Court rejects challenge to Michigan's emergency manager law
Legal Exams
An appeals court on Monday rejected a challenge to Michigan's emergency manager law, saying Gov. Rick Snyder's remedy for distressed communities doesn't violate the constitutional rights of residents.
Emergency managers have exceptional power to run city halls and school districts, while elected officials typically are pushed aside for 18 months or more while finances are fixed. The most significant use of emergency management occurred in Detroit, where Snyder appointed bankruptcy expert Kevyn Orr in 2013. Orr seved for two years.
Critics who sued argued that the law violated a variety of rights — free speech, voting, even protections against slavery — especially in cities with large black populations.
The law might not be the "perfect remedy" but it's "rationally related" to turning around local governments, the 6th U.S. Circuit Court of Appeals said in a 3-0 decision.
"The emergency manager's powers may be vast, but so are the problems in financially distressed localities, and the elected officials of those localities are most often the ones who ... led the localities into their difficult situations," the court said in upholding a decision by U.S. District Judge George Caram Steeh.
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Workers’ Compensation Subrogation of Administrative Fees and Costs
When a worker covered by workers’ compensation makes a claim against a third party, the workers’ compensation insurance retains the right to subrogate against any recovery from that third party for all benefits paid to or on behalf of a claimant injured at work. When subrogating for more than basic medical and indemnity benefits, the Texas workers’ compensation subrogation statute provides that “the net amount recovered by a claimant in a third‑party action shall be used to reimburse the carrier for benefits, including medical benefits that have been paid for the compensable injury.” TX Labor Code § 417.002.
In fact, all 50 states provide for similar subrogation. However, none of them precisely outlines which payments or costs paid by a compensation carrier constitute “compensation” and can be recovered. The result is industry-wide confusion and an ongoing debate and argument with claimants’ attorneys over what can and can’t be included in a carrier’s lien for recovery purposes.
In addition to medical expenses, death benefits, funeral costs and/or indemnity benefits for lost wages and loss of earning capacity resulting from a compensable injury, workers’ compensation insurance carriers also expend considerable dollars for case management costs, medical bill audit fees, rehabilitation benefits, nurse case worker fees, and other similar fees. They also incur other expenses in conjunction with the handling and adjusting of workers’ compensation claims. Workers’ compensation carriers typically assert, of course, that, they are entitled to reimbursement for such expenditures when it recovers its workers’ compensation lien. Injured workers and their attorneys disagree.