For the first time since PROMESA was approved and enacted, thus establishing a new public administration regime in Puerto Rico, the federal government will issue an official statement regarding the statute’s constitutionality.

This was the information providedby the Office of the Solicitor General of the US Justice Department, in response to the legal dispute initiated by the hedge fund Aurelius Investment, LLC. This dispute argues—just like the Electric and Irrigation Industry Workers Union had done before—that PROMESA is illegal because the members of the Fiscal Control Board it creates are not appointed by the president of the Unites States.

At the moment of filing the lawsuit, Aurelius claimed that the US government should submit to the terms imposed on all parties in the Puerto Rican government’s bankruptcy case. But the federal government stated before Judge Laura Taylor Swain that it is necessary to follow the protocols where a statute’s constitutionality is challenged and the federal government is not involved. This means the government has 60 days to decide whether they will get involved in this case, and 30 additional days to submit their position in writing, if they decide to enter the dispute.

In fact, the protocol prohibits the court from ruling that a law is unconstitutional while the federal government is still within the terms established to decide on their participation.

Acting Solicitor General Jeffrey B. Wall asked the judge to abide by these terms, insisting that the impact of the remedy requested by Aurelius should not be underestimated. He claims that if the court rules in favor of the hedge fund, the Board would be declared illegal and its decisions would become void, including the adoption of a Fiscal Plan and the bankruptcy cases for the Puerto Rican government, Retirement Systems, Highways and Transportation Authority, Sales Tax Financing Corporation, and Electric Power Authority.

The last time the federal government adopted a legal position on Puerto Rico was for the Sánchez Vilella case, where they affirmed that the island is a US territory where Congress has full authority.

On August 17, Judge Swain ordered the case to be filed with the US Attorney General, as provided by law, thus disregarding Aurelius’s claims to address this dispute in a different manner.

To see the federal government’s acknowledgment, click on the link below:

Reply to Aurelius _26765