Hope for Puerto Rico! Supreme Court opens their ears up.
Puerto Rico’s future lies in the hands of the Supreme Court
The Supreme Court heard arguments Tuesday on whether Puerto Rico can avoid financial collapse by restructuring a portion of its massive $70 billion debt.
And while it’s hard to interpret how the high court will rule, the four liberal justices sounded more sympathetic to the position of the island’s government than to that of its bondholders.
Certainly more sympathetic than the Republicans in Congress, who have refused for the past eight months to pass any law to assist the 3.5 million U.S. citizens who reside on the Caribbean island.
And in this particular case, the court’s liberal wing will have more influence than usual. That’s because Justice Antonin Scalia died in February - and has yet to be replaced - while Justice Samuel Alito has recused himself, apparently because he or his wife has personal investments in Puerto Rico’s bonds.
That leaves only seven justices.
The issue before the court was a bankruptcy law Puerto Rico’s legislature passed in 2014 that would permit the island’s public utilities to restructure about $20 billion those entities owe to bondholders.
Known as the Recovery Act, that law was struck down last year after several major bondholders sued successfully in federal court to oppose it. A federal appellate court later upheld the lower court.
Both courts concluded that when Congress amended federal bankruptcy law in 1984 it specifically denied Puerto Rico the right to resort to bankruptcy protection for its municipalities and public corporations.
Puerto Rico has maintained that Congress never barred the territory from adopting its own bankruptcy provisions - something Justice Ruth Bader Ginsburg seemed to agree with.
“Why would Congress put Puerto Rico in this never-never land?” Ginsburg asked.
So did Justice Sonia Sotomayor, the daughter of Puerto Rican parents, who specialized in the legal issues surrounding the island’s status when she was a student at Princeton and Yale.
She expressed skepticism that Congress would have kept Puerto Rico from federal bankruptcy without allowing it to pass “emergency legislation that said, ‘Don’t shut off the lights tonight.’ ”
Comments from the two other liberal justices, Elena Kagan and Stephen Breyer, were less emphatic - but both indicated they were open to backing Puerto Rico.
Only Chief Justice John Roberts seemed hostile, saying at one point that he wasn’t sure the territory’s argument “carries much weight.”
Like the other branches of the federal government, the Supreme Court is now faced with more big questions about Puerto Rico than it has in years.
In January, the justices heard arguments in another case over whether the island has the sovereign right to prosecute crimes that have already been tried in federal courts. At their heart, both cases raise troubling questions over what exactly is Puerto Rico’s status, given that it is neither a state nor an independent country.
Decisions on both cases are expected before the end of June.
Meanwhile, Congress continues to stall. House Speaker Paul Ryan, who last year promised to have a bill on Puerto Rico ready by March 31, announced Tuesday he’s set that date back to mid April when Congress returns from its Easter recess.
The island’s governor Alejandro Garcia Padilla has made clear that he will be forced to default on a $440 million debt payment due May 1.
Source
Praying for P.R. & that the Supreme Court hands them some great news.
The Supreme Court heard arguments Tuesday on whether Puerto Rico can avoid financial collapse by restructuring a portion of its massive $70 billion debt.
And while it’s hard to interpret how the high court will rule, the four liberal justices sounded more sympathetic to the position of the island’s government than to that of its bondholders.
Certainly more sympathetic than the Republicans in Congress, who have refused for the past eight months to pass any law to assist the 3.5 million U.S. citizens who reside on the Caribbean island.
And in this particular case, the court’s liberal wing will have more influence than usual. That’s because Justice Antonin Scalia died in February - and has yet to be replaced - while Justice Samuel Alito has recused himself, apparently because he or his wife has personal investments in Puerto Rico’s bonds.
That leaves only seven justices.
The issue before the court was a bankruptcy law Puerto Rico’s legislature passed in 2014 that would permit the island’s public utilities to restructure about $20 billion those entities owe to bondholders.
Known as the Recovery Act, that law was struck down last year after several major bondholders sued successfully in federal court to oppose it. A federal appellate court later upheld the lower court.
Both courts concluded that when Congress amended federal bankruptcy law in 1984 it specifically denied Puerto Rico the right to resort to bankruptcy protection for its municipalities and public corporations.
Puerto Rico has maintained that Congress never barred the territory from adopting its own bankruptcy provisions - something Justice Ruth Bader Ginsburg seemed to agree with.
“Why would Congress put Puerto Rico in this never-never land?” Ginsburg asked.
So did Justice Sonia Sotomayor, the daughter of Puerto Rican parents, who specialized in the legal issues surrounding the island’s status when she was a student at Princeton and Yale.
She expressed skepticism that Congress would have kept Puerto Rico from federal bankruptcy without allowing it to pass “emergency legislation that said, ‘Don’t shut off the lights tonight.’ ”
Comments from the two other liberal justices, Elena Kagan and Stephen Breyer, were less emphatic - but both indicated they were open to backing Puerto Rico.
Only Chief Justice John Roberts seemed hostile, saying at one point that he wasn’t sure the territory’s argument “carries much weight.”
Like the other branches of the federal government, the Supreme Court is now faced with more big questions about Puerto Rico than it has in years.
In January, the justices heard arguments in another case over whether the island has the sovereign right to prosecute crimes that have already been tried in federal courts. At their heart, both cases raise troubling questions over what exactly is Puerto Rico’s status, given that it is neither a state nor an independent country.
Decisions on both cases are expected before the end of June.
Meanwhile, Congress continues to stall. House Speaker Paul Ryan, who last year promised to have a bill on Puerto Rico ready by March 31, announced Tuesday he’s set that date back to mid April when Congress returns from its Easter recess.
The island’s governor Alejandro Garcia Padilla has made clear that he will be forced to default on a $440 million debt payment due May 1.
Source
Praying for P.R. & that the Supreme Court hands them some great news.