Macomb Interceptor Drain Drainage Dist. v. Kilpatrick

Decision Date17 September 2012
Docket NumberCase No. 11–13101.
Citation896 F.Supp.2d 650
PartiesMACOMB INTERCEPTOR DRAIN DRAINAGE DISTRICT, Plaintiff, and City of Detroit and Detroit Water and Sewerage Department, Plaintiff–Intervenors, v. Kwame KILPATRICK, et al., Defendants.
CourtU.S. District Court — Eastern District of Michigan


Lauren Duval Donofrio, Donofrio Law, Warren, MI, Lawrence M. Scott, O'Reilly, Rancilio, Sterling Heights, MI, Patrick S. McKay, Raechel M. Badalamenti, Kirk, Huth & Lange, P.L.C., William W. Misterovich, Clinton Township, MI, for Plaintiff.

Irene B. Hathaway, Jerome R. Watson, Joseph W. Uhl, Saura J. Sahu, W. Mack Faison, Miller, Canfield, Detroit, MI, for Plaintiff-Intervenors.

Kwame Kilpatrick, Cedar Hill, TX, pro se.

David J. Poirier, David W. Williams, Kevin B. Hirsch, Michael F. Jacobson, Jaffe, Raitt, Heuer & Weiss, P.C., Christian P. Collis, Moss and Colella, Southfield, MI, Gordon D. Todd, Thomas C. Green, Sidley Austin, LLP, Washington, DC, Thomas M. Fallucca, Fallucca and O'Shea, Paul M. Mersino, Butzel Long, Stephen P. Stella, Simon, Stella, Detroit, MI, David M. Zack, Don W. Blevins, Marcus R. Sanborn, Mark L. McAlpine, McAlpine and Assoc., Auburn Hills, MI, Martin H. Leaf, Martin H. Leaf PLLC, Ronald E. Kaplovitz, Kaplovitz & Associates PC, Sylvan Lake, MI, Jeremy R. Heuer, Randall M. Lending, Vedder Price P.C., Erik R. Nelson, John S. Mrowiec, Conway & Mrowiec, Chicago, IL, Chris M. Parfitt, Matthew C. Herstein, Deneweth, Dugan, Patrick A. Facca, Facca, Richter, Troy, MI, Daniel J. Donahue, Saint Clair Shores, MI, Scott S. Yaldo, Yaldo Law, PLLC, Anthony S. Spokojny, Birmingham, MI, for Defendants.

Victor M. Mercado, Stuart, FL, pro se.


ROBERT H. CLELAND, District Judge.

Pending before the court are Concurring Defendants' Amended Motion for Summary Judgment,” Defendants Futurenet Group, Inc., and Perry Mehta's Motion for Partial Summary Judgment,” and Plaintiff Macomb Interceptor Drain Drainage District's (Macomb Interceptor's) Motion for Leave to File First Amended Complaint.” Because Macomb Interceptor lacks standing to assert its non-contractual claims, the court will grant the motions for summary judgment and deny the motion for leave to amend. The court will also direct Macomb Interceptor, pursuant to Federal Rule of Civil Procedure 56(f), to show cause why summary judgment should not be entered in favor of the nonmoving Defendants on each of the non-contractual claims.


Macomb Interceptor sues forty Defendants for allegedly violating the Racketeer Influenced and Corrupt Organizations Act (RICO), 18 U.S.C. §§ 1961–68, the Sherman Antitrust Act, 15 U.S.C. §§ 1–7, the Clayton Antitrust Act, 15 U.S.C. §§ 12–27, and state contract and tort laws. The claims arise from Defendants' involvement in the 20042005 repair of a collapsed sewer interceptor at 15 Mile Road in Sterling Heights, Michigan, (hereafter, the “15 Mile Interceptor Repair Project” or “Project”). Macomb Interceptor avers that Defendant Kwame Kilpatrick, then the Mayor of the City of Detroit, along with various City of Detroit officials conspired with the principal contractor overseeing the 15 Mile Interceptor Repair Project, Defendant Inland Waters Pollution Control, Inc., and numerous subcontractors to “overcharge the Detroit Water and Sewerage Department ... for time, labor and materials to stabilize and repair a sewer collapse at 15 Mile Road.” (Pl.'s Compl. ¶ 5, Dkt. # 1.) Macomb Interceptor further alleges that the misconduct was part of a widespread corruption scheme during Defendant Kwame Kilpatrick's tenure as Mayor of Detroit. This broader scheme is alleged to have operated for nearly a decade seeking to steer public works contracts and illicit benefits to associates of Defendant Kwame Kilpatrick and officials throughout his administration. ( See Pl.'s Compl. Ex. A, Dkt. # 1–1.)

It is undisputed that the scheme as alleged was perpetrated against Plaintiff-Intervenors, the City of Detroit and the Detroit Water and Sewerage Department (collectively, the City of Detroit or “City”), not Macomb Interceptor. Macomb Interceptor, though, maintains that it has standing to assert claims arising from the Project based on two independent grounds: (1) it obtained the right, through an assignment clause, to assert any claims, whether sounding in state tort or contract law or federal statutory law, originally possessed by the City of Detroit when, in September 2010, Macomb Interceptor and the City of Detroit entered into the Macomb Interceptor Acquisition Agreement (“Acquisition Agreement” or “Agreement”); and (2) the Project's alleged scheme-inflated cost resulted in Macomb Interceptor paying a higher price to acquire the Macomb System and users paying a higher rate for the water and sewerage system before the execution of the Agreement. The Acquisition Agreement, which is part of a larger global settlement in United States v. City of Detroit, No. 77–71100 (E.D.Mich.), a decades-long lawsuit related to the City of Detroit's compliance with federal environmental laws, transferred to Macomb Interceptor sewer assets located in Macomb County formerly owned by the City of Detroit and also assigned “all of [Detroit Water and Sewerage Department's] rights under all contracts, warranties, and guarantees that apply to services or goods related to the Macomb System.” (Acquisition Agreement art. II, § 2.4, Dkt. # 206–2.)

On May 7, 2012, the court granted the City of Detroit's motion to intervene, recognizing that a dispute exists about who may properly assert the non-contractual claims arising from the 15 Mile Interceptor Repair Project. Since the initiation of this case, many Defendants have maintained that the City of Detroit, not Macomb Interceptor, has standing to assert the statutory and tort law claims contained in the Complaint. A large number of these Defendants (referred to hereafter as the “Concurring Defendants) 1, filed a joint motion for summary judgment, seeking dismissal of Counts I, II, III, V, and VI of the Complaint on the grounds that Macomb Interceptor lacks standing to maintain these Counts. Exhaustive briefing ensued, with Macomb Interceptor filing a response in opposition and the City of Detroit filing a response in support of Concurring Defendants' motion. The ConcurringDefendants and Macomb Interceptor replied.


Under Federal Rule of Civil Procedure 56, summary judgment is proper when “the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a). When deciding a motion for summary judgment, the court “is not to ‘weigh the evidence and determine the truth of the matter but to determine whether there is a genuine issue for trial.’ Sagan v. United States, 342 F.3d 493, 497 (6th Cir.2003) (quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986)). “The central issue is ‘whether the evidence presents a sufficient disagreement to require submission to a jury or whether it is so one-sided that one party must prevail as a matter of law.’ Id. at 497 (quoting Anderson, 477 U.S. at 251–52, 106 S.Ct. 2505). “The judge's inquiry, therefore, unavoidably asks whether reasonable jurors could find by a preponderance of the evidence that the [movant] is entitled to a verdict ....” Anderson, 477 U.S. at 252, 106 S.Ct. 2505.

The party seeking summary judgment has the initial burden of showing the absence of a genuine dispute as to a material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). The burden then shifts to the nonmovant, who “must set forth specific facts showing that there is a genuine issue for trial.” Anderson, 477 U.S. at 256, 106 S.Ct. 2505. It is not enough for the nonmovant to “simply show that there is some metaphysical doubt as to the material facts.” Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986). Rather, the nonmovant must sufficiently allege a fact that, if proven, “would have [the] effect of establishing or refuting one of essential elements of a cause of action or defense asserted by the parties.” Midwest Media Prop. L.L.C. v. Symmes Twp., Ohio, 503 F.3d 456, 469 (6th Cir.2007) (alteration in original) (quoting Kendall v. Hoover Co., 751 F.2d 171, 174 (6th Cir.1984)) (internal quotation marks omitted).

Both parties must support their assertions “that a fact cannot be or is genuinely disputed” by “citing to particular parts of materials in the record, including depositions, documents, electronically stored information, affidavits or declarations, stipulations (including those made for purposes of the motion only), admissions, interrogatory answers, or other materials.” Fed.R.Civ.P. 56(c)(1)(A). Alternatively, either party may carry its burden by “showing that the materials cited do not establish the absence or presence of a genuine dispute, or that an adverse party cannot produce admissible evidence to support the fact.” Id. 56(c)(1)(B). “The court must view the evidence in the light most favorable to the non-moving party, drawing all reasonable inferences in that party's favor.” Sagan, 342 F.3d at 497 (citing Matsushita, 475 U.S. at 587, 106 S.Ct. 1348).


Macomb Interceptor's Complaint alleges three federal claims and three state-law claims. Macomb Interceptor did not exist at the time of the...

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