## Facts

- The City of Central Falls, a home-rule municipality, faced severe fiscal distress, including negative net assets, large projected deficits, substantial debt, and underfunded pension obligations.
- The mayor and city council petitioned the Superior Court for a judicial receivership to address alleged insolvency; the court entered a temporary receivership order in May 2010.
- The General Assembly enacted the Fiscal Stability Act shortly thereafter, creating a state-managed escalation framework (fiscal overseer, budget/review commission, and a nonjudicial receiver) and prohibiting municipal judicial receiverships.
- The Act applied retroactively to mid-May 2010, creating conflict with the prior Superior Court order.
- The Director of the Department of Revenue appointed Robert G. Flanders, Jr. as receiver in July 2010.
- The receiver asserted broad authority over municipal finances and certain governance functions, materially limiting the mayor’s and council’s effective powers while leaving them in office.
- The receiver sought declaratory and injunctive relief to confirm the Act’s validity and clarify his authority; the consolidated actions were decided on an agreed statement of facts.
- The Superior Court upheld the Act as constitutional; the mayor and city council appealed, raising home-rule, separation-of-powers, due process, nondelegation, and vagueness challenges.

## Issues

1. Whether the mayor and city council had standing to challenge the Fiscal Stability Act and the receiver’s authority.
2. Whether the Act qualifies as a general law addressing a matter of statewide concern consistent with Rhode Island’s home-rule provisions.
3. Whether the Act impermissibly alters the “form of government” of a home-rule municipality by reallocating powers to a state-appointed receiver.
4. Whether the Act violates separation of powers principles as applied to state involvement in municipal governance.
5. Whether the Act violates substantive or procedural due process.
6. Whether the Act is an unconstitutional delegation of legislative power or is unconstitutionally vague regarding standards and receiver authority.

## Decision

- The Rhode Island Supreme Court affirmed the Superior Court’s judgment.
- The Court held the mayor and city council had standing because the receivership curtailed their official authority and duties.
- The Court upheld the Fiscal Stability Act as a general law of statewide concern applicable to any municipality meeting statutory fiscal-distress criteria.
- The Court concluded the Act did not unconstitutionally alter municipal form of government because elected officials remained in office, the reallocation of authority was temporary and conditional, and the statute provided standards and oversight.
- The Court rejected challenges based on separation of powers, due process, nondelegation, and vagueness, and confirmed the legality of the receiver’s appointment and authority under the Act.

## Legal Principles

- Elected municipal officials have standing to challenge a statutory scheme that directly curtails their official powers and duties.
- Under Rhode Island home-rule doctrine, the General Assembly may enact generally applicable laws addressing matters of statewide concern even if the laws incidentally limit municipal autonomy.
- A temporary statutory reallocation of municipal authority during a fiscal emergency does not necessarily alter a municipality’s constitutional “form of government” when elected offices persist and the scheme is conditional and terminable.
- Separation of powers constraints apply differently in the municipal context because municipalities are subject to legislative control under general laws.
- Fiscal-emergency legislation satisfies substantive due process if rationally related to legitimate public purposes, including protection of municipal and statewide financial stability.
- Delegations of administrative authority are permissible when statutes supply sufficient standards and oversight to guide decisionmaking; clarity adequate for enforcement defeats vagueness claims.

## Conclusion

The Rhode Island Supreme Court upheld the Fiscal Stability Act and the state receivership for Central Falls, ruling that a generally applicable fiscal-emergency statute may temporarily reallocate municipal powers to a state-appointed receiver without violating home rule, separation of powers, due process, nondelegation, or vagueness limits.


Moreau v. Flanders, 15 A.3d 565 (R.I. 2011)