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"The state's emergency manager law for managing the city's finances would still be the governing authority if that decision stands," said Keith Mason of the law firm McKenna Long and Aldridge.
Unions had more success with the referendum to repeal the year-old emergency manager law.
Critics argue the state's emergency manager law is unconstitutional and, as a result, makes the bankruptcy case illegitimate.
His first decision was to restore the salaries of Mr. Bing and the Council, which had been stripped under the state's emergency manager law.
Many blame Michigan's Emergency Manager Law, which allows the state to hire managers who receive unusually broad powers to address communities in financial distress.
Michigan's emergency manager law — and the possibility that Detroit, the state's largest city, might be affected by it — has been a matter of contention for several years.
Potentially complicating the issue, critics of the broadened emergency manager law filed signatures last month on petitions calling for a statewide vote on the issue.
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The emergency-manager law gives Mr. Orr extraordinary powers to reshape the city, including eliminating Council members' salaries.
It is uncertain how the debate over Mr. Snyder's authority and the emergency-manager law will affect Judge Rhodes's ultimate determination on the city's eligibility for bankruptcy.
The lawyers for the unions and retirees also challenged the nature of Michigan's emergency-manager law, which has been used to take control of several financially troubled cities in the state.
You would have thought that the election validated her position and that of the Michigan Sierra Club, which officially endorsed the proposal to repeal the Emergency Manager Law.
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