By Diane Bukowski, Voice of Detroit, January 3, 2014
DETROIT – In a key development in the Detroit Chapter 9 bankruptcy case, the Michigan and Detroit NAACP plaintiffs succeeded Dec. 30 in moving their appeal of U.S. Bankruptcy Judge Steven Rhodes’ earlier order barring their constitutional challenge to the state’s Emergency Manager law, PA 436, into U.S. District Court.
U.S. District Court Senior Judge Bernard Friedman has been assigned to the case. No hearing date has yet been set. The appeal is key because Detroit is the only municipality in the country where a Chapter 9 bankruptcy is taking place under an unelected official, EM Kevyn Orr.
The NAACP et al appeal asks among other issues, “Whether the Bankruptcy Court had the jurisdiction to address a strictly constitutional law claim, not in any way intertwined with bankruptcy law or the Bankruptcy Code?, and . . . Whether the Bankruptcy Court abused its discretion when it used subjective reasoning and speculation as to the Petitioners’ intentions and determined what is best for the City, over and above fundamental constitutional issues, such as voting rights?”
Judge Rhodes ruled Nov. 6 that he would allow a similar complaint, Phillips et al, to proceed because it exempted Detroit’s situation from its complaint, to avoid interfering with the ongoing Detroit bankruptcy case. But he himself is hearing that complaint.
“The substance of our case is not about debtor-creditor issues, but about voter law,” Melvin “Butch” Hollowell, the Michigan NAACP’s in-house counsel, told Judge Rhodes during the Oct. 2 hearing on their motion to remove Rhodes’ stay of the case, which was then pending before U.S. District Court Judge George Caram Steeh.
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