180205 ORDER RE MERCADO APPEAL REQUEST AND IFP VERSION FEBRUARY 5, 2018 1 

UNITED STATES DISTRICT COURT 

DISTRICT OF PUERTO RICO 

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In re: PROMESA 

 Title III 

THE FINANCIAL OVERSIGHT AND 

MANAGEMENT BOARD FOR PUERTO RICO, 

as representative of No. 17 BK 3283-LTS 

THE COMMONWEALTH OF PUERTO RICO, (Jointly Administered) 

et al., 

 Debtors.1

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ORDER (A) DENYING MOTION REQUESTING RELIEFS FOR APPEAL 

AND (B) MOTION REQUESTING LEAVE IN FORMA PAUPERIS ON APPEAL

Before the Court are: (i) the Motion Requesting Reliefs for Appeal filed by Javier 

Mandry Mercado, pro se (the “Movant”) (Docket Entry No. 1934 (the “Appeal Motion”)); and 

(ii) Motion Requesting Leave in Forma Pauperis Appeal. (Docket Entry No. 1937 (the “IFP 

Motion”).) Movant seeks a stay pending appeal of this Court’s Memorandum Order granting 

relief from the automatic stay (the “Stay Relief Order”). (Docket Entry No. 600.) On December 

19, 2017, original stay relief movant Sucesión Pastor Mandry Mercado filed its opposition (the 

 

1

 The Debtors in these Title III Cases, along with each Debtor’s respective Title III case 

number and the last four (4) digits of each Debtor’s federal tax identification number, as 

applicable, are the (i) Commonwealth of Puerto Rico (Bankruptcy Case No. 17 BK 3283-

LTS) (Last Four Digits of Federal Tax ID: 3481); (ii) Puerto Rico Sales Tax Financing 

Corporation (“COFINA”) (Bankruptcy Case No. 17 BK 3284-LTS) (Last Four Digits of 

Federal Tax ID: 8474); (iii) Puerto Rico Highways and Transportation Authority 

(“HTA”) (Bankruptcy Case No. 17 BK 3567-LTS) (Last Four Digits of Federal Tax ID: 

3808); and (iv) Employees Retirement System of the Government of the Commonwealth 

of Puerto Rico (“ERS”) (Bankruptcy Case No. 17 BK 3566-LTS) (Last Four Digits of 

Federal Tax ID: 9686). (Title III case numbers are listed as Bankruptcy Case numbers 

due to software limitations). 

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180205 ORDER RE MERCADO APPEAL REQUEST AND IFP VERSION FEBRUARY 5, 2018 2 

“Opposition”) to the Appeal Motion. (Docket Entry No. 2115.) On December 27, 2017, Movant 

filed a reply to the Opposition. (Docket Entry No. 2189.) 

The Stay Relief Order granted, to a limited extent, an application brought on 

behalf of a group of Puerto Rico property owners who putatively have inheritance rights in 

certain property that they claim the Commonwealth government has seized for a preserve, for 

relief from the automatic stay to continue a long-running inverse condemnation litigation (the 

“Litigation”) in the Puerto Rico Court of First Instance. The Stay Relief Order allowed the 

Litigation to proceed only to a determination of damages, with the stay remaining in place as to 

the entry and execution of judgment and provisional remedies. 

Movant claims that he, too, has inheritance rights in the property at issue in the 

inverse condemnation litigation and that he was not consulted in connection with the stay relief 

application. Since the entry of the Stay Relief Order, Movant has twice sought reconsideration 

of the Stay Relief Order, arguing that the underlying litigation should remain stayed because 

there have been numerous improprieties in the proceedings in Commonwealth courts, and that 

the lawyer who commenced the stay relief proceeding should be sanctioned for purporting to 

represent all of those with interests in a certain estate while the lawyer neither represented nor 

sought permission from Movant, who asserts that he also has interests in or derived from that 

estate. (Docket Entry Nos. 634, 822.) The Court denied the motions for reconsideration, noting 

that Movant’s issues regarding alleged improprieties in proceedings in the Commonwealth courts 

should be addressed in those courts, and denied the application for sanctions, finding that the 

lawyer provided sufficient evidence of authorization to bring the stay relief application on behalf 

of persons with interests in the estate. (Docket Entry Nos. 712, 844.) 

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180205 ORDER RE MERCADO APPEAL REQUEST AND IFP VERSION FEBRUARY 5, 2018 3 

In the Appeal Motion, Movant seeks a stay of the Stay Relief Order pursuant to 

Federal Rule of Civil Procedure 62(c) and Federal Rule of Appellate Procedure (8)(a)(1)(A) and 

(C) pending his appeal of the Stay Relief Order and denial of his reconsideration motions. He 

also seeks an order directing the filing of English translations of Spanish-language court 

documents that were annexed to the original stay relief motion and counsel’s subsequent 

response (Docket Entry No. 684) to the Court’s order (Docket Entry No. 639) directing 

substantiation of counsel’s authority to make the stay relief application, and permission to 

proceed in forma pauperis on appeal. 

Federal Rule of Civil Procedures 62(c) provides that, “[w]hile an appeal is 

pending from an interlocutory order or final judgment that grants, dissolves, or denies an 

injunction, the court may suspend, modify, restore, or grant an injunction on terms for bond or 

other terms that secure the opposing party’s rights.” Federal Rule of Appellate Procedure 

(8)(a)(1)(A) and (C) provide: “(1) A party must ordinarily move first in the district court for the 

following relief: (A) a stay of the judgment or order of a district court pending appeal . . . [and] 

(C) an order suspending, modifying, restoring, or granting an injunction while an appeal is 

pending.” Federal Rule 62(c) and Federal Rule of Appellate Procedure 8(a)(1) are applicable to 

these proceedings as Movant seeks a suspension of the implementation of the Stay Relief Order, 

which modified the injunction imposed by the 11 U.S.C. § 362(a) automatic stay, while his 

appeal of that order is pending before the Court of Appeals for the First Circuit. 

Courts in the First Circuit consider four factors in determining whether to grant a 

stay pending appeal: “(1) whether the applicant has made a strong showing of success on the 

merits; (2) whether the applicant will be irreparably harmed absent injunctive relief; (3) whether 

issuance of the stay will injure other parties; and (4) where the public interest lies.” AcevedoCase:17-03283-LTS Doc#:2402 Filed:02/05/18 Entered:02/05/18 13:32:54 Desc: Main

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180205 ORDER RE MERCADO APPEAL REQUEST AND IFP VERSION FEBRUARY 5, 2018 4 

Garcia v. Vera-Monroig, 296 F.3d 13, 16 n. 3 (1st Cir. 2002) (quoting Hilton v. Braunskill, 481 

U.S. 770, 776-77 (1987)). “‘The sine qua non [of the stay pending appeal standard] is whether 

the [movants] are likely to succeed on the merits.’” Id. (quoting Weaver v. Henderson, 984 F.2d 

11, 12 (1st Cir.1993)). 

Movant is unlikely to succeed on the merits of an appeal of the Stay Relief Order 

and denials of the reconsideration motions. The narrow issue before this Court that lead to the 

entry of the Stay Relief Order was whether cause existed to lift the automatic stay to allow a 

prepetition lawsuit to proceed. The motion practice that resulted in this Court’s entry of the Stay 

Relief Order did not require the Court to examine the merits or procedural propriety of the 

underlying issues in the Litigation, including decisions previously rendered in that Litigation or 

any alleged misrepresentations by the lawyers in the course of that Litigation. Movant has not 

demonstrated that his grievances regarding the conduct of the Litigation warrant a continuation 

of the stay of the Litigation that arose automatically upon the Commonwealth’s Title III petition. 

The imposition of the automatic stay upon the filing of the Title III proceeding is designed to 

protect the debtor, not third party participants in non-bankruptcy litigation. Moreover, the 

restoration of the stay would be detrimental to other parties to the Litigation, which has been 

pending for over nine years. 

In the IFP Motion, Movant submitted an affidavit in support of his representations 

that he cannot pay either the filing fee or the court costs in connection with his appeal. Pursuant 

to 28 U.S.C. § 1915(a)(3), “[a]n appeal may not be taken in forma pauperis if the trial court 

certifies in writing that it is not taken in good faith.” Good faith for purposes of determinations 

under § 1915(a)(3) is evaluated under an objective standard: the court must determine whether a 

movant “seeks appellate review of any issue not frivolous.” Coppedge v. U.S., 369 U.S. 438, 

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180205 ORDER RE MERCADO APPEAL REQUEST AND IFP VERSION FEBRUARY 5, 2018 5 

445 (1962). Here, Movant seeks through his motion practice in these Title III proceedings to relitigate issues that were adjudicated in the Commonwealth courts and to delay resolution of the 

underlying Litigation. He presents no issues that are non-frivolous in this context. Thus, this 

Court certifies that any appeal taken by Movant of the Stay Relief Orders, the Orders denying 

Movant’s reconsideration motions, and of this Order would not be taken in good faith.2

This Order resolves docket entry nos. 1934 and 1937. 

 SO ORDERED. 

Dated: February 5, 2018 

 /s/ Laura Taylor Swain 

 LAURA TAYLOR SWAIN

 United States District Judge 

Copy mailed to: 

Javier E. Mandry-Mercado 

1326 Calle Salud Apt. 1101 

Ponce, PR 00717 

 

2

 For similar reasons, the Court declines to order the original stay relief movant to file 

official translations of Spanish-language documents, the particulars of which were not 

integral to the Court’s decisions to grant stay relief and deny sanctions.

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