Yes. Yet another Detroit bankruptcy post of interest to only a few but of importance of many(?). Let's start with a news report from Reuters (behind a pay wall) here in which the argument of the Department of Justice supporting the constitutionality of Chapter 9 is noted. Who says Chapter 9 is unconstitutional? Detroit's unions.
The foundation of the dispute is important: the Tenth Amendment to the Constitution--"The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people." Indeed, the U.S. Supreme Court relied on the Tenth Amendment to conclude that the original Chapter IX (enacted as part of FDR's New Deal legislation) was unconstitutional. Yet since the Court's subsequent decision in U.S. v. Bekins, 304 U.S. 27 (1938) upholding a revised version of municipal bankruptcy, no court has cast any doubt on Chapter 9's constitutionality.
While I regularly wish to see parties litigate constitutional bankruptcy issues, this one strikes me a a waste of everyone's resources. Well, everyone, that is, except the lawyers.
The foundation of the dispute is important: the Tenth Amendment to the Constitution--"The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people." Indeed, the U.S. Supreme Court relied on the Tenth Amendment to conclude that the original Chapter IX (enacted as part of FDR's New Deal legislation) was unconstitutional. Yet since the Court's subsequent decision in U.S. v. Bekins, 304 U.S. 27 (1938) upholding a revised version of municipal bankruptcy, no court has cast any doubt on Chapter 9's constitutionality.
While I regularly wish to see parties litigate constitutional bankruptcy issues, this one strikes me a a waste of everyone's resources. Well, everyone, that is, except the lawyers.
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