Financial Oversight and Management Bd. for Puerto Rico v. Aurelius Investment, LLC (18-1334)
argument 18-1334Financial Oversight and Management Bd. for Puerto Rico v. Aurelius Investment, LLC
Supreme Court of the United States
1h 22m
5 speakers
8 chapters
transcribed 7 days ago
official recording ↗
Transcript
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Transcript generated automatically by AI and may contain errors.
What is the core constitutional question about whether the Puerto Rico Oversight Board members are U.S. officers?
We'll hear argument today in case 181334, the Financial Oversight and Management Board for Puerto Rico versus Aurelius Investment and the consolidated cases.
Mr. Verrilli? Mr. Chief Justice, and may it please the Court, the question in this case is whether members of the Financial Oversight Board are officers of the United States who must be selected in the manner that the Appointments Clause prescribes or whether they are instead territorial officers who do not have to be selected in that manner. The Constitution's text, structure, and history in this Court's precedents all make clear that the proper focus in answering that question is the nature of the authority the Board exercises. It comes down to whether Congress has vested the Board with the executive power of the national government or instead vested the Board with the territorial executive power.
The statute that created the Board, Pro Mesa, answers that question in a straightforward way. It sets up an entity within the territorial government, It gives the Board only territory-specific authority and instructs the Board to pursue only territory-specific objectives. The Board acts on behalf of Puerto Rico as its representative in judicial proceedings to restructure the territory's debts. It pursues only Puerto Rico's interests in those proceedings. It's up to the Article III Court that adjudicates those proceedings to balance all the competing interests. Congress also instructed the Board to implement a method for restoring the fiscal stability. That, too, is territorial authority. It reaches only Puerto Rico's budgeting and fiscal planning, and the Board must exercise that authority in a manner that protects Puerto Rico's vital interests.
Now, Congress did build in protections to guarantee the Board's independence. Congress did that because it concluded that Puerto Rico's staggering financial and humanitarian crisis could not be solved unless the Board was insulated from the political pressures that caused that crisis in the first place. But Congress also insulated the board from federal control. Board members can be removed only for cause, which means that the President cannot remove them based on disagreement with the board's policies or priorities in implementing PROMESA. When you put all that together, the board is in the territorial government. It's been given statutory directives to advance the interests of Puerto Rico and and it's insulated from federal control, it's clear that board members are territorial officials,
not officers of the United States. So how can that be, Mr. Verrilli? It seems to me that your very argument that it's independent is suggesting it can't belong to the territory and that there's a serious problem and the federal government is creating an entity that no one can control. Neither Congress nor the President can remove this entity for anything but cause. Tell me how this differs from a U.S. attorney. A U.S. attorney is an officer of the United States. I think you accept that. A U.S. attorney is enforcing federal law in Puerto Rico, the U.S. attorney of Puerto Rico, just the way Promesa is. And a U.S. attorney doesn't have jurisdiction outside of Puerto Rico. So how is the U.S. attorney different
Let me make a general point, and then I'll specifically answer the U.S. Attorney question. The general point, I think it's important to make clear, we don't say, contrary to our friends on the other side, that the Appointments Clause doesn't apply in Puerto Rico. It applies in Puerto Rico just like it applies in a state, in that federal officials, officials who are part of the federal government, have to be appointed in conformity with the Appointments
Clause, including the U.S. Attorney. Could Congress pass a law like PROMESA for a state?
No, I don't think so, because the difference between that situation and this situation is Article 4. And I really think that gets to the heart of the matter, Justice Sotomayor, that I think the beef that my friends on the other side have is not with the appointments clause.
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Chapters
8 chapters
1
What is the core constitutional question about whether the Puerto Rico Oversight Board members are U.S. officers?
0:00–8:50
2
How does the statute (PROMESA) define the Board’s authority as territorial rather than national?
8:50–20:18
3
Why do the parties argue that the Board’s powers are independent of the federal government?
20:18–28:38
4
What historical examples (e.g., Washington mayor, territorial judges) are used to distinguish territorial officers from federal officers?
28:38–37:44
5
How do the Justices apply the Palmore test to determine if the Board’s actions are “primarily local”?
37:44–48:07
6
What are the arguments concerning the de facto officer doctrine and its potential remedy?
48:07–58:48
7
How might the outcome affect home‑rule for territories and the District of Columbia?
58:48–1:11:17
8
What is the final position of counsel on why the Board should be considered a territorial entity and not a federal officer?
1:11:17–1:22:14