Judge Napolitano on What Comes Next for Stockton,
Union workers in Stockton, California are nervous because once the town files for bankruptcy, contracts presumably will become null and void.
Earlier on Your World, Judge Andrew Napolitano weighed in on this topic, stating that the Constitution prohibits the government from interfering with a contract and taking anyone’s property without suing them for it and demonstrating fault before a jury, except when it comes to bankruptcy.
He said, “If they file for bankruptcy, a federal bankruptcy judge in San Francisco alone, not with a jury, will look at the obligations that they have and the income that they are likely to have and she or he will make the decision. That judge will have the power to say to the unions, ‘You have an agreement that says you’re going to earn $50,000 a year, I’m cutting it down to $35,000.’”
He said they can do whatever they want, but pointed out that it’s not going to be forever.
“If this is a successful bankruptcy, by which I mean the city stays solid and basically performs the basic services we all expect of a municipality, you will see other municipalities in California … doing the same thing.”