U.S. Bankruptcy Judge Thomas Bennett will leave state court-appointed receiver John Young in charge of the Jefferson County sewer system, at least for now, but the judge has not yet decided what powers Young will retain, including the authority to raise sewer rates.
Jefferson County lawyers have not asked the judge to remove Young as receiver. Under the Rooker-Feldman doctrine, a lower federal court cannot act as an appeals court for a state court. Had the county asked the judge to remove Young, it would likely have hit a dead end.
However, the county’s lawyers have asked the court to stay the receiver, essentially leaving him powerless. Judge Bennett seemed to entertain that argument.
Lawyers for the receiver has asked the court to abstain from interfering with Young and his authority over the sewer system. Bennett told the lawyers that their motion was too broad.
Judge Bennett also said that he did not believe the Johnson Act applied to the Jefferson County bankruptcy. The Johnson Act prohibits federal courts from setting utility rates.
The hearing will continue throughout the day. Check back for updates.