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Charter Township of Lansing v. Lansing Board of Water and Light

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

January 6, 2017

CHARTER TOWNSHIP OF LANSING and LANSING TOWNSHIP DOWNTOWN DEVELOPMENT AUTHORITY, individually and on behalf of all others similarly situated, Plaintiffs,


          JANET T. NEFF United States District Judge.

         This putative class action lawsuit stems from a decades-long effort to resolve water run-off problems in Lansing Township and is the culmination of a long-running disagreement over apportioned costs for a $12 million drain project among the affected governmental entities and landowners. Plaintiffs Lansing Charter Township and Lansing Township Downtown Development Authority contend that a large portion of the multi-million project cost is attributable to Defendant Lansing Board of Water and Light's actions to remedy environmental contamination on their property, which necessitated the extensive drain project. After failing to obtain satisfactory relief in the administrative process and state court appeals related to the drain project assessment, Plaintiffs filed this suit seeking separate recovery of environmental response costs under the Comprehensive Environmental Response, Compensation and Liability Act ("CERCLA"), 42 U.S.C. § 9607(a), and the Michigan Natural Resources and Environmental Protection Act ("NREPA"), MICH. COMP. LAWS § 324.101 et seq. Defendant Lansing Board of Water and Light ("LBWL" or "BWL") has filed a motion to dismiss or in the alternative, for summary judgment (Dkt 33). Plaintiffs have filed a Response in opposition (Dkt 36); Defendant has filed a Reply (Dkt 37). Having fully considered the parties' submissions, the Court concludes that oral argument would not assist in the disposition of the issues presented. See W.D. Mich. LCivR 7.2(d). Defendant's Motion is denied.

         I. Background

         This case has its genesis in groundwater contamination linked to Defendant's North Lansing Landfill #2 (NLL) beginning in 1993 and plans for a storm drain in the Groesbeck Drain District encompassing the landfill, which evolved from a $600, 000 plan in 1995 to a 2013 plan at an estimated cost of $ 12.595 million.[1] The Ingham County Drain Commissioner ("ICDC") apportioned the cost of the 2013 drain project pursuant to Michigan statutory provisions, assessing 49.5 percent of the cost to the Township, and 30.0846 percent to Defendant. Plaintiffs allege that the increase in costs from the 1995 Drain was caused primarily by the releases, and threat of releases, of contaminants at the NLL site and by Defendant's construction of a slurry wall on the site to contain contamination. Plaintiffs contend that if those contaminants had not been released, the groundwater could drain naturally and the extensive new drain system would be unnecessary. Plaintiffs seek class action status to recover damages and obtain injunctive relief on behalf of real property owners who have incurred, or will be compelled to incur, [2] Drain Assessment Costs as a result of Defendant's release or threat of release of hazardous substances or contamination.

         Pursuant to this Court's dispositive motion procedures, the parties have stipulated to the following Joint Statement of Material Facts (JSMF) (Dkt 38) for purposes of the motion.

         A. Background of the Groesbeck Drain.

         1. The Groesbeck Drain (the "Drain") is a drain district initially laid out by the Ingham County Drain Commissioner in 1985.

         2. A petition to establish the Drain was filed in 1990. A Board of Determination was convened and ultimately determined that the Drain was necessary.

         3. On May 13, 1999, the Ingham County Road Commission filed a petition with the Ingham County Drain Commissioner to "clean out, widen, deepen, straighten or extend" the Drain, in accordance with the Drain Code.

         4. Issues pertaining to the decisions of the Board of Determination and of necessity were resolved by the Michigan Court of Appeals in an unpublished Per curiam opinion dated May 17, 2002. Standard Aggregates, Inc. et al. v. Ingham County Drain Commissioner et al, Michigan Court of Appeals No. 226464, lv. to appeal den. 467 Mich. 952 (2003). At the conclusion of those judicial proceedings, a "Final Order of Determination" was issued and the Drain Commissioner finalized a plan for the construction, financing, and apportionment of costs for the Drain.

         B. Background of the North Lansing Landfill (the "NLL").

         5. In 1979, the BWL acquired fee ownership of 40.44 acres of land in Lansing Township that has since become known as the NLL.

         6. In 1979, the BWL applied for and acquired a license from the Michigan Department of Natural Resources ("MDNR") to operate a Type III landfill for disposal of coal ash resulting from the BWL's steam electric operations in Lansing.

         7. On July 7, 1994, the Michigan Department of Environmental Quality ("MDEQ") advised the BWL that 1993 and 1994 groundwater sampling showed elevated levels of selenium consistent with the disposal of ash at the NLL. The MDEQ further stated that "[d]uring the first quarter 1994 sampling, boron was also detected in four different monitoring wells."

         8. On March 25, 1996, MDEQ denied the LBWL's application for arenewal of a license to dispose of ash at the NLL.

         9. Between 1994 and 2008, the NLL was the subject of significant environmental review, including soil and groundwater testing and various proposed plans to address contamination at the site. The BWL provided remedial action plans and proposals for remediation of groundwater-related issues at the NLL to the MDEQ.

         10. In 2005, new construction plans for the drain were created ("2005 Plan").

         11. In 2008 the BWL began construction of a slurry wall system that consolidated the contaminated soil and fly ash at the site and encapsulated it within a clay barrier.

         12. At the same time, the BWL installed a pumping system to pump groundwater from the contained area to a City of Lansing water treatment facility.

         13. As a part of its construction of the remediation system, the BWL also established a gradient control system.

         14. Construction of the slurry wall began in May 2008.

         15. Construction of the gradient control system began in September 2009.

         16. The slurry wall system was fully approved and is monitored by the MDEQ.

         C. The Apportionment of Cost for the Drain.

         17. Under § 151 of the Michigan Drain Code (MCL § 280.151), a County Drain Commissioner is charged with calculating the cost of improvements to a drain and with apportioning those costs among the owners of property within a drainage district.

         18. The Commissioner determined the cost of the drain improvement project to be approximately $12, 595, 000. The LBWL has been assessed 30% of the costs; Plaintiffs have been assessed the majority of the costs.

         19. The cost apportionment was litigated through administrative and appellate proceedings ("State Court Proceedings").

         20. Plaintiffs filed this action on May 28, 2014[3] prior to the conclusion of the State Court proceedings. On October 24, 2014, this Court stayed the case pending final resolution in the Michigan Court of Appeals and the Michigan Supreme Court. This case was re-opened on or about March 9, 2015.

         Plaintiffs' Complaint alleges nine counts:

Count I: CERCLA § 107 Cost Recovery (All Plaintiffs v. LBWL)
Count II: CERCLA Declaratory Judgment (All Plaintiffs v. LBWL)
Count III: Cost Recovery - Michigan Natural Resources and Environmental Protection Act (All Plaintiffs v. LBWL)
Count IV: Declaratory Relief - NREPA (All Plaintiffs v. LBWL)
Count V: Public Nuisance (Lansing Township v. LBWL)
Count VI: Private Nuisance (All Plaintiffs v. LBWL)
Count VII: Fed.R.Civ.P. 23(b)(2) (DDA and Class ...

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