FRANKLIN CALIFORNIA TAX-FREE TRUST v. PUERTO RICO

Nos. 15-1218, 15-1221, 15-1271, 15-1272.

805 F.3d 322 (2015)

FRANKLIN CALIFORNIA TAX-FREE TRUST, et al., Plaintiffs, Appellees, v. Commonwealth of Puerto Rico, et al., Defendants, Appellants, PUERTO RICO Electric Power Authority (PREPA), Defendant.

United States Court of Appeals, First Circuit.

July 6, 2015.


Attorney(s) appearing for the Case

Christopher Landau , with whom Margarita Mercado-Echegaray, Solicitor General for the Commonwealth of Puerto Rico, Beth A. Williams , Michael A. Glick , Claire M. Murray ; and Kirkland & Ellis LLP, were on brief, for the Commonwealth of Puerto Rico, Governor Alejandro García-Padilla , and César R. Miranda-Rodríguez , appellants.

Martin J. Bienenstock , with whom John E. Roberts , Andrea G. Miller , Proskauer Rose, LLP, Mark D. Harris , Sigal P. Mandelker , Philip M. Abelson , and Ehud Barak , were on brief, for Melba Acosta-Febo and John Doe, appellants.

Lewis J. Liman , with whom Jorge R. Roig , Joanne A. Tomasini-Muñiz , González, Machado & Roig, LLC, Lawrence B. Friedman , Richard J. Cooper , Sean A. O'Neal , and Cleary Gottlieb Steen & Hamilton, LLP, were on brief, for the Puerto Rico Electric Power Authority (PREPA), amicus curiae.

Gabriel R. Avilés-Aponte and Tapia & Avilés, on brief, for Clayton P. Gillette and David A. Skeel, Jr. , amici. curiae.

Edilberto Berríos-Pérez and Berrios & Longo Law Office, P.S.C., on brief, for Edilberto Berríos-Pérez , amicus curiae.

Matthew D. McGill , with whom David C. Indiano , Jeffrey M. Williams , Leticia Casalcluc-Rabell , Indiano & Williams, PSC, Theodore B. Olson , Scott G. Stewart , Matthew J. Williams , and Gibson, Dunn & Crutcher, LLP, were on brief, for BlueMountain Capital Management, LLC, appellee.

Thomas Moers Mayer , with whom Kramer Levin Naftalis & Frankel LLP, Philip Bentley , David E. Blabey, Jr. , Toro, Colón, Mullet, Rivera & Sifre, P.S.C., Manuel Fernández-Bared , and Linette Figueroa-Torres , were on brief, for Franklin California Tax-Free Trust et al., appellees.

Marc E. Kasowitz , with whom Daniel R. Benson , Hon. Joseph I. Lieberman (ret.), Hon. Clarine Nardi Riddle (ret.), Andrew K. Glenn , and Kasowitz, Benson, Torres & Friedman, LLP, were on brief, for the Association of Financial Guaranty Insurers, amicus curiae.

Kate Comerford Todd , Steven P. Lehotsky , U.S. Chamber Litigation Center, Inc., William S. Consovoy , Thomas R. McCarthy , J. Michael Connolly , and Consovoy McCarthy, PLLC, on brief, for the Chamber of Commerce of the United States of America, amicus curiae.

Before HOWARD, Chief Judge, TORRUELLA and LYNCH, Circuit Judges.


The defendants, the Commonwealth of Puerto Rico, its Governor, its Secretary of Justice, and the Government Development Bank ("GDB"), assert that Puerto Rico is facing the most serious fiscal crisis in its history, and that its public utilities risk becoming insolvent. Puerto Rico, unlike states, may not authorize its municipalities...

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