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HomeNewsLocal newsFormer V.I. Bar President Urges Court to Be Careful with PR Case

Former V.I. Bar President Urges Court to Be Careful with PR Case

When lawyers representing creditors owed money by Puerto Rico go before the Supreme Court next month, a former head of the Virgin Islands Bar Association has a message for the high court: Deliberate with care.

Attorney Russell Pate said he sent that message in a friend of the court brief because of what Puerto Rico and the Virgin Islands have in common.

The highest court in the United States is being asked to decide if a financial control board with appointed members was legally convened.

An expert on Supreme Court proceedings said about 40 entities have filed friend of the court briefs – officially known by their Latin title, amicus curiae briefs – in the matter of Puerto Rico’s control board. Pate said he entered one under the bar association banner on behalf of all Virgin Islands citizens.

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One of the reasons the case is attracting so much interest has to do with a set of laws grouped together by Congress in 1901 called the Insular Cases.

One V.I. attorney familiar with the issue explained that the Insular Cases were drawn up at a time when some U.S. states were still territories, like Puerto Rico, the U.S. Virgin Islands, Guam, American Samoa and the Northern Marianas Islands are now. The cases dictated the level of rights citizens in those territories would have claim to.

What most of those territories had in common, he said, were large populations of black and brown people.

Most of the territories within the bounds of the continental U.S. eventually became states. But those territories outside of the continent still live under the limitations of rights laid out in the Insular Cases.

When it became apparent that Puerto Rico was moving dangerously close to financial collapse several years ago, the government tried to set up a financial control board, but it faced a series of legal challenges leading up to a rejection by the Supreme Court. In 2016 Congress stepped in and created the Puerto Rico Oversight, Management and Economic Stability Act.

Under the act – known as PROMESA – the president picks members to serve on the board. The appointment requires nomination of board members by the president and confirmation by the U.S. Senate.

But in the case of PROMESA, that did not occur. If Puerto Rico was a state it would have gotten its board members through the nomination process, he said. However, Puerto Rico is not a state but is classified as an insular area, subject to the 1901 laws providing limited rights.

In an Aug. 29 article by the Cato Institute titled,” Puerto Rico Financial Oversight Board was Unconstitutionally Appointed,” authors Ilya Shapiro and Sam Spiegelman said leaving fiscal control board members out of the nominating process casts doubt on their authority. Instead of being seen as “principal federal officers,” it allows the court to see them as taking on official duties without having official credentials.

This makes Puerto Rico creditors nervous, some say, because millions of dollars in potential settlement awards are in the board’s control.

This case, now before SCOTUS, arises from the Puerto Rico Bankruptcy Court. Some of the creditors were arguing the financial control board was improperly appointed, according to an attorney familiar with the case.

The V.I. bar’s amicus brief joins with 40 others, including one from the American Civil Liberties Union and the Chamber of Commerce of the United States.

“What we’ve asked the court to do is please be careful. Be cognizant of increasing the rights of citizens. It’s a nuanced way to box in these old racist cases,” Pate said.

Oral arguments before the high court are scheduled for Oct. 15 in Washington D.C.

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