Lawyers for Puerto Rico argued before the Supreme Court about the island territory's need to restructure the debt of its public utilities.
Puerto Rico's governor has said that it cannot pay $72 billion in public debt, and the island has suffered in a recession for a decade.
The case seeks to allow an exception to federal bankruptcy law, which allows states to let cities and utilities seek relief from bankruptcy, but forbids Puerto Rico, a territory, from that allowance.
At the end of the one-hour session March 22, it appeared that the case had made some headway among the seven justices who presided over it. Justice Samuel Alito recused himself, possibly due to a financial conflict, said a report by the Associated Press.
Puerto Rico passed its own law in 2014 to help utilities meet bond and debt obligations, but a federal court ruled that was not allowed, and the 1st U.S. Circuit Court of Appeals agreed.
Justice Sonia Sotomayor, whose parents are Puerto Rican, asked Matthew McGill, lawyer for Puerto Rico's creditors, why Congress would not allow Puerto Rico to pass emergency legislation.
Justice Ruth Bader Ginsburg asked McGill why Congress would "put Puerto Rico in this never-never land."
Puerto Rico's lawyer Christopher Landau said Puerto Rico is "facing a crisis in providing essential services to its citizens."
A win for Puerto Rico would allow the island territory to put its utilities in bankruptcy to restructure $20 billion of the debt and help it negotiate with creditors.
A report by Bloomberg
looks at the background of Puerto Rico's debt crisis. The story points out that Puerto Rico has the population of Oklahoma but a debt larger than any U.S. state government besides New York and California.
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