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Friday, July 19, 2013

Federal Court vs. State Court Showdown?

The Detroit Free Press reports:

An Ingham County judge says Thursday's historic Detroit bankruptcy filing violates the Michigan Constitution and state law and must be withdrawn.

But Attorney General Bill Schuette said he will appeal Circuit Judge Rosemarie Aquilina’s Friday rulings and seek emergency consideration by the Michigan Court of Appeals. He wants her orders stayed pending the appeals, he said in a news release.

In a spate of orders today arising from three separate lawsuits, Aquilina said Gov. Rick Snyder and Detroit emergency manager Kevyn Orr must take no further actions that threaten to diminish the pension benefits of City of Detroit retirees.
The only catch is that, according to the article, the bankruptcy filing was made 5 minutes before Judge Aquilina's hearing began. I'm not a bankruptcy lawyer, but it seems to me that she should have lost jurisdiction because of the automatic stay under bankruptcy law. There may also be a federal law preemption issue.

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