Is an EM legal? Lawsuit seeks answer in federal court

Is an EM legal? Lawsuit seeks answer in federal court

UPDATE: Here is the Michigan Citizen’s article about the hearing. The Michigan Citizen is part of New Michigan Media, which is one of the members of the Detroit Journalism Cooperative.

After hearing more than two hours of arguments in a jam-packed courtroom, U.S. District Judge George Caram Steeh said he would rule “as soon as” he can on the state’s request to dismiss a lawsuit that challenges Michigan’s emergency manager law.

He could agree with the state, and make the legal challenge go away. If he does allow the lawsuit to proceed, it will likely not be wrapped up before Detroit’s bankruptcy case has its confirmation hearings, based on the current schedule.

The city’s Chapter 9 case is on track to be finalized by late summer under the leadership of the city’s emergency manager, Kevyn Orr. It’s not exactly clear how this lawsuit, challenging Orr’s authority, could ultimately affect the bankruptcy.

No one can predict what Judge Steeh will decide, but his questions and comments to attorneys during the hearing may have signaled some concerns about the emergency manager law. He pointed out its disproportionate effect on minority-majority communities in Michigan. (More than half of the state’s African-American population lives in a municipality with an emergency manager.)

Judge Steeh also noted how atypical the statute is as compared to what other states have in place to deal with financial challenges of their municipalities. “We’re dealing with a law that is quite unique in the United States. We’re seeing to apply a number of constitutional principles to a law that is quite unusual,” the judge said during the early part of the hearing.

Michigan’s emergency manager law, formerly known as Public Act 436, was passed by the Legislature and signed by Gov. Rick Snyder late in 2012. That November, citizens voted to overturn a previously enacted law, and it took immediate effect. Snyder appointed Orr in March 2013.

First filed last year, the lawsuit debated on Wednesday challenges the constitutionality of the current law on the grounds that it violates rights related to due process, voting and representative government under the U.S. Constitution. Defendants in the case are Snyder and former state Treasurer Andy Dillon.

The suit itself reads:

“Public Act 436 unconstitutionally strips local voters of their right to a republican form of government by transferring governance, including but not limited to legislative powers, from local elected officials to one unelected emergency manager. … In each of these communities, citizens will have effectively lost their right to vote for elected officials or had that right diluted so as to render it an exercise in form without substance.”

Indeed, PA 436 grants broad power to emergency managers, who are appointed by the governor. Attorneys for the plaintiffs argue that:

  • Because the previous emergency manager law was “overwhelmingly rejected by the electorate,” the current law does not represent citizens’ wishes, says Julie Hurwitz, a Detroit-based attorney representing the plaintiffs and the National Lawyers Guild.
  • Hurwitz also says the case is about the “U.S. Constitution and the sovereign power of the state versus the abuse of the sovereign power of the Michigan.” This statement refers to the issue of which law has precedence, federal or state. Since states have the power to create local governments, including cities and school districts (both able to have emergency managers, under PA 436), defenders of the emergency manager law have argued that that power reinforces the legality of emergency managers. But Hurwitz and other attorneys for the plaintiffs argue that state law cannot conflict with federal law, and she believes the current emergency manager law does. “This law, Public Act 436, infringes on the right to a representative form of government. It denies the right to vote,” she said during the hearing. “The law is blatantly unconstitutional.”
  • In arguing against the law, Hurwitz objected to the “sole discretion, power more broadly granted than ever, powers extending beyond those of elected officials” that PA 436 grants to emergency managers. Unlike representatives, senators, city council members, township board members and other local or state lawmakers, emergency managers are not directly elected, and Hurwitz says that is an issue. “They have the power to repeal, amend and enact laws. If that is not a legislative function, I don’t know what is.”
  • John Philo, director of the Sugar Law Center, extended Hurwitz’s argument, explaining that the appointment of an emergency manager replaces an elected official. “We believe this affects a fundamental right to vote,” he said during the hearing.
  • Although states by law create local governmental units, Philo said there are limits to the state power affecting them. “Once the vote is granted – whether it’s for dog catcher or president – it can’t be taken away,” Philo said.
  • Philo also made the argument, in support of the lawsuit being allowed to proceed, that the appointment of an emergency manager means that a vote in a city with such an appointee actually means “less” than a vote in a city without one. For example, in Detroit, “When they vote for governor, they’re not getting a say in the mayor of Birmingham, but when they vote in Birmingham, they’re getting a say in Detroit’s emergency manager,” Philo said.
  • He also questioned why some financially distressed communities in Michigan had received emergency managers and some have not. “We have shown that citizens in emergency manager municipalities have had three times the rates of poverty,” he said. “We believe that there is a causal link and we should be factually permitted to explore that causal link.”
  • Herb Sanders, a Detroit-based attorney representing the plaintiffs, also argued about the effect of the limits of voting that he says the emergency manager law creates. He says the appointment of an emergency manager will decrease voter turnout in future elections in those communities. “When you tell an individual that their vote doesn’t count, it has a certain psychological effect, and they are deterred and less likely to partake in the voting process at all,” he said.

But Michael Murphy, the attorney from the Michigan Attorney General’s office, representing Snyder and Dillon, discounted the plaintiffs’ arguments, starting with the claims that emergency manager laws discriminate against poor or African-American citizens.

“The analysis (of whether to appoint an emergency manager) is based upon money, not the color of the community. The only color we’re dealing with in these criteria is green,” Murphy said. “It’s cash and the ability of the community to manage that money.”

Several times during his time at the podium, Murphy emphasized that the purpose of the law is to help local governments and school districts deal with their challenging finances. “The statute is economic in nature. It was passed for the benefit of the state, of the citizens to protect their health, safety and welfare,” Murphy said.

With the Great Recession, falling property values and population drops in several of the communities with emergency managers, including Detroit, the law was needed, he explained. “It’s not only a unique solution for the times, it’s unique times that force unique solutions,” Murphy said.

For people who don’t like the law, he urged that they “bring their grievances to their state legislator as they see fit” and head to the polls to vote out lawmakers who support the law.

“The remedy isn’t here. It’s at the ballot box. If they didn’t like it, they vote for a new Legislature to repeal it,” Murphy said. “We’re not in the business of squashing local governments. We’re not governing by referendum. … We don’t pass laws by voting. We live by elected representatives who pass laws for us.”

-By WDET’s Sandra Svoboda

@WDETSandra and