Earlier this year, we previewed a Sixth Circuit en banc case regarding emergency measures taken in the City of Pontiac, Michigan to reduce and eliminate health care benefits of retired City employees. Sua sponte raising state law issues, the prior panel told the district court to consider whether the City manager’s actions complied with Michigan law.
The en banc court took a different approach. In this week’s decision, City of Pontiac Retired Employees Ass’n v. Schimmel, the full court (like the prior panel) vacated the district court’s decision to deny the retirees a preliminary injunction and remanded for further review. This time, however, the Sixth Circuit eschewed Michigan law, noting that the parties and district court “need not focus on the state-law issues presented to this court en banc.” Instead, the Court emphasized the potential impact of several federal authorities, including the Bankruptcy Code, the Contract Clause, and the Due Process Clause. The district court was directed to examine those legal issues with the assistance of fuller briefing and a more developed record, updated to reflect recent changes in the facts. Essentially, the Sixth Circuit pressed the “reset” button, and the whole dispute will go back to the district court for further proceedings.
Also of note, the en banc court took the unusual step of issuing its opinion per curiam – literally “by the court” rather than pegged to a particular author. And all 15 participating judges signed on to the same unsigned decision, a rare feat. Judge McKeague authored a separate concurrence but joined fully in the court’s ruling.