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Mon Aug 26, 2019, 01:07 AM

Federal court denies dismissal of FOMB lawsuit

U.S. District Court Judge Laura Taylor Swain denied Thursday a government request to dismiss a Financial Oversight and Management Board lawsuit that seeks to invalidate Law 29, which exempts Puerto Rico’s 78 cities from paying health insurance and pensions, as well as some 20 budget resolutions.

“Because the Oversight Board has alleged sufficiently that both Law 29 and the Joint Resolutions impair and defeat the purposes of PROMESA, Counts VI and VII state claims upon which relief can be granted under Federal Rule of Civil Procedure,” Swain said.

The question at issue was whether and to what extent the FOMB can take action to challenge or constrain the ability of commonwealth officials to implement and enforce fiscal policy decisions that are arguably inconsistent with the certified fiscal plan or the Puerto Rico Oversight, Management, and Economic Stability Act (“PROMESA”).

After Act 29 was enacted, the Oversight Board said it had advised the government against passing the measure. In a May 17 letter, the board told former Governor Ricardo Rosselló, Senate President Thomas Rivera Schatz and House Speaker Carlos Méndez that the potential fiscal impact of the legislation would be of about $311 million for fiscal year 2020, and $1.7 billion through fiscal year 2024.

Read more: http://www.sanjuanweeklypr.com/pdf/Aug-23-19/local.pdf
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