In re City of Detroit, Michigan, ___F.3d___, 2016 WL 5682704 (6th Circ.10/3/16
In re City of Detroit, Michigan, ___F.3d___, 2016 WL 5682704 (6th Circ.10/3/16): The Sixth Circuit refused to reverse cuts to pensions of Detroit municipal retires. The retires pension benefits were cut as part of Detroit City chapter 9 bankruptcy plan. The retirees appealed to the 6th Circuit Court of Appeals. The Sixth Circuit based its ruling on the fact that too many significant or irreversible actions taken under the Chapter 9 plan, would have to be unraveled, for the cut pension benefits to be restored.
There was a dissent 2-1. The split decision of the 6th Circuit concurred with a finding in the US District Court of the Eastern District of Michigan, that the claims of the pensioners were foreclosed under equitable mootness (the retirees did not get a stay pending appeal, of the confirmed Chapter 9 plan being performed). Equitable mootness is more like waiver or forfeiture than getting a ruling on the merits of whether it was improper to cut the pension benefits. Note: the 9th Circuit Court of Appeal, which is the US Circuit Court for California and several additional states, is much more resistant to finding appeals to be “equitably moot”, than was the 6th Circuit Court of Appeal, in this Detroit decision. Equitable mootness will very likely be taken up by, and decided by the US Supreme Court, in future.