Puerto Rico’s status as a U.S. territory took center stage Wednesday as the Supreme Court considered whether its congressionally-appointed oversight body is entitled to the same kind of immunity from lawsuits that U.S. states have.
The justices heard oral arguments in the ongoing feud between Centro de Periodismo Investigativo (CPI), an investigative journalism organization, and the board established under the Puerto Rico Oversight, Management, and Economic Stability Act (PROMESA). PROMESA was adopted by Congress in 2016 to create oversight for critical restructuring of Puerto Rico’s $74 billion debt. CPI often covers PROMESA’s activities and in doing so, it sought records to increase transparency of the board’s operations as part of the massive debt-restructuring process.
PROMESA’s board refused to turn over the documents CPI requested and the news organization sued.
The courtroom match-up, however, focused little on the watchdog function in journalism or the island’s billions in debt. Instead, it focused on the subject of sovereign immunity.
“Things Like States”
Although the Puerto Rican constitution the public a right to access to public information (similar to what the Freedom of Information Act requires of the federal government), the board argues that under federal law, it has a right to sovereign immunity from CPI’s lawsuit and that grave harm would result if it were forced to turn over the records requested.
In Financial Oversight Board v. Centro de Periodismo Investigativo, the Court considers the question of whether, if the oversight board was ever entitled to sovereign immunity from CPI’s claims, that immunity is now gone, leaving the board exposed to lawsuits.
Both the district court and the 1st Circuit ruled in favor of CPI, finding that the PROMESA board was not protected from the lawsuit, because Congress “abrogated sovereign immunity” when it created the board. That legal term of art refers to Congress’s power to revoke sovereign immunity and authorize lawsuits against states or the federal government in specific circumstances.
Puerto Rico’s status as a territory — and not a state or a nation — creates an important distinction for much of the sovereign-immunity case law. Typically, sovereign immunity disputes involve the standard tensions of federalism, pitting state sovereignty against national interests. Other sovereign immunity cases involve lawsuits filed against the federal government — and of course, foreign sovereign immunity cases involve immunity of foreign nations.
The investigative journalism organization points out in its brief that a territory would have a lesser claim to sovereign immunity, because territories lack their own independence and are subject to congressional control under the territory clause of Article IV of the U.S. Constitution.
Sovereign immunity has been a subject of particular interest to the Supreme Court of late. The idea that an independent sovereign, such as a state, the federal government itself, or a foreign country, would be immune from lawsuits is not an unqualified defense. Accordingly, the high court has considered cases involving immunity for various states, the U.S. military, foreign countries, Native American tribes, and most recently, foreign companies who may be considered “agents” of a foreign country.
The Biden administration supports PROMESA’s argument in favor of immunity. In its amicus brief to the Court, it argued:
As a territory, Puerto Rico is not encompassed within the Eleventh Amendment, which speaks to the sovereign immunity of States. Nevertheless, this Court has long recognized that the government established in Puerto Rico is sovereign and entitled to sovereign immunity that prevents the territorial government from being sued without its consent. That immunity parallels the sovereign immunity of the United States, the States, and Indian Tribes—and like the immunities of those entities, it may be abrogated only by a clear statement by Congress.
Attorney Mark Harris argued on behalf of the board of PROMESA that the Court should assume sovereign immunity for purposes of the argument, and that “There is nothing that even comes close” to showing that Congress meant to that abrogate sovereign immunity by creating PROMESA.
“What would be the difference if Puerto Rico were a state?” asked Clarence Thomas, as the questioning began.
Chief Justice John Roberts called the case “different from other sovereign immunity cases,” given that “Puerto Rico once had the sovereignty of Spain.”
Justice Sonia Sotomayor, the only member of the Court of Puerto Rican descent, led Harris through an analysis of what she called a matter with “tremendous implications” for the Puerto Rico.
“Territories like Louisiana and others didn’t have their own sovereignty before they became territories of the United States?” Sotomayor asked.
“And historically, no territory was dragged into federal or territorial courts unless their sovereignty had been waived, correct?” she continued. “In 200 years of our history, Justice Holmes’ proposition that no sovereign (which I think we have given to mean ‘no governing entity’) would be dragged into a court without the consent of the sovereign, correct?”
The justice then brought the analysis to its core and confirmed with Harris, “To the extent that the U.S hasn’t permitted, or entertained, or looked at suits against these territories, they’ve acted akin to states, right?” Sotomayor then summarized, “We said Puerto Rico is like a state.”
Roberts raised a point of contention in his next question in which he asked Harris, “Does the 11th Amendment say ‘states’ or ‘things like states’?”
“Inviting More Lawsuits”
Assistant to the Solicitor General Department Aimee Brown argued briefly on behalf of the Biden administration.
Justice Neil Gorsuch raised a concern to Brown: “Have you considered how your sovereign immunity argument might apply to other territories besides Puerto Rico and what their view might be?”
Attorney Sarah Harris, who argued on behalf of CPI that the Court should reject use of the “clear statement rule” when making its decision, faced tough questions from the bench. The the rule, which has been used in past cases, says that Congress can only abrogate sovereign immunity by making a “clear statement” that it intends to do so.
“You’re analogizing Puerto Rico to a municipality but it’s not,” snapped Sotomayor, reminding Harris. “Everybody gets their sovereignty from the United States including tribes. ”
“You have not given me a reason why Puerto Rico should be treated differently than Indians, differently than territories,” said Sotomayor.
The chief justice took issue with Brown’s argument that the Court should abandon the “clear statement rule.”
“You said that a clear statement rule would interfere with Congress’ powers,” commented Roberts. “I don’t understand quite how that is… it just says they have to be clear.” “Maybe we should apply that rule across the board,” Roberts joked, adding, “it doesn’t prevent Congress from doing whatever it wants.”
Justice Ketanji Brown Jackson appeared to agree and said the chief justice “ma[de] a good point.”
“It’s not really about restraining Congress in any way,” said Jackson, “I understood the clear statement rule is to prevent us from finding something when it’s not crystal clear that Congress intended it.”
Kagan, however, raised a question about the need for Congress make a “clear statement” about its intent to abrogate sovereign immunity: Congress would not have said anything about abrogation unless Congress believed Puerto Rico had sovereign immunity to begin with.
“If Congress doesn’t think Puerto Rico has any immunity, why would it think abrogation is even in the picture?” Kagan asked.
Soon thereafter, Sotomayor shifted the conversation to underscore the importance of the Court’s ruling in the case.
“Others are going to sue Puerto Rico on other claims besides the ones you’re raising,” Sotomayor told Brown, adding that if the Court finds that Congress intended to abrogate sovereign immunity, that finding will control in other cases as well.
“At least if we note the differences here and remand for consideration of the other issue, we can say those are open questions,” rather than “inviting more lawsuits,” Sotomayor suggested.
Questions about the limits of Puerto Rico’s sovereignty were before the Supreme Court in 2016 — though that case was not about immunity from private lawsuits, but rather, about double jeopardy. In the Court’s decision, the justices ruled that Puerto Rico is not a separate sovereign for purposes of double jeopardy, and that therefore, the criminal defendant could not face successive prosecutions.
Of course, the interests and context of the 2016 case are markedly different than what is at stake in the PROMESA litigation, but the question of Puerto Rico’s status looms large as efforts to make the territory the 51st U.S. state continue.
You can listen to the full oral arguments here.
[Photo by Angel Valentin/Getty Images]
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