Mendez-Nunez v. FOMB

Case Type:
Case Status:
18-1773 (1st Circuit, Feb 20,2019) Published
Claims challenging the PROMESA Board’s decisions to not certify Puerto Rico’s fiscal plan and to instead certify a fiscal plan of its own development were properly dismissed for lack of subject matter jurisdiction and failure to state a claim.
Procedural context:
The speaker of Puerto Rico’s House of Representatives and the President of its Senate filed a complaint for declaratory relief affirming (1) that the Financial Oversight and Management Board’s (FOMB) rejected policy recommendations were non-binding and that the Legislative Assembly could not be compelled to implement them; and (2) that the Board’s certified territory budget is null and void; and injuctive relief prohibiting the Board from implementing its proposed territory budget. Defendants, the FOMB and its members, moved to dismiss the claims for lack of subject matter jurisdiction and for failure to state a claim, citing among other things PROMESA § 2126, which states that the district court has no jurisdiction to review FOMB certification determinations. The plaintiffs appealed.
After rejecting the fiscal plan developed and submitted by the Governor of Puerto Rico, the FOMB exercised its authority under PROMESA § 2141 to develop a fiscal plan itself and submit it to the Governor. The Board-developed fiscal plan, among other things, required the repeal of Puerto Rico Law 80, which would have the effect of clarifying that all employment on the island is at-will. In addition, the fiscal plan removed planned cuts to the budgets for the Legislative Assembly and the judiciary. When the Legislative Assembly failed to repeal Law 80, the Board restored the contemplated budget cuts.
Lynch, Souter (by designation), Stahl

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