Update given on water lawsuit against township

February 28, 2020

Attorney Roger Young, at the February 24 Bloomfield Township Board of Trustees meeting,  provided updates about the township's current legal challenge by the law firm Hanley Kickham, a class action lawsuit over potential excessive water and sewer fees.

A class action suit against Bloomfield Township was filed in April 2016 by the law firm Hanley Kickham, which has been largely successful suing municipalities for excessive water and sewer fees, asserting they have been part of an effort on the part of the municipalities to raise revenue in violation of the Headlee tax limitation amendment. Bloomfield Township residents who had paid the township for water and sewer services since March 31, 2010, had been included in the Oakland County Circuit County suit, Youmans v. Charter Township Bloomfield, which challenged Bloomfield Township's imposition of water and sewer charges as a tax in excess of rates imposed by Southeast Oakland County Water Authority (SOCWA). SOCWA  resells water to Bloomfield Township from the city of Detroit, and Oakland County Water Resources Commission, which provides sewer services for the township.



The case was tried before Oakland County Circuit Court Judge Dan O'Brien for the full month of February 2018. There were seven issues under contention in the lawsuit. A previous portion of the class action lawsuit had been awarded to the plaintiffs, in the amount of $3.8 million, in September 2018, and has been appealed by Bloomfield Township. 



O'Brien awarded $5.4 million in damages in two parts of a class action suit against Bloomfield Township last March, determining the township should not have been integrating water loss costs into operations, as well as deciding that the township had overcharged sewer customers, and township attorneys said they plan to appeal, which they did last April. 



O'Brien also awarded the plaintiffs almost $2.2 million over the township's methodology of sewer and water chasrges, determining the township had overestimated sewer flow and therefore was collecting all the revenue needed from water and sewer customers, and additional revenue from sewer customers was excess.



Young, of Young and Associates, said after they filed that claim of appeal on behalf of the township last spring the plaintiff filed a cross claim of appeal in May, which was followed by the township's counsel filing a brief of appeal in October 2019.

 

The plaintiff then filed a brief on their cross appeal in late October and a brief in response to their appeal in December. From there, Young filed a reply to that as they are permitted to do under court rules in January 2020, and a brief in response to the plaintiff's claim of appeal at the end of last month.



Young, who was retained by the township to represent it on the appeal of the adverse ruling that occurred in the Oakland County Circuit Court, said on Monday that the amount of that adverse ruling is now approaching $11 million. 



Young noted in February there was a very important development that occurred. After approaching the Michigan Municipal League (MML) and the Michigan Township Association (MTA) about joining the case in support of their decision, he was pleased to report to the township board both organizations have now filed a very substantial brief in support of the township's position on this appeal.


"We have been busy and we are just as optimistic about prevailing in this case now as we were before all of these briefs were filed," Young said. "We believe that the law of the state of Michigan is on our side and we believe that there are sufficient facts that have been adduced that will support the application of that law to this case and ultimately unburden the township from this massive judgement."

Young said they believed all the briefing has been done in this case.

Trustee Neal Barnett asked if Young felt their position is even stronger now with the involvement of the MML and the MTA.



"I think so," Young replied. "It's important they hear from a litigant who does not have a horse in the race and can actually talk about the fiscal ramifications that will be unleashed if this is permitted to stand."



Moving forward, Young said they are anticipating that oral arguments in the case will most likely occur towards the end of this year, possibly sooner. Currently, there were no dates set from the Michigan Court of Appeals. 



Towards the end of the update, supervisor Leo Savoie mentioned how the board's former treasurer (Dan Devine) thought they should have taken the $2.5 million settlement offered. Savoie said one of the issues and problems is that municipalities weren't standing up to these particular lawsuits and everyone was being held hostage to the way those firms viewed it in relation to what the law actually says.



Over the last several years, Kickham Hanley PLLC of Royal Oak has filed water and sewer lawsuits against several other municipalities, in the name of a resident, as class action suits. They came to settlements with Royal Oak, for $2 million; Ferndale, for $4.2 million; Waterford for $1.4 million; and Birmingham, for $2.8 million, among other communities. A class action lawsuit against the city of Westland was dismissed.



"If I'm right, then we're going to put the $2.5 million exactly where it belongs, in the rear view mirror, along with the $11 million judgement," Young said.

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