Financial Oversight and Management Bd. for Puerto Rico v. Aurelius Investment, LLC ( 2020 )

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4 FINANCIAL OVERSIGHT AND MANAGEMENT BD. FOR
PUERTO RICO v. AURELIUS INVESTMENT, LLC
SOTOMAYOR, J., concurring in judgment
the people of Puerto Rico for approval. Id., at 223.
In 1952, “both Puerto Rico and the United States ratified
Puerto Rico’s Constitution.” Sánchez Valle, 579 U. S., at
___ (BREYER, J., dissenting) (slip op., at 8). The people of
Puerto Rico first approved the draft Constitution in a refer-
endum. Congress then approved the draft Constitution
with modifications, noting the caveat that it “shall become
effective” only when Puerto Rico “declare[s] in a formal res-
olution its acceptance.” 66 Stat. 327–328. Finally, the con-
stitutional convention approved the modified Constitution.
Thus, although the terms of the compact provided for Con-
gress’ approval, “when such constitution did go into effect
pursuant to the resolution of approval by the Congress, it
became what the Congress called it, a ‘constitution’ under
which the people of Puerto Rico organized a government of
their own adoption.” Figueroa v. Puerto Rico, 232 F. 2d 615,
620 (CA1 1956) (citation omitted). “The Commonwealth’s
power, the [Puerto Rico] Constitution proclaims, ‘emanates
from the people and shall be exercised in accordance with
their will, within the terms of the compact agreed upon be-
tween the people of Puerto Rico and the United States.’ ”
Sánchez Valle, 579 U. S., at ___ (slip op., at 4).
With the passage of Public Law 600 and the adoption and
recognition of the Puerto Rico Constitution, “the United
States and Puerto Rico . . . forged a unique political rela-
tionship, built on the island’s evolution into a constitutional
democracy exercising local self-rule.” Id., at ___ (slip op., at
2); cf. Calero-Toledo, 416 U. S., at 672 (noting with approval
the view that, after Public Law 600, Puerto Rico became “a
political entity created by the act and with the consent of
the people of Puerto Rico and joined in union with the
United States of America under the terms of the compact”
(quoting Mora v. Mejias, 206 F. 2d 377, 387 (CA1 1953))).
Of critical import here, the Federal Government “relin-
quished its control over [Puerto Rico’s] local affairs[,]
Cite as: 590 U. S. ____ (2020) 5
SOTOMAYOR, J., concurring in judgment
grant[ing] Puerto Rico a measure of autonomy comparable
to that possessed by the States.” Examining Bd. of Engi-
neers, Architects and Surveyors v. Flores de Otero, 426 U. S.
572, 597 (1976). Indeed, the very “purpose of Congress in
the 1950 and 1952 legislation was to accord Puerto Rico the
degree of autonomy and independence normally associated
with States of the Union.” Id., at 594; see also S. Rep. No.
1779, 81st Cong., 2d Sess., 2 (1950) (Public Law 600 was
“designed to complete the full measure of local self-govern-
ment in” Puerto Rico); H. R. Rep. No. 2275, 81st Cong., 2d
Sess., 6 (1950) (Public Law 600 was a “reaffirmation by the
Congress of the self-government principle”).1 The upshot is
that “Puerto Rico, like a State, is an autonomous political
entity, ‘ “sovereign over matters not ruled by the [Federal]
Constitution.” ’ ” Rodriguez v. Popular Democratic Party,
457 U. S. 1, 8 (1982) (quoting Calero-Toledo, 416 U. S., at
673). And only by holding out that guarantee to the United
Nations has the Federal Government been able to disclaim
certain continuing obligations it previously owed with re-
spect to Puerto Rico under the United Nations Charter. See
infra, at 11–12.
B
In the decades that followed, Puerto Rico underwent fur-
ther changes as a Commonwealth. For many years, the is-
land experienced dynamic growth, increasing its gross na-
tional product more than fourfold from 1950 to 1971.
Cheatham, Council on Foreign Relations, Puerto Rico: A
U. S. Territory in Crisis (Feb. 13, 2020). In 1976, after the
——————
1 To be sure, Public Law 600 reserved certain limited powers to Con-
gress (some of which were soon repealed). See ante, at 12–13. But those
narrow reservations of federal control did not purport to diminish the full
measure of territorial self-governance conferred upon the people of
Puerto Rico through Public Law 600 and the Puerto Rico Constitution.
See 39 Stat. 953; 64 Stat. 319–320.
6 FINANCIAL OVERSIGHT AND MANAGEMENT BD. FOR
PUERTO RICO v. AURELIUS INVESTMENT, LLC
SOTOMAYOR, J., concurring in judgment
revised Federal Tax Code conferred preferential tax treat-
ment on productive industries in Puerto Rico, Puerto Rico
developed robust pharmaceutical and manufacturing sec-
tors. Issacharoff, Bursak, Rennie, & Webley, What Is
Puerto Rico? 94 Ind. L. J. 1, 27 (2019).
Eventually, however, the island and its people confronted
several economic setbacks. Congress repealed Puerto Rico’s
favorable tax credits, and manufacturing growth deflated,
precipitating a prolonged recession. Steady outmigration
correlated with persistently high unemployment rates
greater than 8 percent. Dept. of Labor, Bureau of Labor
Statistics, Databases, Tables & Calculators by Subject
(May 28, 2020). Deprived of its primary sources of income,
the Commonwealth began borrowing heavily. The island’s
outstanding debts rose to approximately $70 billion, a sum
greater than its annual economic output. Puerto Rico’s
credit ratings were downgraded to junk levels, D. Austin,
Congressional Research Service, Puerto Rico’s Current Fis-
cal Challenges 4, 13 (June 3, 2016), rendering borrowing
practically impossible. Without any realistic ability to set
its finances on the right course, the island declared bank-
ruptcy in 2016.
Months later, Hurricane Maria made landfall, causing
immense devastation and a humanitarian emergency the
likes of which had not been seen in over a century. The
island suffered thousands of casualties and an estimated
$90 billion in damages. Most recently, significant earth-
quakes have further rattled an already shaken population
and economy still recovering from the impact of Hurricane
Maria. Robles, Months After Puerto Rico Earthquakes,
Thousands Are Still Living Outside, N. Y. Times, Mar. 1,
2020.
C
Congress passed the Puerto Rico Oversight, Manage-
ment, and Economic Stability Act (PROMESA), 130 Stat.
Cite as: 590 U. S. ____ (2020) 7
SOTOMAYOR, J., concurring in judgment
549, 48 U. S. C. §2101 et seq., in the midst of Puerto Rico’s
dramatic reversal of fortune, with the aim of mitigating the
island’s “severe economic decline,” see 48 U. S. C.
§2194(m)(1). To that end, the statute establishes a Finan-
cial Oversight and Management Board to oversee the is-
land’s finances and restructure its debts. See ante, at 3–4;
Issacharoff, 94 Ind. L. J., at 30–31.
The Board’s decisions have affected the island’s entire
population, particularly many of its most vulnerable citi-
zens. The Board has ordered pensions to be reduced by as
much as 8.5 percent, a measure that threatens the sole
source of income for thousands of Puerto Rico’s poor and el-
derly. Walsh & Russell, $129 Billion Puerto Rico Bank-
ruptcy Plan Could Be Model for States, N. Y. Times, Sept.
29, 2019. Other proposed cuts take aim at already depleted
healthcare and educational services. It is under the yoke of
such austerity measures that the island’s 3.2 million citi-
zens now chafe.
PROMESA does not provide for the appointment of Board
members according to the straightforward methods set out
in the Appointments Clause. U. S. Const., Art. II, §2, cl. 2
(requiring principal “Officers of the United States” to be
nominated by the President, with Senate advice and con-
sent). Instead, the statute prescribes a labyrinthine proce-
dure by which the Speaker of the House, majority leader of
the Senate, minority leader of the House, and minority
leader of the Senate each submit to the President separate
lists with any number of candidates; and the President, in
turn, selects individuals from each of those lists, plus an
individual in his sole discretion. See §101(e), 130 Stat. 554–
555.2 With only one exception, then, the President is not
——————
2 Specifically, PROMESA provides that “[t]he Board shall be comprised
of one Category A member, one Category B member, two Category C
members, one Category D member, one Category E member, and one
Category F member.” §101(e)(1)(B), 130 Stat. 554. The Speaker of the
House submits “separate, non-overlapping list[s]” for the Category A and
8 FINANCIAL OVERSIGHT AND MANAGEMENT BD. FOR
PUERTO RICO v. AURELIUS INVESTMENT, LLC
SOTOMAYOR, J., concurring in judgment
“singly and absolutely” responsible for any members of the
Board. The Federalist No. 77, p. 461 (C. Rossiter ed. 1961)
(A. Hamilton) (Appointments Clause ensures that “[t]he
blame of a bad nomination . . . fall[s] upon the President
singly and absolutely”). And with no exceptions, the Senate
fails to advise or consent to the President’s selections.
Despite the Board’s wide-ranging, veto-free authority
over Puerto Rico, the solitary role PROMESA contemplates
for Puerto Rican-selected officials is this: The Governor of
Puerto Rico sits as an ex officio Board member without any
voting rights. §101(e)(3), 130 Stat. 555. No individual
within Puerto Rico’s government plays any part in deter-
mining which seven members now decide matters critical to
the island’s financial fate.
II
A
In concluding that the Board members are territorial of-
ficers not subject to the strictures of the Appointment
Clause, the Court does not meaningfully address Puerto
Rico’s history or status. Nor need it, as the parties do not
discuss the potential consequences that Congress’ recogni-
tion of complete self-government decades ago may have on
the Appointments Clause analysis. But in my view, how-
ever one distinguishes territorial officers from federal offic-
ers (whether under the Court’s “primarily local” test, ante,
at 14, or some other standard), the longstanding compact
between the Federal Government and Puerto Rico raises
——————
Category B members, the majority leader for the Senate submits a list
for the two Category C members, the majority leader of the House sub-
mits a list for the Category D member, and the minority leader of the
Senate submits a list for the Category E member. §101(e)(2)(A), id., at
554–555. Finally, “the Category F member may be selected in the Pres-
ident’s sole discretion.” §101(e)(2)(A)(vi), id., at 555. Many other condi-
tions apply to the lists submitted and the individuals who may appear
on them. See generally §§101(e)–(f ), id., at 554–556.
Cite as: 590 U. S. ____ (2020) 9
SOTOMAYOR, J., concurring in judgment
grave doubts as to whether the Board members are territo-
rial officers not subject to the Appointments Clause. When
Puerto Rico and Congress entered into a compact and rati-
fied a constitution of Puerto Rico’s adoption, Congress ex-
plicitly left the authority to choose Puerto Rico’s govern-
mental officers to the people of Puerto Rico. That turn of
events seems to give to Puerto Rico, through a voluntary
concession by the Federal Government, the exclusive right
to establish Puerto Rico’s own territorial officers.
No less than the bedrock principles of government upon
which this Nation was founded ground this proposition.
When the Framers resolved to build this Nation on a repub-
lican form of government, they understood that the Ameri-
can people would have the authority to select their own gov-
ernmental officers. See, e.g., The Federalist No. 39, at 251
(J. Madison) (“[W]e may define a republic to be . . . a gov-
ernment which derives all its powers directly or indirectly
from the great body of the people”); A. Amar, America’s
Constitution: A Biography 278–279 (2005) (“[T]he general
understanding of republicanism across America” at the
founding embraced a concept of government “in which ‘the
people are sovereign’; in which ‘the people are consequently
the fountain of all power’; in which ‘all authority should
flow from the people’ ”). Core to the 1950s “compact” be-
tween the Federal Government and Puerto Rico was that
Puerto Rico’s eventual constitution “shall provide a repub-
lican form of government.” §2, 64 Stat. 319 (codified in 48
U. S. C. §731c). Thus, “resonant of American founding prin-
ciples,” the Puerto Rico Constitution set forth a tripartite
government “ ‘republican in form’ and ‘subordinate to the
sovereignty of the people of Puerto Rico.’ ” Sánchez Valle,
579 U. S., at ___ (slip op., at 4) (quoting P. R. Const., Art. I,
§2); see also Torres v. Puerto Rico, 442 U. S. 465, 470 (1979).
“[T]he distinguishing feature” of such “republican form of
government,” this Court has recognized over and again, “is
10 FINANCIAL OVERSIGHT AND MANAGEMENT BD. FOR
PUERTO RICO v. AURELIUS INVESTMENT, LLC
SOTOMAYOR, J., concurring in judgment
the right of the people to choose their own officers for gov-
ernmental administration, and pass their own laws in vir-
tue of the legislative power reposed in representative bod-
ies, whose legitimate acts may be said to be those of the
people themselves.” In re Duncan, 139 U. S. 449, 461 (1891)
(discussing the republican governments of the States); see
also Pacific States Telephone & Telegraph Co. v. Oregon,
223 U. S. 118, 149 (1912) (same).
Thus, whatever authority the Federal Government exer-
cised to select territorial officers for Puerto Rico before Con-
gress recognized Puerto Rico’s republican form of govern-
ment, the authority “to choose [Puerto Rico’s] own officers
for governmental administration” now seems to belong to
the people of Puerto Rico. Duncan, 139 U. S., at 461. In-
deed, however directly responsible the Federal Government
was for Puerto Rico’s local affairs before Public Law 600,
those matters might be said to “now procee[d]” in the first
instance “from the Puerto Rico Constitution as ‘ordain[ed]
and establish[ed]’ by ‘the people.’ ” Cf. Sánchez Valle, 579
U. S., at ___ (slip op., at 15) (quoting P. R. Const., Preamble)
(acknowledging “that the Commonwealth’s power to enact
and enforce criminal law now proceeds . . . from the Puerto
Rico Constitution,” “mak[ing] the Puerto Rican populace . . .
the most immediate source of such authority”).
The developments of the early 1950s were not merely
symbolic either; this Court has recognized that the para-
digm shift in relations between Puerto Rico and the Federal
Government carried legal consequences. In Calero-Toledo,
for instance, this Court held that the “enactments of the
Commonwealth of Puerto Rico” were “ ‘State statute[s]’ ”
within the meaning of a federal law requiring a three-judge
court panel to consider any action seeking to enjoin a “‘State
statute.’ ” 416 U. S., at 675–676. The Court reasoned that
Puerto Rico was entitled to similar treatment as the States
under the federal law, due to “significant changes in Puerto
Rico’s governmental structure” in the early 1950s. See id.,
Cite as: 590 U. S. ____ (2020) 11
SOTOMAYOR, J., concurring in judgment
at 670–674. For similar reasons, this Court has recognized
on multiple other occasions that Puerto Rico is akin to a
State in key respects. See, e.g., Flores de Otero, 426 U. S.,
at 597 (Congress granted Puerto Rico “a measure of auton-
omy comparable to that possessed by the States”); Rodri-
guez, 457 U. S., at 8 (“Puerto Rico, like a state, is an auton-
omous political entity”); see also Sánchez Valle, 579 U. S.,
at ___ (BREYER, J., dissenting) (slip op., at 3) (“[T]he paral-
lels between admission of new States and the creation of
the Commonwealth [of Puerto Rico] are significant”).
The compact also had international ramifications, as the
Federal Government repeatedly represented at the time.
Shortly after the ratification and approval of the Puerto
Rico Constitution, federal officials certified to the United
Nations that, for Puerto Rico, the United States no longer
needed to comply with certain reporting obligations under
the United Nations Charter regarding territories “whose
peoples have not yet attained a full measure of self-govern-
ment.” Charter of the United Nations, 59 Stat. 1048, Art.
73, June 26, 1945, T. S. No. 993 (U. N. Charter). According
to federal officials, that was because the people of Puerto
Rico now had “complete autonomy in internal economic
matters and in cultural and social affairs under a Constitu-
tion adopted by them and approved by the Congress.” Mem-
orandum by the Government of the United States of Amer-
ica Concerning the Cessation of Transmission of
Information Under Article 73(e) of the Charter With Regard
to the Commonwealth of Puerto Rico, in A. Fernós-Isern,
Original Intent in the Constitution of Puerto Rico 153 (2d
ed. 2002). To the extent federal law had previously “di-
rected or authorized interference with matters of local gov-
ernment by the Federal Government,” federal officials elab-
orated, “[t]hose laws . . . ha[d] been repealed.” Ibid.; see
also ibid. (“Congress has agreed that Puerto Rico shall
have, under [the Puerto Rico] Constitution, freedom from
12 FINANCIAL OVERSIGHT AND MANAGEMENT BD. FOR
PUERTO RICO v. AURELIUS INVESTMENT, LLC
SOTOMAYOR, J., concurring in judgment
control or interference by the Congress in respect of inter-
nal government and administration”).
Based on those explicit representations, the United Na-
tions General Assembly declared that the people of Puerto
Rico “ha[d] been invested with attributes of political sover-
eignty which clearly identify the status of self-government
attained . . . as that of an autonomous political entity.”
G. A. Res. 748, U. N. GAOR, 8th Sess., Supp. No. 17, U. N.
Doc. A/2630 (Nov. 27, 1953). And consistent with that dec-
laration, the Federal Government promptly stopped com-
plying with the Charter’s reporting obligations with respect
to Puerto Rico (and has never since recommenced). Thus,
in the eyes of the international community looking in, as
well as of the Federal Government looking out, Puerto Rico
has long enjoyed autonomous reign over its internal affairs.
Indeed, were the Federal Government’s representations to
the United Nations merely aspirational, the United States’
compliance with its international legal obligations would be
in substantial doubt. See Lawson & Sloane, The Constitu-
tionality of Decolonization by Associated Statehood: Puerto
Rico’s Legal Status Reconsidered, 50 Boston College L. Rev.
1123, 1127 (2009) (arguing that if Puerto Rico remains “just
another territory subject to Congress’ plenary power under
the Territories Clause,” “the United States . . . is in viola-
tion of its international legal obligations vis-à-vis Puerto
Rico”).
There can be little question, then, that the compact al-
tered the relationship between the Federal Government
and Puerto Rico. At a minimum, the post-compact develop-
ments, including this Court’s precedents, indicate that Con-
gress placed in the hands of the Puerto Rican people the
authority to establish their own government, replete with
officers of their own choosing, and that this grant of self-
government was not an empty promise. That history
prompts serious questions as to whether the Board mem-
bers may be territorial officers of Puerto Rico when they are
Cite as: 590 U. S. ____ (2020) 13
SOTOMAYOR, J., concurring in judgment
not elected or approved, directly or indirectly, by the people
of Puerto Rico.
B
Of course, it might be argued that Congress is neverthe-
less free to repeal its grant of self-rule, including the grant
of authority to the island to select its own governmental of-
ficers. And perhaps, it might further be said, that is exactly
what Congress has done in PROMESA by declaring the
Board “an entity within the territorial government” of
Puerto Rico. §101(c)(1), 130 Stat. 553. But that is not so
certain.
This Court has “ ‘repeatedly stated . . . that absent “a
clearly expressed congressional intention” ’ ” to repeal,
“ ‘[a]n implied repeal will only be found where provisions in
two statutes are in “irreconcilable conflict,” or where the
latter Act covers the whole subject of the earlier one and “is
clearly intended as a substitute.” ’ ” Carcieri v. Salazar, 555
U. S. 379, 395 (2009) (quoting Branch v. Smith, 538 U. S.
254, 273 (2003) (plurality opinion)). Not so, it seems, with
PROMESA on the one hand, and Congress’ 1950 and 1952
legislations on the other. As written, PROMESA is a tem-
porary bankruptcy measure intended to assist in restoring
Puerto Rico to fiscal security. It is not an organic statute
clearly or expressly purporting to renege on Congress’ prior
“gran[t to] Puerto Rico [of] a measure of autonomy compa-
rable to that possessed by the States,” Flores de Otero, 426
U. S., at 597, nor on the concomitant grant of authority to
select officers of its own choosing. It would seem curious to
interpret PROMESA as having done so indirectly, simply
through its characterization of the Board “as an entity
within the territorial government.” §101(c)(1), 130 Stat.
553.
Further, there is a legitimate question whether Congress
could validly repeal any element of its earlier compact with
14 FINANCIAL OVERSIGHT AND MANAGEMENT BD. FOR
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SOTOMAYOR, J., concurring in judgment
Puerto Rico on its own initiative, even if it had been abun-
dantly explicit in its intention to do so. The truism that
“one Congress cannot bind a later Congress,” Dorsey v.
United States, 567 U. S. 260, 274 (2012), appears to have its
limits: As scholars have noted, certain congressional ac-
tions are not subject to recantation. See, e.g., Magruder,
The Commonwealth Status of Puerto Rico, 15 U. Pitt.
L. Rev. 1, 14 (1953) (listing as examples the congressional
grant of independence to the Philippine Islands and con-
gressional grant of private title to public lands under home-
stead laws); Issacharoff, 94 Ind. L. J., at 14 (“Once a Con-
gress has disposed of a territory, of necessity it binds future
Congresses to the consequences of that decision”); T. Aleini-
koff, Semblances of Sovereignty: The Constitution, the
State, and American Citizenship 90 (2002) (“The granting
of neither statehood nor independence may be revoked, nor
may land grants or other ‘vested interests’ be called back by
a subsequent Congress”).
Plausible reasons may exist to treat Public Law 600 and
the Federal Government’s recognition of Puerto Rico’s sov-
ereignty as similarly irrevocable, at least in the absence of
mutual consent. Congress made clear in Public Law 600
that the agreement between the Federal Government and
Puerto Rico was “in the nature of a compact.” 64 Stat. 319.
That “solemn undertaking, based upon mutual consent, . . .
of such profound character between the Federal Govern-
ment and a community of U. S. citizens,” has struck many
as “incompatible with the concept of unilateral revocation.”
E.g., Report of the United States-Puerto Rico Commission
on the Status of Puerto Rico 12–13 (1966); see also A.
Leibowitz, Defining Status: A Comprehensive Analysis of
United States Territorial Relations 172–173 (1989) (de-
scribing how “many in the Congress” understood Public
Law 600 to constitute “an irrevocable grant of authority in
local affairs with an understanding of mutual consent being
required before Congress would resolve the ultimate status
Cite as: 590 U. S. ____ (2020) 15
SOTOMAYOR, J., concurring in judgment
question or change the status of the Commonwealth”). In-
deed, shortly after Congress approved the Puerto Rico Con-
stitution, federal officials expressly represented to the
United Nations that the compact was of a “bilateral na-
ture,” such that its “terms [could] be changed only by com-
mon consent.” F. Bolton, U. S. Rep. to the Gen. Assembly,
Statement to U. N. Committee IV (Trusteeship) (Nov. 3,
1953), reprinted in 29 Dept. State Bull. 802, 804 (1953); see
also Press Release No. 1741, U. S. Mission to the United
Nations, Statement by M. Sears, U. S. Rep. in the Comm.
on Information From Non-Self Governing Territories 2
(Aug. 28, 1953) (“[A] compact . . . is far stronger than a
treaty” because it “cannot be denounced by either party un-
less it has the permission of the other”).3
All of this presses up against broader questions about
Congress’ power under the Territories Clause of Article IV,
——————
3 In opting to proceed with Puerto Rico’s Commonwealth endeavor by
way of compact, Public Law 600 was not entirely without precedent.
When Congress enacted the Northwest Ordinance prior to Ratification
to govern the newly acquired Northwest Territory, it provided for a cat-
alog of fundamental rights, styled as “articles of compact between the
original States and the people and States in the said territory” that
would “forever remain unalterable, unless by common consent.” Act of
Aug. 7, 1789, 1 Stat. 52, n. (a) (reproducing the Northwest Ordinance of
1787). That understanding of a compact between the Federal Govern-
ment and the Territories was the only extant precedent for the compact
language in Public Law 600, and proponents of Public Law 600 were vo-
cal in their reliance on the Northwest Ordinance as a model. See Lawson
& Sloane, The Constitutionality of Decolonization by Associated State-
hood: Puerto Rico’s Legal Status Reconsidered, 50 Boston College L. Rev.
1123, 1149, n. 142 (2009) (prior to Public Law 600, “[t]he term ‘compact’
. . . had seldom appeared in U. S. law,” with the exception of the North-
west Ordinance and subsequent organic statutes modeled after the
Northwest Ordinance); J. Trías Monge, Puerto Rico: The Trials of the
Oldest Colony in the World 111 (1997) (discussing debate among the
drafters of Public Law 600 about whether to adopt the precise compact
language in the Northwest Ordinance).
16 FINANCIAL OVERSIGHT AND MANAGEMENT BD. FOR
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SOTOMAYOR, J., concurring in judgment
U. S. Const., Art. IV, §3, cl. 2, the purported source of legis-
lative authority for enacting PROMESA, see §101(b)(2), 130
Stat. 553; ante, at 5. May Congress ever simply cede its
power under that Clause to legislate for the Territories, and
did it do so nearly 60 years ago with respect to Puerto Rico?
If so, is PROMESA itself invalid, at least insofar as it holds
itself out as an exercise of Territories Clause authority?
This Court has never squarely addressed such questions,
except perhaps to acknowledge that Congress’ authority un-
der the Territories Clause may “continu[e] until granted
away.” National Bank v. County of Yankton, 101 U. S. 129,
133 (1880); cf. Cincinnati Soap Co. v. United States, 301
U. S. 308, 319 (1937) (recognizing that a statute preparing
the Philippine Islands for independence from the United
States “brought about a profound change in the status of
the islands and in their relations to the United States,” such
that “the power of the United States has been modified,”
even while “it has not been abolished”).
After all, the Territories Clause provides Congress not
only the power to “make all needful Rules and Regulations
respecting the Territor[ies],” but also the power to “dispose
of ” them, which necessarily encompasses the power to re-
linquish authority to legislate for them. U. S. Const., Art.
IV, §3, cl. 2. And some have insisted that the power to cede
authority exists no less in the absence of full “dispos[al]”
through independence or Statehood. See Aleinikoff, Sem-
blances of Sovereignty, at 77 (“It has been strongly argued
that” with “the establishment of commonwealth status,”
“Congress lost general power to regulate the internal affairs
of Puerto Rico”).
Still, the parties here do not dispute Congress’ ability to
enact PROMESA under the Territories Clause in the first
place; nor does it seem strictly necessary to call that matter
into question to resolve the Appointments Clause concern pre-
sented here. Despite the “full measure of self-government”
the island supposedly enjoys, U. N. Charter, Art. 73; see
Cite as: 590 U. S. ____ (2020) 17
SOTOMAYOR, J., concurring in judgment
also supra, at 4–5, 9–12, Puerto Rico can well remain a
“Territory” subject to some measure of Congress’ Territories
Clause authority. But even assuming that the Territories
Clause thus enables Congress to enact federal laws “re-
specting” Puerto Rico, U. S. Const., Art. IV, §3, cl. 2, still
some things the Clause does not necessarily do: It does not
necessarily allow Congress to repeal by mere implication its
prior grant of authority to the people of Puerto Rico to
choose their own governmental officers. It does not neces-
sarily give Congress license to revoke unilaterally an in-
strument that may be altered only with mutual consent.
And it does not necessarily permit Congress to declare by
fiat that the law must treat its exercise of authority under
the Territories Clause as territorial rather than federal, ir-
respective of the compact it entered with the people of
Puerto Rico leaving complete territorial authority to them.
Cf. Hernández Colón, The Evolution of Democratic Govern-
ance Under the Territorial Clause of the U. S. Constitution,
50 Suffolk U. L. Rev. 587, 605 (2017) (after 1952, “Congress
partially relinquished its territorial powers over Puerto
Rico’s internal affairs, as recognized in Sanchez Valle,” even
while “Congress continues to retain territorial powers in
federal affairs” (emphasis added)).
III
Nor is it significant that Congress has historically pro-
vided for the appointment of officers who perform duties re-
lated to the Territories through methods other than those
prescribed by the Appointments Clause. Those methods
may be permissible up to a point in a Territory’s develop-
ment. But that historical practice does not, in my view, re-
solve the far more complex question whether Congress can
continue to act in that manner indefinitely or long after
granting Territories complete self-government.
Essentially none (if any) of the allegedly nonconforming
18 FINANCIAL OVERSIGHT AND MANAGEMENT BD. FOR
PUERTO RICO v. AURELIUS INVESTMENT, LLC
SOTOMAYOR, J., concurring in judgment
appointments referenced by the parties occurred in circum-
stances where, as in the case of Puerto Rico, Congress pre-
viously granted the Territories complete home rule. See in-
fra, at 19–21, and nn. 4–5. Instead, they largely occurred
during the initial or transitional stages of a Territory’s ex-
istence, when often the terms of the organic statute estab-
lishing the Territory expressly provided for the Federal
Government to act on behalf of the Territory. (After all, in
newly established Territories, no recognized territorial gov-
ernment existed until the organic statute established one.)
Because in that state of affairs, an organic statute plainly
contemplated that Congress had authority to establish of-
fices for the Territory, such congressionally established of-
fices could fairly—indeed, necessarily—be treated as “terri-
torial” to the extent they were tasked with territorial
duties.
Does that necessarily remain the case if Congress later
grants or establishes complete territorial self-government?
As Puerto Rico’s history may demonstrate, it is seemingly
at that point that Congress purports to recognize that the
Territory itself (not the Federal Government) wields au-
thority over matters of the Territory, including the ability
to select its own territorial officers. Perhaps it is also at
that point that a distinction between territorial officers and
federal officers crystallizes: Territorial officers are those
who derive their authority from the people of the Territory;
federal officers are those who derive their authority from
the Federal Government. And here, the Board members in-
disputably are selected by the Federal Government, under
a statute passed by Congress that specifies not just their
governance responsibilities but also the priorities of their
decisionmaking. See ante, at 3–4.
The scores of historical vignettes highlighted by petition-
ers, see, e.g., Brief for Petitioner Financial Oversight and
Management Board for Puerto Rico 28–33; Brief for Peti-