Bankruptcy v. The Constitution? Detroit attorney argues for civil rights creditors

Bankruptcy v. The Constitution? Detroit attorney argues for civil rights creditors

In Detroit’s bankruptcy trial, it’s mainly financial creditors challenging the city’s restructuring plan. But another, smaller group of people say they’re owed money and want their claims to be allowed to proceed. WDET’s Sandra Svoboda spoke with Attorney Bill Goodman about his clients, their civil rights lawsuits against the city, and how they are tied up in the bankruptcy case.

Here is the audio of their conversation. The full transcript appears below.

Here is the lawsuit Katie Williams’ estate filed.

Here is the lawsuit Walter Swift filed.

Bill Goodman: I represent Walter Swift, a man who was wrongfully and falsely convicted of rape and went to prison for 26, 27 years until he was exonerated and is now free and suffering from the effects of the fact that his life has been stolen from him. I represent Katie Williams, a victim of domestic violence who also happened to be a Detroit police officer whose husband and violator was also a Detroit cop and whom the Detroit police department and other police departments let get away with murder. Literally.

Sandra Svoboda: What kind of lawsuits have they filed?

BG: They have filed actions against individual police officers and the city of Detroit under a federal statute known as the Civil Rights Act of 1875 which actually goes back to 1866, which was passed in conjunction with the 14th Amendment to the United States Constitution. They’re asking for damages. They’re asking for punitive damages and they’re asking for attorneys’ fees, all of which they’re entitled to under section 1983 of the Civil Rights Act.

SS: And what’s happened to their cases during the bankruptcy?

BG: They have been sadly and tragically stayed. They haven’t been able to take the depositions that they need to take. They haven’t been able to get the documents they need to get. They haven’t been able to proceed with their cases because of bankruptcy.

SS: Why?

BG: Because Judge Rhodes entered an order staying all proceedings in these cases, which he’s entitled, theoretically, entitled to do under Chapter 9 of the Bankruptcy Code, which we say violates their rights under the Constitution of the United States.

SS: So your clients, and of course there’s a handful of others with similar claims, basically we’re seeing their Constitutional rights, their civil rights claims clashing with the bankruptcy law in the proceedings. Is that an oversimplification?

BG: No. I don’t think it’s an oversimplification. It’s true but actually their rights are not merely clashing with the bankruptcy code or the rights of the city of Detroit and others under the bankruptcy code, their rights have been virtually eliminated by the bankruptcy code and they’re entitled to 10 cents on the dollar or whatever pathetic sum creditors are entitled to now, unliquidated creditors.

SS: Have we see civil rights claims like this in other municipal bankruptcies?

BG: Yes, but the issue of whether it is Constitutional for a court to diminish people’s rights under the civil rights laws has never been decided. It’s been raised for the first time by my clients and others following my clients’ lead.

SS: Judge Rhodes, of course, asked for and got a ruling from the U.S. Attorney General about where the civil rights issue stands in relation to bankruptcy and constitutional claims. As I remember you weren’t too happy when the Attorney General’s opinion came out.

BG: The Attorney General’s opinion, which was really an opinion from the Solicitor General under the Attorney General, said that we’re not entitled to any different treatment than any other unliquidated creditor, not withstanding the fact that we brought a claim under the United States Constitution. This was bad. This was false, it was wrongheaded, and it was a disgrace for the United States Department of Justice to file such a brief.

SS: What are your clients seeking?

BG: They’re seeking full compensation. If you’ve been in prison for 27 years for a crime you didn’t commit and everyone knows that it was a crime you didn’t commit and you’ve been exonerated, and the police officer who arrested you has filed an affidavit that said you didn’t do this crime, you were wrongfully convicted, you should be compensated. People in other states against other systems are averaging a million dollars a year for these wrongful convictions. Walter Swift by that analysis is entitled to 10 cents on the dollar at most and not until 10 years from now.

SS: Because of the bankruptcy case?

BG: That’s right. Because of the alleged constraints of Chapter 9 in the bankruptcy code.

SS: Why is he different than any other financial creditor with a claim against the city?

BG: Because his rights have been brought under the Constitution of the United States. That means that to deprive him of those rights deprives him of constitutional rights and it’s an unconstitutional action. Whether it’s an action by Judge Rhodes or by the City of Detroit, it violates his constitutional rights and cannot be accepted.

SS: Where do things stand now and what do you think will happen to resolve your case?

BG: We have an objection filed in front of Judge Rhodes, which he has to decide, which says we want him to say, “That’s right. Your clients’ rights, Mr. Swift’s rights are protected by the Constitution and I cannot in a bankruptcy court, cannot interfere with them, diminish them in any way.” That’s where it stands right now, and we hope and expect and fully anticipate that we will be vindicated and Judge Rhodes will rule with us on this.


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