The Supreme Court will take up a dispute over the constitutionality of appointments to an oversight panel tasked with restoring financial stability to Puerto Rico.
Created under the Puerto Rico Oversight, Management and Economic Stability Act, which Congress passed in 2016, the seven-member board was designed to supervise the restructuring of Puerto Rico’s debt and implement fiscal reforms as the country grappled with a budget crisis.
But several creditors challenged the appointments as violations of the Constitution’s Appointments Clause because the members didn’t receive Senate confirmation. In February, the 1st U.S. Circuit Court of Appeals invalidated the appointments but upheld the previous actions taken by the board.
In filings with the court, lawyers for the board argued Congress made clear when it enacted the Puerto Rico Oversight, Management and Economic Stability Act in 2016 that the Fiscal Oversight and Management Board is a territorial entity and its members are territorial officers, and thus do not have to be confirmed by the Senate.
The lower court’s ruling, they said, throws “into doubt the legality of the board’s past and present actions” and threatens “the considerable progress that Puerto Rico has made to this point.” The justices will hear the cases involving the Financial Oversight and Management Board in October, when the high court convenes for its next term.
