By Tom Kirvan
Legal News
In a case with potentially far-reaching implications for municipalities across Michigan, a three-judge panel of the state Court of Appeals voted unanimously Jan. 7 to reverse a judgment of more than $9 million against Bloomfield Township for allegedly charging excessive water and sewer rates.
The ruling stemmed from an appeal of a class action judgment entered against the township following a bench trial in front of an Oakland County Circuit judge, who awarded plaintiff Jamila Youmans and the plaintiff class more than $9 million in restitution for what were found to be inflated water and sewer charges. The case was filed in April 2016 by the law firm of Hanley Kickham, which reportedly has representedother plaintiffs in similar class action cases against various municipalities.
The township was represented on appeal by Young & Associates, P.C. and its founder Rodger Young.
Young noted the “38-page detailed opinion issued by the Court of Appeals was extraordinarily thorough and sets an important precedent for other municipalities and governmental entities.”
The appellate court ruling was issued per curiam by Judges Christopher Murray, Cynthia Stevens, and Deborah Servitto. The Michigan Municipal League and the Michigan Townships Association submitted an amicus brief in support of the township’s position, according to Young. “The real fulcrum of the case is that we were able to demonstrate that the plaintiff went through the water and sewer budget line by line, cherry picking items that they deemed too high and thereby making the gigantic leap that the entire rate structure was too high,” Young said. “That, the court found, was a real stretch. Historically, courts have given great deference to municipalities when reviewing the validity of their rate structures. There is a longstanding principle of ‘presumptive
reasonableness’ when it comes to municipal utility rates.”
In order to overcome the presumption of validity, Young indicated, the plaintiff’s counsel was required to provide “clear evidence of wrongdoing,” which they were unable to produce at an adequate level, the Court of Appeals ruled.
Young praised township officials for holding firm. “They were convinced their rate structure was sound and fair, and they maintained a stance throughout that they weren’t going to agree to any sort of settlement,” Young said. “They knew that doing otherwise would result in a catastrophic hit to their budget.”
Young said it is unclear if the decision will be appealed to the Michigan Supreme Court; the plaintiff has 42 days from the Jan. 7 Court of Appeals ruling to do so.
“We will be seeking reimbursement for costs and fees,” Young said.
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