Opinion ID: 618268
Heading Depth: 2
Heading Rank: 3

Heading: The Puerto Rico Litigation Concerning the Commonwealth's Fiduciary Duties

Text: Law 230 directs the Commonwealth to take into trust property belonging to plaintiffs for a statutorily prescribed period, during which it is required to administer that trust. P.R. Laws Ann. tit. 26, § 8055( l ). The Commonwealth's status as trustee over the funds was conceded by all the parties in this case, and has been recognized repeatedly by both the district court and this court over the course of this litigation, see García-Rubiera, 570 F.3d at 452 (Furthermore, upon transfer to the Secretary, Law 230 requires the Secretary to hold the duplicate premiums in a fiduciary capacity. (citing P.R. Laws Ann. tit. 26, § 8055(1) (The Secretary of the Treasury shall retain these funds as trustee . . . .))); id. (comparing the funds entrusted to the Commonwealth to funds held in trust in an IOLTA account or an interpleader account); García-Rubiera, 752 F.Supp.2d at 184, 188-89; García-Rubiera, 516 F.Supp.2d at 191 n. 14 (Therefore, it appears that the trust continues even after the Secretary has transferred the money to the General Fund.); id. at 198 (directing the Commonwealth to cease its acquisition of any interest accrued on the duplicate payments). The fact that the Commonwealth holds the funds in trust presents several important questions of the possible breach of fiduciary duties under Puerto Rico trust law, as to the notice requirements for fiduciaries, the complexity and burdens of the refund procedure, and its tax set off provision. We leave to the Puerto Rico courts the question of whether the particulars of Procedure 96 violate the Commonwealth's fiduciary duties to plaintiffs under Puerto Rico trust law.