Emergency Manager Law, Public Act 4 — October 4, 2011 at 12:57 pm

1st of two lawsuits challenging Michigan’s Emergency Manager Law dismissed


As I reported back in April, two pension boards in the City of Detroit filed suit in the U.S. District Court challenging the Republican-passed Public Act 4 — The Emergency Manager Law. From a now-unavailable Detroit Free Press article:

The City of Detroit’s two pension boards have challenged part of the state’s new emergency financial manager law, calling it unconstitutional and a threat to the pension systems.

The lawsuit, filed Monday in U.S. District Court in Detroit, claims the law gives the governor and state treasurer unbridled power to appoint emergency managers with “czar-like powers” that could usurp collective bargaining rights of city employees who negotiated pension plans. One pension system covers general employees, the other police and firefighters.

The 30-page complaint calls unconstitutional a portion of the new law that the suit claims allows EFMs to remove members of local pension boards “for any or no reason at all.”

Last week, U.S. District Judge Sean F. Cox dismissed the case saying that it was not yet “ripe” for consideration because the plaintiffs had not yet been affected by it.

A federal judge dismissed a lawsuit seeking to overturn a Michigan statute giving emergency powers to state-appointed financial managers, saying the law wasn’t ready for a legal challenge.

The Detroit workers’ pension boards, which sued in April, asked the federal court in Detroit to declare the law unconstitutional and block it from taking effect. The law, which lets managers terminate employee contracts and suspend collective bargaining, was signed by Michigan Governor Rick Snyder in March.

U.S. District Judge Sean F. Cox said the issues in the case weren’t “ripe” for consideration. The emergency powers wouldn’t be triggered unless multiple events occurred, including written notice by the state treasurer to the city of Detroit, a preliminary review, and a finding that a pension fund is underfunded, Cox said.

“The action is not ripe for review because not only have the above multistep processes that could potentially lead to the use of the powers of Section 19(1)(m) not been completed, they have not even begun,” Cox said in his 20-page ruling yesterday.

While this is a setback, to be sure, it’s not the only lawsuit challenging this odious, disenfranchising, undemocratic law. A lawsuit filed by the Sugar Law Center is still pending. I spoke recently with Tova Perlmuter from Sugar Law who told me her group is awaiting a ruling by the Republican-dominated Michigan Supreme Court on a desperate request by Governor Rick Snyder to have a ruling on the suit expedited (more HERE.) Stay tuned.