Supreme Court takes case on Puerto Rico financial crisis
Washington — The Supreme Court will decide a challenge to the oversight board established by Congress in response to Puerto Rico’s financial crisis. The justices said Thursday they are adding the issue to their term that begins in October and will hear the case that month.
Hedge funds that invested in Puerto Rican bonds won a lower court ruling that board members were appointed in violation of the Constitution because they were not confirmed by the Senate. The president selects the board’s seven voting members. They and one other non-voting member chosen by Puerto Rico’s governor approve budgets and fiscal plans drawn up by the island’s government.
It also handles proceedings similar to bankruptcy cases that allow the island to restructure its debts. Both sides had urged the court to take up the case and decide it quickly.
The Trump administration had urged the Supreme Court to take the case, arguing that the appeals court’s ruling “simultaneously imperiled Puerto Rico’s recovery from the worst fiscal crisis in its history and cast substantial doubt on the constitutionality of territorial self-governance.”
The 1st U.S. Circuit Court of Appeals in Boston gave the president time to rectify the problem by re-nominating the members and getting them approved by the Senate. President Trump has sent the nominations to the Senate, but it’s unclear when there might be a vote and how that would affect the pending court case.