Mountain Gold Properties v. LATHRUP VILLAGE, Civ. A. No. 94-72791.

• Decision Date: 24 January 1995
• Docket Number: Civ. A. No. 94-72791.
• Citation: 874 F. Supp. 769
• Parties: MOUNTAIN GOLD PROPERTIES, INC., a Michigan corporation, individually and on behalf of a class of persons, Plaintiff, v. CITY OF LATHRUP VILLAGE, a municipal corporation, Defendant and Third-Party Plaintiff, v. COUNTY OF OAKLAND, a Michigan constitutional corporation, Third-Party Defendant and Third-Party Plaintiff, v. CITY OF DETROIT, acting through its Board of Water Commissioners, a municipal corporation, Third-Party Defendant.
• Court: U.S. District Court — Eastern District of Michigan

874 F. Supp. 769

MOUNTAIN GOLD PROPERTIES, INC., a Michigan corporation, individually and on behalf of a class of persons, Plaintiff, v. CITY OF LATHRUP VILLAGE, a municipal corporation, Defendant and Third-Party Plaintiff, v. COUNTY OF OAKLAND, a Michigan constitutional corporation, Third-Party Defendant and Third-Party Plaintiff, v. CITY OF DETROIT, acting through its Board of Water Commissioners, a municipal corporation, Third-Party Defendant.

Civ. A. No. 94-72791.

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

January 24, 1995.

Robert H. Golden, Lathrup Village, MI, for plaintiff Mountain Gold.

Gordon R. Wyllie, Asst. Corp. Counsel, Pontiac, MI, for County of Oakland.

Charles E. Kovsky, Southfield, MI, for defendant City of Lathrup Village.

Robert C. Walter, Richard J. McClear, Dykema Gossett, Detroit, MI, for City of Detroit.

OPINION AND ORDER

FEIKENS, District Judge.

I. Introduction

Before me are cross-motions for summary judgment submitted by plaintiff Mountain Gold Properties, Inc. (Mountain Gold) and defendant City of Detroit (Detroit). Defendants, City of Lathrup Village and Oakland County join in Detroit's motion. After reviewing the papers and hearing oral argument, it is apparent to me that Mountain Gold has raised no genuine issues of material fact as to its being a commercial user and thus subject to a surcharge on disposal of its wastewater. Thus, Detroit is entitled to summary judgment as a matter of law.

II. Background

This case is preceded by an April 26, 1980 Amended Consent Judgment, a March 9, 1981 Order, a July 10, 1981 Order and a July 27, 1981 Order which bear directly on the proper disposition of this dispute.

The Amended Consent Judgment of April 26, 1980 Civil Action # 77-1100 (Amended Consent Judgment) provides the definition of commercial user. It says "`Commercial and Industrial' shall mean those users defined in section 56-6-3(H) and (P) of Detroit Ordinance No. 353-H of Chapter 56 of Article 6 passed November 7, 1979". Amended Consent Judgment at 3. The Detroit Ordinance states:

"Commercial User" shall mean all non-domestic sources of indirect discharge other than industrial users, as defined herein including but not limited to the following. A publicly owned facility where persons are engaged in the exchange or sale of goods or services, hospitals, retail establishments, schools and facilities operated by local and State governments.

Detroit Ordinance No. 353-H (1979).

In my March 9, 1981 Order I assumed jurisdiction of all challenges to Detroit's wastewater treatment rates (March 9 Order). That order stated in relevant part:

1. The Court shall take jurisdiction of all challenges to the City of Detroit's wastewater treatment rates to become effective July 1, 1981....

2. All users, customers and rate payers of the system shall be bound by the results of any such challenge or challenges to the rates unless in writing and by or before March 20, 1981 a party opts out and states in a paper duly filed in this Court and cause, that it will not be bound by any or all of the provisions of this Order.

March 9, 1981 Court Order at p. 2, Civil Action # 77-71100. Plaintiff admits that it is covered by this Order.

On July 27, 1981 I issued an order responding to challenges to Detroit's rate structure (July 27 Order). An Order to show cause why the commands of the July 27 Order should not be implemented was issued July 10, 1981 and objections were heard by this Court July 24, 1981. None of the parties or their predecessors filed objections. The primary purpose of the July 27 Order was to fund the activities of the Detroit Sewer Department's Industrial Waste Control Section. The Order stated:

A monthly charge ... shall be effective July 1, 1981, to be collected on all bills rendered on or after August 1, 1981, to non-residential customers provided that said charge shall be further adjusted as necessary, subject to the approval of this Court, to collect 3.2 million dollars in order to recover the full twelve-month cost of the Industrial Waste Control Section budget.

See p. 2 July 27, 1981 Court Order at p. 2, Civil Action # 77-71100.

Taken together, the Consent Decree and orders establish that plaintiff's building is in the commercial class and that a surcharge is assessed to the commercial class of customers of Detroit's Water and Sewer Department (DWSD).

Mountain Gold Properties Inc. (Mountain Gold) owns a small office building in the City of Lathrup Village (Lathrup Village). Lathrup Village utilizes the services provided by the DWSD. The building is commercial property, so it is subject to the commercial user surcharge. In its complaint plaintiff argues that applying the surcharge to small office buildings constitutes unconstitutional discrimination.

The charges assessed to commercial users by Lathrup Village are imposed on Lathrup Village by Oakland County to fund the Evergreen-Farmington drain system. For this reason, Lathrup Village impleaded Oakland County. Similarly, Oakland County charges Lathrup Village the amount imposed upon it by the DWSD. Thus, Oakland County impleaded Detroit. Detroit removed the action to this court on the basis of the Amended Consent Judgment in civil action # 77-71100.

On November 17, 1994 I heard oral argument. Plaintiff argued that it is unfair for a small commercial building, which uses less water than a great number of large non-industrial buildings, to be classified with commercial entities which deliver great amounts of waste into the system. Plaintiff claims that surcharges should be based upon usage, not classifications. Defendants contend that the surcharge is imposed by the July 27, 1981 Order and Amended Consent Judgment. In the hearing it became clear that plaintiff did not dispute the applicability of...