budget should not be certified because it did not comply with the
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against the Oversight Board, and any action otherwise arising out
of Senate Bill 1011 was inconsistent with the May Fiscal Plan's
Fiscal Plan. And § 106(e) bars district courts from reviewing the
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id. § 2141(c)(3), (c)(1), while § 202 does not use the phrase "sole
judicial review. Cf. Paluca v. Sec'y of Labor, 813 F.2d 524, 528
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Peña, 109 F.3d 258, 269 (5th Cir. 1997) (defining the "clear
violated in Leedom v. Kyne, 358 U.S. 184 (1958), with the standards
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the Board exceeded its authority under PROMESA §§ 204 and 205,
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these claims that the Board exceeded its authority under PROMESA,
the Board otherwise nullified Law 80. The Board did nothing of
the sort; Law 80 remains on the books and the applicable Fiscal
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on § 205. That provision allows the Board to "at any time submit
the reforms mandatory. But the Board did not impose any reforms.
Instead, it removed the labor package from the Fiscal Plan after
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decision not to repeal Law 80. Yet, the recommendation that the
declined to repeal Law 80, the Board acted within its authority
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When the Board certified the 2019 Fiscal Plan and Budget, then, it
III.
are awarded.
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