WASHINGTON (CN) — Puerto Rico’s financial oversight board got a high court pass on Thursday, allowing it to avoid handing over government documents to a nonprofit media organization.
Centro de Periodismo Investigativo wants access to financial documents and communications from the territory’s oversight board, which was created in the wake of a severe financial crisis. Puerto Rico was reported to have $71.1 billion in debt in 2016, leading Congress to pass a law creating the Financial Oversight and Management Board for Puerto Rico.
Claiming Puerto Rico’s Constitution affords the right to access public records, CPI sued the board in 2017. The board, however, argued it has sovereign immunity under the 11th Amendment. It claimed that Congress preempted disclosure requirements when it enacted the Puerto Rico Oversight, Management, and Economic Stability Act, also known as Promesa.
A federal judge disagreed and denied the motion to dismiss. The judge ruled that while the board did have immunity under the 11th Amendment, Promesa waived that immunity.
After its loss in court, the board handed over some of the requested documents but continued to withhold others. This triggered a second legal battle. The board faced repeated losses in the lower courts, setting off a high court showdown.
When the justices heard oral arguments in the dispute in January, they were largely focused on how Puerto Rico’s sovereign immunity shaped the legal battle between CPI and the board.
In Thursday's ruling, the court's 8-1 majority found that nothing in Promesa makes Congress’s intent to repeal the board’s sovereign immunity “unmistakably clear.”
“The statute does not explicitly strip the board of immunity. It does not expressly authorize the bringing of claims against the board. And its judicial review provisions and liability protections are compatible with the board’s generally retaining sovereign immunity,” Justice Elena Kagan wrote for the majority. “We therefore reverse the judgment of the court of appeals and remand the case for further proceedings consistent with this opinion.”
CPI argued that the statute's provisions insulating the board from monetary liability and suits challenging its budgetary decisions would be pointless “if the board were immune generally.”
But Kagan wrote that litigation against the board can still arise, even though it enjoys sovereign immunity. She added that under statutes other than Promesa – such as Title VII of the Civil Rights Act, which prohibits various kinds of employment discrimination – the board would be stripped of those protections.
Justice Clarence Thomas wrote in a dissenting opinion that his colleagues in the majority came to their conclusion without first determining if the board enjoys the sovereign immunity it asserts at all.
He noted that because Puerto Rico is a territory, it does not fall under the same inherent sovereign immunity that states have in federal court.
“To be sure, the United States has urged us to hold that Puerto Rico enjoys a form of common-law immunity that, it claims, territorial governments can invoke in federal court,” Thomas wrote. “But the board has, at every stage, argued only that it possesses the same immunity as states. That argument appears untenable.”
Attorneys representing the board and CPI did not immediately respond to a request for comment.
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