Three former members of the federal control board tasked with overseeing Puerto Rico’s finances have filed a lawsuit in federal court, alleging that their abrupt firings by the administration of former President Donald Trump were illegal. The suit, lodged on September 18, 2025, in San Juan, has thrust Puerto Rico’s ongoing financial crisis and the limits of presidential authority back into the national spotlight, raising questions about the future of the island’s economic recovery and the rule of law in U.S. territories.
The plaintiffs—Arthur J. Gonzalez, Andrew G. Biggs, and Betty A. Rosa—were all dismissed in a matter of weeks over the summer. Gonzalez and Rosa received terse, two-sentence emails on August 1, 2025, informing them of their removal from the board. Nearly two weeks later, Biggs received a similar message. None of the notifications provided any reason or justification for the terminations. According to the lawsuit, “Neither email articulated any ‘cause’ or provided any other justification for the removals. Those purported removals were unlawful.”
The lawsuit names Donald Trump, Sergio Gor (director of the White House personnel office), John E. Nixon (the lone remaining board member), and Robert F. Mujica (the board’s executive director) as defendants. The plaintiffs are seeking reinstatement to their former positions, arguing that the president overstepped his legal authority in removing them. “This is a case about power over the board and over Puerto Rico,” Eduardo Santacana, an attorney from Cooley LLP representing the plaintiffs, told the Associated Press. “The president is attempting to exert a lot of power here that he does not have.”
The crux of the legal argument centers on the 2016 Promesa Act, which created the Financial Oversight and Management Board (FOMB) within Puerto Rico’s territorial government. The board was established after Puerto Rico announced in 2015 that it could not pay its more than $70 billion public debt, leading to the largest municipal bankruptcy in U.S. history in 2017. Promesa was designed to provide a path to fiscal stability and protect the island from creditor lawsuits while it worked out a plan to restructure its debts.
Under the terms of the Promesa Act, the board is supposed to have seven members, six of whom are appointed by the U.S. president with the advice and consent of the Senate. These members serve three-year terms and, crucially, can only be removed “for cause.” The lawsuit contends that because the board’s members are not federal executive branch officers, the president does not have inherent authority to remove them at will. Instead, the law requires that members be given notice and a hearing before any removal for cause—a process the plaintiffs say was wholly ignored.
“The stakes of this case could not be higher: If the President can violate the laws that Congress passed establishing local governments in the territories, he could remove any territorial officer tomorrow. On that theory, he may also be able to remove officers from the District of Columbia,” the lawsuit states. The concern is not merely academic; the outcome could set a precedent for the autonomy of territorial governments and the limits of presidential reach.
The dismissals came at a particularly sensitive moment for Puerto Rico’s financial future. The oversight board had been locked in contentious negotiations with bondholders over more than $9 billion owed by the island’s Electric Power Authority. Before the firings, the board had insisted on a $2.6 billion payment as part of a restructuring deal. But with the Trump administration’s move to replace six board members—including Gonzalez, Biggs, and Rosa—experts now worry that newly appointed members might be more inclined to meet bondholders’ demands for the full $8.5 billion, a shift that could have significant repercussions for Puerto Rico’s recovery.
Of the six board members dismissed by the Trump administration, four were Democrats. John E. Nixon, a Republican, remains as the lone member. The other dismissed members, Cameron McKenzie, Juan Sabater, and Luis Ubiñas, did not join the lawsuit. The backgrounds of the plaintiffs underscore the board’s expertise: Gonzalez is a retired bankruptcy judge, Rosa is the commissioner of the New York State Education Department and president of the University of the State of New York, and Biggs is an expert in Social Security reform.
Attorney Eduardo Santacana, echoing the lawsuit’s language in court documents, argued, “The president’s actions represent a dangerous overreach of power over the board and Puerto Rico.” Santacana emphasized that upholding the structure of authority established by Congress is essential to preserving the integrity of territorial governance. He warned that allowing the president to unilaterally dismiss board members could open the door to unchecked federal intervention in local affairs, undermining both the spirit and the letter of the Promesa Act.
The legal battle has cast a shadow over the board’s ongoing efforts to steer Puerto Rico out of insolvency. Since its creation, the board has faced criticism from multiple directions—some Puerto Rican officials and activists have argued that it represents an undemocratic imposition by Washington, while others see it as a necessary, if imperfect, mechanism for restoring order to the island’s finances. The abrupt firings and subsequent lawsuit have only deepened these divisions, fueling debate over how much control the federal government should wield over Puerto Rico’s affairs.
The case also highlights the broader implications for U.S. territories and the delicate balance of power between local governments and federal authorities. If the court sides with the plaintiffs, it could reaffirm the protections built into Promesa and similar statutes, ensuring that territorial officers cannot be removed without due process. If the court rules in favor of the administration, it may set a precedent for greater executive authority over territorial governance, potentially affecting not just Puerto Rico but other territories and even the District of Columbia.
Meanwhile, the uncertainty has left Puerto Rico’s financial future hanging in the balance. With only one board member remaining, the effectiveness of the oversight body is in question, and the ongoing negotiations with creditors remain unresolved. The possibility that new board appointees might favor bondholders’ demands for a much larger payout is a source of anxiety for many on the island, who worry about the impact on public services and economic recovery.
As the legal proceedings move forward, all eyes are on the federal court in San Juan. The outcome will not only determine the fate of Gonzalez, Biggs, and Rosa, but will also shape the contours of federal-territorial relations for years to come. For Puerto Rico, still struggling under the weight of a massive debt and a fragile recovery, the stakes could hardly be higher.
With the board’s authority and composition in flux, and the legal challenge now underway, Puerto Rico faces a period of heightened uncertainty. The result could redefine the boundaries of executive power—and the future of the island’s financial oversight.
