Former Puerto Rico board members sue for reinstatement
2 min read
Bloomberg News
Three former Puerto Rico Oversight Board members filed a lawsuit against President Donald Trump Thursday seeking to overturn their terminations from the board.
Observers say the composition of the board
Five board members, including Arthur Gonzalez and Betty Rosa were dismissed via email in early August, with Andrew Biggs fired the same way in mid-August. John Nixon is the only remaining board member.
Gonzalez,
The former board members “make interesting legal arguments,” said Phillip Escoriaza, partner at law firm Feldesman LLP. However, “the president has the upper hand in this dispute with the fired members because the law is purposefully murky on this.”
Puerto Rico Attorney John Mudd said the three plaintiffs may win. “The question is whether any actions by new board members would be illegal and void.”
“A lawsuit like this is probably critical for any future settlements or agreements, because it will (maybe) determine up front if the incoming [board] members, and thus whatever agreements they sign, are valid or not,” said Matt Fabian, a partner at Municipal Market Analytics. “Without this, the inevitable future litigation cycle in Puerto Rico will last even longer than it otherwise would.”
The Puerto Rico Oversight, Management and Economic Stability Act says board members can be removed only for “cause,” the former board members said in the complaint and the emails terminating their roles did not include a cause or justification.
Trump “may claim that the president has inherent authority under Article II of the Constitution to terminate Judge Gonzalez, Dr. Biggs or Dr. Rosa,” the complaint said. But the U.S. Supreme Court found the board members are not officers of the United States but part of Puerto Rico’s territorial government, established under Article IV of the Constitution.
The terminations breached PROMESA because no cause was provided, the Fifth Amendment because the board members were not given due process to defend themselves, and violates sections of the Constitution providing Congress with authority over appointments to independent agencies for territories and conditions for removal of members of those agencies, lawyers for the plaintiffs said.
The suit has been filed in the United States District Court for the District of Puerto Rico. The plaintiffs are being represented by Indiano & Williams, Washington Litigation Group, Democracy Defenders Fund, and Cooley LLP.
The former board members are seeking a jury trial.
The White House press office didn’t immediately respond to a request for a comment. A spokeswoman for the Oversight Board said it would decline to comment.
