LUMA Energy LLC v. Puerto Rico Dep't of Consumer Affairs
CourtCourt of Appeals for the First Circuit
Date FiledAugust 13, 2026
Docket25-2077
StatusPublished
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Full Opinion
United States Court of Appeals
For the First Circuit
No. 25-2077
IN RE: THE FINANCIAL OVERSIGHT AND MANAGEMENT BOARD FOR PUERTO
RICO, as Representative for the Commonwealth of Puerto Rico; THE
FINANCIAL OVERSIGHT AND MANAGEMENT BOARD FOR PUERTO RICO, as
Representative for the Employees Retirement System of the
Government of the Commonwealth of Puerto Rico; THE FINANCIAL
OVERSIGHT AND MANAGEMENT BOARD FOR PUERTO RICO, as
Representative for the Puerto Rico Highways and Transportation
Authority; THE FINANCIAL OVERSIGHT AND MANAGEMENT BOARD FOR
PUERTO RICO, as Representative for the Puerto Rico Electric
Power Authority (PREPA); THE FINANCIAL OVERSIGHT AND MANAGEMENT
BOARD FOR PUERTO RICO, as Representative of the Puerto Rico
Public Buildings Authority,
Debtors,
LUMA ENERGY, LLC; LUMA ENERGY SERVCO, LLC,
Movants, Appellants,
v.
PUERTO RICO DEPARTMENT OF CONSUMER AFFAIRS (DACO); INSTITUTO DE
COMPETITIVIDAD Y SOSTENIBILIDAD ECONÓMICA (ICSE),
Respondents, Appellees.
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF PUERTO RICO
[Hon. Laura Taylor Swain,* U.S. District Judge]
* Of the Southern District of New York, sitting by
designation.
Before
Dunlap, Lynch, and Kayatta,
Circuit Judges.
David Horniak, with whom Brett Ingerman, Dale K. Cathell, DLA
Piper LLP, Mariana Muñiz Lara, and DLA Piper (Puerto Rico) LLC
were on brief, for appellants.
Peter Friedman, with whom Omar Andino Figueroa, Frank A.
Rosado Méndez, Office of the Solicitor General of Puerto Rico,
Matthew M. Higgins, Maria J. DiConza, Gabriel Olivera, Jason
Zarrow, and O'Melveny & Myers LLP were on brief, for appellee
Puerto Rico Department of Consumer Affairs (DACO).
Fernando E. Agrait Betancourt, with whom José Leonardo Pou
Román and Fernando E. Agrait Law Office were on brief, for appellee
Instituto de Competitividad y Sostenibilidad Económica (ICSE).
Martin J. Bienenstock, John E. Roberts, Paul V. Possinger,
Margaret A. Dale, and Proskauer Rose LLP on brief for Financial
Oversight and Management Board for Puerto Rico as nonparty.
August 13, 2026
KAYATTA, Circuit Judge. LUMA Energy, LLC, and LUMA
Energy ServCo, LLC, (collectively, "LUMA") agreed to take over
operation and maintenance of Puerto Rico's electric power
transmission and distribution system from Title III debtor the
Puerto Rico Electric Power Authority (PREPA). When Puerto Rico's
consumer protection agency sued LUMA and PREPA in a Puerto Rico
court challenging an important term of that agreement, LUMA -- but
not PREPA -- sought an order from the Title III court staying that
action. After the Title III court denied LUMA's request, LUMA
appealed. For the following reasons, we find that LUMA has no
statutory standing to pursue this appeal.
I.
A.
We have elsewhere chronicled the fiscal emergency in the
Commonwealth of Puerto Rico (the "Commonwealth") and Congress's
2016 enactment of PROMESA (short for the Puerto Rico Oversight,
Management, and Economic Stability Act, 48 U.S.C. §§ 2101–2241) to
address that emergency. See, e.g., Pierluisi v. Fin. Oversight &
Mgmt. Bd. for P.R. (In re Fin. Oversight & Mgmt. Bd. for P.R.), 37
F.4th 746, 750 n.1 (1st Cir. 2022) (collecting cases). For present
purposes, suffice it to say that PROMESA created a "modified
version of the municipal bankruptcy code" and authorized the
Financial Oversight and Management Board (the "Board") to place
the Commonwealth and its instrumentalities into bankruptcy
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proceedings known as Title III proceedings.1 Fin. Oversight &
Mgmt. Bd. for P.R. v. Federacion de Maestros de P.R., Inc. (In re
Fin. Oversight & Mgmt. Bd. for P.R.), 32 F.4th 67, 75 (1st Cir.
2022); see 48 U.S.C. §§ 2121(a), (b)(1), (c)(1), 2161–2178. In
such proceedings the Board "is the representative of the debtor."
48 U.S.C. § 2175(b).
PREPA is a public corporation and instrumentality of the
Commonwealth that was created by statute in 1941 to provide
electric power to Puerto Rico. See P.R. Laws Ann. tit. 22,
§ 193(a) (2025); Union de Trabajadores de la Industria Eléctrica
y Riego v. Fin. Oversight & Mgmt. Bd. (In re Fin. Oversight & Mgmt.
Bd. for P.R.), 7 F.4th 31, 34 (1st Cir. 2021). To that end, PREPA
owns and has operated an extensive electric power transmission and
distribution system (the "T&D System").
In an effort to restructure PREPA's daunting debt, the
Board initiated Title III proceedings on behalf of the company in
2017. Those proceedings triggered an automatic stay of many claims
against PREPA, including "any act to obtain possession of" or
"exercise control over property of the estate." 11 U.S.C.
1 "Title III" refers to the subchapter of PROMESA that
authorizes and details these bankruptcy proceedings. See 48 U.S.C.
§§ 2161–2178. When overseeing Title III cases, the district court
is commonly referred to as the "Title III court." See, e.g., Fin.
Oversight & Mgmt. Bd. for P.R. v. Ad Hoc Grp. of PREPA Bondholders
(In re Fin. Oversight & Mgmt. Bd. for P.R.), 899 F.3d 13, 18 (1st
Cir. 2018).
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§ 362(a)(3); 48 U.S.C. § 2161(a) (incorporating 11 U.S.C. § 362
into PROMESA); see Union de Trabajadores, 7 F.4th at 35.
B.
In 2018, while PREPA's restructuring case was underway
in the Title III court, the Legislative Assembly of Puerto Rico
passed the Puerto Rico Electric Power System Transformation Act.
See P.R. Laws Ann. tit. 22, §§ 1111–1125 (2025); Union de
Trabajadores, 7 F.4th at 35. That Act authorized the partial
privatization of PREPA and facilitated a competitive bidding
process to select a private partner who would assume operation and
maintenance of the T&D system. See Union de Trabajadores, 7 F.4th
at 35. The Puerto Rico Public-Private Partnerships Authority
(P3A), another public corporation of the Commonwealth, oversaw the
bidding process. LUMA, a private corporation, was ultimately
selected as the winning bidder. See id.
In June 2020, P3A, PREPA, and LUMA entered into a long-
term contract, the Operation and Maintenance Agreement (OMA), in
which LUMA agreed to take over operation and maintenance of the
T&D System, with PREPA retaining ownership of that system. The
OMA also called for the parties to apply to the Puerto Rico Energy
Bureau (PREB), an independent regulator of Puerto Rico's public
energy policy, for a waiver of LUMA's liability to consumers in
connection with its management of the T&D system:
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Liability Waiver. In connection with the
submission of the Initial Budgets to PREB, the
Parties agree to apply for inclusion in the
Rate Order that the . . . terms of service
include: (i) a waiver of [PREPA]'s, [LUMA
Energy]'s and [LUMA Energy ServCo]'s2
liability to customers or any Person receiving
Power and Electricity for any Losses arising
in any way out of or in connection with the
operation of the T&D System and the provision
of Power and Electricity including any events
of interrupted, irregular or defective
electric service due to Force Majeure Events,
other causes beyond [PREPA]'s, [LUMA Energy]'s
or [LUMA Energy ServCo]'s control or ordinary
negligence, gross negligence or willful
misconduct of [PREPA], [LUMA Energy] or [LUMA
Energy ServCo], or their respective employees,
agents or contractors; and (ii) a waiver in
all cases of responsibility for any loss of
profits or revenues, special, exemplary,
punitive, indirect, incidental or
consequential damages, including loss of
revenue, loss of use of equipment, cost of
capital, cost of temporary equipment,
overtime, business interruption, spoilage of
goods, claims of customers of electric
customers or other economic harms, in each
case howsoever and whensoever arising,
including where caused by any of [PREPA]'s,
[LUMA Energy]'s or [LUMA Energy ServCo]'s
ordinary negligence, gross negligence or
willful misconduct (collectively the
"Liability Waiver").
Under the OMA, PREB's approval of a liability waiver "generally
consistent" with this provision and that waiver being "in full
force and effect" are conditions precedent to LUMA's obligation to
2 Throughout the OMA, PREPA is referred to as "Owner," LUMA
Energy is referred to as "ManagementCo," and LUMA Energy ServCo is
referred to as "ServCo." For clarity, when quoting from the OMA
we replace these terms with the names of the entities to which
they refer.
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commence providing services under the OMA.3 The OMA also requires
PREPA to indemnify LUMA against certain claims by customers and
non-parties to the OMA in connection with the T&D system.4
On May 31, 2021, PREB issued a Resolution and Order
approving the liability waiver, with some modifications.5 LUMA
has since operated the T&D System under an extended supplemental
agreement, the details of which do not bear on the jurisdictional
issue addressed in this opinion.
C.
After LUMA invoked the liability waiver to deny over
1,800 consumer claims, the Puerto Rico Department of Consumer
Affairs (DACO) filed suit in a Commonwealth court on July 22, 2025,
naming as defendants LUMA, PREPA, and PREB (the "DACO action").
DACO sought a declaration that the OMA's liability waiver and
PREB's Resolution and Order largely approving that waiver were
unconstitutional under the Puerto Rico Constitution. After
3 PREPA's exit from Title III proceedings under terms
"reasonably acceptable" to LUMA is also a condition precedent to
the OMA's service commencement date.
4 The parties disagree about the scope of these
indemnification agreements. But we need not resolve this dispute,
as it has no bearing on the jurisdictional question before us.
5 PREB rejected the proposed waiver's inclusion of gross
negligence and willful misconduct but approved a waiver of LUMA's
liability for ordinary negligence. And even where LUMA can face
liability -- i.e., in cases of gross negligence or willful
misconduct -- the waiver curtails the damages consumers can recover
to "direct damages" only.
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originally filing in the Commonwealth Court of First Instance,
DACO requested that the Supreme Court of Puerto Rico hear and
decide the case through intrajurisdictional certification. See
P.R. Laws Ann. tit. 4, § 24s(f) (2025) (permitting the Supreme
Court of Puerto Rico to, through certification, "immediately . . .
consider and . . . resolve[] any matter pending in the Court of
First Instance" if "there is a question of imperative public
importance that includes any substantial constitutional matter
under the Constitution of Puerto Rico"). The Supreme Court of
Puerto Rico granted DACO's request on August 22, 2025, and took up
the case.
II.
A.
With that background in place, we turn to the court order
that gives rise to this appeal. On September 18, 2025, in an
effort to pause the Supreme Court of Puerto Rico's consideration
of the DACO action, LUMA -- but not its codefendants PREPA or
PREB -- filed a motion in the Title III court to enforce PROMESA's
automatic stay. LUMA sought an order finding that the DACO action
violated the stay and directing DACO to withdraw its complaint.
The Board, PREPA's representative in Title III proceedings, did
not make an appearance or file any pleadings in that matter, nor
otherwise seek to invoke the stay on PREPA's behalf. The Board
did, however, "permit[] LUMA to report" to the Title III court
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that the Board believed the automatic stay applied to the DACO
action.6
The Title III court was not convinced. The court held
that, even assuming the DACO action qualified as an act to
"exercise control over" the OMA as property of PREPA, see 11 U.S.C.
§ 362(a)(3), it was nevertheless exempted from the stay by the
police power exception. In re Fin. Oversight & Mgmt. Bd. for P.R.,
808 F. Supp. 3d 267, 273–74, 274 n.6 (D.P.R. 2025). That exception
excludes from the automatic stay's reach "the commencement or
continuation of an action or proceeding by a governmental
unit . . . to enforce such governmental unit's . . . police and
regulatory power." 11 U.S.C. § 362(b)(4). The Title III court
concluded that the DACO action fell within this exception as a
suit by Puerto Rico's consumer protection agency to enforce its
power to protect consumers through litigation. In re Fin.
6 At this court's request, the Board submitted a brief
detailing its position on the automatic stay's applicability to
the DACO action. In that brief, the Board agrees with LUMA,
asserting that the DACO action violates the automatic stay "for
the reasons identified in LUMA's" briefing. The Board also argues
that the outcome of this case could affect PREPA's restructuring.
But those arguments are of no moment here, where the Board did not
seek to enforce the stay on PREPA's behalf below nor seek to appeal
the Title III court's order, and where we conclude that the party
that is invoking our appellate jurisdiction, LUMA, lacks standing
to do so. See Microsystems Software, Inc. v. Scandinavia Online
AB, 226 F.3d 35, 39 (1st Cir. 2000) ("[I]f the putative appellants
lack standing to appeal, the only role for the appellate court is
to memorialize that fact and simultaneously terminate the
proceeding.").
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Oversight & Mgmt. Bd., 808 F. Supp. 3d at 274–75. Accordingly, on
October 27, 2025, the Title III court issued a Memorandum Order
denying LUMA's motion to enforce the automatic stay, thereby
leaving the DACO action free to proceed in the Commonwealth courts.
Id. at 279. LUMA timely appealed the Title III court's order.
B.
On December 1, 2025, before any briefing to this court
was due, the Supreme Court of Puerto Rico, in a unanimous opinion,
held the liability waiver unconstitutional under the Puerto Rico
Constitution. See generally Departamento de Asuntos del
Consumidor v. Luma Energy, LLC, 2025 TSPR 126, 2025 WL 3533919
(P.R. Dec. 1, 2025).7 The court reasoned that "the authority to
grant immunity to a private entity is a public policy decision
that can be made only by the Legislative Assembly," id. at *29,
and found that the Legislative Assembly had not delegated that
power to PREB, id. at *1 (referring to PREB by its Spanish-language
abbreviation, NEPR). The court concluded that PREB's conduct in
approving the liability waiver therefore ran afoul of the
separation of powers, id., rendering the waiver unconstitutional,
id. at *28.
7 The court rendered its decision in Spanish. We rely on
the English translation provided to us by the parties, while citing
to the corresponding portions of the publicly available Spanish-
language version.
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That decision did not moot this appeal. Should LUMA
prevail before this court, the Puerto Rico Supreme Court's decision
in the DACO action would be void unless the Title III court on
remand were to "lift the automatic stay retroactively and thereby
validate actions which otherwise would be void." Soares v.
Brockton Credit Union (In re Soares), 107 F.3d 969, 976 (1st Cir.
1997) (adopting the majority rule that actions taken in violation
of an automatic bankruptcy stay are subject to being deemed void,
while also affirming the availability of retroactive relief from
the stay under 11 U.S.C. § 362(d)).
III.
On appeal, LUMA asserts that the Title III court erred
in finding that the police power exception applies to the DACO
action and thus declining to enforce the automatic stay. In
response, DACO and its co-appellee ICSE8 defend the Title III
court's decision on the merits. DACO also argues that, as a
threshold matter, LUMA lacks standing to appeal the Title III
8 ICSE, the Instituto de Competitividad y Sostenibilidad
Económica, intervened as amicus curiae in the DACO action in
support of DACO. When LUMA sought a stay of the DACO action in
the Title III court, ICSE -- which had appeared in prior Title III
proceedings related to PREPA -- filed a response brief and a
surreply, and the Title III court considered ICSE's arguments in
its order denying LUMA's requested stay. In re Fin. Oversight &
Mgmt. Bd., 808 F. Supp. 3d at 270 n.3, 272–73. As a result, ICSE
is a named respondent and appellee in this appeal of the Title III
court's order.
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court's order.9 We begin and end with the question of LUMA's
standing to appeal.
A.
As the party invoking our appellate jurisdiction, LUMA
bears the burden of proving it has standing to do so. Neira Rivera
v. Scotiabank de P.R. (In re Neira Rivera), 14 F.4th 60, 67 (1st
Cir. 2021). To carry that burden on appeal from a final order of
a bankruptcy court, an appellant must establish that it is a
"person aggrieved" by the court's order. Id. at 66; see In re El
San Juan Hotel, 809 F.2d 151, 154 (1st Cir. 1987) (noting the
"person aggrieved" standard is a "prerequisite for appellate
review" in proceedings under the Bankruptcy Code). This is a "more
stringent" standard than that required for Article III standing.
Neira Rivera, 14 F.4th at 66.
In theory, it might be possible that a different
appellate standing requirement applies in Title III proceedings
than in those under the Bankruptcy Code, since "while PROMESA
incorporates many provisions of that Code, it also has many
9 ICSE contends that LUMA lacked standing to enforce the stay
in the first place. It is unclear whether ICSE, like DACO, also
contends that LUMA lacks standing to appeal the Title III court's
order. In any event, because we conclude that this case is not
properly before us due to LUMA's lack of standing to appeal, we do
not pass on ICSE's argument regarding LUMA's standing to enforce
the stay below. See Microsystems Software, 226 F.3d at 39; cf.
United States v. Otero, 155 F.4th 78, 86 n.12 (1st Cir. 2025)
("When it is not necessary to decide more, it is necessary not to
decide more." (citation modified)).
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differences." Zorrilla v. Fin. Oversight & Mgmt. Bd. for P.R. (In
re Fin. Oversight & Mgmt. Bd. for P.R.), 178 F.4th 747, 757 (1st
Cir. 2026). But LUMA itself argues (with DACO's approval) that we
should apply the narrow "person aggrieved" standard. LUMA has
thus waived any argument that appellate standing is more forgiving
under PROMESA than under the Bankruptcy Code.10
To qualify as a "person aggrieved," LUMA must show that
the order declining to stay the DACO action "'directly and
adversely' affects [LUMA's] pecuniary interests." Neira Rivera,
14 F.4th at 66 (quoting Spenlinhauer v. O'Donnell, 261 F.3d 113,
117 (1st Cir. 2001)). This standard is stringent by design: "The
nature of bankruptcy litigation, with its myriad of parties,
directly and indirectly involved or affected by each order and
decision of the bankruptcy court, mandates that the right of
appellate review be limited to those persons whose interests are
directly affected." San Juan Hotel, 809 F.2d at 154.
B.
LUMA does not purport to represent PREPA's interests,
conceding that the Board is PREPA's "sole Title III representative
under PROMESA." LUMA instead roots its standing argument in its
asserted status as a post-petition creditor of PREPA under the
10Nor is there any independent reason for us to look beyond
this plain waiver given that the standard LUMA invokes does not
call for the assertion of jurisdiction broader than that which
would otherwise apply.
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OMA's indemnification scheme.11 As creditor, LUMA argues it will
be directly and adversely affected by the failure to stay the DACO
action because without the liability waiver, it will be left to
seek indemnification for consumer claims from PREPA -- an entity
with limited resources by virtue of its status as a Title III
debtor.
As a threshold matter, there is a fair amount of case
law suggesting the protection of the automatic stay in the first
instance is solely for the benefit of the debtor's estate. See
Lee v. McCardle (In re Peeples), 880 F.3d 1207, 1213–16 (10th Cir.
2018) ("[T]he automatic stay is for the sole benefit of the
debtors' estate and it could subvert the bankruptcy trustee's
powers to allow a creditor to appeal if the trustee chooses not
to."12 (citation modified)). And while creditors do have standing
to appeal some types of bankruptcy court orders,13 we have referred,
11 LUMA also based its standing argument below on its
asserted creditor status.
12 The Board is the equivalent of a bankruptcy trustee in
cases brought under Title III of PROMESA. 48 U.S.C. § 2161(c)(7)
(establishing that, with one exception not relevant here, "[t]he
term 'trustee' . . . means the Oversight Board").
13 For instance, a creditor may appeal a bankruptcy court's
confirmation order when that order's treatment of the creditor's
claim inflicts direct, adverse, pecuniary injury, see Asociación
de Empleados del Estado Libre Asociado de P.R. v. Nieves (In re
Nieves), 647 B.R. 809, 820, 823 (B.A.P. 1st Cir. 2023)
(entertaining creditor's appeal of confirmation order that
allegedly affected its rights and statutory lien against the
debtor), or a summary judgment order that finds a creditor's
security interest unperfected, see Yamaha Motor Corp., USA v. Perry
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albeit in dictum, to a creditor's assertion of standing "to
challenge an alleged violation of the automatic stay" as
"problematic." FDIC v. Shearson-American Express, Inc., 996 F.2d
493, 497 (1st Cir. 1993). At the same time, there are other cases
that recognize that one of the purposes of the stay is to protect
creditors. See Spookyworld, Inc. v. Town of Berlin (In re
Spookyworld, Inc.), 346 F.3d 1, 10 (1st Cir. 2003).
We need not resolve this tension here because -- as LUMA
itself acknowledges -- even in these latter cases, creditors can
find haven in the stay only to the extent they are threatened with
the type of harm the stay was designed to prevent.14 See Peeples,
880 F.3d at 1214 (holding that, although a creditor "arguably" met
Hollow Mgmt. Co. (In re Perry Hollow Mgmt. Co.), 297 F.3d 34, 36–
37, 39 (1st Cir. 2002).
14 Some cases that address the way in which the stay protects
creditors -- including St. Paul Fire & Marine Insurance Co. v.
Labuzan, 579 F.3d 533 (5th Cir. 2009), upon which LUMA
relies -- discuss creditors' standing to initiate a cause of action
under a subsection of the automatic stay not at issue here. That
subsection, 11 U.S.C. § 362(k), allows "an individual injured by
any willful violation of a stay" to recover damages. See St. Paul
Fire, 579 F.3d at 539, 543. As the Tenth Circuit has recognized,
the use of "an individual" in that damages-authorizing subsection
suggests that it "is meant for some party or parties other than
the bankruptcy trustee" and thus has a "broader reach" than the
provision at issue here. Peeples, 880 F.3d at 1215–16; see id. at
1213–16 (distinguishing the analysis under § 362(a), the provision
LUMA seeks to enforce, from that under § 362(k), the damages-
authorizing subsection). Cases construing § 362(k) are thus
largely inapposite here, where the question is LUMA's standing to
appeal the district court's determination under § 362(a), except
insofar as those cases shed light on the type of creditor harm
with which the stay is concerned.
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the general standard to appeal a bankruptcy court order, he could
not do so because "he hasn't alleged that he's been harmed in his
capacity as a creditor"); Magnoni v. Globe Inv. & Loan Co. (In re
Globe Inv. & Loan Co.), 867 F.2d 556, 559–60 (9th Cir. 1989)
(holding appellants lacked standing to invoke the automatic stay
because, although creditors, they were not proceeding as such, and
instead the "true nature of their claim . . . shows them to be
aggrieved property owners").
Case law from across circuits recognizes that, insofar
as the automatic stay seeks to benefit creditors, it does so by
protecting them from inequitable treatment as compared to other
creditors. See Spookyworld, 346 F.3d at 10 (noting the automatic
stay's "purpose is to prevent some private creditors from gaining
priority on other creditors"); St. Paul Fire & Marine Ins. Co. v.
Labuzan, 579 F.3d 533, 540 (5th Cir. 2009) ("The purpose of the
automatic stay is to protect creditors in a manner consistent with
the bankruptcy goal of equal treatment." (citation omitted));
Peeples, 880 F.3d at 1216 ("[T]he automatic stay's specific
purposes are to protect the debtor from collection efforts and to
protect creditors from inequitable treatment.").
LUMA fails to identify any way in which the Title III
court's order places it on unequal footing with any other creditor
of PREPA. The only injury LUMA links to its status as a creditor
at all is that, without the liability waiver, it "will hold claims
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against an estate in Title III proceedings with limited
resources." But this harm is not one that places LUMA in an
unequal position compared to any other creditor of PREPA. To the
contrary, it places LUMA in the same position as PREPA's other
creditors, each of whom, by definition, holds a claim against an
estate in Title III proceedings with limited resources. See 11
U.S.C. § 101(10)(A) (defining "creditor" as an "entity that has a
claim against the debtor");15 48 U.S.C. § 2161(a), (c)
(incorporating the definitions in 11 U.S.C. § 101 into PROMESA
except as otherwise provided therein and declining to vary the
Bankruptcy Code's definition of "creditor").
LUMA argues both that its injury does not depend on
future "failed indemnification" and that PREPA's status as a debtor
renders its resources limited, thereby threatening its ability to
fully indemnify LUMA. Insofar as LUMA seeks to claim the potential
harm posed to PREPA by "cascading tort liability" as its own
injury, it is the Board, not LUMA, that has the authority to claim
that harm for purposes of standing. And insofar as LUMA identifies
the harm posed to it by potential future failed indemnification as
an injury relevant to its standing, the only rationale LUMA
provides for the risk of failed indemnification is the fact that
15 The Bankruptcy Code also recognizes entities holding
certain kinds of "claim[s] against the estate" or "community
claim[s]" as creditors. 11 U.S.C. § 101(10)(B)–(C).
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PREPA is a Title III debtor. As we have explained, the risk of
harm inherent in holding a claim against a Title III debtor places
LUMA on equal, not unequal, footing with PREPA's other creditors.
C.
LUMA nevertheless lays a litany of harms at the Title III
court's feet and claims that those injuries satisfy the "person
aggrieved" standard. LUMA asserts that the court's order
"impair[s] its rights" under the OMA by extinguishing the liability
waiver; "diminishe[s] [its] property" by stripping away a material
term of the OMA, namely, the liability waiver; and "increase[s]
its burdens" by exposing LUMA to consumer tort litigation, again
by virtue of the loss of the liability waiver. See San Juan Hotel,
809 F.2d at 154 (noting an appellant qualifies as a "person
aggrieved" when the appellant's "rights or interests are 'directly
and adversely affected pecuniarily'" by an order that "diminishes
his property, increases his burdens, or impairs his rights"
(citation omitted)). But none of the harms identified by LUMA
flows "directly" from the Title III court's order. See Neira
Rivera, 14 F.4th at 66 (citation omitted). Nor, for that matter,
do they relate to LUMA's status as a creditor of PREPA. See supra
Section III.B.
The Title III court's decision did not invalidate the
liability waiver; it simply permitted the Supreme Court of Puerto
Rico to render a decision regarding the waiver's constitutionality
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while PREPA's restructuring is still underway. Indeed, the
Title III court's order left equally open the possibilities that
the Supreme Court of Puerto Rico would uphold or invalidate LUMA's
waiver of liability. Each injury LUMA identifies is thus the
direct result of the Supreme Court of Puerto Rico's ultimate
decision in the DACO action -- not the Title III court's order
permitting that action to proceed sooner rather than later. While
LUMA argues that, but for the Title III court's order, the DACO
action could not (yet) have proceeded and LUMA therefore would
have retained its liability waiver (at least for now), LUMA cites
no support for the proposition that bankruptcy's "stringent"
standing requirement that the appealed order "directly and
adversely affect[]" the appellee's pecuniary interests is
satisfied whenever but-for causation is established. See Neira
Rivera, 14 F.4th at 66 (citation modified). Nor is such an
interpretation consistent with the "limited" nature of appellate
bankruptcy standing. See San Juan Hotel, 809 F.2d at 154; see
also Bostock v. Clayton Cnty., 590 U.S. 644, 656 (2020) (observing
that but-for causation "can be a sweeping standard").
The only injury that does directly flow from the
Title III court's order concerns the timing of the DACO action,
which implicates both LUMA's need to defend itself in that case
and its receipt of the Supreme Court of Puerto Rico's ultimate
decision before, rather than after, PREPA's restructuring is
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complete. LUMA does not attempt to argue that the burden of
defending itself in the DACO action during PREPA's restructuring
confers it with standing, preferring to hang its hopes on the
burden posed by consumer lawsuits in the absence of the waiver.
But that burden, like all the others identified by LUMA, neither
flows directly from the Title III court's order nor exposes LUMA,
as an asserted post-petition creditor, to the type of harm the
stay was designed to prevent.
D.
We need not -- indeed, cannot -- go further. LUMA's
lack of standing to prosecute this appeal means "we have no
jurisdiction to decide the merits of the case." Sea Shore Corp.
v. Sullivan, 158 F.3d 51, 54 (1st Cir. 1998). Having determined
LUMA's absence of standing and the according want of our own
jurisdiction, all that remains is for us to terminate these
proceedings. See Microsystems Software, Inc. v. Scandinavia
Online AB, 226 F.3d 35, 39 (1st Cir. 2000).
IV.
For the foregoing reasons, we conclude that this case is
not properly before this court, and accordingly we dismiss LUMA's
appeal for lack of appellate jurisdiction.
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