Emergency Manager Litigation
Attorneys from the National Lawyers Guild and Sugar Law Center agreed to file a major constitutional rights lawsuit challenging the Michigan Emergency Manager Law as in violation of the U.S. Constitution. On March 27, 2013, plaintiffs filed suit (Phillips v Snyder) against the state in the Federal District Court for the Eastern District challenging the constitutionality of PA 436. The judge assigned to hear the case was Judge Steeh;
In May 2013, the state filed papers to have our case dismissed alleging plaintiffs did not have standing and generally denying any constitutional violations. Plaintiffs filed a response opposing the state’s argument. Judgment on these issues is still pending.
In July 2013, Detroit filed for Chapter 9 bankruptcy and an automatic stay was placed on all court cases against the City of Detroit (a stay puts a case on indefinite hold until the bankruptcy court lifts the stay or until the bankruptcy is over). Our case was not against the City of Detroit so the automatic stay did not automatically apply, but the Governor asked the bankruptcy court to extend the stay to cases against the Governor and State Treasurer (identifying three pension cases that directly impacted Detroit pensions, but not our case);
The bankruptcy court agreed to extend the stay to include all cases against the Governor and State Treasurer;
In August 2013, the Governor then asserted that the wording of the extended stay applied to our case (the wording of the bankruptcy court’s order granting the extended stay stated that the stay applied to all cases against the Governor). The judge in our case agreed, (even though he explicitly questioned why it should apply to this case);
In September 2013, we filed papers with the bankruptcy court to lift the stay in our case; (requesting a lift to the stay means that we made the argument that the stay did not apply to our case, given the nature of our case, particularly with the constitutional issues involved, and we requested that our case be allowed to proceed.)
At the end of October 2013, the bankruptcy judge, Judge Rhodes, lifted the stay in our case to permit us to seek a ruling on the constitutionality of Public Act 436;
In November 2013, the Governor (joined by the City/ Debtor in bankruptcy/Kevin Orr) asked the bankruptcy court to reconsider its order lifting the stay in our case;
The bankruptcy court then ordered additional briefing and a hearing. In late December, Judge Rhodes issued another order deciding not to reconsider his order lifting the stay and to allow us to proceed;
We then immediately filed papers asking the Federal District Court (where our case is pending) to reopen the case based on the bankruptcy judge’s ruling;
Earlier this month, the Governor filed papers to appeal the bankruptcy court’s ruling (which the City/ Debtor in bankruptcy/Kevin Orr also joined). We will be opposing the appeal.
Meanwhile, we are scheduled to appear in Federal District Court (Judge Steeh) on February 6 for a Scheduling Conference.