DIRECT ACTION OF UNCONSTITUTIONALITY 1348 – INTERIM MEASURE
RAPPORTEUR : JUSTICE OCTAVIO GALLOTTI
DECISION DATE : OCTOBER 4, 1995
Subject: Privatization of State Bank
The governor of the State of Rio de Janeiro filed a direct action of unconstitutionality against article 364 and its sole paragraph of the State Constitution. This article, which considers Rio de Janeiro State Bank (Banco do Estado do Rio de Janeiro S.A, - BANERJ) a patrimony of the people of Rio de Janeiro State, (a) did not allow the sale of ordinary nominal stocks which represented state control over BANERJ and (b) designated BANERJ as the exclusive institution to collect state revenue and to carry out its outpayments.
(1) May the State Constitution prohibit the sale of asset control of a specific mixed-capital company, in this case BANERJ?
(2) May the State Constitution confer the monopoly of revenue collection and outpayments to the State Bank?
(1) In line with the precedent established in the Direct Action of Unconstitutionality 234, the Full Court ruled that the stocks that confer state control of BANERJ may be sold, as long as there exists an authorization by formal law.
(2) The Full Court by majority recognized that the State Constitution may not decide on the monopoly of state revenue collection due to (a) apparent formal unconstitutionality in violation of the state governor’s competence for the organization and operation of the state administration and (b) apparent substantial unconstitutionality in violation of the principle of free enterprise. One vote concurred with the rapporteur in respect to the first fundament only, and one dissident vote rejected both fundaments.
Consequently, the Full Court by majority granted the request of interim measure to suspend the enforcement of the articles at stake until final judgment of the action, based on the relevance of the allegation of unconstitutionality.
Full text of the decision in Portuguese