Reversal: $9M judgment against township overturned by appeals court

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By Tom Kirvan
Legal News

In a high stakes case with potentially far-reaching implications for municipalities across Michigan, a three-judge panel of the state Court of Appeals voted unanimously January 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 Court 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 Royal Oak-based law firm of Hanley Kickham, which reportedly has represented assorted other plaintiffs in similar class action cases against various municipalities.

The township was represented on appeal by the Farmington Hills-based Young & Associates PC and its founder Rodger Young, who has headed the boutique law firm specializing in complex business litigation since 1990.

“We are proud and gratified with the outcome of this appeal,” Young said. “After being retained on appeal by Bloomfield Township, I immediately went to work on our argument and building a solid case with the singular goal of overturning the previous trial court ruling. That’s exactly what we accomplished.”

Young, who praised his associate Josh Apel for his research work on the appeal, noted that 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 Bloomfield 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 indicated. “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, an Air Force veteran who formerly served as a U.S. delegate to the United Nations General Assembly, praised township officials for holding firm throughout the case.

“They were convinced that 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, although the plaintiff has 42 days from the date of the January 7 Court of Appeals ruling to do so.

“We will be seeking reimbursement for costs and fees,” said Young of his next legal move on behalf of the township.

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