The US Supreme Court ruled unanimously Monday in Financial Oversight and Management Board for Puerto Rico v. Aurelius Investment, LLC that the president did not require the Senate’s advice and consent before making appointments to the Financial Oversight and Management Board in Puerto Rico based on the Appointments Clause of the Constitution.
The Oversight Board was created by Congress in 2016 in the midst of a fiscal crisis in Puerto Rico. The board’s voting members were “to be appointed by the President without the Senate’s advice and consent.” US President Barack Obama selected the board’s members, and they subsequently filed bankruptcy proceedings. Their plans included major restructuring to allow Puerto Rico to “recover from an unsustainable debt burden and decades of fiscal mismanagement.”
As the board members continued to execute decision-making authority, creditors moved to dismiss these proceedings in an argument that the appointment of the board members was done in violation of the Appointments Clause.
The Supreme Court held that the Appointments Clause, which applies to “officers of the United States,” generally can apply to those of the nation’s territories as well. In this case, however, the appointments did not violate the Constitution because, when the appointed individual is performing primarily local duties, they are not considered an officer of the United States. Thus, the primarily local duties of the board members signified that they were not operating as officers of the United States, and the president thus did not require the Senate’s approval to appoint them.