16 F.4th 954
1st Cir.2021Background:
- PREPA Employees' Retirement System (pension plan for ~12,000 retirees) is administered by a Board of Trustees under PREPA bylaws dating to 1945.
- PROMESA created a Fiscal Oversight and Management Board (FOMB); PREPA was designated a covered entity in 2016.
- On March 22, 2018 Governor Rosselló issued Exec. Order No. 2018-012, temporarily appointing PREPA's Board of Directors as trustee for limited purposes (finalize actuarial reports/financial statements and provide budget information), restricting some trustee functions.
- The Order expired by its own terms in June 2019 (upon FOMB actions) and was formally rescinded by Exec. Order No. 2019-060 in November 2019.
- The Retirement System sued seeking a declaratory judgment that the Order and actions taken under it were null and void; the FOMB removed the case to the Title III Court under PROMESA.
- The Title III Court dismissed the Second Amended Complaint as moot for lack of an Article III case or controversy; the district court’s dismissal is affirmed on appeal.
Issues:
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Justiciability / Mootness (main) | Order caused displacement and fiduciary impairment; declaratory relief needed to void acts taken under Order | Order expired and was rescinded; no live controversy | Dismissed for lack of subject-matter jurisdiction: moot because Order is no longer operative |
| Ongoing injury / Article III standing | Even post-rescission, plaintiffs suffer continuing harm from financial statements issued under the Order | Plaintiffs cannot identify any concrete, traceable injury caused by the now-expired Order | Plaintiffs failed to show a concrete, particularized injury; generalized unease insufficient (Spokeo) |
| Voluntary cessation exception | Rescission does not preclude recurrence when FOMB/COMMONWEALTH find it necessary again | Defendants contend expiration/rescission and pre-established termination criteria make recurrence unlikely | Exception not applied; plaintiffs didn’t preserve argument below and recurrence not shown as reasonable expectation |
| Capable of repetition yet evading review | Short-lived Order could reoccur and evade full review | Order lasted ~15 months; ample time existed for litigation; no showing it was too short to litigate | Exception fails: duration was not inherently too short and plaintiffs didn’t show inability to obtain timely review |
| Collateral consequences exception | Plaintiffs suffer ongoing collateral effects from past actions under the Order | Alleged consequences are vague and unquantified; no concrete collateral harms shown | Exception inapplicable: alleged collateral consequences are too diffuse and speculative |
Key Cases Cited
- Md. Cas. Co. v. Pac. Coal & Oil Co., 312 U.S. 270 (1941) (standard for declaratory-judgment justiciability)
- Town of Portsmouth v. Lewis, 813 F.3d 54 (1st Cir. 2016) (mootness where challenged law removed live controversy)
- In re Fin. Oversight & Mgmt. Bd. for P.R. (Aurelius Cap. Master II), 919 F.3d 638 (1st Cir. 2019) (Article III and declaratory-judgment principles under PROMESA)
- Friends of the Earth, Inc. v. Laidlaw Envtl. Servs., 528 U.S. 167 (2000) (voluntary cessation standard)
- American Civil Liberties Union of Mass. v. U.S. Conference of Catholic Bishops, 705 F.3d 44 (1st Cir. 2013) (applying Friends of the Earth standard)
- Spokeo, Inc. v. Robins, 136 S. Ct. 1540 (2016) (concrete injury requirement for Article III standing)
- Weinstein v. Bradford, 423 U.S. 147 (1975) (capable-of-repetition-yet-evading-review test)
- Gulf of Me. Fisherman's All. v. Daley, 292 F.3d 84 (1st Cir. 2002) (assessing whether action was too short in duration to litigate)