Since district judges in Puerto Rico disagree about the applicability of the automatic stay under the Puerto Rico Oversight, Management, and Economic Stability Act, one district judge came up with a solution: Impose the stay, but tell the plaintiff to move for modification of the stay in the court handling Puerto Rico’s debt restructuring.
The opinion on May 16 by District Judge Francisco A. Besosa of San Juan included a hint that the PROMESA court should seriously consider modifying the stay to ensure protection of the plaintiff’s constitutional rights.
In the case before Judge Besosa, a prisoner filed suit under 42 U.S.C. § 1983, alleging that the conditions of his confinement violated the Eighth Amendment because, as a potential witness, his life was in danger since he was being housed in the general prison population. He sought both an injunction and $3 million in monetary damages.
Twice before, Judge Besosa had refused to impose PROMESA’s automatic stay in 42 U.S.C. § 2161, saying that a provision PROMESA, 42 U.S.C. § 2106, specifically provides that nothing in the statute will relieve Puerto Rico from complying with federal law. However, Puerto Rico filed a motion for rehearing and won.
Puerto Rico began its debt restructuring under PROMESA on May 3, 2017. Over the ensuing year, “the parameters of the automatic stay [became] more precise,” Judge Besosa said. His opinion cites cases going both ways with regard to “ordinary course” litigation, noting that the stay has been held not applicable to petitions for habeas corpus and to suits seeking only injunctions and not monetary damages.
Reciting cases that have imposed the PROMESA stay, Judge Besosa concluded that “PROMESA and precedent from this district establish that the automatic stay encompasses [the plaintiff’s] Section 1983 action.”
Reflecting his point of view, Judge Besosa cited cases where the First Circuit had applied the PROMESA stay to appeals in Section 1983 suits. He also cited Ruíz-Colón v. Rodriguez, 17-2223, 2018 U.S. Dist. Lexis 74455 (D.P.R. April 30, 2018), where District Judge William G. Young imposed the stay on a prisoner’s suit for violation of constitutional rights. For ABI’s discussion of Ruíz-Colón, click here.
Judge Besosa concluded that the stay was invoked automatically because Puerto Rico was shouldering the expense of litigation and would be liable for judgments. Still, he was “mindful” that the plaintiff was seeking compliance with the Constitution.
Although he imposed the stay, Judge Besosa said the plaintiff could seek a modification of the stay from the district judge responsible for Puerto Rico’s financial restructuring under PROMESA.
Last week, ABI reported Colón-Colón v. Negron-Fernandez, 14-1300 (D.P.R. May 14, 2018), a decision by Chief District Judge Gustavo A. Gelpí. The decisions by Judges Besosa and Gelpí are difficult if not impossible to reconcile because Judge Gelpí seemed reluctant to impose the stay on ordinary course litigation, even in a case not involving the plaintiff’s constitutional rights. To read ABI’s discussion of Judge Gelpí’s decision, click here.