The U.S. Supreme Court is again mulling a request to overrule the Insular Cases, a set of decisions made in the early 1900s that established relations between the federal government and its newly acquired overseas territories.
This time, the issue has been raised in a case involving a federal financial oversight board’s decision to downgrade retirement benefits for teachers in Puerto Rico.
Advocates for overruling the Insular Cases have been trying to find a legal case that they could use as a vehicle to bring the matter before the Supreme Court. They argue that the decisions in the Insular Cases set up a system of unequal treatment for people living in the island territories and that they were based largely on racial bias.
In the past year, the Court has side-stepped the issue in two well-publicized cases, deciding them without ruling against the Insular Cases, although two members — Justices Neil Gorsuch and Sonia Sotomayor — are on record criticizing the Insular Cases and suggesting that when there is an appropriate case under review, the Court should reconsider the precedents set by the Insular Cases.
The Court was to consider the most recent attempt to raise the issue during a private conference Friday and to render a decision in the next few days, possibly as early as Monday.
The immediate issue is whether the seven-member board that Congress established in 2016 when it passed the Puerto Rico Oversight, Management and Economic Stability Act has the authority to alter the island’s retirement system for public school teachers.
PROMESA was established when Puerto Rico was teetering on the edge of bankruptcy.
As part of its economic restructuring plan, the federal board decided to implement a less generous retirement system for teachers.
Among the changes was one covering eligibility. Local law had allowed teachers to retire at age 55 with 30 years of service or at age 60 with at least five years of service. The new system calls for retirement at age 63 with a minimum of 10 years of service.
That and other changes to the system prompted teacher associations to bring suit to oppose “the gutting of their pension system.”
In Federacion de Maestros de Puerto Rico, Inc. v. Financial Oversight and Management Board for Puerto Rico, et al., the plaintiffs said the announcement of the change caused a “mass exodus of public school teachers” and “contributed to the hardships of Puerto Rico’s public education system.”
Of the 30,000 public school teachers affected by the move, 2,800 submitted applications for retirement before the change was implemented, the plaintiffs said. By contrast, in the prior year, there were about 1,000 fewer retirement applications.
The teachers lost their case in the lower court. In April, the U.S. Court of Appeals for the First Circuit ruled that the PROMESA board has the power to preempt and amend laws.
“This conclusion was only possible because it was based pursuant to the morally repugnant doctrine of the Insular Cases,” the plaintiffs said in their bid to get the U.S. Supreme Court to review the case.
In August, they filed a petition for a Writ of Certiorari with the Supreme Court, asking the Court to hear their case in the context of reviewing the Insular Cases.
The defendants, the PROMESA board, opposed the petition, saying the Insular Cases are “irrelevant to this case.” All that actually happened, they said, is that the board substituted a more affordable retirement plan for teachers going forward.
While the plaintiffs pointed to references to the Insular Cases in their earlier filings, the defendants said the plaintiffs hadn’t made them a part of their actual arguments.
Invoking the Insular Cases now, the defendants said, “is a desperate attempt to deceive the Court into thinking the issues at stake are more important than they are.”