City of Pontiac Retired Employees v. Louis Schimmel
751 F.3d 427
6th Cir.2014Background
- Governor appointed emergency manager for Pontiac under Public Act 4; orders reduced or eliminated retirees' health-care benefits in 2011–2012; retirees filed putative class action and sought injunctive relief; district court denied TRO and preliminary injunction; Public Act 436 later reenacted similar powers and in 2013 orders eliminated all retiree benefits through 2015 or while in receivership; this court reversed and remanded for additional fact-finding and state-law issues; remand directed to develop more record on federal and state-law questions; case remains live for damages and injunctive relief with updated factual context
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether § 903(1) binds retirees without consent | Schimmel argues § 903(1) applies to Public Act 4/436 | Retirees contend a state law method of composition binds without consent | Live issue; remand for development of § 903(1) analysis |
| Whether emergency manager actions were legislative under Contract Clause | Retirees claim actions impair contracts as legislative in character | City/State contend not a legislative act | Live issue; remand for factual/legal development on legislative character |
| Whether reductions/eliminations were necessary and reasonable under Contract Clause | Reductions were not necessary/reasonable to address fiscal emergency | Actions served legitimate fiscal reform | Live issue; remand to assess reasonableness/necessity with fuller record |
| Whether due process rights were violated and if procedural protections apply | Contract rights create property interests; due process requires adequate process | Record incomplete; need contract scope and record of process | Remand; analyze viability with full record and contractual context |
Key Cases Cited
- Ne. Fla. Chapter of Associated Gen. Contractors of Am. v. City of Jacksonville, 508 U.S. 656 (U.S. 1993) (jurisdiction retained when superseding law changes but substantially similar)
- U.S. Trust Co. of N.Y. v. New Jersey, 431 U.S. 1 (U.S. 1977) (test for substantial impairment under Contract Clause)
- Ross v. Oregon, 227 U.S. 150 (U.S. 1913) (whether action is legislative depends on character, not form)
- INS v. Chadha, 462 U.S. 919 (U.S. 1983) (legislative character depends on substance)
- Bi-Metallic Inv. Co. v. State Bd. of Equalization, 239 U.S. 441 (U.S. 1915) (due process; contractual property interests)
- Atkins v. Parker, 472 U.S. 115 (U.S. 1985) (due process implications of public welfare actions)
- Hahn v. Star Bank, 190 F.3d 708 (6th Cir. 1999) (procedural due process and property interests in contracts)
- Leary v. Daeschner, 228 F.3d 729 (6th Cir. 2000) (contract rights as property interests; due process)
- City of Pontiac Retired Emps. Ass'n v. Schimmel, 726 F.3d 767 (6th Cir. 2013) (origin of case; panel and remand history)
- Obama for Am. v. Husted, 697 F.3d 423 (6th Cir. 2012) (likelihood of success on merits in constitutional injunctive relief)
- PACCAR Inc. v. TeleScan Techs., LLC, 319 F.3d 243 (6th Cir. 2003) (four-factor standard for preliminary injunctions)
- Green Party of Tenn. v. Hargett, 700 F.3d 816 (6th Cir. 2012) (remand to consider amended statute)
- NAACP v. City of Mansfield, 866 F.2d 162 (6th Cir. 1989) (standard for reviewing likelihood of success on merits)
- City of Pontiac Retired Emps. Ass'n v. Schimmel, 726 F.3d 767 (6th Cir. 2013) (reference to live issues and remand posture)