Puerto Rico's Fate Hangs on Chief Justice Roberts

A little-noticed provision in a bill signed into law in 2016 places the fate of Puerto Rico in the hands of Supreme Court Chief Justice John Roberts, USA Today reported yesterday. PROMESA gives Chief Justice Roberts the power to appoint a U.S. district court judge to oversee the bankruptcy-like case involving a U.S. territory. That was a "jarring break" from traditional municipal bankruptcies, which are overseen by bankruptcy judges, said Melissa Jacoby, a University of North Carolina law professor. One significant difference is that district court judges, unlike bankruptcy judges, are political appointees. As other municipal bankruptcies have demonstrated, the judge in control of the case retains significant sway over the outcome. Chief Justice Roberts' views on municipal debt issues are unclear but in a case that came before the court and decided last June, he joined a 5-2 decision that rejected Puerto Rico's attempt to establish its own legal procedure akin to municipal bankruptcy. The fierce legal battle that's about to ensue will involve a fight over which creditors deserve to be paid the most. This may ultimately require the judge in control of the case to make tough decisions, distinguish between creditors, referee disputes with little legal precedent and possibly decide whether retirees will endure cuts to their pensions and health care.