Mich. Dep't of Envtl. Quality v. City of Flint

• Decision Date: 17 October 2017
• Docket Number: Civil Case Number 17–12107
• Citation: 282 F.Supp.3d 1002
• Parties: MICHIGAN DEPARTMENT OF ENVIRONMENTAL QUALITY, Plaintiff, v. CITY OF FLINT, Defendant, and Flint City Council, Intervening defendant.
• Court: U.S. District Court — Eastern District of Michigan

282 F.Supp.3d 1002

MICHIGAN DEPARTMENT OF ENVIRONMENTAL QUALITY, Plaintiff,

v. CITY OF FLINT, Defendant,andFlint City Council, Intervening defendant.

Civil Case Number 17–12107

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

Signed October 17, 2017

Margaret A. Bettenhausen, Nathan A. Gambill, Zachary C. Larsen, Michigan Department of Attorney General, Richard S. Kuhl, Lansing, MI, for Plaintiff.

Anne V. McArdle, Harvey, Kruse, Flint, MI, Charles A. Boike, Michael J. Guss, Harvey, Kruse, PC, Grand Blanc, MI, for Defendant.

Joseph A. Doerr, Doerr Law Firm PLLC, Bloomfield Hills, MI, Peter M. Doerr, Doerr & Doerr, Mt. Morris, MI, for Intervening defendant.

OPINION AND ORDER GRANTING IN PART PLAINTIFF'S MOTION FOR SUMMARY JUDGMENT

DAVID M. LAWSON, United States District Judge

"There are risks and costs to action. But they are far less than the long-range risks of comfortable inaction."—John F. Kennedy

The problems that the City of Flint has encountered with operating its water system over the past several years have been grave and well-documented. See Boler v. Earley , 865 F.3d 391, 397 (6th Cir. 2017) (outlining the catastrophe that resulted when Flint changed water sources from the Detroit system to the Flint River, and holding that the plaintiffs' tort claims for damages caused by drinking contaminated Flint water were not preempted by the Safe Drinking Water Act (SDWA)); Davenport v. Lockwood, Andrews & Newnam, Inc. , 854 F.3d 905, 907 (6th Cir. 2017) (holding in "one of numerous actions arising from the water crisis in Flint, Michigan" that the local controversy exception in the Class Action Fairness Act did not apply); Guertin v. Michigan , No. 16-CV-12412, 2017 WL 2418007 (E.D. Mich. June 5, 2017) (putative class action tort case in which the plaintiffs, residents of Flint, alleged that state and city defendants are legally responsible for harm that was caused when plaintiffs drank and bathed in water that was contaminated with dangerous levels of lead); Concerned Pastors for Soc. Action v. Khouri , 217 F.Supp.3d 960 (E.D. Mich. 2016) (holding that state and city officials failed to meet their responsibilities prescribed by regulations enacted under the SDWA to deliver safe drinking water to Flint residents); Concerned Pastors for Soc. Action v. Khouri , 194 F.Supp.3d 589, 593–96 (E.D. Mich. 2016) (describing history of the Flint water crisis and allowing suit under SDWA for remedial relief to proceed). Flint's mismanagement—either at the hands of the State of Michigan while it was in receivership or on its own—has earned it an enforcement order from the Environmental Protection Agency (EPA), a consent-judgment-like settlement mandating replacement of some of the water system's infrastructure, and multiple personal injury lawsuits. The City now finds itself in the cross-hairs of another lawsuit—this time by the Michigan Department of Environmental Quality (MDEQ)—aimed at ensuring that the municipal government takes appropriate steps now to ensure that the water system has access to a safe and reliable source of drinking water into the foreseeable future, at a cost that will not bankrupt the City. The foundation of the lawsuit is an EPA communique notifying the City over a year ago that it would need to make a decision about a long-term source of drinking water, probably before October 2017, when then-current supply contracts would expire. According to the complaint, the City—through its mayor and a member of city counsel—engaged in multilateral negotiations with various entities, resulting in an agreement in April 2017 that would achieve the health, safety, and financial goals consistent with the EPA's orders. All the participants signed the agreement, except the City of Flint. Although the City administration favors the agreement, the Flint City Council has not voted to approve it, nor has it offered an alternative. That failure to act, coupled with the urgency of securing a long-term source of finished water, prompted this lawsuit.

Plaintiff MDEQ filed a motion for summary judgment, now pending, in which it documented the past problems of Flint's water system, the path to recovery, the EPA's mandate, the financial imperatives, the need for immediate action, and the lack of any practical alternatives. MDEQ asks for a mandatory injunction directing the City to sign the negotiated agreement. The City, through its municipal law department, agrees with the MDEQ and consents to the requested relief. However, the City Council hired its own attorney and was allowed to intervene. Its response to the summary judgment motion signals agreement, for the most part, with the facts outlined by the MDEQ. It opposes the motion however on these grounds: (1) it believes that the MDEQ's claim is not ripe; (2) it contends that the complaint does not raise a federal question and therefore this Court has no subject matter jurisdiction; (3) it contends that a court cannot order a public legislative body to approve a contract; and (4) even if a court could do so, no irreparable harm has been demonstrated to justify injunctive relief. For its part, the City of Flint insists that its city council is not a juridical entity separate and distinct from the City itself, and therefore it should not be allowed to intervene in the case.

The Court heard oral argument on September 26, 2017. The Court had appointed a mediator on August 1, 2017, and settlement talks with the parties, including representatives of the City Council, continued through the oral argument date and beyond. There has been no resolution: the City Council has not voted on the negotiated agreement, it has not proposed an alternative, and the future of Flint's fragile water system—its safety, reliability, and financial stability—is in peril. Because of the City's indecision, the Court must issue its ruling.

I.

In September 2016, the EPA, which had been monitoring the Flint water system since at least October 2015 when it received a petition for an emergency order, notified the City of Flint that it would have to make a decision soon about the long-term source of its drinking water. That notification followed the issuance of an Emergency Administrative Order (EPA Order) nine months earlier on January 21, 2016, which directed Flint and the State of Michigan to take certain steps to begin to address the crisis that resulted from ill-considered decisions and actions that occurred in April 2014, when Flint began to draw its drinking water from the Flint River. The EPA emphasized the urgency of making a decision in light of the EPA Order's requirements and the impending termination of then-existing source water contracts. To date, Flint has not entered into a long-term contract. Instead, it has made a two-year agreement, and then a series of month-to-month extensions, which, the MDEQ points out, are not financially sustainable. These facts, and the ones that follow, are uncontested.

A. Historical Background

The City of Flint has operated a public water system for over a century. See Concerned Pastors , 217 F.Supp.3d at 964 (citation omitted). Since 1965, the City of Detroit, through the Detroit Water and Sewerage Department (DWSD), provided its treated or "finished" water. DWSD treated water drawn from Lake Huron and shipped it via a 72" pipeline to Flint.

In November 2011, the City of Flint was put into a state-controlled receivership. In April 2013, while still under receivership, Flint announced its intention to contract with the Karegnondi Water Authority (KWA) and eventually switch from DWSD as its water source. As part of the arrangement, KWA intended to construct a pipeline that would transport raw water from Lake Huron to Flint, where the City would use its own plant (which apparently had been mothballed for nearly 50 years) to treat the raw water before distribution.

In light of the announcement, DWSD subsequently notified Flint that effective April 2014, it would no longer be required to provide finished water to Flint. The KWA pipeline project, however, was estimated to take several years to complete, so between April 27, 2014 and October 15, 2015, Flint drew raw water from the Flint River and treated that water at its plant before distributing it to its residents. The public works department did not add the proper treatment chemicals, however, which caused the corrosive Flint River water to damage water mains and service lines, and water contaminated by lead and copper was distributed throughout the system. During that time, serious public health risks associated with Flint's water supply were discovered.

Flint eventually decided to discontinue using the Flint River as a water source. On October 16, 2015, Flint contracted with the Great Lakes Water Authority (GLWA)—which had become the lessee of DWSD's assets—to furnish drinking water that is safe and reliable. Nonetheless, in January 2016, the EPA determined that the drinking water situation in Flint posed an imminent and substantial endangerment to public health that would continue absent preventative action. In its Emergency Administrative Order, the EPA found that Flint's public health was substantially endangered by lead contamination in drinking water that persons legitimately assumed was safe for human consumption. Because changing water sources again could exacerbate the condition, the EPA Order imposed stringent requirements on Flint if it intended to switch from GLWA to another source. One such condition was that the City must demonstrate that it has a sufficient number of qualified and trained personnel to operate its water treatment plant.

B. Financial Impact

In the April 2013 arrangement in which Flint would switch from DWSD to KWA as its water source, Flint agreed to pay 34% of the costs associated with the new pipeline's construction. As a consequence, it is now obligated to retire approximately $85,000,000 in bonds issued to fund the pipeline, as well as a share of KWA's annual fixed costs of...