Judge grants US attorney general time to decide whether to intervene in constitutional challenges to
By THE STAR STAFF
U.S. District Judge Laura Taylor Swain granted the U.S. attorney general time Thursday to decide on intervening in the Puerto Rico Electric Power Authority (PREPA) bankruptcy following constitutional challenges to its debt adjustment plan.
The U.S. attorney general filed for the extension to weigh in on the matter after Assured Guaranty, a monoliner, filed a constitutional challenge to PREPA’s plan of adjustment. Another legal challenge was filed by the Electrical Industry and Irrigation Workers Union (UTIER by its Spanish acronym).
The attorney general asked the court on Wednesday for time until Sept. 6 to decide whether to intervene, arguing that the U.S. has a statutory right to intervene in any federal court action where a congressional act’s constitutionality is called into question. Assured Guaranty objected to PREPA’s plan of adjustment on June 12, arguing in part that the Puerto Rico Oversight, Management and Economic Stability Act (PROMESA), which governs the Title III restructuring, violates the uniformity requirement of the U.S. Constitution’s bankruptcy clause because it treats Puerto Rico differently from other U.S. jurisdictions. That argument has previously been rejected, but, Assured argued, the earlier ruling has been “superseded by other authorities and events,” including that the Financial Oversight and Management Board argued, and the court agreed, in the bond lien and recourse challenge that the oversight board had the status of a trustee in bankruptcy.
“Absent a future reversal of the summary judgment order, that holding necessarily means that PROMESA is a ‘bankruptcy’ law subject to the uniformity requirement of the bankruptcy clause,” Assured said.
UTIER issued a notice of its constitutional challenge on June 14 arguing that PROMESA was imposed upon the people of Puerto Rico based on the infamous and racist Insular Cases from the early 20th century that allowed the U.S. territories to be treated differently.