Supreme Court of the United States
Commonwealth of Puerto RICO, Petitioners v. Franklin California Tax-Free Trust
June 13, 2016195 L. Ed. 2d 298
Summary
The Court held that the Bankruptcy Code's pre-emption provision bars Puerto Rico from enacting its own municipal bankruptcy law. The Court reasoned that the Code's definition of 'State' excludes Puerto Rico only for the purpose of authorizing municipalities to file under Chapter 9, not for pre-emption purposes. Justice Sotomayor dissented, arguing the exclusion removes Puerto Rico from Chapter 9 entirely.