Roman Catholic Archdiocese of San Juan v. Feliciano

The Puerto Rican courts lacked jurisdiction to issue payment and seizure orders after the case was removed to federal district court for Chapter 11 bankruptcy proceedings.

Petitioner was a participant in a trust to administer a pension plan created for employees of Catholic schools in Puerto Rico. Respondents brought suit alleging that the trust had been terminated and eliminated employees’ benefits. The Supreme Court of Puerto Rico concluded that if the trust did not have the necessary funds to meet its obligations, then the participating employers would be required to pay. The case was remanded to the Court of First Instance to resolve which parties had “legal personalities” to determine which entities were responsible for payment. Ultimately, the lower courts found that Petitioner was the only entity with legal personality and that the other schools in question were indivisible fragments of the Catholic church in Puerto Rico.  The United States Supreme Court did not address the issues in this matter and instead held that the Court of First Instance in Puerto Rico lacked jurisdiction to issue orders. Petitioner had removed the case to the United States District Court for the District of Puerto Rico as the trust had filed for Chapter 11 Bankruptcy and therefore gave rise to federal jurisdiction. The payment and seizure orders issued by the Puerto Rican courts are void. VACATED AND REMANDED.