Diaz-Morales v. Rubio-Paredes, No. 18-1074 (1st Cir. 2021)
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The First Circuit held that the district court correctly denied the Commonwealth of Puerto Rico's motions for reconsideration at issue in this appeal insofar as they might be construed as motions to apply an automatic stay under the Puerto Rico Oversight, Management, and Economic Stability Act (PROMESA) to either dismiss a 42 U.S.C. 1983 action or a settlement agreement that had not yet been enforced, holding that the circuit court did not err.
This case stemmed from a settlement following a section 1983 suit against a Commonwealth officer. After the settlement agreement was filed under seal and the district court had dismissed the case with prejudice, and before the first installment of the agreed settlement payments was due, a petition for bankruptcy relief was filed on behalf of the Commonwealth under Title III of PROMESA. Appellant filed a motion in opposition, arguing that the automatic stay was not applicable in his case. The district court granted the opposition. The Commonwealth filed a motions for reconsideration, which the district court denied. The First Circuit affirmed, holding that the district court did not err in denying the Commonwealth's motions for reconsideration insofar as they may be construed as motions to apply PROMESA's automatic stay to either the dismiss section 1983 action or the settlement agreement.
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