Federal Appeals Court Rejects Challenge to Detroit Pension Cuts
Detroit News staff and wire reports
2:32 p.m. EDT October 3, 2016
Detroit — A federal appeals court has ruled in favor of Detroit in a lawsuit by retirees whose pensions were cut in a plan to get the city out of bankruptcy.
Some retirees sued, saying they deserve the pension that was promised before the city filed for bankruptcy in 2013. But in a 2-1 decision Monday, the court said it’s “not a close call.”
The court says Detroit’s emergence from bankruptcy in 2014 was the result of a series of major settlements between the city and creditors and must not be disturbed. Thousands of retirees saw their pensions cut by 4.5 percent.
In dissent, Judge Karen Nelson Moore says retirees deserve their day in court. She says they have been left “with the impression that their rights do not matter.”
Jamie Fields, a retired Detroit Police Department deputy chief, said Monday that Moore, a Clinton appointee, validated his legal battle in her dissent.
“With all the people who said we were crazy for filing this, at least there was one judge who said they agreed with me. I feel some vindication that one person didn’t say I was crazy,” he said.
Fields said he will ask for the full appeals court to hear the case.
“The next step after that would be to take it to the Supreme Court. The odds of them taking it are small, but the retirees deserve it, and we have no choice but to go forward,” Fields said.
Detroit Mayor Mike Duggan declined to comment at an afternoon jobs event since he had not seen the ruling.
In 2014, Detroit’s approved bankruptcy plan was the biggest municipal bankruptcy case in U.S. history.
The city’s plan shed $7 billion in debt, restructured another $3 billion and is to put $1.7 billion into improved services.
In the bankruptcy, the city cut $7.8 billion from payments to its retired workers. The city also has escaped $4.3 billion in retirement health care benefits.
2:32 p.m. EDT October 3, 2016
Detroit — A federal appeals court has ruled in favor of Detroit in a lawsuit by retirees whose pensions were cut in a plan to get the city out of bankruptcy.
Some retirees sued, saying they deserve the pension that was promised before the city filed for bankruptcy in 2013. But in a 2-1 decision Monday, the court said it’s “not a close call.”
The court says Detroit’s emergence from bankruptcy in 2014 was the result of a series of major settlements between the city and creditors and must not be disturbed. Thousands of retirees saw their pensions cut by 4.5 percent.
In dissent, Judge Karen Nelson Moore says retirees deserve their day in court. She says they have been left “with the impression that their rights do not matter.”
Jamie Fields, a retired Detroit Police Department deputy chief, said Monday that Moore, a Clinton appointee, validated his legal battle in her dissent.
“With all the people who said we were crazy for filing this, at least there was one judge who said they agreed with me. I feel some vindication that one person didn’t say I was crazy,” he said.
Fields said he will ask for the full appeals court to hear the case.
“The next step after that would be to take it to the Supreme Court. The odds of them taking it are small, but the retirees deserve it, and we have no choice but to go forward,” Fields said.
Detroit Mayor Mike Duggan declined to comment at an afternoon jobs event since he had not seen the ruling.
In 2014, Detroit’s approved bankruptcy plan was the biggest municipal bankruptcy case in U.S. history.
The city’s plan shed $7 billion in debt, restructured another $3 billion and is to put $1.7 billion into improved services.
In the bankruptcy, the city cut $7.8 billion from payments to its retired workers. The city also has escaped $4.3 billion in retirement health care benefits.
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