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Saturday, June 12, 2010

Spencer Roane in the SG's Office? The United States denies that SCOTUS has jurisdiction over Puerto Rico

In opposing a petition for certiorari to the supreme court of Puerto Rico, the Solicitor General has adopted a truly odd reading of the relevant jurisdictional statute: The SG's brief argued that the SCOTUS lacked any jurisdiction over the Puerto Rican supreme court's orders denying discretionary review under 28 u.s.c. section 1258.

I will address the technical merits of this statutory interpretation below the jump. As a matter of legal policy, the SG's position hearkens back to Spencer Roane's 1810 view that "the appellate power of the Supreme Court of the United States does not extend to this [Virginia Court of Appeals]." In effect, the SG declared that, so long as the Puerto Rican supreme court denies a writ of certiorari from the Commonwealth's appellate courts, SCOTUS lacks any power to review those appellate courts' rulings on federal law, including federal constitutional law. The SG has carved out an enclave where territorially circumscribed non-Article III courts have the final word on everything from the Sherman Act to the U.S. Constitution.

As a federalism kind of guy, this revival of what amounts to nullification -- i.e., giving subnational jurisdictions the final word on national law -- fascinates me: Is there some latter-day Spencer Roane in the Obama Administration pining to liberate Puerto Rico from SCOTUS's oppressive grip?

But first, the technical merits. The relevant jurisdictional statute, 28 u..s.c section 1258, provides that "“[f]inal judgments or decrees rendered by the Supreme Court
of the Commonwealth of Puerto Rico may be reviewed by the Supreme Court by writ of certiorari.” The SG's brief notes that this wording differs from the analogous grant of jurisdiction to review state-court judgments: 28 u.s.c. section 1257(a) provides that “[f]inal judgments or decrees rendered by the highest court of a State in which
a decision could be had.” Those last seven words permit the SCOTUS to review intermediate appellate state court judgments when the state supreme court denies discretionary review rather than rule in the merits of a case. Because the grant of jurisdiction over the Puerto Rican supreme court lacks those words, the SG contends that the SCOTUS cannot review decrees and orders from intermediate appellate courts in Puerto Rico. (Of course, the SCOTUS could theoretically review the Puerto Rican supreme court's orders and decrees denying certiorari review -- but these do not raise any federal question, being discretionary decisions about case management rather than decisions on the merits).

One must concede that the SG has a textualist point: There is a difference in wording between the two statutes. Indeed, then-Deputy AG Byron White commented on the difference back in 1961 when section 1258 was enacted, urging that the discrepancy be eliminated. For reasons unknown, Congress never got around to revising section 1258. The SG suggests that this difference in wording was somehow deliberate, but they offer no argument beyond a vague allusion to the "different system" of laws prevailing in Puerto Rico. The SG notes that that such a limit on SCOTUS jurisdiction is not unique: SCOTUS “may not review by a writ of certiorari * * * any action of the Court of Appeals for the Armed Forces in refusing to grant a petition for review.” 10 U.S.C. section 867a(a). But section 867(a) expressly cuts off review in a military context, where judicial interference with military justice has traditionally been curtailed and where collateral relief, in any case, will allow the SCOTUS to hear every case of importance.

To my knowledge, however, the SCOTUS has never been denied the power to review the decisions of territorial courts, legislative courts, state courts, and other non-Article III tribunals when those decisions rule against a federal right. That's what happened in Puerto Rico: An intermediate Puerto Rican court held that there was no federal due process limit to imposing 15 years' worth of retroactive taxation on a corporation that relied on an earlier letter ruling from the Puerto Rican Department of Treasury that the corporation was tax-exempt. In effect, the SG holds that this decision denying a federal constitutional right is simply unreviewable.

The ghost of John C. Calhoun ought to be celebrating. On the SG's opinion, the Puerto Rican courts have carte blanche to rule against federal defenses -- ERISA, section 301 of the Wagner Act, the Due Process clause, the First Amendment's free speech clause, the Thirteenth Amendment, the Takings clause, you name it -- free from SCOTUS's oversight. As a federalism-lovin' kind of guy, I ought to be celebrating as well.

But even federalism lovers can admit that there can be too much of a good thing. Yes, I know: Puerto Rico is constitutionally unique, suspended between the status of a state and a territory since 1952. I suppose that the SG's position might be defended as a way to vindicate Puerto Rican autonomy from the feds. But even states enjoying full state autonomy, are supposed to bow to SCOTUS's interpretation of federal law, right? Do we really want to exempt Puerto Rico from Martin v. Hunter's Lessee?

If the SCOTUS denies cert, of course, we will never know why. One might think that the SG's revolt against Martin and embrace of the spirit of Spencer Roane deserves a bit more explanation than a tight-lipped cert denial. One might argue, therefore, that the SG's jurisdictional argument against granting certiorari is, in fact, the best reason for granting cert. I like federalism as much as the next guy, but I am not quite sure that I want to go back to the nullifying days of the antebellum period to secure it. But I'd like full briefing and oral argument before SCOTUS before we walk down that path.

Posted by Rick Hills on June 12, 2010 at 12:24 AM in Constitutional thoughts | Permalink


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I would like to add my 2cents to;[Saturday, June 12, 2010, Spencer Roane in the SG's Office? The United States denies that SCOTUS has jurisdiction over Puerto Rico.] As a dual citizen if there is such a thing, I see where the US has gone from Micro-managing to macro managing and now into anarchy, as to the treatment of Puerto Rico and its people in Puerto Rico and the US living Puerto Ricans. Having their Judicial(US) nose in everything was America's way of being overly intrusive in Puerto Rico development. Does anyone know about the double taxation of Puerto Ricans in America? I say this due to the extent the exposure of dirty laundry as to how Puerto Ricans are being under-represented in ALL fields(funding, grants,stimulous,etc.)privy to the extent of not getting Federal funds for schools, elderly, poor and families within Puerto Rico; after US-Puerto Ricans are shelling out per capital the burden of taxes for ALL Latinos within America. This exposure has also demonstrated the lack of imposing any scrutiny of US Law for criminal activities against Puerto Ricans by illegal Latinos and criminal organized business leaders that have purposely sought to destroy thousands of Puerto Rican businesses to promote illegals; and their Latino countries criminal organizations and their coutries economies. Having said that the absence of ALL and any responsibilty by the US Government and the Judicial Branch is short of a kangaroo court and the continued lack of any immediate structure states that Puerto Rico is better off seeking international support than by the existing powers that be. [email protected]

Posted by: PR Legal Help | Sep 12, 2010 1:42:09 PM

Hi - great piece, thought I would tell you I enjoyed the analysis. I live in Spencer Roane's old boyhood/early-adult home ("Mahockney" in Essex County, VA) and have done quite a bit of reading on his views/rulings. I laughed out loud when I came upon your post. If I see SR's ghost wandering around the house, I'll let him know that his agenda is being pursued in, of all places, the SG's office on, of all topics, Puerto Rico! :)

Posted by: Lewis Shepherd | Aug 2, 2010 2:16:53 AM

Bottom line. Will the Supreme Court of the United States revive the pre-Civil War argument of nullification?

Posted by: a w maldonado | Jun 21, 2010 5:01:51 PM

The SG’s reading of 28 U.S.C § 1258 presents to the legal community an interpretation that is quite surprising and obviously unexpected. The implications of the SG’s reading of 28 U.S.C § 1258 is not only to propose an interpretation that would deprive Triple-S of a right to challenge in the United States Supreme Court the decision of an agency that clearly has the indicia of a violation of due process; it proposes an interpretation that denies any resident of Puerto Rico the right to present to the United States Supreme Court a Constitutional claim that was not addressed to or ignored by Puerto Rico’s Supreme Court. It is quite clear that the results of this reading are illogical and unreasonable as it proposes an interpretation that qualifies a person’s ability to claim a Constitutional right depending on whether such person is a resident of Puerto Rico or a resident of a State. As argued by Triple-S’s counsel, the language of 28 U.S.C § 1258 as well as its legislative history clearly shows that the intent was to provide Puerto Rico residents the same appellate rights that are enjoyed by residents of the States; in other words, 28 U.S.C § 1258 is to operate in a manner that totally contrary to the SG’s view. Furthermore, the SG’s view of an agency’s power to retroactively revoke a determination issued by the agency to a person and that was relied upon by that person for a number of years, is based on the questionable notion that such action is within the agency’s power to correct prior acts and does not raise any due process considerations. The final tally here is that in accordance to the SG’s view on both of these issues, a resident of Puerto Rico that has suffered a violation of a fundamental due process right runs the risk of not being to able to claim such right before the Court of Last Resort solely because of an incorrect construction of 28 U.S.C § 1258. The issues presented by this case and the SG’s expressions highlight the fact that this is a unique opportunity that has been presented to the Supreme Court to clarify the meaning of 28 U.S.C § 1258 as well as to clarify the Constitutional limitations that apply to agencies in invoking their rule making and adjudication functions.

Posted by: Juan R. Rivera Font | Jun 18, 2010 12:08:59 PM

It seems that Section 1258 was meant to be equivalent to 1257 and that the U.S. Supreme Court will view it that way.

Before Puerto Rico became a Commonwealth in 1952, the judgments of its Supreme Court were reviewable in the First Circuit, pursuant to 28 USC §1293: "The courts of appeals for the First and Ninth Circuits shall have jurisdiction of appeals from all final decisions of the supreme courts of Puerto Rico and Hawaii, respectively... ."

In 1956, the First Circuit had to address the question as to whether that section no longer applied to Puerto Rico after its change of status. Chief Judge Magruder wrote:

"Perhaps it can be said that in view of the present commonwealth status of Puerto Rico it would be more appropriate if the judgments of the Supreme Court of Puerto Rico were reviewable only in the Supreme Court of the United States, on the same basis of jurisdiction as is presently given to the Supreme Court of the United States to review judgments of the highest court of a state. The Congress, however, has not seen fit to provide for such direct review in the Supreme Court of the United States; it may be that this is one of those loose ends left unprovided for in Public Law 600 which the Congress will tidy up in due time by further legislation." Figueroa v. People of Puerto Rico, 232 F.2d 615 (1st Cir. 1956).

That tidying up occurred in 1961 with the adoption of section 1258. The House Judicial Committee proposed the legislation precisely because of the change in Puerto Rico's status from that of a territory to a Commonwealth. That change in status justified the new legislation because as the First Circuit had stated in Mora v Mejias, 206 F.2D 377 (1st Cir. 1953), "[With the adoption of its Commonwealth status] Puerto Rico has thus not become a State in the federal Union like the 48 States, but it would seem to have become a State within a common and accepted meaning of the word."

The textual difference between 1257 –“[f]inal judgments or decrees rendered by the highest court of a State in which a decision could be had”– and 1258 –“[f]inal judgments or decrees rendered by the Supreme Court of the Commonwealth" seems owed to the fact that court structures and terminology vary from State to State. The highest court in New York, for instance, is called "Court of Appeals", while that of California is called "Supreme Court". Texas has two "highest courts", the Supreme Court and the Court of Criminal Appeals. In Puerto Rico the highest court "in which a decision could be had" is always the Supreme Court of Puerto Rico. Since 1258 is exclusively a Puerto Rico provision there was no need to adopt the same language as 1257.

Posted by: Jose Hernandez Mayoral | Jun 18, 2010 7:27:52 AM

I find it ironic that the USDOJ under President Obama takes a jurisdiction stripping position in this case -- that a potential violation of federal constitutional rights is not reviewable by the U.S. Supreme Court -- because of the purported difference in the language used by Congress in 28 U.S.C. Sec. 1258. Congress may not strip the Supreme Court of jurisdiction over those cases that are within its original jurisdiction. This includes "... all Cases ... in which a State shall be Party ..." per Art. III -- and has included Puerto Rico.

As Prof. Hills and Mr. Romeo lay out, U.S. citizens in Puerto Rico may soon find themselves in a legal world that is a cross between "the nullifying days of the antebellum period" and an arbitrary system of justice as seen in some Latin-American countries -- all resulting in more politically motivated government action in Puerto Rico. The DOJ's position is not consistent with President Obama's promise to strengthen and protect civil liberties. In the end, who is the protector of last resort vis-a-vis the oppressive power of the state? Well, in Puerto Rico, the USDOJ essentially argues it can be the state.

Posted by: Hermann Ferre, Esq. | Jun 17, 2010 8:17:10 PM

I write to comment on what I consider to be the ill-conceived and dangerous position taken by the U.S. Department of Justice (“USDOJ”) in its Brief as Amicus Curiae currently before the United States Supreme Court in Triple-S Management Corporation v. Municipal Revenue Collection Center, No. 09-233.

The USDOJ takes the unsustainable position that federal constitutional rights of residents of Puerto Rico can be denied without federal review, so long as the Puerto Rico Supreme Court refuses to review an appeal from a final judgment of the Puerto Rico Court of Appeals. In the Triple-S case, the Municipal Revenue Collection Center (known locally as the “CRIM” for its acronym in Spanish), arbitrarily, capriciously -- and retroactively -- imposed 15 years of tax liability on the best known, and most respected, insurance company in Puerto Rico. This was done, notwithstanding Triple-S’s meeting of every legal and regulatory requirement required of it by the local Department of Treasury starting in 1979; notwithstanding Treasury’s re-affirmation of its rulings in 1987 and in 1998; and notwithstanding the concurrent opinion of 2 former Attorneys Generals on the propriety of the exemption.

In 2003, without any basis to explain rejection of its position held –- and reaffirmed -- for 24 years, Treasury revoked the exemption previously granted to Triple-S. Faced with this situation, Triple-S and Treasury entered into an agreement wherein Triple-S would, essentially, only pay income tax for taxable year 2003. In 2006, to everyone’s surprise, Treasury revoked Triple-S’s property tax exemption, ab initio, arguing that its own rulings dating back to 1979 were incorrect and they did not create a property or any other right in Triple-S’s favor. The trial and appellate courts agreed, holding that Triple-S’s exemption was void, and ultra vires. The trial and appellate courts also denied discovery on the 4 year statute of limitations. The Puerto Rico Supreme Court denied review.

Surprisingly and suspiciously, based on an obscure and unsupported interpretation of 28 USC section 1258, now the USDOJ urges the U.S. Supreme Court to deny review arguing that it lacks jurisdiction to hear an denial of certiorari by the P.R. Supreme Court (a final order) of a final order by the P.R. Court of Appeals. Save the USDOJ, no one seriously entertains the notion that Puerto Rico is the sole US Territory or State where its residents cannot seek review of final judgments by the highest court of the territory or state. Such position is legally incorrect, unsupported and untenable, as Triple-S has conclusively established in its Response to the Brief of the United States.

I write to underscore that the USDOJ’s position is also seriously irresponsible from a business standpoint. Finality and certainty of government determinations is the foundation of business and investor confidence in Puerto Rico, as it is in the rest of our Nation. Without finality, initial and long term investment and growth is impossible, particularly in Puerto Rico.

Arbitrary and capricious imposition of retroactive tax on a legitimate business enterprise that explicitly relied on 24 years of clear and affirmative government rulings in its favor will destroy an already fragile business environment in the island where changing governmental and political whims have for far too long had an undesirable effect on the independence of judicial determinations in state courts. Such a ruling, if unreviewable by the US Supreme Court, will only embolden island politicos to take actions harming established rights that are otherwise unthinkable in the rest of our Nation. Armed with the certainty of un-reviewability, local political interests will seek to influence the issuance of decisions not to review rulings from the PR Court of Appeals. Given the concentration of power in the hands of a privileged few, this will not be a difficult task. This, in turn, will destroy the certainty of fair and full judicial process and review that ensures uniformity with the rest of our Nation, and will be nothing but a short step away from the historic chaos, unreliability and arbitrary nature of justice that have plagued some Latin-American countries in the past.

I must also underscore that the USDOJ is irresponsibly – although apparently unwittingly -- taking a position that will have deep and undesirable political and status-related ramifications. Granting a veto right to the PR Supreme Court over review by the US Supreme Court will only inflame anti-business and anti-US separatists in their (to date) loosing battle to deny equal treatment to the 4 million US citizens that call Puerto Rico home. It will lend incorrect legal and factual support to an extreme minority (2% in the last elections) to argue that Puerto Rico somehow has the right (or the desire) to veto application of federal law/rights via the PR Supreme Court. It will also certainly engender litigation specifically designed to force that conclusion. Submission of incorrect legal theories that fan separatism is the hallmark of incorrect legal analysis and policy, as well as a violation of the neutrality expected of an agency such as the USDOJ.

The USDOJ’s position only encourages lack of uniformity in our Nation and incentivizes Puerto Rico to act as a rogue jurisdiction with regards to federal constitutional rights. The USDOJ must reconsider and withdraw is incorrect and uninformed political argument currently before the Court. Failure to do so will have a profoundly negative effect on business investment and finality of judgments in Puerto Rico. Indeed, it will have an unintended, but deeply troubling (and heretofore rejected) political effects on the Island.

Xavier Romeu, Esq.

From 1997 to 2000, at different times, I served Puerto Rico as Secretary of Commerce and Economic Development; Executive Director of the Puerto Rico Industrial Development Company; and as Executive Director of the Puerto Rico Federal Affairs Administration in Washington, D.C.

Posted by: Xavier Romeu, Esq | Jun 17, 2010 5:59:56 PM

Professor Hills raises some fascinating issues that go to the core of Puerto Rico’s political relationship with the United States. I can only disagree with him on one point: John C. Calhoun’s ghost is surely convulsing, not celebrating. It is one thing to oppose the ratification of the U.S. Constitution, as Spencer Roane did in 1788, based on a firm belief that each state should be its own supreme judge, and quite another to argue that a U.S. territory can exercise that right by simply having its supreme court deny cert on a federal issue, while the fifty states of the union are fully subject to federal appellate jurisdiction. Whether this anomaly results from a textual reading of 28 u.s.c. section 1258 or from a delegation by Congress under the territorial clause, it remains a preposterous idea.

Posted by: Rafael Mullet | Jun 16, 2010 2:45:40 PM

To imply that Puerto Rico can isolate its decisions on federal constitutional and statutory law from any federal review, as the Solicitor General has done here, simply by having its Supreme Court deny certiorari is to grant an unprecedented power over federal law to non-Article III courts. Supporting that position with a vague allusion to the “different system” of laws of Puerto Rico makes no sense. We are talking about decisions that affect federal constitutional and statutory rights. The traditional understanding of Puerto Rico’s present territorial status has been that if federal rights were meant to apply differently in Puerto Rico, that was a decision for Congress to make and for the U.S. Supreme Court to eventually validate or reject. But to say that the extent to which federal rights apply in Puerto Rico has been delegated by Congress to Puerto Rico itself is unprecedented. Even if that delegation did in fact occur (because of the difference in wording used in the corresponding jurisdictional statutes) the question then becomes whether that delegation is constitutional. How far can Congress go in the exercise of plenary powers under the Territorial Clause of the Constitution? Could Congress delegate this power to decide the scope of federal rights in a particular jurisdiction (which certainly is not a power reserved by the states under the Tenth Amendment) constitutionally to a territory? That has never been the understanding of U.S. citizens born and living in Puerto Rico nor of U.S. citizens born in the mainland but moving to Puerto Rico. The position taken by the S.G. makes the need for the granting of certiorari in this case much more pressing.

Posted by: Rafael Escalera | Jun 15, 2010 2:03:41 PM

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