Michigan Court Reverses Detroit Financial Crisis Review Order

A Michigan (STOMI1) appeals court reversed a judge’s ruling that required his approval for implementation of any agreement between Detroit and a state financial review team to address the city’s financial crisis.

The Michigan Court of Appeals also ordered Ingham County Circuit Court Judge William Collette on March 23 “to take no further action” in a lawsuit claiming the review team violated Michigan’s open-meetings law by holding closed-door sessions.

Michigan Governor Rick Snyder appointed the team in December after a preliminary study found the city was in “probable financial stress.” The group is considering whether Detroit, Michigan’s largest city, needs an emergency manager. The team found last week that the city was in a severe financial emergency.

Collette ruled March 20 that the review team couldn’t “execute and/or sign a consent agreement or its equivalent” with the city “until further order of this court.” He had earlier barred the team from holding closed-door sessions. Michigan officials appealed both decisions.

Michigan law “does not authorize the court to bar future actions by defendants in the absence of a finding of continued violations of the Open Meetings Act,” the appeals court said in its reversal of the March 20 ruling.

‘No Further Action’

“Pending further order of this court, the trial court shall take no further action in this case including, without limitations, the holding of hearings and the scheduling or taking of depositions,” the three-judge appellate panel said. The court hasn’t acted on the appeal of Collette’s earlier ruling on closed-door sessions.

Snyder, a Republican, this month proposed placing Detroit’s finances under a nine-member advisory board in an attempt to avoid appointment of an emergency manager who would have broad powers to rein in costs. Detroit Mayor Dave Bing has rejected Snyder’s plan and submitted a counterproposal.

Collette barred the review team from holding closed-door sessions in response to a complaint by Robert Davis, staff representative of the American Federation of State, County & Municipal Employees, which represents Michigan employees. Davis said the group is required under Michigan law to hold meetings open to the public.

Attorneys for the state maintain that the study group isn’t a public body as defined under Michigan’s Open Meetings Act.

The case is Davis v. City of Detroit Financial Review Team, 12-112-CZ, Circuit Court, Ingham County, Michigan (Mason).

To contact the reporter on this story: Margaret Cronin Fisk in Detroit at mcfisk@bloomberg.net

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net

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