Victor J. Salgado & Associates v. Cestero-Lopategui, No. 20-1855 (1st Cir. 2022)
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The First Circuit reversed the judgment of the district court denying Defendants' motion for entry of an automatic stay under 11 U.S.C. 922, incorporated into Title III of the Puerto Rico Oversight, Management, and Economic Stability Act (PROMESA), 48 U.S.C. 2101-2241, through 48 U.S.C. 2161(a), holding that Defendants were entitled to an automatic stay.
Plaintiffs, who owned an operated the Integrand Assurance Company, sued Defendants, Puerto Rico government officials whose defense was assumed by the Commonwealth of Puerto Rico pursuant to the Commonwealth's legal representation and indemnification statute, alleging, among other claims, that the government officials violated their First Amendment rights, the Equal Protection Clause, and the Due Process Clause. Defendants, who were granted legal representation under Law 9, filed a notice of automatic stay. The district court denied the motion, concluding that PROMESA did not stay the litigation. The First Circuit reversed, holding that the automatic stay provision in Title III of PROMESA applied to this action.
The court issued a subsequent related opinion or order on May 20, 2022.
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