SCOTUS

WANDA STRIKES BACK

 

 

”All politics are local.” Thomas “Tip” O’Neill

 

For several weeks now, the Board has admonished the  Commonwealth stating that some of the laws it has approved violate  PROMESA in some way. It also informs the Commonwealth that these laws are not in effect. Although the Commonwealth knows that pursuant to PROMESA and Judge Swain’s decision of April 15, 2020 on Law 29, the Board must go to the Federal District Court in order to invalidate any law, on June 12, 2020, it filed not one but SIX complaints against the agency. In essence, the six complaints argue that the  Board’s actions are  “unreasonable from a public policy standpoint” but if not checked, “the  people of Puerto Rico will be disenfranchised because their local elected Government will be stripped of its policy making powers.” Although they are six complaints having to do with six different local laws, the legal argument is the same; the Commonwealth explained in compliance with PROMESA section 204 why these laws did not “substantially inconsistent with the fiscal plan.” Obviously, the Board did not agree.

 

What will happen now? After the proper briefing, the Court will likely dismiss these cases, probably sometime after August 9. In the law 29 case, decided on April 15, 2020, Judge Swain discussed the process for the certifications by the Commonwealth of laws that are not inconsistent with the Fiscal Plan. She decided that the Board’s decision was reviewable but that the standard of review is to be the deferential “arbitrary and capricious” standard used to review federal agencies’ interpretation of its own laws. PROMESA does not define what evidence is sufficient for the Board to be convinced that a particular law is not “substantially inconsistent with the Fiscal Plan” and she will give great deference to the Board’s interpretation. Since I was not privy to the evidence the Commonwealth presented to the Board, I cannot comment on it, but it seems likely Swain will side with the Board. Moreover, we must remember that in the Aurelius SCOTUS decision, Judge Breyer stated at page 17 “[i]n short, the Board possesses considerable power—in­cluding the authority to substitute its own judgment for the considered judgment of the Governor and other elected offi­cials.” Since that is precisely what the Board is  doing here, likelihood of success for the Commonwealth is not high. If so, why file not one but six complaints? I will explain.

I have the highest regard for Peter Friedman, the  Commonwealth’s attorney, who successfully opposed the appointment of Mr. Zamot as CEO of PREPA. He, as all attorneys, however, is bound by his client’s desires and as long as the proper warnings are issued, it is totally ethical to continue with a case that is not likely to succeed. The Governor’s motivations, however, are quite different. She has been a petty and supercilious politician all of her career in the Government. She, as all PR politicians, believe that the voter wants them to oppose the Board and since in the past she had been quoted as cooperating, this is, in her view, a necessary change. Also, the challenged laws are populistic in nature and she wants to be able to claim she tried her utmost to have them put into effect, but the evil Board” prevented her. Since Judge Swain is not likely to decide the issues before August 9, the day of the PNP primaries, she can claim the high ground against Pedro Pierluisi who, irrespective of what he says, is viewed as pro-Board and is (or was) related to one of its members. Also, if she were to win the PNP nomination, even if Judge Swain dismisses the complaints before the November election, she will appeal and still claim the high ground.

 

The sad part of this is that the Puertorrican taxpayer will pay the Commonwealth and the Board’s lawyers in these SIX CASES, money better put to use in other, more important endeavors. But that is the way the Puertorrican politicians operate.

That is why we are in Bankruptcy.

 

Let’s see what happens.

 

 

 

JUEZ TORRUELLA Y VAELLO

 

 

El día 10 de abril de 2020, Viernes Santo, se publica la opinión del Primer Circuito en US v. Vaello, sobre la aplicación del  Supplemental Social Security (SSI) a Puerto Rico. En ese caso, el Sr. Vaello recibió el SSI, el cual  se concede a las personas mayores de 65 años, retirados y de  bajos recursos,  pero solo en  los estados y en  Northern Marianas.  El Sr. Vaello se muda a PR y 3 años más tarde se entera de que no podía recibir el  SSI si era residente del ELA.  Los USA deciden demandarlo por  poco más de $28,000 por el dinero que recibió de más.  Vaello, que no tenia  abogado, iba a firmar una estipulación para pagar la cantidad cuando el Juez Gelpí decide nombrarle abogado. Estos letrados  cuestionan las acciones de USA, que se de cuenta de su error de relaciones públicas y trata de desestimar el caso. El Juez Gelpí,  sin embargo, no lo permitió y determinó que el Congreso, al discriminar contra PR y no extender el SSI, violaba la Igual Protección de las leyes de la Constitución Federal.  USA apeló al  Primer Circuito aquí trataré de explicar lo que se decide.

 

El Juez Torruella comienza diciendo:

 

This appeal raises a fundamental question of constitutional law requiring us to consider the equal protection component of the Fifth Amendment as it applies to the residents of Puerto Rico.1 Specifically, Appellee claims that the exclusion of Puerto Rico residents from receiving the disability benefits that are granted to persons residing in the fifty States, the District of Columbia, and the Northern Mariana Islands under the Supplemental Security Income (SSI) provisions of Title XVI of the Social Security Act, 42 U.S.C. §§ 1381-1383(f), contravenes the equal protection guarantees of the Fifth Amendment.

 

Lo primero que llama la atención es el análisis se hace bajo la 5ta Enmienda y no bajo el usual dicho que de que la Igual Protección aplica bajo una o la otra.  ¿Por qué es importante? Porque los enemigos de la estadidad explotaban eso para alardear que el ELA era algo especial. NOT ANYMORE.

 

Otro punto importante es que el Juez Torruella hace el análisis del caso bajo el escrutinio de “rational basis” que es el más fácil para declarar válida una ley. A la página 12, el Juez explica:

 

Equal protection does not “require a legislature to articulate its reasons for enacting a statute,” and the “conceived reason[s]” put forth in support of the statute in litigation do not need to be the same as those that “actually motivated the legislature.” (quoting FCC v. Beach Commercial, Inc., 508 U.S. 307, 315 (1993)

 

Otros abogados, yo incluido, argumentábamos  que se debía examinar esta controversia bajo el escrutinio estricto. Food for thought.

 

Torruella a la página 13 discute la exclusión de PR del SSI y dice:

 

Here, the classification subject to challenge can be defined as: individuals who meet all the eligibility criteria for SSI except for their residency in Puerto Rico. This classification is clearly irrelevant to the stated purpose of the program, which is to provide cash assistance to the nation’s financially needy elderly, disabled, or blind. See Moreno, 413 U.S. at 534. Therefore, if we are to sustain this classification, it “must rationally further some legitimate governmental interest other than those specifically stated in the congressional [statement of purpose.]”

 

Para llevar a cabo su análisis, el Juez Torruella discute los casos de Califano v. Torres, 435 U.S. 1 (1978) y Harris v. Rosario, 446 U.S. 651 (1980). Interesantemente, el Juez Torruella fue el juez a nivel de distrito en el caso de Califano, fallando en contra del gobierno. Harris lo decidió el Juez Toledo. El Juez Torruella al hacer su análisis nos dice a la página 15-16:

 

Califano is an opinion in which the footnotes are almost as important as its main text. Commencing with footnote four,  a major distinction becomes apparent between the holding in Califano and the present case. The present case challenges the disparate treatment of the residents of Puerto Rico on equal protection grounds, while Califano was decided on issues related to the right to travel. Although the complaint in Califano alleged an equal protection claim, as is clearly reflected by its opinion, the three-judge district court decided the case strictly on issues related to the fundamental constitutional right to travel, Gautier Torres, 426 F. Supp. at 1108, 1110, 1113, a holding the Supreme Court recognized in footnote four. Califano, 435 U.S. at 3 n.4; see Harris, 446 U.S. at 654-655 (Marshall, J., dissenting) (“[T]he District Court relied entirely on the right to travel, and therefore no equal protection question was before this Court. The Court merely referred to the equal protection claim briefly in a footnote . . . . At most, [this is] reading[] more into that single footnote of dictum [in Califano] than it deserves.” (citation omitted) (emphasis supplied)). As acknowledged by the Court, and vigorously endorsed by Justice Marshall in his dissent in Harris, there was no equal protection question before the Court in Califano. See Harris, 446 U.S. at 654-655 (Marshall, J., dissenting). (underlining added)

 

Esta distinción es de gran importancia. En esencia indica que Califano nunca tocó el argumento de Igual Protección y por ende no es un precedente obligatorio. Subsiguientemente, el Juez Torruella habla de Harris y dice a la página 18:

 

What should be patently clear is that the Court ruled in Califano on the validity of SSI’s treatment of the persons residing in Puerto Rico, as affected by the right to travel, while in Harris it was called to pass upon differential treatment of block grants under the AFDC program in light of the equal protection component of the Fifth Amendment. Contrary to Appellant’s contention, the Court has never ruled on the validity of alleged discriminatory treatment of Puerto Rico residents as required by the SSI program under the prism of equal protection. (Underlining added)

 

A la misma página, nota 8, el Tribunal menciona que considera persuasiva la opinión del Juez Young en Martínez v. Azar, 376 F.Supp.3d 191 (D.P.R. 2019) de que en Califano y Harris se usa la conjunción “and” cuando se menciona los tres factores para justificar la decisión. O sea, que los factores son en conjunto y no individualmente sostendrían la conclusión.

 

Más adelante a la página 19, el Juez continúa diciendo “[w]e  do not view Califano and Harris as a carte blanche for all federal direct assistance programs to discriminate against Puerto Rico residents. There still must be a rational justification for the classification.”

 Esta oración tiene grandes implicaciones para otros casos que cuestionan otros programas federales, incluyendo uno en el que estoy envuelto.

 

En la página 20, el Juez continua con el análisis de los dos casos seminales, diciendo, “[a]dditionally, there are several other reasons why Califano and Harris are not precisely on point. Today, Appellant makes no claim that granting ‘greater [SSI] benefits [to Puerto Rico residents at this time] could disrupt the economy.” Harris, 446 U.S. at 652.’”

Esto es importante porque en otros casos el Gobierno Federal no ha renunciado a ese argumento. Hay también una interesante explicación del mal llamado “economic disruption” a la nota 10, página 21-22, haciendo referencia directa a la creación de la Junta.

 

Siguiendo en la página 23, el Juez indica:

 

Therefore, considering the dubious nature of this once accepted rationale, we are relieved that we are not called upon to decipher it and note its abandonment only as an additional factor that weakens the relevance of Califano and Harris for this appeal. In fact, if anything, the former Court’s acceptance of this now defunct argument and citation to “a contemporary policy evaluation document” — the 1976 Report — sets us up to consider the present day circumstances surrounding Puerto Rico’s exclusion from SSI and whether the current classification is unrelated to a legitimate government interest.

 

Como indiqué, esto es importante para los casos presentes y futuros que cuestionan el discrimen del Congreso con Puerto Rico. De hecho, a la página 26, nota 13, el Juez indica que se puede argumentar que existe una correlación entre la falta de paridad en los programas federales y la crisis fiscal de la isla.

 

El Juez discute el asunto del pago de impuestos federales por los residentes de PR y nos dice a las páginas 26-28:

 

The residents of Puerto Rico not only make substantial contributions to the federal treasury, but in fact have consistently made them in higher amounts than taxpayers in at least six states, as well as the territory of the Northern Mariana Islands. From 1998 up until 2006, when Puerto Rico was hit by its present economic recession, Puerto Rico consistently contributed more than $4 billion annually in federal taxes and impositions into the national fisc. See Internal Revenue Service, SOI Tax Stats – Gross Collections, by Type of Tax and State – IRS Data Book Table 5, available at https://www.irs.gov/statistics/soi-tax-stats-gross-collections-by-type-of-tax-and-state-irsdata-book-table-5 (last visited April 9, 2020). This is more than taxpayers in several of the states contributed, including Vermont, Wyoming, South Dakota, North Dakota, Montana, and Alaska, as well as the Northern Mariana Islands. Id. Even since 2006 to the present, and notwithstanding monumental economic problems aggravated by catastrophic Hurricane María and serious ongoing earthquakes, Puerto Ricans continue to pay substantial sums into the federal treasury through the IRS: $3,443,334,000 in 2018; $3,393,432,000 in 2017; $3,479,709,000 in 2016; . . .$4,036,334,000 in 1998. Id. Puerto Rico’s contributions include the payment of federal income taxes by residents of Puerto Rico on income from sources outside Puerto Rico for which they are liable under the Internal Revenue Code, the regular payment of federal income taxes by all federal employees17 in Puerto Rico, 26 U.S.C. § 933, as well as the full Social Security, Medicare, and Unemployment Compensation taxes that are paid in the rest of the United States, see 26 U.S.C. §§ 3101, 3111, 3121(e), 3301, 3306(j). 18 That in 2018 the IRS collected approximately $3,443,334,000 from Puerto Rico taxpayers clearly undermines the contention that Puerto Rico residents do not contribute to the federal treasury. There should be little doubt that, to the extent that there may have been a basis for it when Califano and Harris were decided, the argument that Puerto Rico’s residents do not contribute to the federal treasury is no longer available.

 

El caso sigue la discusión legal sobre impuestos y a las páginas 31-33:

 

We are unaware of, and Appellant fails to point to, any instance where the government has justified the exclusion of a class of people from welfare payments (which are untied to income tax receipts) because they do not pay federal income tax. Cf. Zobel v. Williams, 457 U.S. 55, 63 (1982) (“Appellants’ reasoning would . . . permit the State to apportion all benefits and services according to the past tax [or intangible] contributions of its citizens. The Equal Protection Clause prohibits such an apportionment of state services.” (emphasis in original) (quoting Shapiro v. Thompson, 394 U.S. 618, 632-33 (1969))). As recognized by the Court in Shapiro, the sort of welfare benefits at issue here are distinguishable from federal insurance programs, like Social Security Disability Insurance, which “may legitimately tie the amount of benefits [awarded] to the individual’s contributions.” 394 U.S. at 633 n.10.21 See H.R. Rep. No. 92-231, at 146-47 (1971) (“[C]ontributory social insurance should continue to be relied on as the basic means of replacing earnings that have been lost as a result of old age, disability, or blindness. But some people who because of age, disability, or blindness are not able to support themselves through work may receive relatively small social security benefits . . . [which] therefore, must be complemented by an effective assistance program.”). However, because SSI is a means-tested program, by its very terms, only low-income individuals lacking in monetary resources are eligible for the program. For example, as pointed out by Amicus Resident Commissioner of Puerto Rico, to be eligible in fiscal year 2015, an individual could not make more than $733 of countable income a month, or $1100 in the case of a couple.  Consequently, any individual eligible for SSI benefits almost by definition earns too little to be paying federal income taxes.23 Thus, the idea that one needs to earn their eligibility by the payment of federal income tax is antithetical to the entire premise of the program. How can it be rational for Congress to limit SSI benefits “to exclude populations that generally do not pay federal income taxes” when the very population those benefits target do not, as a general matter, pay federal income tax?

 

Luego el Juez Torruella discute el asunto del costo al fisco federal y a la página 37 dice:

 

In response to Appellee’s argument that if costs alone justify exclusion then “Congress could arbitrarily exclude the residents of any State or municipality to reduce cost,” Appellant concedes “there may be other constraints, legal or political, on Congress’s ability to enact a statute excluding residents of a particular State from a benefits program [but] that does not mean that cost to the public fisc is not itself a rational consideration.” What Appellant plainly fails to grapple with is that cost alone does not support differentiating individuals. If it did, how would Congress be able to decide upon whom to bestow benefits? Presumably along the lines of its legislative priorities which, at a minimum, must be supported by some conceivable rational explanation. The circularity of this logic defeats itself.

 

Finalmente, el Juez Torruella concluye diciendo a la página 45:

 

The categorical exclusion of otherwise eligible Puerto Rico residents from SSI is not rationally related to a legitimate government interest. In addition to the record established by the parties, we have considered even conceivable theoretical reasons for the differential treatment conceded by the government. Having found no set of facts, nor Appellant having alleged any additional theory, establishing a rational basis for the exclusion of Puerto Rico residents from SSI coverage, such exclusion of the residents of Puerto Rico is declared invalid.

 

¿Que pasa ahora? Los USA podrían pedir rehearing en banc para que los todos los  jueces activos vean el caso y probablemente lo haga. En el caso no hubo disidencias lo cual quiere  dicer que los tres  jueces están de acuerdo. Si los jueces lo deniegan o llegan al mismo resultado, entiendo que el Gobierno Federal acudirá al SCOTUS para un certiorari. El SCOTUS le concede el 26% de los certioraris a los federales. Veremos lo que ocurre.

 

¿Quiere esto decir que el Congreso no puede discriminar contra PR en asignación de fondos  federales? No automáticamente. Se tendrán que decidir casos ya corriendo y casos futuros que se puedan radicar pero es una decisión importantísima para PR.

 

May you live in interesting times.

DECLARACION DE EMERGENCIA DE TRUMP

 

Donald Trump dijo el 14 de febrero que iba a hacer una declaración de emergencia. Hay muchos comentarios en las redes sociales de lo que puede o no puede hacer el Presidente. Aquí trataré de darles un sentido sobre los poderes del Presidente.

Todos imaginamos que la declaración de emergencia tiene que ver con la construcción del muro en la frontera con México y ya en el pasado ha dicho que va a utilizar fondos de recuperación de California y Puerto Rico y para la construcción de vivienda militar. ¿Puede el Presidente hacer esto? ¿Qué tiene que hacer?

El Presidente tiene poderes inherentes para declarar emergencias pero modernamente se hace a base de estatus. El National Emergencies Act, 50 U.S.C. § 1601, et seq., regula las declaraciones de emergencia. La sección 1621(a) establece que “[w]ith respect to Acts of Congress authorizing the exercise, during the period of a national emergency, of any special or extraordinary power, the President is authorized to declare such national emergency. Such proclamation shall immediately be transmitted to the Congress and published in the Federal Register.“ La emergencia termina al año de ser declarada a menos que se renueve la declaración por un año más. La sección 1622 establece también que una resolución conjunta del Congreso, con la aprobación del Presidente, terminaría la emergencia. En otras palabras, el Senador republicano tendría que estar de acuerdo con la Cámara Demócrata para ello y el Presidente también tendría que aprobarlo. Si no, el Congreso tendría que ir por encima del veto del Presidente. No sería fácil.

El National Emergencies Act no define lo que es una emergencia. El Congressional Research Service en el 2007 publicó un informe al Congreso titulado National Emergency Powers. A la página CRS-4, dijo:

An eminent constitutional scholar, the late Edward S. Corwin, explained emergency conditions as being those “which have not attained enough of stability or recurrency to admit of their being dealt with according to rule.” During congressional committee hearings on emergency powers in 1973, a political scientist described an emergency in the following terms: “It denotes the existence of conditions of varying nature, intensity and duration, which are perceived to threaten life or well-being beyond tolerable limits.” Corwin also indicated it “connotes the existence of conditions suddenly intensifying the degree of existing danger to life or well-being beyond that which is accepted as normal.” (notas al calce omitidas)

Según el Brennan Center for Justice, nada conservador, identificó 136 bases para el poder del Presidente para declarar emergencias, incluyendo dos directamente relacionados al muro.  Estos son el 33 U.S.C. § 2293 y 10 U.S.C. § 2808. El primero dice;

(a)Termination or deferment of civil works projects; application of resources to national defense projects

In the event of a declaration of war or a declaration by the President of a national emergency in accordance with the National Emergencies Act [50 U.S.C. 1601 et seq.] that requires or may require use of the Armed Forces, the Secretary, without regard to any other provision of law, may (1) terminate or defer the construction, operation, maintenance, or repair of any Department of the Army civil works project that he deems not essential to the national defense, and (2) apply the resources of the Department of the Army’s civil works program, including funds, personnel, and equipment, to construct or assist in the construction, operation, maintenance, and repair of authorized civil works, militar construction, and civil defense projects that are essential to the national defense.

El segundo dice:

(a)

In the event of a declaration of war or the declaration by the President of a national emergency in accordance with the National Emergencies Act (50 U.S.C. 1601 et seq.) that requires use of the armed forces, the Secretary of Defense, without regard to any other provision of law, may undertake militar construction projects, and may authorize the Secretaries of the militar departments to undertake militar construction projects, not otherwise authorized by law that are necessary to support such use of the armed forces. Such projects may be undertaken only within the total amount of funds that have been appropriated for militar construction, including funds appropriated for family housing, that have not been obligated.

Obviamente, esto tendría que ver con fondos que van al Corps of Engineers para hacer mejoras en Puerto Rico. Pero además el Presidente y su gente puede identificar otras bases estatutarias. Veremos.

No existe casos sobre esta ley que impacten lo que podría pasar.  En Youngstown Sheet & Tube Co. v. Sawyer, 343 U.S. 579 (1952), el SCOTUS detuvo acciones del Presidente Truman para detener una huelga en la industria del acero. Sin embargo, el SCOTUS se basó en la inexistencia de ley para justificar lo que hizo.  Aquí tenemos más de cien leyes sobre el asunto.

Irrespectivo de lo antes dicho, si el Presidente redirige fondos para California y Puerto Rico, estos irán al Tribunal para detenerlo. California es parte del 9no Circuito y Puerto Rico el 1er Circuito. Si los estados ganan, es usual el que se detenga la ejecución del injunction hasta la apelación pero si no ocurre, el Presidente usualmente va al SCOTUS, que puede detenerlo. Además, si los Circuitos estuviesen en conflicto, uno a favor del Presidente y otro en contra, el SCOTUS intervendría y usualmente el Presidente gana. Usualmente. Pero California y Puerto Rico tienen que ir al Tribunal y ya el Gobernador Rosselló señaló que llevará al Presidente al Tribunal. Good for him.

Si Trump toma esta acción, definitivamente estaría poniendo en tela de juicio nuestra democracia y espero que pierda. Aún si pierde, esto puede obligar a la Cámara a comenzar el proceso de residenciamiento. Esta situación es bien seria y no va a acabar bien. Manténganse al tanto.