Whether Puerto Rico enjoys the same immunity from lawsuits that U.S. states have was considered by the Supreme Court on Jan. 11 in a battle over media access to internal documents of a governmental body.
The hearing came after a recent push by congressional Democrats for a statehood referendum in Puerto Rico failed in the last Congress. In December 2022, the U.S. House of Representatives approved the proposed Puerto Rico Status Act but it died because the Senate had not yet considered it when the old Congress wrapped up. It is unclear if the new Republican-controlled House seated last week will revive the measure.
The case is Financial Oversight and Management Board for Puerto Rico v. Centro de Periodismo Investigativo Inc., court file 22-96.
The Eleventh Amendment forbids lawsuits “against one of the United States by Citizens of another State, or by Citizens or Subjects of any Foreign State.” The amendment prevents a state from being sued without its consent but Congress can waive this immunity for states, though the Supreme Court has said it must make its intention abundantly clear when doing so.
Although Puerto Rico is a territory and not a state, the Supreme Court has previously held it should be treated as a state in some situations.
Puerto Rico’s fiscal house was a mess, so in 2016 Congress passed the Puerto Rico Oversight, Management, and Economic Stability Act (PROMESA) to restructure the U.S. territory’s debt. The law created the Financial Oversight and Management Board to “develop, approve, and certify Fiscal Plans and Territory Budgets, … negotiate with [Puerto Rico’s] creditors, … and … commence a bankruptcy-type proceeding on behalf of [Puerto Rico],” according to a Legal Information Institute (LII) summary.
After the board was created, a not-for-profit media group, Centro de Periodismo Investigativo Inc. (CPI), filed a complaint against the board in a federal district court under the provisions of PROMESA. CPI sought board documents including those about Puerto Rico’s fiscal status, internal communications, and financial disclosure forms for board members that the board had withheld. CPI claimed the board abridged freedom of the press and contravened the Puerto Rico constitution.
The board said the disclosures sought were blocked by the Eleventh Amendment and that PROMESA overrides the disclosure obligations of the territorial constitution. The district court ruled against the board, finding that PROMESA did not preempt the territorial constitution.
Meanwhile, CPI filed another complaint against the board in hopes of obtaining communications between the board, the U.S. government, and the Puerto Rican government. The district court consolidated the two pending cases and denied the board’s motion to dismiss. The board appealed to the Boston-based U.S. Court of Appeals for the 1st Circuit, which upheld the lower court. The circuit court found that previous precedents and PROMESA and its legislative history abrogated the purported sovereign immunity of the board.
The board disagreed and asked the Supreme Court to review the decision, which on Oct. 3, 2022, it agreed to do.
Board attorney Mark D. Harris told the justices during oral arguments that federal law bars CPI’s lawsuit.
Although Section 2126(a) of PROMESA gives “the federal courts exclusive jurisdiction over any and all suits against the board,” the 1st Circuit found that the section abrogated the board’s immunity, exposing it to “every type of suit, federal and territorial.”
“That decision was wrong and should be reversed,” Harris said. “In order to abrogate, a statute must be clear and unmistakable on its face. There is nothing in Section 2126(a) that even comes close.”
“This court has held many times that jurisdictional provisions do not abrogate because the power to hear a case says nothing about the availability of a defense, and mere textual inferences do not qualify,” the lawyer said.
It is the board’s position that “the court has repeatedly held for more than a hundred years that Puerto Rico has immunity. It held that way before Puerto Rico’s constitutional assembly in the 1950s, and, since then, it has said that Puerto Rico has a degree of … autonomy comparable to a state,” he said.
It would represent a “sea change for Puerto Rico and an extremely harmful one” to allow the territory or its officials to be sued under its own laws in federal court, Harris said.
CPI’s attorney, Sarah M. Harris, said the board is not immune to lawsuits.
The board’s “one-size-fits-all theory of immunity would be a drastic and unnecessary way to protect Puerto Rico, which will not be flooded with federal suits no matter what,” she said.
Several justices seemed to think the issue of the sovereign immunity of Puerto Rico and the board was not yet resolved in the case.
Justice Elena Kagan said it “seems quite weird to me” to look at legal precedents before dealing with the issue.
Justice Neil Gorsuch suggested moving forward without considering the immunity issue would be a bad idea.
Addressing CPI’s lawyer, Gorsuch said, “Why aren’t all those just good reasons to defer this question for another day, if it ever becomes relevant again, given … Congress’s statute saying that Puerto Rico generally has sovereign immunity?”
Justice Sonia Sotomayor told U.S. Department of Justice attorney Aimee W. Brown, “Everybody gets their sovereignty from the United States, including tribes, because we have determined not to take it away.”
Brown replied: “There is a fundamental difference between states that come into the union under the equal footing doctrine and tribes and territories here that I think is significant.”
Brown told Kagan that Puerto Rico has been treated like a state “for more than a century.” That territories cannot be sued by private parties “is just kind of the necessary corollary to the existence of self-government,” she said.
Chief Justice John Roberts pointed out that Puerto Rico is not a state.
“I’m just wondering how far you can stretch the analogy to state sovereign immunity,” Roberts said.
Gorsuch said that whether Puerto Rico enjoys sovereign immunity is “a rather large and important constitutional question” to move forward on without first receiving proper submissions from all the U.S. territories that would be affected.
Justice Amy Coney Barrett suggested to Brown that it might be best to “just vacate” the lower court’s ruling “and “remand to the 1st Circuit, given the complexities of this question.”
The Supreme Court is expected to rule on the case by June.