City of Pontiac Retired Employees Ass'n v. Schimmel
2013 U.S. App. LEXIS 16519
6th Cir.2013Background
- Pontiac’s emergency manager under Public Act 4 modified CBAs and pension/retiree benefits to address municipal insolvency.
- Voters rejected Public Act 4 by referendum in November 2012, raising questions about the legal effect of actions taken under PA 4.
- The district court denied TRO and preliminary injunction; the retirees sought to halt EM modifications to healthcare benefits.
- The Sixth Circuit vacated and remanded to develop state-law questions (immediate effect and referendum impact) before addressing federal merits.
- Key state-law issues identified include whether PA 4 obtained immediate effect with two-thirds votes and whether referendum voided prior actions.
- The panel emphasized respect for state-law determinations and urged expedited fact-finding on remand.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| PA 4 immediate effect vs. Michigan Constitution | Retired Employees argue two-thirds vote requirements were not met, invalidating immediate effect. | Pontiac contends PA 4 validly gave immediate effect under constitutional rule and House procedures. | Remanded for state-law fact-finding; federal issues not decided. |
| Voter referendum and EM actions | Referendum rejection voids actions taken under PA 4. | Referendum effects are unsettled; actions may remain valid pending state-law analysis. | Remanded for state-law fact-finding; federal issues not decided. |
| Waiver and sua sponte state-law review | Waiver/non-briefing should not bar considerations if state law dispositive. | Issue should not be decided sua sponte; state-law questions belong to Michigan courts. | Remanded; the court did not decide these state-law questions on federal appeal. |
Key Cases Cited
- Buffalo Teachers Fed’n v. Tobe, 464 F.3d 362 (2d Cir. 2006) (substantial impairment criterion for Contracts Clause scrutiny)
- Independent Insurance Agents of America v. Clarke, 508 U.S. 439 (Supreme Court 1993) (courts may consider issues sua sponte to avoid advisory opinions)
- Hammel v. Speaker of House of Representatives, 825 N.W.2d 616 (Mich. Ct. App. 2012) (state House rules and immediate-effect procedures; precedential in Michigan)
- West v. AT&T Co., 311 U.S. 223 (Supreme Court 1940) (state appellate judgments as a datum for state-law questions)