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Wednesday, September 18,2013

A civil action coming

South Lansing residents get behind class-action lawsuit over storm water, sewage flooding in their homes

by Andy Balaskovitz
An overnight storm dumped 4 inches of rain on Lansing on June 12 and 13.

Predictably, basements flooded, leaving hundreds with sewage or rainwater backups.

Predictably, residents railed against City Hall. “In this area, the systems have failed,” Deanna Ray, a resident of the Coachlight Neighborhood in south Lansing, told the State Journal.

Predictably, city officials expressed sympathy but said Mother Nature won this one, overwhelming an infrastructure that isn’t designed to protect against all serious storms.

But perhaps less predictably, residents are doing something about it. Nearly 400 people with damaged basements have banded together in what will soon be a class-action lawsuit against the city. They’re seeking a fix and money to cover damages that could easily climb into the millions of dollars. The Detroit-based law firm representing them is well versed in the field, promoting on its website that it’s settled with municipalities — mostly in metro Detroit but also in Indiana and Ohio — over sewage backups totaling more than $46 million. That includes a $1.2 million settlement with Lansing in 2001. The lead attorney taking the case, Steven Liddle, helped write the state law enacted in 2001 that provides for government immunity from damages after storms. Indeed, the firm of Macuga, Liddle & Dubin has become known statewide for this sort of thing.

The suit, which Liddle said will be filed early next month, will claim that piping defects beneath those homes caused the backups; that the city knew about the defects; and that the city failed to correct them in a reasonable amount of time. That all must be proven for the city to be held liable, based on that 2001 state law known as Public Act 222.

Moreover, the number of suits against cities particularly vulnerable to flooding, like Lansing and southeast Michigan, exploded in the mid-1990s when insurance stopped covering such major risks, experts say.

Perhaps at the heart of these issues that lead to wretched experiences for property owners is aging infrastructure dating back to a time when routing sewage and storm water together was perfectly acceptable. While upgrading that infrastructure is underway throughout the country, it’s expensive and doesn’t happen overnight. Ultimately, all of these costs incurred when these old systems fail are passed on to all taxpayers.

PA 222

Days after the June storm, word had spread that a Detroit law firm might be able to help all of those residents who wanted the city to take some responsibility for damages. By late July, Liddle’s law firm contacted the Ingham County Drain Commissioner’s Office and the city of Lansing with a “sewage notice claim form” that included over 300 properties in the southwest quadrant of the city.

Under Public Act 222 of 2001, the claimants had 45 days after the storm event to provide written notice to the city. It then must wait another 45 days before it can file suit if a settlement hasn’t been reached.

“I’ve handled thousands of these cases. This is what we do,” Liddle said. “A lot of these people have had enough, and it hasn’t been one time. There are frustrations there.”

Deanna Ray is one of those frustrated residents. Ray, who lives on Danbury Crossroad Street in the Coachlight Neighborhood, contacted the law firm early. Then she started the petition drive to get others to join in the suit, “trying to create as much exposure as possible.”

She was also one of the first after the storm to speak out in the local media.

“This was the third time my basement has flooded with raw sewage,” adding she had “never received any compensation from the city of Lansing. I always filled out the property complaint forms but was always just denied.”

Ray, 32, has lived in Lansing all her life in the house where she grew up. She feels “stuck” with her two children in her home without insurance and little outside resources. She said the Red Cross did all it could to help, coming out with buckets and squeegees. It wasn’t easy removing roughly 4 feet of standing water and sewage from her basement.

“It’s terrible,” she said. Ray’s and two other properties on her road are part of the city’s “Basement Backup Pilot Program.” Launched this year, it “proactively addresses the issue of basement sewer backups and offers assistance to protect families from future backups,” according to the city’s website.

Forty-three homes that have had sewage backups were chosen for the program. Participants can hire contractors to fix plumbing issues, for which the city will reimburse up to $4,750. (All of the first $1,000 of eligible costs will be reimbursed, plus 75 percent of the next $5,000 in eligible costs.) Residents at five properties in the pilot program have also joined the lawsuit, according to basement pilot addresses recently released by the city and the list of claimants.

Sarah Catey lives in her parents’ home with her husband, son, two siblings and parents down the street from Ray. Catey said the June flooding, which she said brought 4-plus-feet of sewage and storm water into their basement, was the third — and worst — such event since 2010. Her parents, as the property owners, are on the list of claimants but haven’t started on work related to the basement pilot program, she said.

She and her husband “lost pretty much everything of ours” that was in the basement, which included clothes, dressers, computers and laundry machines. “The insurance wouldn’t cover any of the flooding damage in the basement unless we had a sump pump.”

Catey, 24, said she called the city at 12:30 a.m. June 13 to let it know about the sewage coming in. She was told a halfhour later to ride the storm out. Her parents bought the home 15 years ago.

“First of all, we were pissed. The city should have done something right when they knew water was coming in,” she said. “There was sewage coming up. Shit all over the basement.”

Forty-year-old Keisha Wade, who lives with her family about a mile north of the Coachlight Neighborhood on Lucie Street, also is part of the lawsuit and the pilot program. She said every time a major rainstorm comes, water rises up through her finished basement. While they’ve had seven or eight floods in the 10 years living there, she has not had problems particularly with sewage.

“We always just kind of prepare now for the storm,” she said. “It’s the new normal for us.”

She joined the lawsuit to have the problem fixed and for the city to reimburse her for the $5,000 or $6,000 she said it cost her during the last storm. “I’ve filed (insurance) claims, but there’s been times I didn’t make a claim because I didn’t want to risk losing my homeowners insurance,” she said.

“It’s an ordeal. It’s very depressing to go downstairs in the morning and stand in puddles of water. And that’s a two-week process to get the smell out,” she said.

Following the June event, Lansing Public Services Director Chad Gamble told the State Journal that serious storm events will challenge even functioning storm water management systems. He also told the LSJ that projects are planned, including upgrading a pump station in Frances Park, that could help alleviate the flooding in that area of the city.

It’s unclear yet how much the claimants may seek from the city for damages. Liddle said that will likely be determined during the case’s discovery phase when dollar amounts for each property are calculated.

“We have evidence that some people have flooded on numerous occasions,” Liddle said. “That really says something is wrong.”

How it works and who pays

Ingham County Drain Commissioner Pat Lindemann explains that backups happen as a result of our built environment of vast impervious surfaces and antiquated practices for dealing with storm water runoff.

“There’s an age-old saying in the water business: Never declare war on water,” he said. “If you try to, the water will always win. Backups are a product of inadequate infrastructure.”

While houses are hooked up to sanitary lines that can back up with too much storm water in them, Lindemann said the ultimate problem is how Lansing, like all cities, was built.

“When you build more parking lots and you don’t accommodate the space necessary to store the water, pipes become overwhelmed. The infrastructure just needs to be rebuilt,” he said, which could include installing bigger pipes and “low-impact design” like rain gardens and generally more pervious surfaces.

However, Gamble said that a “vast majority” of basement sewage backups the city investigates turn out to be problems with privately owned plumbing and drains on private property — not publicly owned sewer systems. “In the City of Lansing, property owners are responsible for maintaining their sewer service pipe,” he wrote.

He also said the city doesn’t consider it a system “defect,” as specified by state law, if problems are “caused by a rain event that is greater than the sewer is designed to carry.”

Lindemann said it’s likely true that a majority of backups throughout the year are a result of private plumbing issues. “But when you have backups all in one neighborhood all on the same night, it’s probably unlikely it’s a private drain problem,” he said. “It’s more than likely not the faults of theirs. It’s more likely the fault of an over-burdened sewer system.”

Which takes us to the heart of this classaction lawsuit: When pipes do back up and cause damage in residential homes, who’s responsible to pay for it?

Mike Forster, director of risk management services for the Michigan Municipal League, said since the mid- to late-‘90s when losses “spun out of control and became uninsurable,” law firms started filing class-action lawsuits against cities “virtually every time there was a severe rainstorm. It exceeded the capacity for cities to handle, and the cities would nonetheless get hit with a class-action lawsuit.

“It presents an enormous amount of exposure,” he said, adding that hundreds of people with relatively minor damages can end up costing huge amounts. So by the early 2000s, he said, insurers became overwhelmed and “severely restricted or even eliminated the coverage for it.”

The Municipal League’s Liability and Property Pool is an insurance entity of about 400 communities throughout the state to self-insure losses. However, it doesn’t include places that are more susceptible to flooding, such as Lansing, which is self-insured and not a member.

“Those communities that don’t have sewer backups don’t want to subsidize those that do,” Forster said. “If we have to raise rates a couple million dollars a year for five communities where it’s going to occur, the other 395 communities are just going to get insurance somewhere else for cheaper. It makes it almost impossible to insure.”

“When a plaintiff attorney comes in filing a lawsuit on behalf of 500 people that may or may not have damage, it’s simply not an insurable risk,” he added.

While Forster couldn’t speak specifically to what Lansing would do in such a case, typically the ultimate costs are rolled into water rates, he said.

Gamble said the city reviews complaints and investigates whether the system “is operating as designed.” It tries to “determine the cause of the damage, reviewing the amount of precipitation, complaint history, cleaning records, sewer drawings, etc.,” he said.

But if a government is found liable, is it fair for those costs to be passed on to other taxpayers or ratepayers?

Forster said one side may argue that. “On the other hand, sewer backups are a very emotional, frustrating, miserable event for someone who’s had it occur to them. I can certainly understand why the courts are very reluctant to dismiss claims no matter what the circumstances are for homeowners who had a backup,” he said. “It’s always a very difficult issue for everyone involved.”

Old infrastructure

Pipes installed underground in the 1930s, ‘40s and ‘50s were designed to carry water to treatment plants before being discharged into the river. The city’s effort to separate those, known as the Combined Sewer Overflow project, was mandated under state law and started in 1992. It is a 30-year, $176 million project to separate the sewage and storm water so that the sewage goes to the wastewater treatment plant and the storm water to the river.

The city has put that program on hold after completing 70 percent of it and reducing the annual overflow volume by 58 percent. It has alternative plans pending with the state Department of Environmental Quality, some of which could qualify the city for revolving loan funds to help pay for it.

“Despite all the work completed to date, the existing sanitary sewer system provides variable wet weather performance,” according to a new project proposal the city sent to the state. That project, called the Wet Weather Control Program, is estimated to cost $420 million and “is expected to extend beyond 2020 due to the program cost and the City’s continuing economic hardship,” the proposal says.

“I wish we had millions and millions of dollars to be able to help these people,” Gamble told the Journal in June, referring to the fact that upgrading infrastructure takes time and lots of money.

Chuck Bennett, an environmental engineer with the DEQ, said Lansing has “a history of some problems with capacity of sewer systems during wet weather and has been working with us to address them over a number of years.”

While the combined systems present one challenge, even some areas that have already been separated are experiencing what are called “sanitary sewer overflows.”

“It’s analogous to fighting a battle on two fronts,” Bennett said. “They’ve come to us with a proposal to remedy those problems. Instead of working on them separately, they come with a holistic plan, the Wet Weather Control Plan.”

The schedule for completing that is being negotiated, Bennett said.

As cities grapple with these fundamental infrastructure problems, time ticks.

Mother Nature is not waiting and, as multiple studies have shown, is getting more powerful as extreme weather events are being exacerbated by climate change.

Governments are battling time and money to get the work done. But there’s a more absolutist view held by some, like Lindemann, who say sewage backups are unacceptable, period.

“The government is supposed to represent the people. We work for them. My job is to make sure they’re safe and that public health is taken care of,” he said. “When sewage backs up in your basement floor, you think that’s healthy?” Liddle, the attorney leading the suit, agrees.

“This is the United States in 2013. A lot of these people have said, ‘I’ve flooded three times.’ One person said, ‘I let it go one or two times.’ But what do you do? This is how the system works. You can’t just sit there and flood people out,” he said.

Referring to the idea that we live in an age when it’s no longer acceptable to directly discharge sewage into waterways: “If it’s so bad that it can’t be in Lake Michigan or Lake Huron, it sure can’t be in someone’s basement. That’s something that’s intolerable.”

Indeed, Lindemann says. “It’s unacceptable in modern society to have sewage backups,” he said. “It’s unacceptable for a community to live like that.

It is not a bad thing for people to demand that they have working infrastructure.”

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