Lawsuit seeks to remove Michigan emergency managers

Reuters News
Posted: Sep 27, 2012 12:21 PM
Lawsuit seeks to remove Michigan emergency managers

(Reuters) - A new lawsuit in Michigan is seeking to oust state-appointed emergency managers who are running fiscally stressed governments on the basis there is no law in place authorizing such appointments.

The lawsuit was filed on behalf of city council members in Pontiac, Flint and Benton Harbor, which are operating with managers.

Michigan passed a law in 2011 (known as Public Act 4) to boost the power of emergency managers. But labor unions have put forward a ballot measure seeking to repeal it. They are concerned about provisions giving emergency managers the ability to suspend collective bargaining agreements with workers and usurp the powers of elected local government officials.

Public Act 4 was suspended in August ahead of a state-wide vote on November 6 on whether it should be repealed.

Attorney General Bill Schuette has taken the position that the suspension of the law allowed the state to use Public Act 72, a weaker law it had replaced. Under the terms of that law, state officials reappointed or replaced existing managers in three school districts and four cities.

The lawsuit, filed late on Wednesday against Michigan's governor, treasurer and attorney general in Ingham County Circuit Court, seeks the removal of those emergency managers.

"The suit we filed is based on the obvious fact that there cannot be emergency managers without the legal framework to support them. The new law has been suspended and the old law is dead," said John Philo, legal director of the Sugar Law Center, which along with other law groups filed the lawsuit.

The legal action will not likely affect an April financial stability agreement that gave Michigan oversight for Detroit's finances unless parts of that pact are tied to Public Act 72, according to Philo.

There was no immediate comment on the lawsuit from Michigan officials.

(Reporting by Karen Pierog; Editing by Claudia Parsons)