810.513.3044 PH

Kevin A. Lavalle

Specializing in Environmental Law and Real Property Law

STORMWATER UTILITY ACT REBORN

In 2017, I wrote a blog post on Michigan House Bill HB 4100, which sought to create the “Stormwater Utility Act.” The proposed Act was intended to confer legal authority upon local units of government to regulate stormwater runoff. HB 4100 was referred to committee, where it presumably died a peaceful death.

HB 4100 has been resurrected and was recently reintroduced as Senate Bill No. 756. SB 756 has been referred to the Senate Committee on local government. With local units of government asking legislators to provide them with greater protection from liability for flooding, providing them  with tools to address stormwater would appear to be an idea whose time has come.

Scaling Back Relief for Flooded Property

The Governmental Immunity Act grants governmental agencies broad immunity for tort liability. The Act contains an exception for liability arising from overflows or backups from sewage disposal systems however. The “sewage disposal event exception” to governmental immunity is the sole remedy for obtaining damages resulting from overflows or backups of sewage regardless of the legal theory. More often than not, this exception is invoked after one’s basement floods. The Michigan House of Representatives is considering House Bill 4290, which would expand governmental immunity for flooding claims.

There currently is no limitation on the amount of rain that must fall to invoke the sewage disposal event exception. House Bill 4290 would change that. It would impose a precipitation threshold on recovery. If enacted, House Bill 4290 would limit recovery for flooding damages to weather events where: 1) 1.7 inches or more of precipitation falls with one hour or 2) 3.3 or more inches of precipitation falls within a continuous 24-hour period. If it rains an inch and the creek begins to flow through your basement, you’re out of luck regardless of whether you have a paddle or not.

House Bill 4290 is intended to protect municipalities from paying damages for an increasing frequency of deluges. Not surprising, the bill has enthusiastic support from municipalities. However, if a person’s basement floods every time it rains, why punish an innocent homeowner who has no control over the situation. In those instances, extending immunity isn’t going to provide any incentive to fix the problem.

Flint Water Lawsuits Partially Revived

A prior blog post addressed the dismissal of Boler et al.v Early et al. and Mays et al. v Snyder et al. on the basis that the Safe Drinking Water Act (“SDWA”) provides a comprehensive enforcement mechanism demonstrating congressional intent to preclude suits for depravations of constitutional rights. The U.S. Court of Appeals for the Sixth Circuit has partially reinstated both cases. After review of the specific language and remedial scheme created by the SDWA, coupled with the rights and protections afforded persons under the Act, the Court of Appeals concluded that Congress did not intend to foreclose suits enforcing constitutional rights.

The Court of Appeals did find however that Eleventh Amendment sovereign immunity precluded suits against the State of Michigan and its agencies, the MDEQ and MDHHS. As a result, it reaffirmed the dismissal of the claims in both suits against those defendants. The Court made it clear that its holding related to jurisdictional matters only and remanded the case back to the district court to determine the merits of the claims.

A New Twist on the Statute of Limitations in Environmental Claims?

Statute of limitations require a person with a cause of action to bring suit within a specific period of time. Determining when that time period begins and ends is often hard to nail down. A recent case decided by the Michigan Court of Appeals illuminates this uncertainty in the context of environmental claims.

The matter of Henry v Dow Chemical Co. 2017 WL 239069 involved application of the statute of limitations to claims arising from the presence of dioxin contamination along the Tittabawassee River in Saginaw County. Dioxins can be created as a byproduct in the production of certain chlorinated organic compounds. The World Health Organization considers dioxins to be highly toxic.

The Henry Plaintiffs alleged injuries as a result of dioxin contamination of their property. While the parties agreed the applicable statute of limitation was three years, they could not agree on when it began to run.

Statute of limitations begin to run at the time a claim accrues. Claims accrue when the plaintiff is harmed rather than when the defendant acted.

The Plaintiffs claimed they sustained injuries in 2002 when the MDEQ released a series of bulletins advising residents of proposed cleanup activities. Those bulletins warned local residents about the possibility of dioxin in their soil. Defendant claimed that information about the dioxin contamination was known to the public in the early 1980s and the cause of action accrued in 1984 at the latest. The Plaintiffs had originally filed suit in 2003. The case is still ongoing after multiple appeals to the Michigan Supreme Court and Court of Appeals.

The Henry Court stated the statute of limitations began to run when the plaintiffs first suffered the harm from the dioxin in their soil. According to the Court, that occurred in 2002, not the early 1980’s. Knowledge of an existing claim is not the same as the presence of a necessary element. The bulletins issued by the MDEQ in 2002, while meant to be informative in nature, marked the creation of the damage element necessary to support the plaintiffs’ claims for nuisance and negligence. Prior to those bulletins, there were no restrictions on the use of plaintiffs’property. They could sell it without any loss in value and did not have to disclose the contamination. Because the Court believed the plaintiffs’ claim of depreciation in property value did not exist in any tangible form until the MDEQ published its advisories, it held the plaintiffs’ claims accrued in 2002.

More Flint Water Lawsuits Dismissed

The Federal District Court recently dismissed two more cases involving contamination of drinking water in Flint, Michigan. Similar to Boler et al. v Early et al., the plaintiffs in Mays et al. v Snyder et al. filed suit under §1983 of the Civil Rights Act claiming their constitutional rights were violated by the contaminated drinking water. Judge O’Meara, who also presided over the Boler case, dismissed the plaintiffs’ claims finding the Safe Drinking Water Act (“SDWA”) provides a comprehensive enforcement mechanism that demonstrates a congressional intent to preclude suits for depravations of constitutional rights.

Judge O’Meara also dismissed Myia et al. v Snyder et al., another Flint water case. While the Myia plaintiffs asserted a SDWA claim, they ran afoul of its jurisdictional requirements. Before any civil action can be commenced under the SDWA, the plaintiffs must provide notice to the proposed defendants 60 days prior to filing suit. A notice provision is common in many environmental statutes including Michigan’s environmental remediation statute. The notice provision is mandatory and when not provided, the matter must be dismissed.

Not a good start for some City of Flint water plaintiffs.

Rain Dance = Rain Tax?

Some Michigan municipalities currently collect fees for stormwater drainage. Those fees are often criticized. Are they user fees or taxes subject to the Headlee Amendment? What about the benefits conferred on the property owner by these programs, are they proportional to the amount of the fees?

A bill introduced last week in the Michigan House of Representatives seeks to address some of the complaints. House Bill No: 4100, the proposed “Stormwater Utility Act,” would provide the legal authority to local units of government to create stormwater management utilities. The proposed act would allow local units of governments to manage stormwater on a quantitative basis [volume and rate] as well as a qualitative basis [reduction, elimination or treatment of pollutants].

The proposed act provides procedures to set up such a utility and grants such utilities the authority to collect “stormwater utility fees.” On its face, the proposed fee provisions appear to grant flexibility in setting and making future adjustments to these fees. Utilities would be required to reduce the fee amount when a property owner makes improvements to reduce or eliminate stormwater discharges. The proposed Act also requires such utilities to establish an appeals board to hear grievances on the extent a property uses a stormwater system or challenge the amount of the fee.

It remains to be seen whether House Bill No: 4100 becomes law and whether it fosters the creation of Stormwater Utilities. Until then, in most areas of our State, the rain is still free.

Is there a Constitutional Right to Safe Drinking Water?

Fresh out of graduate school with a Masters degree in water and wastewater engineering, I went to work for the City of Flint. On rare occasions, I was asked to perform water quality testing at the City’s Water Plant. Yep, that one. Back then, the water plant served as an emergency backup and any treated water was returned back to the Flint River. I enjoyed my visits to the water plant. They were educational and left me with a true appreciation of what it takes to produce safe drinking water.

Unfortunately, missteps by those responsible for operating the water plant caused the delivery of unsafe drinking water to the citizens of Flint. Those missteps have opened the floodgates for legal actions. The court in Concerned Pastors et al. v Khouri commented that as of May of this year, 52 separate actions arising from the Flint water crisis were pending in federal district court. While appearing straight forward, the legal process of assigning blame for this crisis will be full of twists and sharp turns.

In Boler et al. v Early et al., the plaintiffs filed suit under §1983 of the Civil Rights Act claiming the City violated their constitutional rights by providing contaminated drinking water. Several courts had previously held that certain environmental statutes preclude such suits. The court in Mattoon v City of Pittsfield extended those holdings to the Safe Drinking Water Act (“SDWA”). In the eyes of the Mattoon court, the provisions of the SDWA evinced a clear congressional intent to regulate public drinking water to the degree that no relief was available for alleged depravations of constitutional rights under §1983.

While the Boler plaintiffs asserted claims arising from the delivery of tainted drinking water, they did not assert any claim under the SDWA. The Plaintiffs claimed they did not need to as their claims were based solely on the violation of their constitutional rights. The court disagreed. In its eyes, the plaintiffs’ case arose solely from the delivery of tainted drinking water. Labeling as a violation of constitutional rights doesn’t change the substance of those claims [i.e. if it looks like a duck…]. The court concluded that plaintiffs had no independent right to claim depravation of a constitutional right to safe drinking water. The court believed the SDWA was the plaintiffs’ sole remedy, and because they had not asserted any claim under the SDWA, the court dismissed the plaintiffs’ action.

Alternative Mechanisms to Protect Against Exposure to Contamination

The Michigan Senate recently passed a bill, that if approved by the House, would make it easier to restrict exposure to contaminants from leaking underground storage tanks. Among other things, Senate Bill 717 (Substitute S-2) addresses contamination under roadways and seemingly extends due care requirements to owners/operators who are responsible for contamination underneath a public highway.

One of the more intriguing parts of Senate Bill 717 relates to land and resource use restrictions. Part 213 of NREPA requires the imposition of land and resource use restrictions when corrective action results in a final remedy that falls short of meeting residential risk based screening levels. In those circumstances, exposure to contaminants is usually restricted by use of a Notice of Corrective Action, a restrictive covenant, or in some cases, both.

In limited circumstances, if a liable party demonstrates that the imposition of land or resource use restrictions are impractical, exposure can be regulated by a mechanism other than a restrictive covenant. Usually this takes the form of a local ordinance that prohibits the use of groundwater in a manner that prevents unacceptable exposure to contaminants.

Senate Bill 717 would eliminate the need to demonstrate impracticability. It would also expand the type of permissible mechanisms to use in place of restrictive covenants. Senate Bill 717 would allow reliance on any ordinance, state law or rule that prohibits development in certain locations or restricts property to certain uses i.e. a zoning ordinance.

Part 213 requires that the MDEQ be notified when changes are made to an ordinance used to prevent exposure to contaminants. Senate Bill 717 contains a similar requirement. While some local governments might balk at such requirement in a zoning ordinance, Senate Bill 717 only requires that an ordinance adopted after its effective date (assuming it becomes law) to contain such a requirement. Because most local governments already have zoning ordinances in place, the notice requirement should not stand in the way of using a zoning ordinance in place of a restrictive covenant.

Michigan Underground Storage Tank Cleanup Fund Claims

The Michigan Underground Storage Tank Authority began accepting claims for corrective action and indemnification on January 1, 2016. Claims are limited to release(s) discovered and reported on or after December 30, 2014. There are a number of other requirements that must be met in order to be eligible to receive money from the Authority. Most notably, the release(s) must have been reported within 24 hours after discovery. The owner/operator must also be in compliance with all applicable registration and financial responsibility requirements.

If you have questions regarding the application process, contact Kevin Lavalle at 810-234-3633 or klavalle@gaultdavison.com.

Changes to Liquid Waste Regulations

The State of Michigan recently amended several laws that will significantly change the way liquid industrial wastes are regulated. The term “Liquid Industrial Waste” is being replaced by a new term, “Liquid industrial by-product.” The term liquid industrial by-product is defined similar to the former term “liquid industrial waste.” However, the list of specific materials and substances cited in the former definition has been deleted. The new term encompasses liquid materials produced by, that are incident to, or results from industrial, commercial or governmental activity. Manifests and site identification numbers are out. Shipping documents and a response plan are in. The new laws expand the remedies available for enforcement. The former statute contained a somewhat narrow remedy limited to recovery of damages to natural resources. The attorney general is now authorized to commence civil actions for violations of the amended statute including requests for injunctive relief.