Peaje Investments LLC v. The Financial Oversight and Management Board for Puerto Rico, et al.

Petitioner owns bonds issued by Respondent, the Puerto Rico Highway & Transportation Authority (“HTA”). The bonds are secured by a lien on toll revenues as directed by Puerto Rico statute and HTA regulations. Since before its bankruptcy filing, HTA has been spending all the toll revenues, and has announced its intention to continue spending these revenues indefinitely, leaving Petitioner unpaid. Under the Bankruptcy Code, a “lien” is defined as a “charge against or interest in property to secure payment of a debt,” 11 U.S.C. §101(37), and is entitled to protection depending on its type: whether it is a “statutory lien,” a “security interest,” or a “judicial lien,” id., §§101(53), (51), (36). The First Circuit held that Petitioner’s lien is not a statutory lien because, even though the lien is imposed unilaterally by statutory and agency regulation, the lien’s elements are not all set out in a statute; some are specified in HTA’s regulations as a matter of discretionary agency action. In contrast, the Third and Ninth Circuits have determined that a statutory lien need not be specified entirely in a statute, and may arise as a matter of discretionary agency action. Likewise, the Fifth Circuit has held that a lien imposed unilaterally by operation of law, as opposed to one arising from bilateral agreement, is properly a statutory lien. The question presented is: Should the Court grant certiorari to resolve a conflict among the courts of appeals over the correct legal standard for determining whether a lien is a “statutory lien” under the Bankruptcy Code?