On the heels of a ruling saying that Puerto Rico is not a separate sovereign of the United States, a new opinion from the Supreme Court on Monday morning about Puerto Rico’s debt crisis reaffirmed that Congress is the island’s sole and final arbiter when it comes how Puerto Rico can resolve its economic woes.
The crux of the 5-2 decision, tweeted out by SCOTUSBlog, boiled down to this: even though the government of Puerto Rico passed a 2014 local Recovery Art bill that gave the island’s municipalities and public utilities the ability to declare some form of bankruptcy, the Court’s opinion (written by Justice Clarence Thomas) rejected that bill and concluded that bankruptcy statutes enacted by Congress cannot be rewritten.
SCOTUS rules 5-2 that federal law blocks Puerto Rico’s use of its own bankruptcy law.
— SCOTUSblog (@SCOTUSblog) June 13, 2016
Currently, municipalities in Puerto Rico cannot file for Chapter 9 bankruptcy. A bipartisan bill called PROMESA (“promise” in Spanish) passed the House of Representatives last week and is now with the Senate. Despite gaining the support of the White House, the PROMESA bill has been criticized for some of its provisions, which includes a federally-mandate fiscal control board for Puerto Rico and reduction of the minimum wage for young workers. On July 1, the government of Puerto Rico is expected to default on a payment of $2 billion in bonds.
“Federal law, therefore, pre-empts the Recovery Act,” Thomas wrote at the end of his opinion.
Justice Sonia Sotomayor wrote a dissenting opinion, with support from Justice Ruth Bader Ginsburg. At one point, Sotomayor, who is of Puerto Rican descent, wrote the following:
“Congress could step in to resolve Puerto Rico’s crisis. But, in the interim, the government and people of Puerto Rico should not have to wait for possible congressional action to avert the consequences of unreliable electricity, transportation, and safe water—consequences that members of the Executive and Legislature have described as a looming ‘humanitarian crisis.'”
Here is the complete opinion: