IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF PUERTO RICO

In re:

THE FINANCIAL OVERSIGHT AND MANAGEMENT BOARD FOR PUERTO RICO,

as representative of

THE COMMONWEALTH OF PUERTO RICO et al.

Debtors.1

PROMESA

Title III

No. 17 BK 3283-LTS

(Jointly Administered)

Re: Dkt. 3503

URGENT JOINT MOTION OF AURELIUS, THE FINANCIAL OVERSIGHT 

AND MANAGEMENT BOARD, AND THE UNITED STATES REQUESTING 

CERTIFICATION OF THIS COURT’S JULY 13, 2018 OPINION AND ORDER 

FOR IMMEDIATE APPEAL PURSUANT TO 48 U.S.C. § 2166(e)(3)–(4)

 

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); (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); and (v) Puerto Rico Electric Power Authority 

(“PREPA”) (Bankruptcy Case No. 17 BK 4780-LTS) (Last Four Digits of Federal Tax ID: 3747) 

(Title III case numbers are listed as Bankruptcy Case numbers due to software limitations).

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Aurelius Investment, LLC, Aurelius Opportunities Fund, LLC, and Lex Claims, LLC 

(“Aurelius”), the Financial Oversight and Management Board (“the “Board”), and the United 

States, jointly state as follows:

1. On July 13, 2018, this Court issued an Opinion and Order (“Order”) denying Aurelius’s Objection and Motion of Aurelius to Dismiss Title III Petition, Dkt. 913 (“Motion to Dismiss”), on the ground that the Board is a territorial entity whose members need not be appointed 

in conformity with the Appointments Clause of the United States Constitution. See Order, Dkt. 

3503. In the same Order, the Court denied Aurelius’s Motion for Relief from the Automatic Stay 

to Pursue Injunctive and Declaratory Relief, Dkt. 914 (the “Stay Relief Motion”), for the same 

reasons. 

2. On July 17, 2018, Aurelius filed a notice of appeal of this Court’s Order to the United 

States Court of Appeals for the First Circuit. Dkt. 3594. Aurelius believes that both this Court’s 

denial of Aurelius’s Motion to Dismiss and this Court’s denial of Aurelius’s Stay Relief Motion 

are final orders appealable as of right under 28 U.S.C. § 1291, while the Board and the United 

States believe that this Court’s Order is a non-final, interlocutory order not subject to immediate 

appeal as of right. Because it is in the interests of all parties to these proceedings—and to the 

people of Puerto Rico—that the constitutional issues at the heart of Aurelius’s motions be definitively resolved, Aurelius, the Board, and the United States hereby respectfully request that this 

Court certify its Order for immediate interlocutory appeal to the First Circuit under 48 U.S.C. 

§ 2166(e)(3)(A). 

3. The Puerto Rico Oversight, Management, and Economic Stability Act (“PROMESA”) 

itself contemplates that parties may appeal immediately from interlocutory decisions. 

PROMESA provides that an interlocutory order or decree in a Title III proceeding is immediateCase:17-03283-LTS Doc#:3715 Filed:07/27/18 Entered:07/27/18 15:42:23 Desc: Main

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ly appealable if it: (1) “involves a question of law as to which there is no controlling decision of 

the court of appeals for the circuit or of the Supreme Court of the United States,” 48 U.S.C. 

§ 2166(e)(3)(A)(i); (2) “involves a matter of public importance,” id.; (3) “involves a question of 

law requiring the resolution of conflicting decisions,” id. § 2166(e)(3)(A)(ii); or (4) “may materially advance the progress of the case or proceeding,” id. § 2166(e)(3)(A)(iii). PROMESA directs that if a district court finds that any of these circumstances exist, the court “shall” certify 

the order for immediate appeal. Id. § 2166(e)(4). The Order satisfies all of these grounds.

4. First, there is substantial disagreement over whether the central issue that Aurelius has 

raised in its Motion to Dismiss—i.e., whether PROMESA’s provisions for appointing the 

Board’s members are unconstitutional—is governed by controlling Supreme Court precedent. 

Aurelius maintains that Lucia v. Securities and Exchange Commission, 138 S. Ct. 2044, 2047–

48, 2052 (2018), Metropolitan Washington Airports Authority v. Citizens for Abatement of Aircraft Noise, Inc., 501 U.S. 252, 270 (1991) (“MWAA”), as well as other Supreme Court precedent, compel the conclusion that the Board is a federal entity whose members were appointed in 

violation of the Appointments Clause. This Court has disagreed, and has declined to apply Lucia

or MWAA in this case. See Order at 16 n.11, 33 n.17. Accordingly, there is at least a substantial 

dispute as to whether controlling Supreme Court precedent governs Aurelius’s Motion to Dismiss.

5. Second, this Court’s Order unquestionably involves a matter of public importance. 

48 U.S.C. § 2166(e)(3)(A)(i). The Board is a primary actor in the largest municipal bankruptcy 

in history and it wields significant powers that affect the daily lives of the people of the Commonwealth of Puerto Rico. The legality of the Board members’ appointments is undeniably a 

question of public importance that merits resolution through an immediate appeal. 

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6. Third, the Court’s Order “involves a question of law requiring the resolution of conflicting decisions.” 48 U.S.C. § 2166(e)(3)(A)(ii). Aurelius has argued that, under Lucia,

MWAA, Buckley v. Valeo, 424 U.S. 1, 126 (1976), Freytag v. Commissioner, 501 U.S. 868, 892 

(1991), and Edmond v. United States, 520 U.S. 651, 659 (1997), a government official who “exercis[es] significant authority pursuant to the laws of the United States” and is accountable only 

to the President must be nominated by the President and confirmed by the Senate. But the Opposing Parties have argued that the Board is properly structured under a line of authority recognizing Congress’s “plenary power . . . under the Constitution over the territories of the United 

States.” U.S. Br. 8 (quoting El Paso & N.E. Ry. Co. v. Gutierrez, 215 U.S. 87, 93 (1909)); see 

also Board Opp. 24 n.13 (invoking the “the line of decisions holding that with respect to all territories, Congress had plenary discretion to structure territorial governments as it saw fit, unconstrained by the Constitution’s separation-of-powers provisions”). This Court has agreed with the 

Opposing Parties, concluding that “the Oversight Board is an instrumentality of the territory of 

Puerto Rico, established pursuant to Congress’s plenary powers under Article IV of the Constitution, that its members are not ‘Officers of the United States’ who must be appointed pursuant to 

the mechanism established for such officers by Article II of the Constitution.” Order at 34. 

Moreover, on the same day that this Court held that “the Oversight Board is an instrumentality of 

the territory of Puerto Rico” and “that its members are not “Officers of the United States,’” Dkt. 

3503, at 34, the Court of Federal Claims held that the Oversight Board “is an entity of the Federal Government” under Lebron v. Nat’l R.R. Passenger Corp., 513 U.S. 374 (1995), and its members are “federal civil officials” under Lucia and Freytag. Altair Glob. Credit Opportunities 

Fund (A), LLC v. United States, --- Fed. Cl. ---, No. 17-970C, 2018 WL 3425051, at *15–*19 

(Fed. Cl. July 13, 2018). 

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7. Fourth, immediate appellate review will materially advance the progress of this Title 

III proceeding and, ultimately, Puerto Rico’s return to fiscal health. See 48 U.S.C. 

§ 2166(e)(3)(A)(iii). The sooner this important issue can be resolved, the better for all interested 

parties. 

8. For the foregoing reasons, Aurelius, the Board, and the United States respectfully request that this Court grant this Urgent Motion and certify the Order for immediate appeal to the 

First Circuit.

9. Counsel for the Board contacted each of the other parties that filed briefs opposing 

Aurelius’s motion to dismiss: Puerto Rico Fiscal Agency and Financial Advisory Authority; 

American Federation of State, County and Municipal Employees; Official Committee of Retired 

Employees of Puerto Rico; Official Committee of Unsecured Creditors; and COFINA Senior 

Bondholders’ Coalition. None of these parties oppose the relief requested by this motion.

10. A proposed order is attached as Exhibit A.

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Dated: July 27, 2018 Respectfully submitted,

 /s/ Luis A. Oliver-Fraticelli

Luis A. Oliver-Fraticelli

Lourdes Arroyo-Portela

Katarina Stipec-Rubio

USDC-PR Bar Nos. 209204, 

226501, & 206611

ADSUAR MUÑIZ GOYCO SEDA &

PÉREZ-OCHOA PSC

208 Ponce de Leon Ave., Suite 1600

San Juan, P.R. 00918

Phone: (787) 756-9000

Fax: (787) 756-9010

Email: loliver@amgprlaw.com

larroyo@amgprlaw.com

kstipec@amgprlaw.com

 /s/ Theodore B. Olson

Theodore B. Olson (pro hac vice)

Matthew D. McGill (pro hac vice)

Helgi C. Walker (pro hac vice)

Lucas C. Townsend (pro hac vice)

Lochlan F. Shelfer (pro hac vice)

Jeremy M. Christiansen (pro hac vice)

GIBSON, DUNN & CRUTCHER LLP

1050 Connecticut Avenue, N.W.

Washington, D.C. 20036

Phone: (202) 955-8500

Fax: (202) 467-0539

Email: tolson@gibsondunn.com

mmcgill@gibsondunn.com

hwalker@gibsondunn.com

ltownsend@gibsondunn.com

lshelfer@gibsondunn.com

jchristiansen@gibsondunn.com

Counsel for Aurelius 

/s/ Hermann D. Bauer___________ _

Hermann D. Bauer

USDC No. 215205

Ubaldo M. Fernández

USDC No. 224807

O’NEILL & BORGES LLC

250 Muñoz Rivera Ave., Suite 800

San Juan, PR 00918-1813

Tel: (787) 764-8181

Fax: (787) 753-8944

Email: hermann.bauer@oneillborges.com

ubaldo.fernandez@oneillborges.com

/s/ Donald B. Verrilli, Jr._

Donald B. Verrilli, Jr. (pro hac vice)

Ginger D. Anders (pro hac vice)

Chad I. Golder (pro hac vice)

Sarah G. Boyce (pro hac vice)

MUNGER, TOLLES & OLSON LLP

1155 F Street N.W., Seventh Floor

Washington, D.C. 20004-1357

Tel: (202) 220-1100

Fax: (202) 220-2300

Email: Donald.Verrilli@mto.com

Ginger.Anders@mto.com

Chad.Golder@mto.com

Sarah.Boyce@mto.com

Counsel for the Financial Oversight and

Management Board

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THOMAS G. WARD

Deputy Assistant Attorney General

JENNIFER D. RICKETTS

Director, Federal Programs Branch 

CHRISTOPHER R. HALL

Assistant Branch Director

/s/ Jean Lin 

JEAN LIN (USDC-PR No. G02514)

Special Counsel

CESAR A. LOPEZ-MORALES 

(USDC-PR No. G02704)

Trial Attorney 

U.S. Department of Justice, Civil Division

Federal Programs Branch

20 Massachusetts Ave., N.W.

Washington, D.C. 20530

(202) 514-3716 (office)

(202) 616-8202 (fax)

Jean.lin@usdoj.gov

/s/ Martin J. Bienenstock_

Martin J. Bienenstock (pro hac vice)

Stephen L. Ratner (pro hac vice)

Timothy W. Mungovan (pro hac vice)

Mark D. Harris (pro hac vice)

Chantel L. Febus (pro hac vice)

PROSKAUER ROSE LLP

Eleven Times Square

New York, NY 10036

Tel: (212) 969-3000

Fax: (212) 969-2900

Email: mbienenstock@proskauer.com

sratner@proskauer.com

tmungovan@proskauer.com

mharris@proskauer.com

cfebus@proskauer.com

Counsel for the Financial Oversight and

Management Board

Counsel for the United States

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EXHIBIT A

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IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF PUERTO RICO

In re:

THE FINANCIAL OVERSIGHT AND MANAGEMENT BOARD FOR PUERTO RICO,

as representative of

THE COMMONWEALTH OF PUERTO RICO et al.

Debtors.1

PROMESA

Title III

No. 17 BK 3283-LTS

(Jointly Administered)

ORDER GRANTING URGENT JOINT MOTION OF AURELIUS, THE FINANCIAL OVERSIGHT AND MANAGEMENT BOARD, AND THE UNITED 

STATES REQUESTING CERTIFICATION OF THIS COURT’S JULY 13, 2018 

OPINION AND ORDER FOR IMMEDIATE APPEAL PURSUANT TO 48 U.S.C. 

§ 2166(e)(3)–(4)

Upon the Urgent Joint Motion for Leave to File Notice of Appeal (the “Urgent Motion”), 

and any objections being overruled, it is HEREBY ORDERED THAT:

1. The Urgent Motion is granted.

2. Pursuant to 48 U.S.C. § 2166(e)(3)–(4), and for the reasons set forth in the Urgent 

Motion, this Court hereby certifies its July 13, 2018 Opinion and Order Denying the Aurelius 

 

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); (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); and (v) Puerto Rico Electric Power Authority 

(“PREPA”) (Bankruptcy Case No. 17 BK 4780-LTS) (Last Four Digits of Federal Tax ID: 3747) 

(Title III case numbers are listed as Bankruptcy Case numbers due to software limitations).

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Motions to Dismiss the Title III Petition and for Relief from the Automatic Stay, Dkt. 3503 (the 

“Order”) for immediate appeal to the United States Court of Appeals for the First Circuit.

3. In support of this certification, the Court finds that: 

(i) the Order involves a question of law as to which there is no controlling decision of the court of appeals for the circuit or of the Supreme Court of the United 

States, and involves a matter of public importance, see 48 U.S.C. 

§ 2166(e)(3)(A)(i), namely: Whether this Title III proceeding should be dismissed because the Puerto Rico Oversight, Management, and Economic Stability 

Act (“PROMESA”) authorizes the appointment of members of the Financial 

Oversight and Management Board for Puerto Rico (the “Board”) in a manner that 

violates the United States Constitution;

(ii) the Order involves a question of law requiring the resolution of conflicting decisions, see 48 U.S.C. § 2166(e)(3)(A)(ii); and 

(iii) an immediate appeal from the Order may materially advance the progress of 

this proceeding, see 48 U.S.C. § 2166(e)(3)(A)(iii).

4. Aurelius is given permission to appeal this Court’s July 13, 2018 Order. The Court 

shall retain jurisdiction to hear and determine all matters arising from the implementation of this 

Order.

SO ORDERED.

Dated: __________

San Juan, Puerto Rico _______________________

LAURA TAYLOR SWAIN

United States District Judge

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