Supreme Court to take up cases on Puerto Rico financial crisis

The Supreme Court on Thursday agreed to take up a series of major cases arising out of constitutional challenges to the Financial Oversight and Management Board for Puerto Rico — which Congress created in 2016 to help respond to and manage the Puerto Rican financial crisis.

In February, the federal appeals court in Boston had held that the manner in which members of the Board had been selected violated the Constitution’s Appointments Clause, because they were not all appointed by the President and confirmed by the Senate.

The appeals court also concluded that at least some of the Board’s actions could nevertheless be sustained because it was acting with apparent, if not actual, authority.

Five different petitions were filed with the Supreme Court challenging different aspects of the appeals court’s ruling, including a petition by the US Justice Department earlier this month. The Justices not only agreed to hear the cases this fall, but also agreed to hear the issue in early October when its new term begins.

It can help Puerto Rico’s economic recovery that challenges to the Board be resolved one way or the other, but it also gives the court an opportunity to address, for the first time in decades, the extent to which the Constitution’s structural provisions do or do not limit Congress’s ability to legislate where federal territories are concerned.