Reuters

A victory for the city's lawyers, a defeat for public-employee unions.

Since the moment Detroit filed for bankruptcy last Thursday – making it the largest municipality in U.S. history to ever resort to the tactic – civil servants and retirees who stand to lose part of their pensions in any debt restructuring have argued that the city legally doesn't have the right to go bankrupt. The Michigan constitution, they've argued, bars any action that threatens the pensions of public employees, as a bankruptcy ruling would theoretically make possible. And on Friday, an Ingham County Circuit judge agreed with the unions, ruling the bankruptcy unconstitutional.

Now, some of those obstacles to city emergency manager Kevyn Orr's strategy have been cleared by a U.S. Bankruptcy Court judge. With protesting public servants picketing outside, a federal judge suspended all outside legal challenges on Wednesday. This doesn't mean that the city is eligible for bankruptcy – that decision is yet to come. But Judge Steven Rhodes ruled that federal courts, and not state courts (nor an Ingham County judge), will make that call.

Opponents of the bankruptcy effectively cannot try to derail or bog it down now with lawsuits filed in other jurisdictions (typically, all other litigation is suspended during a bankruptcy filing). All issues related to the city's bankruptcy, Rhodes ruled, will be decided in bankruptcy court. The decision is a victory for the city and its emergency manager. Further delays in the case, Rhodes said in his ruling, would only harm Detroit.

Now the city and everyone watching it can prepare for the next court date, on Aug. 2.

Top image of protesters outside a federal courthouse in Detroit on Wednesday: Rebecca Cook/Reuters

About the Author

Most Popular

  1. photo: South Korean soldiers attempt to disinfect the sidewalks of Seoul's Gagnam district in response to the spread of COVID-19.
    Coronavirus

    Pandemics Are Also an Urban Planning Problem

    Will COVID-19 change how cities are designed? Michele Acuto of the Connected Cities Lab talks about density, urbanization and pandemic preparation.  

  2. Illustration: two roommates share a couch with a Covid-19 virus.
    Coronavirus

    For Roommates Under Coronavirus Lockdown, There Are a Lot of New Rules

    Renters in apartments and houses share more than just germs with their roommates: Life under coronavirus lockdown means negotiating new social rules.

  3. photo: a bicycle rider wearing a mask in London
    Coronavirus

    In a Global Health Emergency, the Bicycle Shines

    As the coronavirus crisis forces changes in transportation, some cities are building bike lanes and protecting cycling shops. Here’s why that makes sense.

  4. An African healthcare worker takes her time washing her hands due to a virus outbreak/.
    Coronavirus

    Why You Should Stop Joking That Black People Are Immune to Coronavirus

    There’s a fatal history behind the claim that African Americans are more resistant to diseases like Covid-19 or yellow fever.

  5. Equity

    We'll Need To Reopen Our Cities. But Not Without Making Changes First.

    We must prepare for a protracted battle with coronavirus. But there are changes we can make now to prepare locked-down cities for what’s next.

×