Updated June 21

Former U.S. solicitors general Theodore Olson and Donald Verrilli Jr. are set to square off before the U.S Supreme Court in October to resolve a complex dispute over the status of an oversight board, established by Congress in 2016 to help Puerto Rico recover from a devastating financial crisis.

Olson, partner at Gibson, Dunn & Crutcher, and Verrilli, partner at Munger, Tolles & Olson are counsel of record for the main parties in the dispute. They are veteran advocates who have argued on the same and opposite sides of numerous appellate cases. Current solicitor general Noel Francisco is also likely to argue, though that is not certain.

In an unusual order, the high court Thursday granted certiorari in five cases testing the legitimacy of the Financial Oversight and Management Board, created by the Puerto Rico Oversight, Management and Economic Stability Act passed by Congress.

Parties in the cases had specifically asked the court to consider the case at its Thursday conference in hopes it would quickly grant review and expedite the briefing schedule so it could be argued early in the fall term, which begins on the first Monday in October.

The order consolidated the five cases and gave detailed instructions on the length and color of the briefs. In spite of its new rules reducing the length of merits briefs from 15,000 to 13,000, the court said one set of briefs that will focus on the two main aspects of the case could run as long as 20,000 words and would bear a light red cover.

The order was so complex that the court issued a corrected version Thursday afternoon informing readers that it had incorrectly used the word “supporting” to describe one set of parties, when it actually was “challenging” an aspect of the disputed ruling by the U.S. Court of Appeals for the First Circuit.

The order did not specify how long the arguments would last or which parties would have argument time. Verrilli told NLJ on Friday that it's “not clear yet exactly how argument will sort out.”

Ted Olson, of Gibson, Dunn & Crutcher. Photo: Diego M. Radzinschi/NLJ

A group of hedge funds as well as a labor union in Puerto Rico challenged the board's legitimacy because the board members appointed without being confirmed by Congress. The First Circuit agreed with the challengers, but said the actions it had already taken could stand. The parties in the cases before the Supreme Court have differing views about both aspects of the circuit decision.

Verrilli, who represents the oversight board, argued in his petition that the First Circuit ruling was a “radical departure” from precedents that say territorial government officers do not have to conform to the appointments clause of the Constitution. The United States agreed with the board.

“We also disagree on what consequence should follow if the appointments clause does apply and the appointments are invalid,” Verrilli told NLJ. “We argue, and the First Circuit agreed, that the Board's prior work should not be invalidated.”

Olson, who represents Aurelius Investment, a creditor of the commonwealth of Puerto Rico, argued in his reply brief that the board members are covered by the appointments clause “like every official that holds a continuing office and exercises significant authority pursuant to the laws of the United States.”

In a statement Thursday, Olson said: “The Appointments Clause is vitally important to our democracy because it ensures that citizens can hold the President accountable for the actions of the thousands of unelected officials that populate the federal government. The Oversight Board says that this safeguard against tyranny-by-bureaucracy does not apply in Puerto Rico, but the people of Puerto Rico are entitled to all the same constitutional rights and protections that citizens of the 50 States enjoy.”

This report was updated with comment.