## Facts

- The Workers’ Party (Partido dos Trabalhadores—PT) filed a Direct Action of Unconstitutionality (ADI) in Brazil’s Supreme Federal Court (STF) during a period of economic and banking instability.
- The suit challenged two National Monetary Council (Conselho Monetário Nacional—CMN) resolutions: Resolution No. 2,197/1995 and Resolution No. 2,211/1995.
- The challenged resolutions authorized the creation and regulation of a deposit-protection mechanism in Brazil (described in the resolutions as a private, non-profit entity to administer a protection mechanism for creditors of financial institutions) and set rules on participation, governance, and funding.
- PT argued that the CMN, an executive-branch body, could not validly create and regulate such a mechanism by resolution because Article 192 of the Brazilian Constitution requires that the national financial system be governed by a “supplementary law” (a statute requiring an absolute majority in Congress).
- The President of the Republic (named as the defendant in the English-captioned version of the case) defended the executive response to the crisis as necessary economic action taken within the constitutional framework for financial policy.
- The CMN asserted that its resolutions operated only in support of the constitutional model and were meant to fill in details connected to Article 192, including the provision addressing financial-system organization.
- Along with the ADI, PT sought interim relief (medida cautelar) to suspend, pending a final merits judgment, rules that would require the placement or collection of significant resources—especially where public funds or large compulsory contributions could be drawn into the new mechanism.
- The STF addressed only the request for interim relief in this 1996 preliminary decision (Medida Cautelar), issued by the Plenary (reported as STF, ADI 1.398 MC/DF, rel. Min. Nelson Jobim, decided March 13, 1996).

## Issues

1. Whether the requirements for interim relief in an ADI were satisfied—specifically, whether there was a plausible claim of unconstitutionality (fumus boni iuris) and a risk of serious harm in waiting for a final decision (periculum in mora) as to the challenged CMN resolutions on deposit protection.
2. Whether parts of the interim-relief request had become moot because later CMN action altered the regulatory provisions being attacked.

## Decision

- The STF granted the requested interim relief in part, provisionally suspending the effectiveness of certain portions of the challenged resolutions.
- The Court found sufficient indication of legal invalidity to justify provisional relief, given the argument that Article 192 reserves core regulation of the financial system to supplementary law enacted by Congress, rather than to executive resolutions.
- The Court found periculum in mora in the prospect that the challenged framework would mobilize and collect very large sums under the resolutions, with uncertain recovery if the STF later invalidated the norms.
- The STF declared the interim-relief request prejudiced (moot) as to specific provisions of Resolution No. 2,211/1995 because a subsequent resolution (Resolution No. 2,249/1996) changed the regulatory framework, removing the immediate target of the injunction for those points.
- The ruling was expressly preliminary and did not finally decide the constitutionality of the deposit-protection scheme; it only addressed whether provisional suspension was warranted pending a merits decision.

## Legal Principles

- In an ADI, interim relief depends on both (i) a plausible showing of unconstitutionality (fumus boni iuris) and (ii) a concrete risk of serious harm from continued enforcement during the case (periculum in mora).
- A strong form of periculum in mora exists where challenged financial regulations would trigger the movement, collection, or allocation of large sums that may be difficult or impossible to restore if the governing rule is later struck down.
- Where the Constitution assigns regulation of a subject to a specific legislative vehicle (such as supplementary law under Article 192), executive-branch rulemaking may face serious constitutional doubt when it functions as a substitute for that required legislative act.
- Interim relief may be tailored: a constitutional court can suspend only parts of challenged norms rather than halt an entire regulatory package.
- A request for interim relief can become moot in part if later legal changes replace or materially alter the provisions challenged, eliminating the need for provisional suspension of those specific items.

## Conclusion

In ADI No. 1398-0 (1996), the STF’s Plenary partially granted interim relief against National Monetary Council resolutions that structured a deposit-protection mechanism, concluding that the constitutional challenge raised serious doubts under Article 192’s supplementary-law requirement and that delaying relief risked substantial, potentially unrecoverable financial transfers; it also treated parts of the request as moot after a later resolution changed the contested provisions.


Workers Party v. President of the Republic - Preliminary Decision, Direct Action of Unconstitutionality no. 1398-0 (1996)