Background
Appellants received just compensation for land taken by the Commonwealth of Puerto Rico, with funds deposited in court. The Administration of Tribunals (OAT) deducted a fifteen percent administrative fee from accrued interest and retained the interest itself. Appellants sued the OAT Administrator, alleging unconstitutional takings and due process violations. The district court dismissed most claims for lack of standing and granted summary judgment on the fee claim, finding the fee reasonable.
The court’s reasoning
The court held that the administrative fee claim was filed in violation of the automatic stay provisions of Title III of the Puerto Rico Oversight, Management, and Economic Stability Act, rendering the claim void. Regarding the interest claim, the court affirmed the district court’s finding that appellants lacked standing because they failed to allege they requested disbursement of the interest, rendering their injury abstract and hypothetical.
Because appellants filed their administrative fee claim in federal court in violation of the automatic stay, it is void and without legal effect.
Opinion at 17
What it means going forward
The ruling reinforces that claims against the Commonwealth of Puerto Rico must comply with PROMESA automatic stay and discharge provisions, and clarifies that standing to challenge administrative disbursement procedures requires a specific allegation of a request for payment.