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Lasalle Town Houses Cooperative Association v. City of Detroit

United States District Court, E.D. Michigan, Southern Division

April 20, 2015

LASALLE TOWN HOUSES COOPERATIVE ASSOCIATION, et al., Plaintiff,
v.
CITY OF DETROIT, acting through its DETROIT WATER AND SEWERAGE DEPARTMENT, Defendant.

ORDER DENYING PLAINTIFFS' MOTION TO STRIKE AND EXCLUDE OPINIONS DEFENDANT OFFERS FROM BART D. FOSTER [#69] AND CANCELLING MAY 5, 2015 HEARING

GERSHWIN A. DRAIN, District Judge.

I. INTRODUCTION

Presently before the Court is the Plaintiffs' LaSalle Town Houses Cooperative, Nicolet Town Houses Cooperative Association, Lafayette Town Houses, Inc., Joliet Town Houses Cooperative and St. James Cooperative and certified class, Motion to Strike and Exclude Opinions Defendant Offers from Bart D. Foster, filed on March 20, 2015. Defendant, City of Detroit, acting through its Detroit Water and Sewerage Department, filed a Response in Opposition on April 6, 2015. Plaintiffs filed a Reply brief on April 13, 2015. Upon review of the parties' briefing, the Court finds that oral argument will not aid in the resolution of this matter. Accordingly, the Court will resolve Plaintiffs' present motion on the briefs and will cancel the May 5, 2015 hearing. See E.D. Mich. L.R. 7.1(f)(2). For the reasons that follow, the Court will deny Plaintiffs' Motion to Strike.

II. FACTUAL BACKGROUND

Plaintiffs represent a class consisting of apartment buildings, cooperatives, townhouses and condominiums with five or more residential units. Plaintiffs filed the instant action challenging Defendant's classification of Plaintiffs' properties as commercial for purposes of billing for water and sewage removal services. Plaintiffs maintain that Defendant's classification scheme runs afoul of the Equal Protection clause because there is no rational reason justifying the application of a higher commercial rate to residential structures with five or more units and not structures with less units or single family dwellings.

Defendant listed Mr. Foster as an expert in its Witness List, which was filed with the Court on July 31, 2014. Discovery in this matter ended on October 31, 2014. The parties filed their respective Motions for Summary Judgment in late January of 2015. Defendant submitted Mr. Foster's Declaration in support of its Motion for Summary Judgment.

A. Mr. Foster's Education and Background

Mr. Foster's experience includes "almost thirty years of performing financial and engineering management consulting services, specializing in services for municipal utility clients in the United States." See Def.'s Resp., Ex. A at ¶ 4.[1] Mr. Foster holds two degrees from the University of Kansas: (a) a Bachelor of Science in Mechanical Engineering, which he received in 1983, and (b) a Master of Business Administration, with a concentration in Finance, which he received in 1985. Id. at ¶ 3.

Mr. Foster worked for a large consulting practice serving utility and other municipal clients in the United States for nearly twenty years. Id. at ¶¶ 3, 4, 5 and 6. In 2004, he founded The Foster Group LLC, a consulting firm that provides finance and engineering management consulting services to a large number of municipal clients. Id. at ¶ 5. In the three decades he has been involved with assisting municipalities and their utilities, Mr. Foster has served at least ten different cities, townships, counties and regional authorities in Michigan. Id. at ¶ 7. In addition to Defendant, Mr. Foster has provided services for the cities of Lansing, Flint, Ann Arbor, Grand Rapids, Kalamazoo, Wyoming, Holland, as well as the Southeastern Oakland County Water Authority. Id.

His professional experience has involved management of rate design studies for water and wastewater utilities and the management of financial planning and cost of service mechanisms for those utilities. Id. He has also been an advisor to the executives of the municipalities to provide evaluations of critical business issues that will affect those governmental utilities, has provided reports in conjunction with the issuance of municipal revenue bonds and has performed a host of other analytical, evaluative, development, management and design functions for those utility entities. Id.

Mr. Foster has consulted on water and wastewater rate and finance issues for the Defendant "on a continuous basis since 1985." Id. at ¶ 8. He has "detailed personal knowledge about the methodology that [Defendant] employed to set rates for the entire Case Period, " or the time period during which Plaintiffs are claiming damages, August 1, 2006 through July 31, 2015.

B. Defendant's Classification Scheme

Defendant "has tens of thousands of customers...." Id. at ¶ 12. Because of this number, Defendant cannot set individualized rates for each customer that reflect the customer's usage of Defendant's water and sewage removal services. Defendant therefore "(a) groups its customers into customer classes and subclasses (b) employs averages or other factors representative of the class or subclass as a whole for various cost-related characteristics of those customers." Id. Defendant classifies Plaintiffs and the respective class as commercial properties for rate making purposes. Id. at ¶ 16. Specifically, Defendant's practice has been to include properties containing (a) four or fewer residential units in the "residential" customer class and (b) five or more residential units that were not individually metered for water service in the commercial customer class for rate making purposes. Id. This classification scheme defining residential customers as any dwellings with four units or less and commercial customers as five or more unit ...


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