Court Opinion

ID: 4370542
Source: CourtListenerOpinion
Date Created: 2019-02-23 02:00:10.891198+00
Date Added: 2024-06-11T14:49:23.807356
License: Public Domain

United States Court of Appeals
                     For the First Circuit

No. 18-1773

  IN RE: THE FINANCIAL OVERSIGHT AND MANAGEMENT BOARD FOR PUERTO
RICO, AS REPRESENTATIVE FOR THE COMMONWEALTH OF PUERTO RICO; THE
   FINANCIAL OVERSIGHT AND MANAGEMENT BOARD FOR PUERTO RICO, AS
  REPRESENTATIVE FOR THE PUERTO RICO HIGHWAYS AND TRANSPORTATION
    AUTHORITY; THE FINANCIAL OVERSIGHT AND MANAGEMENT BOARD FOR
    PUERTO RICO, AS REPRESENTATIVE FOR THE PUERTO RICO ELECTRIC
 POWER AUTHORITY (PREPA); THE FINANCIAL OVERSIGHT AND MANAGEMENT
   BOARD FOR PUERTO RICO, AS REPRESENTATIVE FOR THE PUERTO RICO
   SALES TAX FINANCING CORPORATION, a/k/a Cofina; THE FINANCIAL
         OVERSIGHT AND MANAGEMENT BOARD FOR PUERTO RICO, AS
     REPRESENTATIVE FOR THE EMPLOYEES RETIREMENT SYSTEM OF THE
           GOVERNMENT OF THE COMMONWEALTH OF PUERTO RICO,

                            Debtors.

 CARLOS MÉNDEZ-NÚÑEZ, in his official capacity and on behalf of
          the House of Representatives of Puerto Rico,

                      Plaintiff, Appellant,

 THOMAS RIVERA-SCHATZ, in his official capacity and on behalf of
                    the Senate of Puerto Rico,

                           Plaintiff,

                               v.

  THE FINANCIAL OVERSIGHT AND MANAGEMENT BOARD FOR PUERTO RICO;
 JOSE B. CARRION, III; ANDREW G. BIGGS; CARLOS M. GARCIA; ARTHUR
    J. GONZALEZ; JOSE R. GONZALEZ; ANA J. MATOSANTOS; DAVID A.
                  SKEEL, JR.; NATALIE A. JARESKO,

                     Defendants, Appellees,

  COMMONWEALTH OF PUERTO RICO; PUERTO RICO SALES TAX FINANCING
       CORPORATION, a/k/a Cofina; PUERTO RICO HIGHWAYS AND
  TRANSPORTATION AUTHORITY; EMPLOYEES RETIREMENT SYSTEM OF THE
   GOVERNMENT OF THE COMMONWEALTH OF PUERTO RICO; PUERTO RICO
                ELECTRIC POWER AUTHORITY (PREPA),

                       Debtors, Appellees.

No. 18-1777

  IN RE: THE FINANCIAL OVERSIGHT AND MANAGEMENT BOARD FOR PUERTO
RICO, AS REPRESENTATIVE FOR THE COMMONWEALTH OF PUERTO RICO; THE
   FINANCIAL OVERSIGHT AND MANAGEMENT BOARD FOR PUERTO RICO, AS
  REPRESENTATIVE FOR THE PUERTO RICO HIGHWAYS AND TRANSPORTATION
    AUTHORITY; THE FINANCIAL OVERSIGHT AND MANAGEMENT BOARD FOR
    PUERTO RICO, AS REPRESENTATIVE FOR THE PUERTO RICO ELECTRIC
 POWER AUTHORITY (PREPA); THE FINANCIAL OVERSIGHT AND MANAGEMENT
   BOARD FOR PUERTO RICO, AS REPRESENTATIVE FOR THE PUERTO RICO
   SALES TAX FINANCING CORPORATION, a/k/a Cofina; THE FINANCIAL
         OVERSIGHT AND MANAGEMENT BOARD FOR PUERTO RICO, AS
     REPRESENTATIVE FOR THE EMPLOYEES RETIREMENT SYSTEM OF THE
           GOVERNMENT OF THE COMMONWEALTH OF PUERTO RICO,

                            Debtors.

 THOMAS RIVERA-SCHATZ, in his official capacity and on behalf of
                    the Senate of Puerto Rico,

                      Plaintiff, Appellant,

 CARLOS MÉNDEZ-NÚÑEZ, in his official capacity and on behalf of
          the House of Representatives of Puerto Rico,

                           Plaintiff,

                               v.

  THE FINANCIAL OVERSIGHT AND MANAGEMENT BOARD FOR PUERTO RICO;
 JOSE B. CARRION, III; ANDREW G. BIGGS; CARLOS M. GARCIA; ARTHUR
    J. GONZALEZ; JOSE R. GONZALEZ; ANA J. MATOSANTOS; DAVID A.
                  SKEEL, JR.; NATALIE A. JARESKO,

                     Defendants, Appellees,

  COMMONWEALTH OF PUERTO RICO; PUERTO RICO SALES TAX FINANCING
       CORPORATION, a/k/a Cofina; PUERTO RICO HIGHWAYS AND
  TRANSPORTATION AUTHORITY; EMPLOYEES RETIREMENT SYSTEM OF THE
   GOVERNMENT OF THE COMMONWEALTH OF PUERTO RICO; PUERTO RICO
                ELECTRIC POWER AUTHORITY (PREPA),

                       Debtors, Appellees.

          APPEALS FROM THE UNITED STATES DISTRICT COURT
                 FOR THE DISTRICT OF PUERTO RICO

          [Hon. Laura Taylor Swain,* U.S. District Judge]

                               Before

                      Lynch, Circuit Judge,
                   Souter,** Associate Justice,
                    and Stahl, Circuit Judge.

     Israel Roldán-González for Carlos Méndez-Núñez.
     Claudio Aliff-Ortiz, with whom Eliezer Aldarondo-Ortiz,
Sheila Torres-Delgado, David Rodríguez-Burns, and Aldarondo &
López Bras ALB, were on brief for Thomas Rivera-Schatz.
     Timothy W. Mungovan, with whom John E. Roberts, Guy Brenner,
Martin J. Bienenstock, Steven L. Ratner, Mark D. Harris, Kevin J.
Perra, and Proskauer Rose LLP, were on brief, for the Financial
Oversight and Management Board for Puerto Rico; Jose B. Carrion,
III; Andrew G. Biggs; Carlos M. Garcia; Arthur J. Gonzalez; Jose
R. Gonzalez; Ana J. Matosantos; David A. Skeel, Jr.; Natalie A.
Jaresko.

                        February 22, 2019

     *  Of the    Southern   District   of   New   York,   sitting   by
designation.
     ** Hon. David H. Souter, Associate Justice (Ret.) of the
Supreme Court of the United States, sitting by designation.
            LYNCH,   Circuit     Judge.       These    appeals   raise   several

questions about the authority, under the Puerto Rico Oversight,

Management and Economic Stability Act (PROMESA), of the Financial

Oversight and Management Board for Puerto Rico to develop and

certify Fiscal Plans and Territory Budgets for the Commonwealth.

48 U.S.C. §§ 2141-2142.         In particular, this case is about the

2019 Fiscal Plan and Territory Budget.

            The plaintiffs, the Speaker of Puerto Rico's House of

Representatives, Carlos Méndez-Núñez, and the President of its

Senate, Thomas Rivera-Schatz, in their official capacities and on

behalf of the Legislative Assembly, sued the Board, its members,

and its executive director after the Board developed and certified

a Fiscal Plan and a Territory Budget for Fiscal Year 2019.                   The

complaint    alleged     that   the   Board   had     made   several   erroneous

certification decisions and had exceeded its power under PROMESA

during    the   Fiscal   Plan   and   Territory       Budget   development   and

certification processes.          It sought declaratory and injunctive

relief.     The district court dismissed the complaint, in part for

lack of subject matter jurisdiction and in part for failure to

state a claim.       See Rivera-Schatz v. Fin. Oversight & Mgmt. Bd.

for P.R. (In re Fin. Oversight & Mgmt. Bd. for P.R.), 327 F. Supp.
3d 364 (D.P.R. 2018). We affirm the dismissal on the same grounds.

                                      - 4 -
                                          I.

            We    describe    the    statutory   context    and    the    relevant

events surrounding the 2019 Fiscal Plan and Territory Budget.1

A.   PROMESA's Basic Structure

            Finding Puerto Rico to be amid a "fiscal emergency,"

Congress    enacted   PROMESA       in   2016.   See   Pub.   L.    No.    114-187

§ 405(m)(1), 130 Stat. 549, 591 (2016); see also Aurelius Inv.,

LLC v. Commonwealth of P.R., Nos. 18-1671, 18-1746, 18-1787, 2019
WL 642328, at *1-2 (1st Cir. Feb. 15, 2019) (recounting the origins

of the emergency and the responses before PROMESA).                        PROMESA

created mechanisms for restructuring the debts of U.S. territories

and for overseeing reforms of their fiscal and economic policies.

See 48 U.S.C. § 2121(a) (stating this purpose).                      The Board,

established "as an entity within the territorial government" of

Puerto Rico, id. § 2121(c)(1), was empowered by PROMESA to, among

other things, develop, approve, and certify Fiscal Plans and

Territory       Budgets,     id.    §§ 2141-2142,      negotiate         with   the

Commonwealth's creditors, id. § 2146, and, under Title III, to

commence    a     bankruptcy-type         proceeding   on     behalf       of   the

Commonwealth, id. § 2175; see generally Aurelius Inv., 2019 WL
1    Because the complaint was disposed of at the motion to
dismiss stage, we take the facts from the complaint, its
attachments, and the motion to dismiss and its attachments. See,
e.g., In re Colonial Mortg. Bankers Corp., 324 F.3d 12, 14-15 (1st
Cir. 2003). There are no material disputes about this record.

                                         - 5 -
642328, at *2-3, *11-12 (outlining key powers granted to the

Board).

            Congress enacted PROMESA under its Article IV "Power to

dispose of and make all needful Rules and Regulations respecting

the Territory . . . belonging to the United States."            U.S. Const.

art. IV § 3, cl. 2; see 48 U.S.C. § 2121(b)(2). Puerto Rico became

a U.S. territory in 1898, see Treaty of Paris, art. 9, Dec. 10,

1898, 30 Stat. 1759, and is governed by a popularly elected

Governor and Legislative Assembly under a constitution adopted by

Puerto Rico and approved by Congress under the Territorial Clause,

see Act of July 3, 1952, Pub. L. No. 447, ch. 567, 66 Stat. 327;

see also Puerto Rico v. Sanchez Valle, 136 S. Ct. 1863, 1875 (2016)

(recognizing the congressional role in authorizing Puerto Rico's

"constitution-making     process"    and    in   approving    the   resulting

Constitution).

            PROMESA explicitly reserves "the power of [Puerto Rico]

to control, by legislation or otherwise, the territory," except as

that power is limited by Titles I and II of PROMESA.                48 U.S.C.

§ 2163.     In addition to that exception, PROMESA's provisions

preempt   any    inconsistent   "general    or   specific     provisions   of

territory       law,"   including    provisions      of      Puerto    Rico's

Constitution. See id. § 2103; see also United States v. Maldonado-

Burgos, 844 F.3d 339, 346 (1st Cir. 2016) (citing United States v.

Quinones, 758 F.2d 40 (1st Cir. 1985) and then citing United States

                                    - 6 -
v.   Acosta-Martinez,   252 F.3d 13,   18   (1st   Cir.   2001))   ("[A]

provision of the Puerto Rico Constitution cannot prevail where it

conflicts with applicable federal law.").

             We have previously had occasion to interpret aspects of

PROMESA's Title III.     See Fin. Oversight & Mgmt. Bd. for P.R. v.

Ad Hoc Grp. of PREPA Bondholders (In re Fin. Oversight & Mgmt. Bd.

for P.R.), 899 F.3d 13, 18 (1st Cir. 2018); Peaje Invs. LLC v.

García-Padilla, 845 F.3d 505, 511 (1st Cir. 2017); Lex Claims, LLC

v. Fin. Oversight & Mgmt. Bd., 853 F.3d 548, 552 (1st Cir. 2017);

see also Altair Glob. Credit Opportunities Fund, LLC v. The Emps.

Ret. Sys. (In re Fin. Oversight & Mgmt. Bd. for P.R.), 914 F.3d
694, 707 (1st Cir. 2019) (noting PROMESA's enactment).           Recently,

in Aurelius Investment, LLC v. Commonwealth of Puerto Rico, 2019
WL 642328, at *1, this court considered the constitutionality of

PROMESA's procedure for appointing Board members, see 48 U.S.C.

§ 2121(e).     Aurelius' holding that this procedure violates the

Appointments Clause, U.S. Const. art. II, § 2, cl. 2, has no effect

on the "otherwise valid actions of the Board prior to the issuance

of [Aurelius'] mandate," and so does not impact the outcome of

these appeals, Aurelius Inv., 2019 WL 642328, at *17.

             At issue here are events that occurred in 2018 and

questions of first impression about Title II's provisions related

to Fiscal Plans and Territory Budgets.          48 U.S.C. §§ 2141-2142.

We explain those provisions in greater detail below.

                                 - 7 -
B.    2019 Fiscal Plan

            Congress intended for Fiscal Plans to provide roadmaps

for Puerto Rico "to achieve fiscal responsibility and access to

the capital markets."     Id. § 2141(b)(1).     PROMESA § 201 grants the

Board exclusive authority to review, approve, and certify these

Plans.2    See id. § 2141(c)-(e); cf. Aurelius Inv., 2019 WL 642328,

at *12 (describing these and related powers and characterizing

them as "significant").         That section also outlines a yearly

process, involving only the Governor and the Board, for development

of Fiscal Plans.    See generally 48 U.S.C. § 2141.        The Legislative

Assembly has a formal role in economic planning and budgeting under

PROMESA,    but   that   role   is   limited   to   the   Territory   Budget

development process.      See id. § 2142(d).

      2   PROMESA does provide one path for the Governor and the
Board to jointly develop and certify Fiscal Plans "that meet[] the
requirements under [§ 201]." 48 U.S.C. § 2141(f).        The full
provision reads:
            (f) Joint development of Fiscal Plan
            Notwithstanding any other provision of this
            section, if the Governor and the Oversight
            Board jointly develop a Fiscal Plan for the
            fiscal year that meets the requirements under
            this section, and that the Governor and the
            Oversight Board certify that the fiscal plan
            reflects a consensus between the Governor and
            the Oversight Board, then such Fiscal Plan
            shall serve as the Fiscal Plan for the
            territory or territorial instrumentality for
            that fiscal year.

Id.

                                     - 8 -
        1.     Initial Development

               PROMESA's prescribed process for "[d]evelopment, review,

approval, and certification of Fiscal Plans" occurs on a schedule

set by the Board, id. § 2141(c); see id. § 2141(a), and begins

with the submission of a proposed Fiscal Plan by the Governor, see

id. § 2141(c) ("The Governor shall submit to the Oversight Board

any proposed Fiscal Plan . . . .").              For 2019, the Governor sent

several versions of his proposed Fiscal Plan to the Board between

January and April 2018.

               The Board reviewed each of these proposals, as required

by § 201(c)(3), which states that "[t]he Oversight Board shall

review any proposed Fiscal Plan to determine whether it satisfies

the requirements set forth in subsection (b)."             Id. § 2141(c)(3).

Contained in subsection (b) are over a dozen specific requirements.

Those       include   "provid[ing]   for   the    elimination   of   structural

deficits" and "for the investments necessary to promote economic

growth."       Id. § 2141(b)(1)(A)–(N).3

        3      The requirements "set forth in" § 201(b) are:
               (A) provide for estimates of revenues and
               expenditures in conformance with agreed
               accounting standards and be based on --
                    (i) applicable laws; or
                    (ii) specific    bills   that    require
                    enactment in order to reasonably achieve
                    the projections of the Fiscal Plan;
               (B) ensure the funding of essential public
               services;
               (C) provide adequate funding for public
               pension systems;

                                     - 9 -
          Here, the Board rejected each of the Governor's proposed

2019 Fiscal Plans as not satisfying § 201(b)'s requirements.4   The

          (D) provide for the elimination of structural
          deficits;
          (E) for fiscal years covered by a Fiscal Plan
          in which a stay under subchapters III or IV is
          not effective, provide for a debt burden that
          is sustainable;
          (F) improve          fiscal        governance,
          accountability, and internal controls;
          (G) enable the achievement of fiscal targets;
          (H) create independent forecasts of revenue
          for the period covered by the Fiscal Plan;
          (I) include a debt sustainability analysis;
          (J) provide for capital expenditures and
          investments necessary to promote economic
          growth;
          (K) adopt      appropriate     recommendations
          submitted by the Oversight Board under section
          2145(a) of this title;
          (L) include such additional information as the
          Oversight Board deems necessary;
          (M) ensure that assets, funds, or resources of
          a territorial instrumentality are not loaned
          to, transferred to, or otherwise used for the
          benefit of a covered territory or another
          covered territorial instrumentality of a
          covered territory, unless permitted by the
          constitution of the territory, an approved
          plan of adjustment under subchapter III, or a
          Qualifying    Modification   approved    under
          subchapter VI; and
          (N) respect the relative lawful priorities or
          lawful liens, as may be applicable, in the
          constitution, other laws, or agreements of a
          covered territory or covered territorial
          instrumentality in effect prior to June 30,
          2016.

48 U.S.C. § 2141(b)(1).
     4    If the Board had determined that one of the Fiscal Plans
proposed by the Governor did "satisf[y] such requirements, the

                             - 10 -
Board returned two of the Governor's proposals to him, as required

by § 201(c)(3)(B), with "a notice of violation that includes

recommendations    for   revisions      to   the   applicable     Fiscal   Plan;

and . . . an     opportunity     to    correct     the     violation."       Id.

§ 2141(c)(3)(B).     At the time the Board rejected the Governor's

final, April 2018, proposal, the deadline for certifying a 2019

Fiscal Plan had passed.        Under such circumstances (that is, when

"the Governor fails to submit to the Oversight Board a Fiscal Plan

that   the   Oversight   Board   determines        in    its   sole   discretion

satisfies the requirements . . . by the time specified"), PROMESA

§ 201(d)(2) provides that "the Oversight Board shall develop and

submit to the Governor and the Legislature a Fiscal Plan that

satisfies the requirements."          Id. § 2141(d)(2).

       2.    April 19, 2018 Fiscal Plan

             On April 19, 2018, the Board accordingly certified a

2019 Fiscal Plan that it had developed.                 That Fiscal Plan was

automatically "deemed approved by the Governor" under § 201(e)(2).

See id. § 2141(e)(2) ("If the Oversight Board develops a Fiscal

Plan under subsection (d)(2), such Fiscal Plan shall be deemed

approved by the Governor . . . .").

             The April Fiscal Plan incorporated many aspects of the

Governor's proposed Fiscal Plan.         It also included a labor reform

Oversight Board" would have been required to "approve" and certify
that proposed Fiscal Plan. Id. § 2141(c)(3)(A), (e)(1).

                                  - 11 -
package not proposed by the Governor.                This was one among a set of

"comprehensive structural reforms to the economy of Puerto Rico"

set forth in the Plan.              These comprehensive reforms, to Puerto

Rico's labor laws, business regulations, and infrastructure (among

other areas), were designed by the Board to "revers[e] the negative

trend [of economic] growth over the last 10 years and enabl[e] the

Island to become a vibrant and productive economy going forward."

             "[I]ncreasing          labor    force   participation     may     be   the

single most important reform for long-term economic well-being in

Puerto Rico," the April Plan stated.                 It identified three "labor

market   reforms"       intended      "[t]o    reduce    the   cost   to   hire     and

encourage job creation, including movement of informal jobs to the

formal      economy."         The    three    "initiatives      to    change    labor

conditions" were: a shift to at-will employment; a "[r]eduction of

mandated paid leave, including sick leave and vacation pay;" and

an end to "mandated Christmas bonuses."                  The called-for adoption

of at-will employment required the repeal of Puerto Rico's Law No.

80 of May 30, 1976, P.R. Laws Ann. tit 29 §§ 185a-185m, which bars

termination of many private-sector employees without cause.

             As to this first reform, the Plan noted that "49 out of

50   U.S.    states     are    employment      at-will    jurisdictions,       giving

employers the flexibility to dismiss an employee without having to

first prove just cause."              It acknowledged that "some employees

benefit from Puerto Rico's lack of at-will employment" but credited

                                        - 12 -
evidence that for-cause employment "makes it more costly and risky

not only to dismiss, but also to hire, an employee."                       "For

example," the Plan summarized, "studies have found that laws

preventing        unfair    dismissal   caused     reductions   in   employment,

particularly in labor-intensive industries."                It concluded that

switching to at-will employment "will lower the cost and risk of

hiring in Puerto Rico."

                 The Plan quantified the impact of the labor reform

package on the Commonwealth's annual budget surplus over thirty

years. It projected that, with the adoption of at-will employment,

Puerto Rico would have a $39 billion cumulative surplus over that

period, compared with a $2 billion cumulative surplus without the

enactment of at-will employment.

                 The April Fiscal Plan also cut the operating budget of

the Puerto Rican Legislative Assembly.              These "reductions for the

Legislative Assembly" were "informed by benchmarking against other

full-time legislatures" in the United States, the Plan explained.

The Puerto Rican Legislative Assembly's expenditure in Fiscal Year

2018       was    about    300%   greater   than   the   (population-weighted)

national average of full-time U.S. legislatures, according to an

analysis by the Board of publicly available data.5              The Plan stated

       5         This analysis appeared in the Board's motion to dismiss.

                                        - 13 -
that these reductions would achieve "reinvestment savings" of

between $23.6 and $25 million per year for the next five years.

        3.   May 30, 2018 Fiscal Plan

             The Governor and the Board continued negotiating about

the labor reform package and other matters after the April Fiscal

Plan had been certified.     Eventually, the Board agreed to certify

a revised Fiscal Plan that it had developed.     It did so on May 30,

2018.    Two aspects of the Board's May Fiscal Plan are relevant to

these appeals.

             First, the May Fiscal Plan provided for a shift to

at-will employment.     Specifically:

             The Legislature shall introduce and the
             Governor shall sign a bill that repeals Act
             No. 80 . . . on or before June 27, 2018, which
             shall become effective on or before January 1,
             2019. . . . The Bill shall state that, for
             the avoidance of doubt, an employee hired for
             an indefinite period of time does not have a
             cause of action against their employer merely
             for   the  employer's   termination   of   the
             employment relation.

That is, the government of Puerto Rico would repeal Law 80 and

clarify that employment is at will.

             Second, the cut to the Legislative Assembly's budget was

removed from the May version of the Fiscal Plan.        In addition,

cuts to the budget of the judiciary included in the April Fiscal

Plan were "reduced by half each year" in the May version, a change

that increased the court system's budget by up to $23 million per

                                - 14 -
year over what had been budgeted in the April version.        According

to a statement of understanding between the Governor and the Board,

these operating budgets were to "be revisited annually," and these

funding levels were made contingent on Puerto Rico's "compliance

with the then-applicable fiscal plan."        That is, the May Fiscal

Plan stated that the allocations for the Legislative Assembly and

the judiciary

           are pursuant to Puerto Rico becoming an
           employment at-will jurisdiction by repealing
           Law 80 of May 30, 1976 on or before June 27,
           2018 . . . .   If the repeal does not occur,
           none of these changes and alterations [to the
           Legislative Assembly's and the judiciary's
           budgets] shall be implemented.

           The Legislative Assembly did not repeal Law 80. Instead,

the day the Board certified the May Fiscal Plan, May 30, Puerto

Rico's   Senate   passed   Senate   Bill   1011,   which   made   at-will

employment the rule for employees hired after the date of the

bill's enactment, while retaining Law 80's for-cause rule for those

already employed.6

           The    House    of   Representatives     immediately     began

considering Senate Bill 1011.       Recognizing that the bill did not

     6    The Senate also studied a labor reform bill that the
Board had drafted based on the April Fiscal Plan.         Based on
testimony from experts and a review of studies, a Senate committee
penned a report in July 2018 rejecting the proposed bill and
stating that the bill's reforms, including at-will employment,
"have not had a positive or significant impact in [other] economies
where similar . . . reforms have been implemented."

                                 - 15 -
fully repeal Law 80, the President of the House Government Affairs

Committee sent a letter to the Board asking about the "effect on

the Fiscal Plan and the budget to be certified by the Financial

Oversight Board" were the House to pass Senate Bill 1011.                The

Board responded that same day, June 4, that, if the Legislative

Assembly "fails to comply exactly with the understanding reached

with the Oversight Board concerning the repeal of Law 80, the

Oversight Board will amend the Fiscal Plan and Budget to," among

other    things,    "[m]aintain   the   cuts   to   the   budgets   of   the

Legislature and Judiciary as outlined in the April 19 Fiscal Plan."

Ten days later, on June 14, the House passed Senate Bill 1011.

The parties agree that Senate Bill 1011 never became law; the

record does not explain why.

        4.   June 29, 2018 Fiscal Plan

             On June 29, 2018, the Board informed the Governor and

the Legislative Assembly by letter that it was certifying a new

Fiscal Plan.       As had been promised in the May Fiscal Plan and in

the Board's June 4 letter, the Board's June Fiscal Plan funded the

judiciary and the Legislative Assembly at the levels stated in the

April Plan.     The letter explained, "Unfortunately, we now know

that the Government of Puerto Rico will not implement the [May]

Fiscal Plan in full because the Legislature . . . failed to pass

the most important component of the Labor Reform Package -- the

                                  - 16 -
repeal of Law 80 and turning Puerto Rico into an at-will employment

jurisdiction."

            The labor reform package was absent from the Board's

June Fiscal Plan, certified June 29, 2018.            On that subject, the

June Plan stated the following:

            [W]hile successful human capital and welfare
            reforms would have been projected to generate
            approximately $39 billion in additional
            revenues by FY2048 and over ~$320 million from
            FY2018-FY2023, the Legislature's demonstrated
            noncompliance with the comprehensive labor
            reform requirements of previous fiscal plans
            has forced the removal of these projected
            revenues from the New Fiscal Plan.

C.   2019 Territory Budget

            PROMESA § 202 grants the Board exclusive authority to

review, approve, and certify Territory Budgets.              See 48 U.S.C.

§ 2142; see also Aurelius Inv., 2019 WL 642328, at *12 (recognizing

the Board's "significant" power to approve and reject Commonwealth

budgets).     The Legislative Assembly's only responsibility under

§ 202 is to "submit to the Oversight Board the Territory Budget

adopted by the Legislature."         48 U.S.C. § 2142(d)(1).

            For 2019, the Legislative Assembly did this on June 30,

2018, the day before the start of the Fiscal Year.             Earlier that

day, the Legislature had approved an $8,708,623,000 Commonwealth

budget (which the Governor later signed).

            Also   on   June   30,    the     Board   determined   that   the

Legislative    Assembly's      Budget    was     non-compliant     with   the

                                     - 17 -
Board-certified June Fiscal Plan.7             The Legislative Assembly's

$84,275,000      combined   allocation   for    Puerto   Rico's   House   of

Representatives ($45,470,000) and Senate ($38,805,000) matched the

budget for the Legislative Assembly under the Board's May Fiscal

Plan but exceeded the reduced allocation in the June Plan.

              The Board then immediately certified a Territory Budget

it had developed totaling $8,757,524,000.          Of this, and consistent

with the June Fiscal Plan, $65,292,000 was allocated to the

Legislative Assembly ($35,228,000 to the House and $30,064,000 to

the Senate).      In developing and certifying this Budget, the Board

relied   on    its   authority   under   § 202(e)(3).      That   provision

provides:

              If the Governor and the Legislature fail to
              develop and approve a Territory Budget that is
              a compliant budget by the day before the first
              day of the fiscal year for which the Territory
              Budget is being developed, the Oversight Board
              shall submit a Budget to the Governor and the
              Legislature . . . and such Budget shall be --
                   (A) deemed to be approved by the Governor
                   and the Legislature; . . .
                   (C) in full force and effect beginning on
                   the first day of the applicable fiscal
                   year.

     7    If the Board had deemed this "adopted Territory Budget"
to be compliant with the Fiscal Plan, then the Oversight Board
would have been required to "issue a compliance certification for
such compliant budget." 48 U.S.C. § 2142(d)(1)(A).

                                   - 18 -
Id. § 2142(e)(3).8             By operation of law, then, the Board's 2019

Territory Budget went into effect.

D.    Procedural History

                 On July 9, plaintiffs filed their complaint against the

Board seeking the following relief:9 (1) a declaration "that the

rejected policy recommendations in the Fiscal Plan are non-binding

recommendations,         and    that   the   Legislative    Assembly    cannot   be

compelled to implement any of those policies, and the [Board] may

not       take     any    actions      to    force    compliance       with   such

recommendations;" (2) a declaration that the Territory Budget

certified by the Board "is null and void;" and (3) an injunction

"prohibiting the defendants from implementing and enforcing" the

Board-developed          and    certified    Budget   and   "reinstat[ing]"      the

Budget adopted by the Legislative Assembly.                 We describe the pled

theories for relief in the analysis.

                 Defendants moved to dismiss the complaint for lack of

subject matter jurisdiction and for failure to state a claim to

relief, and the district court granted the motion.                Rivera-Schatz,

      8   Had these events occurred before "the day before the
first day of the fiscal year" and had the Board determined that
the submitted Budget was not compliant, then PROMESA says that
"the Oversight Board shall provide to the Legislature -- (i) a
notice of violation that includes a description of any necessary
corrective action; and (ii) an opportunity to correct the
violation." 48 U.S.C. § 2142(d)(1)(B).
      9   The complaint was filed in the District of Puerto Rico
in the Commonwealth's ongoing case under Title III of PROMESA.

                                        - 19 -
327 F. Supp. 3d at 369-71.        The court first held that the request

for a declaration about Fiscal Plan recommendations did not rest

on a proper Article III case or controversy, and it dismissed that

request, which appeared in Paragraph 79 of the complaint, for lack

of   subject   matter    jurisdiction.        Id.    at    370-71.      Next,   in

dismissing     the    remaining     declaratory-      and     injunctive-relief

claims, the district court gave two reasons.                To the extent those

claims     directly    challenged    the    Board's       budget    certification

decisions, the district court dismissed them for lack of subject

matter jurisdiction, relying on PROMESA § 106(e).                    Id. at 371.

That provision states that "[t]here shall be no jurisdiction in

any United States district court to review challenges to the

Oversight Board's certification determinations under [PROMESA]."

48 U.S.C. § 2126(e); see Rivera-Schatz, 327 F. Supp. 3d at 371.

To the extent that the remaining claims challenged the Board's

actions as exceeding its authority under PROMESA or as encroaching

on   the    Legislative     Assembly's       power    under        Puerto   Rico's

Constitution, the district court dismissed them for failure to

state a claim.       Rivera-Schatz, 327 F. Supp. 3d at 372-73.

                                      II.

             We review the district court's grant of the motion to

dismiss de novo.       See, e.g., Flores v. OneWest Bank, F.S.B., 886
F.3d 160, 162 (1st Cir. 2018).        In doing so, we analyze the issues

within the basic three-part framework outlined by the district

                                    - 20 -
court, considering first the request for a declaration about Fiscal

Plan recommendations, and then the declaratory- and injunctive-

relief claims about the 2019 Budget.

          We affirm the district court's grounds for dismissal.

First, the federal courts lack Article III jurisdiction over the

complaint's   request   for   a     declaration    about   Fiscal   Plan

recommendations.   Second, the district court correctly concluded

that, under § 106(e), it lacked jurisdiction to review alleged

errors in the Board's certification determinations.          Third, the

complaint fails to state a claim to relief on the theory that the

Board exceeded its authority under PROMESA during the 2019 Fiscal

Plan and Territorial Budget processes.

          The Board defends these grounds.        It does not challenge

the district court's reading of § 106(e), and we do not engage

that topic.

A.   Article III Jurisdiction

          Count I of the complaint alleges that "PROMESA does not

allow the [Board] to bypass or usurp the Legislative Assembly's

legislative power" by "set[ting] forth the Commonwealth's public

policy" as to "the rights of employees in Puerto Rico."       The Board

did just that, the complaint asserts, "when it tried to force the

Legislative Assembly to pass a bill retroactively repealing Law 80

as a condition to approve the Commonwealth's budget."          And when

the Legislative Assembly declined to repeal Law 80, the complaint

                                  - 21 -
says, the Board "punished it by imposing severe cuts in its

operational budget."       Based on those allegations, Paragraph 79 of

the complaint says:

             Plaintiffs are therefore entitled to a
             judicial declaration under [the Declaratory
             Judgment Act] . . . that the rejected policy
             recommendations in the Fiscal Plan are
             non-binding recommendations, and that the
             Legislative Assembly cannot be compelled to
             implement any of those policies, and the
             [Board] may not take any actions to force
             compliance with such recommendations.

The federal courts lack Article III jurisdiction over Paragraph

79's request.

             The Declaratory Judgment Act allows "any court of the

United States" to "declare the rights and other legal relations of

any interested party seeking such declaration, whether or not

further relief is or could be sought," but only "[i]n a case of

actual controversy within [that court's] jurisdiction."                 28 U.S.C.

§ 2201(a).     As the Supreme Court has explained, "the phrase 'case

of actual controversy' in the Act refers to the type of 'Cases'

and   'Controversies'     that     are    justiciable   under    Article   III."

MedImmune, Inc. v. Genentech, Inc., 549 U.S. 118, 127 (2007)

(citing Aetna Life Ins. Co. v. Haworth, 300 U.S. 227, 240 (1937)).

Although there is not "the brightest of lines between those

declaratory-judgment actions that satisfy the case-or-controversy

requirement and those that do not," id., "[b]asically, the question

in    each   case   is   whether    the    facts   alleged,     under   all   the

                                     - 22 -
circumstances,   show     that    there   is   a   substantial     controversy,

between parties having adverse legal interests, of sufficient

immediacy and reality to warrant the issuance of a declaratory

judgment," Maryland Cas. Co. v. Pac. Coal & Oil Co., 312 U.S. 270,

273 (1941).

            This standard cannot be satisfied if Paragraph 79 is

read to request a declaration about the rights of the Board and

the Legislative Assembly whenever there is disagreement about

whether to implement a Fiscal Plan policy included by the Board.10

That would be a request for an advisory opinion about the import

of Fiscal Plans under PROMESA.

            Appellants'     attempts      to   read    into    Paragraph    79   a

justiciable dispute with definite legal and factual dimensions

fare no better under Article III's standard.                The request cannot

be   made     justiciable        by   defining        the     "rejected    policy

recommendations" as the labor reform package introduced in the

     10   The district court observed that "recommendations" could
refer to "the concept of 'recommendations' under Section 205 of
PROMESA."   Rivera-Schatz, 327 F. Supp. 3d at 370.     Section 205
allows the Board to make policy recommendations to the Governor or
the Legislative Assembly "at any time" and provides a procedure
for "the territorial government" to adopt or reject the
recommendations. 48 U.S.C. § 2145. In his brief, Méndez-Núñez,
the House Speaker, alludes to this reading.     We agree with the
district   court   that,  if   Paragraph   79   refers   to  § 205
recommendations in the abstract, that paragraph requests an
advisory opinion about the "meaning and effect of a section of the
statute," and we lack Article III jurisdiction. Rivera-Schatz,
327 F. Supp. 3d at 371.

                                      - 23 -
April Fiscal Plan, as Rivera-Schatz, the Senate President, does in

his brief.    Under this reading of Paragraph 79, the dispute lacks

the requisite reality: The currently certified Fiscal Plan does

not include the objected-to labor reforms, which were removed

before the June version.         To provide the declarations, then, would

require a court to imagine a set of labor reforms into the Fiscal

Plan and to predict the Board and the Legislative Assembly's

reactive moves and counter-moves.         The resulting declaration would

be an impermissible "opinion advising what the law would be upon

a hypothetical state of facts."          Aetna, 300 U.S. at 241.

             Appellants cannot get around this by reading Paragraph

79 to request a declaration about the April or May Fiscal Plans

and the ensuing actions of the Legislative Assembly and the Board.

Such a request would still be one for an advisory opinion, as past

differences are not amenable to the type of relief that Article

III allows courts to give -- "decree[s] of a conclusive character"

adjudicating adverse parties' actual rights and interests.             Aetna,
300 U.S. at 241; cf. Hall v. Beals, 396 U.S. 45, 48 (1969) (holding

that   an   amendment    to   the     challenged    statute   eliminated    any

"controversy of the kind that must exist if we are to avoid

advisory opinions").

             Nor can the request be made justiciable by reading

Paragraph    79   to   request    a   declaration    on   disputes   that   the

appellants say are likely to arise under future Fiscal Plans.                In

                                      - 24 -
Declaratory Judgment Act cases where jurisdiction is exercised

based on a threat of future injury, the potential injury is

typically legal liability on a set of already defined facts,11 so

that the Act merely "defin[es] procedure" to enable judicial

resolution of a case or controversy that might otherwise be

adjudicated at a different time or in a slightly different form.

See Aetna, 300 U.S. at 240.     That is not this request.           Whatever

future disputes may arise have not yet been and may never be

adequately framed by their factual dimensions. See Texas v. United

States, 523 U.S. 296, 300 (1998) (stating that a dispute is not

justiciable "if it rests upon 'contingent future events that may

not occur as anticipated, or indeed may not occur at all'" (quoting

Thomas v. Union Carbide Agric. Prods. Co., 473 U.S. 568, 580-81

(1985))).     Declaratory   claims     based    on   abstractions   are   not

justiciable   under   Article   III.      See    Int'l   Longshoremen's     &

Warehousemen's Union, Local 37 v. Boyd, 347 U.S. 222, 224 (1954)

("Determination of the scope . . . of legislation" on fictional

facts "involves too remote and abstract an inquiry for the proper

exercise of the judicial function.").

     11   See, e.g., Steffel v. Thompson, 415 U.S. 452, 475 (1974)
(exercising jurisdiction over pre-prosecution challenge to
criminal statute); MedImmune, 549 U.S. at 137 (recognizing Article
III jurisdiction over declaratory claims based on threatened
private enforcement action).

                                - 25 -
B.   Statutory Subject Matter Jurisdiction

             The complaint also seeks a declaration that the June

Budget certified by the Board "is null and void" and an injunction

"prohibiting the defendants from implementing and enforcing" the

Board-developed    and   certified   Budget   and   "reinstat[ing]"     the

Legislative Assembly's Budget.       In support of this, Count II of

the complaint outlines a theory that the Board erred in determining

that Senate Bill 1011 did not conform with the May Fiscal Plan.

This error, Count II asserts, led the Board to a second erroneous

determination that the June Fiscal Plan should be certified, then

to a third erroneous determination that the Legislative Assembly's

Budget should not be certified because it did not comply with the

June Fiscal Plan, and finally to a fourth erroneous determination

that the Board-developed Budget should be certified.          The district

court held that it lacked jurisdiction under § 106(e) over the

claims that rested on Count II's allegations.         See Rivera-Schatz,

327 F. Supp. 3d at 371.

             We agree.   PROMESA grants the Board exclusive authority

to certify Fiscal Plans and Territory Budgets for Puerto Rico.           It

then insulates those certification decisions from judicial review

in § 106(e): "There shall be no jurisdiction in any United States

district court to review challenges to the Oversight Board's

certification    determinations   under    this   chapter."     48   U.S.C.

§ 2126(e).     Section 106(e) is an exception to PROMESA's general

                                  - 26 -
grant of jurisdiction at § 106(a), which provides that "any action

against the Oversight Board, and any action otherwise arising out

of this chapter, in whole or in part, shall be brought in a United

States district court for the covered territory."             Id. § 2126(a).

              Count II of the complaint alleges four unreviewable

Board errors in "certification determinations under this chapter."

Id. § 2126(e).        The district court was correct that it lacked

jurisdiction to review the Board's determination that the passage

of Senate Bill 1011 was inconsistent with the May Fiscal Plan's

requirement to repeal Law 80.           That determination was the basis

for the Board's decision to certify, under § 201(e)(2), the June

Fiscal Plan.     And § 106(e) bars district courts from reviewing the

reasons   for       certification   determinations       as     much   as   the

certification determinations themselves.           Nor did the district

court have jurisdiction to review whether the Board erred in

deeming the Legislative Assembly's Budget non-compliant with the

applicable Fiscal Plan and in certifying instead a Board-developed

Territory Budget.      These decisions, which § 202 expressly empowers

the   Board    to   make,   see   id.   § 2142(d)-(e),    are    prototypical

"certification determinations under this chapter," id. § 2126(e).

              Rivera-Schatz's argument that the Board's determinations

about Territory Budgets adopted by the Legislative Assembly are

reviewable runs headlong into the text of § 106(e).              His argument

rests on the following attempted contrast of §§ 201 and 202: § 201

                                    - 27 -
states that the Board has "sole discretion" to determine whether

to certify a Fiscal Plan or a Budget proposed by the Governor, see

id. § 2141(c)(3), (c)(1), while § 202 does not use the phrase "sole

discretion" in granting the Board authority to "determine whether

the [Legislature-]adopted Territory Budget is a compliant budget,"

id. § 2142(d)(1).      From this, Rivera-Schatz asks us to infer first

that   the    Board's     authority    to    make   determinations     about

Legislature-adopted Budgets is non-exclusive. Rivera-Schatz urges

that a second inference -- that such determinations are subject to

judicial review -- follows.           Section 106(e)'s text forecloses

these inferences.       It plainly bars judicial review of "challenges

to   the   Oversight    Board's   certification     determinations."    Id.

§ 2126(e). It does not distinguish among the various certification

determinations that PROMESA commits to the Board.

             Appellants next argue, by analogy to a doctrine of

administrative      law,     that      the    challenged     certification

determinations are reviewable, despite § 106(e)'s jurisdictional

prohibition, because the Board's actions violated clear statutory

directives in §§ 201 and 202.          This court has never recognized

such an exception to any statutory provision explicitly precluding

judicial review.       Cf. Paluca v. Sec'y of Labor, 813 F.2d 524, 528

(1st Cir. 1987) (declining the invitation).          Nor do we here.   That

is because (among other reasons) PROMESA's instructions to the

Board about certification are not comparable to the types of

                                    - 28 -
congressional     commands     that   can     prompt    "judicial     review

independent of [statutory] review provisions."            Kirby Corp. v.

Peña, 109 F.3d 258, 269 (5th Cir. 1997) (defining the "clear

statutory mandate" exception as limited to administrative agency

actions "so contrary to the terms of the relevant statute that

[they] necessitate[] judicial review independent of [statutory]

review provisions").        To see this, compare the statutory rule

violated in Leedom v. Kyne, 358 U.S. 184 (1958), with the standards

laid out in PROMESA §§ 201 and 202.            Kyne reviewed (without a

statute authorizing judicial review) a National Labor Relations

Board order certifying a collective bargaining unit mixing two

types of employees, despite an unambiguous statutory bar on units

mixing those employees.       Id. at 185.     In contrast, under § 201,

the Board has "sole discretion" to determine whether Fiscal Plans

comply   with   statutory    requirements   such   as   "provide    for   the

elimination of structural deficits."          48 U.S.C. § 2141(b)(1)(D);

see   id.   § 2141(b)-(c).       Similarly,    § 202    gives   the   Board

"discretion" to decide whether a Territory Budget comports with a

multifaceted Fiscal Plan.      See id. § 2142.

            Nor, finally, are appellants helped by their citations

to McNary v. Haitian Refugee Center, Inc., 498 U.S. 479 (1991).

That case allowed jurisdiction, despite a statutory bar on judicial

review, over a challenge to an agency's procedures under the Due

                                  - 29 -
Process Clause.   Id. at 481-84.     But no federal constitutional

claims have been brought here.

          The district court properly dismissed the challenges to

the Board's certification decisions in Count II for lack of

statutory subject matter jurisdiction.

C.   Failure to State a Claim

          The complaint could arguably be read to allege three

remaining theories for relief.12   First, we read it to assert that

the Board exceeded its authority under PROMESA §§ 204 and 205,

which grant the Board powers related to legislation. See 48 U.S.C.

§§ 2144-2145; see also Aurelius Inv., 2019 WL 642328, at *12

(noting the Board's legislation-related powers).   Second, we read

the complaint as alleging that the Board's decision to certify a

     12   Also remaining are two arguments made by appellants on
appeal but not to the district court: (1) The Board exceeded its
authority under § 201 when it certified its June Fiscal Plan
without allowing the Governor another opportunity to submit a
compliant Fiscal Plan.       (2) The Board deliberately delayed
certifying its June Fiscal Plan so that the Legislative Assembly
would not have time before the start of Fiscal Year 2019 to approve
and submit to the Board under § 202(d)(1) a Territory Budget
compliant with the Board's June Fiscal Plan. Neither argument was
developed in the pleadings, see Rivera-Schatz, 327 F. Supp. 3d at
371 (cataloging other theories pled), and so we consider both
waived, see, e.g., French v. Bank of N.Y. Mellon, 729 F.3d 17, 19
n.1 (1st Cir. 2013) ("[B]elated allegations" are waived.). In any
event, both arguments are also inconsistent with the events of the
winter, spring, and summer of 2018. The arguments overlook the
lineage of the Board's June Fiscal Plan: That Fiscal Plan was the
culmination of the formal development process and the informal
negotiation process between the Governor and the Board between
January and May. And the June Fiscal Plan was also identical, in
all respects relevant to this case, to the April Fiscal Plan.

                                - 30 -
Board-developed Budget that cut the Legislative Assembly's funds

was punitive and therefore "contraven[ed] . . . the limited powers

delegated     by   Congress   to   the   [Board]."     Third,     we    read   the

complaint to allege that the Board's decision to certify its Budget

over    the   Legislative     Assembly's    impinged   on   the    Legislative

Assembly's power under Puerto Rico's Constitution.

              The district court chose to exercise jurisdiction over

these claims that the Board exceeded its authority under PROMESA,

a choice we do not evaluate,13 and to dismiss them for failure to

state a claim to relief. We affirm the dismissal, taking the three

remaining arguments in turn.

              First,   the    complaint's    assertions     that       the   Board

violated §§ 204 and 205 rest on an inaccurate factual premise:

that the Board forced the Legislative Assembly to repeal or that

the Board otherwise nullified Law 80.           The Board did nothing of

the sort; Law 80 remains on the books and the applicable Fiscal

Plan does not call for its repeal.

       13 The   issue   of   whether  § 106(e)   also  precludes
jurisdiction over these claims is not free from doubt, but we
bypass it here and assume statutory subject matter jurisdiction
because the merits of the remaining claims are quite easily
resolved against the party invoking our jurisdiction. See, e.g.,
Moriarty v. Colvin, 806 F.3d 664, 668 (1st Cir. 2015) (using
hypothetical jurisdiction where the sidestepped jurisdictional
question is statutory); Umstead v. Umstead, 446 F.3d 17, 20 n.2
(1st Cir. 2006) (citing Restoration Pres. Masonry, Inc. v. Grove
Eur. Ltd., 325 F.3d 54, 59-60 (1st Cir. 2003)) (same).

                                    - 31 -
            As    to    § 204,   the   complaint    alleges   that   the   Board

"invalidate[d]" Law 80 and, in doing so, exceeded its authority

under § 204(a) to review laws that were enacted "after, rather

than before the [Board] became operational."14                 That provision

authorizes the Board to review, for consistency with the governing

Fiscal    Plan,   legislation      that   "a    territorial   government   duly

enacts . . . during any fiscal year in which the Oversight Board

is in operation."         48 U.S.C. § 2144(a)(1).       It also empowers the

Board to "direct the territorial government to . . . correct the

law to eliminate" any "significant[] inconsisten[cy]" with the

Fiscal Plan.           Id. § 2144(a)(4)(B).        And if "the territorial

government fails to comply with" such a directive, the Board may

"take such actions as it considers necessary . . . to ensure that

the enactment or enforcement of the law will not adversely affect

the territorial government's compliance with the Fiscal Plan,

including preventing enforcement or application of the law."                Id.

§ 2144(a)(5).      But the Board did not "prevent[] enforcement or

application" of Law 80.          Id.   The complaint fails to state a claim

to relief based on § 204.

     14   In his brief on appeal, Rivera-Schatz argues instead
that the Board unlawfully bypassed the § 204 process in deeming
Senate Bill 1011 to be inconsistent with the Fiscal Plan. This
theory was not raised in the complaint or otherwise before the
district court and is therefore waived. See, e.g., French, 729
F.3d at 19 n.1.

                                       - 32 -
            The complaint also fails to state a claim to relief based

on § 205.    That provision allows the Board to "at any time submit

recommendations to the Governor or the Legislature on actions the

territorial government may take to ensure compliance with the

Fiscal Plan."       Id. § 2145(a).     The Governor and the Legislative

Assembly may then decide "whether the territorial government will

adopt the recommendations."          Id. § 2145(b)(1).   The complaint

alleges that the labor reform package was a § 205 recommendation

and that, because § 205 empowers the Legislative Assembly to reject

such recommendations, the Board violated that provision in making

the reforms mandatory.      But the Board did not impose any reforms.

Instead, it removed the labor package from the Fiscal Plan after

the Legislative Assembly chose not to repeal Law 80.

            Next,     the   sequence    of   events   leading   to   the

certification of the 2019 Budget refutes the second alleged theory.

On that theory, the complaint specifically says that, although the

Board lacks "the power to impose penalties on Commonwealth officers

or employees,"15 the Board certified a 2019 Budget with a cut to

the Legislative Assembly's budget, a cut which the complaint

alleges was a punitive response to the Legislative Assembly's

     15   The   complaint   cites    § 104(l),   which   subjects
Commonwealth officials to discipline by the Governor, not by the
Board, for violation of "any valid order of the Oversight Board."
48 U.S.C. § 2124(l). We take no position on the meaning or effect
of this provision.

                                  - 33 -
decision not to repeal Law 80.    Yet, the recommendation that the

Legislative Assembly's budget should be reduced, along with the

budgets of other government entities, originated in the April

Fiscal Plan, and preceded by months the Legislative Assembly's

actions on Law 80.      Further, after the Legislative Assembly

declined to repeal Law 80, the Board acted within its authority

when it certified a June Fiscal Plan and 2019 Territory Budget

that included the previously proposed cuts to the Legislative

Assembly's operating budget. PROMESA authorizes the Board to adopt

Fiscal Plans and Budgets incentivizing the Legislative Assembly to

enact the Board's recommended policies and accounting for the

Legislative Assembly's responses to those recommended policies.

See id. §§ 2141-2151.   Indeed, it is difficult to see how, without

such powers, the Board could be effective in achieving Congress's

"purpose" of "provid[ing] a method for [Puerto Rico] to achieve

fiscal responsibility and access to the capital markets."         Id.

§ 2121(a) (stating Board's purpose).

          Finally, the complaint alleges that the Board's decision

to certify its Budget over the Legislative Assembly's was an

"unlawful[]   encroach[ment]   upon     the   Legislative   Assembly's

exclusive legislative power under the Puerto Rico Constitution."

But PROMESA accounts for the Legislative Assembly's power under

the Constitution: Under PROMESA's preemption provision, the grants

of authority to the Board at §§ 201 and 202 to approve Fiscal Plans

                               - 34 -
and Budgets "prevail over any general or specific provisions of

territory law," including provisions of Puerto Rico's Constitution

that are "inconsistent with [PROMESA]."            Id. § 2103; see also

Maldonado-Burgos, 844 F.3d at 346.         PROMESA does generally reserve

"the   power   of   [Puerto   Rico]   to    control,   by   legislation    or

otherwise, the territory." 48 U.S.C. § 2163. But this reservation

of power is expressly "[s]ubject to the limitations set forth in

[Titles] I and II of [PROMESA]," where §§ 201 and 202 appear.             Id.

When the Board certified the 2019 Fiscal Plan and Budget, then, it

exercised authority granted to it under PROMESA.

                                  III.

           The judgment of the district court is affirmed. No costs

are awarded.

                                 - 35 -