Michigan's Emergency Financial Manager law survives legal challenge

Dec 5, 2012

Michigan’s controversial Emergency Financial Manager law has survived a legal challenge.

But the judge’s decision may have opened a new door to legal challenges.

Michigan’s old Emergency Financial Manager law (Public Act 72) was repealed when state lawmakers passed a new law in 2011 giving the managers even broader powers.  However that new tougher law was rejected by voters last month.

Attorney General Bill Schuette decided the old law was back in effect after the new Emergency Manager law was suspended, when state election officials earlier this year certified a petition putting the repeal of Public Act 4 on the November ballot.  

But critics filed suit saying a repealed law doesn’t just go back in effect when its replacement is thrown out.

An Ingham County judge decided in this case it does.

Assistant Attorney General Michelle Brya argued before Ingham County Circuit Court Judge Rosemarie Aquilina Wednesday that the whole purpose of referendum would be rendered meaningless if the judge ruled part of PA 4  (the repeal of PA72) remained in effect.

Judge Aquilina appeared torn as she issued her ruling.  The judge made it very clear that she didn’t want to ‘legislate’ from the bench.   

In the end, the judge dismissed the legal challenge. 

Attorney Herbert Sanders challenged the state's position.   He says the judge’s ruling raises new questions.

“The judge’s ruling dictates that those actions taken by emergency managers under PA 4 are null and void,” Sanders said after the hearing.   The judge made it clear during the hearing that she did not want to get into that legal area. 

Sanders says he has to talk with his clients about what their next step should be.  But it appears there will be a next step.   

“You know there is always room for appeal,” says Sanders, “These are battles. The war continues.”

The ruling means the work of Emergency Financial Managers in a handful of Michigan cities and school districts can continue.

There is speculation that the city of Detroit could soon join the list of Michigan cities with Emergency Financial Managers.