Published in Michigan Environmental Law Journal, Summer 2019, Vol. 37, No. 1, Issue 106 [view full issue].
Cite: 37 Mich Env Law J 1 (2019)
by Steven Chester, Senior Counsel, Miller, Canfield, Paddock and Stone PLC
On December 11, 2018, the Great Lakes Water Authority (“GLWA”), Detroit Water and Sewerage Department (“DWSD”), Oakland Water Resources Commissioner (“WRC”), and the City of Livonia (collectively referred to as the “Plaintiffs”) filed a Complaint for a Declaratory Judgment with the Michigan Court of Claims seeking to invalidate the recently enacted state “Lead and Copper Rules” (the “Rules”). The Complaint was filed against the Department of Environmental Quality (“DEQ”). Plaintiffs are municipal water suppliers who collectively provide drinking water to well over a million customers. As public health agencies, Plaintiffs have spent decades insuring their customers receive safe, clean drinking water.
So why did Plaintiffs feel compelled to challenge the validity of the new Rules which require the removal of all lead service lines statewide in twenty years? What obligations do the Rules impose on municipal water suppliers that the suppliers find problematic? To appreciate the dilemma the Rules create for water suppliers requires an understanding of how and why the Rules came to be.
Older housing stock commonly includes plumbing materials with lead and copper components. If not managed correctly, lead and copper can leach into drinking water and pose significant public health concerns. The most common sources of lead in drinking water are faucets, fixtures, solders, and the lead service lines that connect the home to the public water supply. With a few exceptions, most lead service lines are privately owned and located on the homeowner’s private property.
In 1991, pursuant to authority under the federal Safe Drinking Water Act, the United States Environmental Protection Agency (“EPA”) promulgated the federal lead and copper rule. The federal rule, which has been revised over the years, protects public health by setting lead and copper action levels and requiring water suppliers to apply corrosion control treatment to minimize lead and copper levels in drinking water systems. If an action level is exceeded in more than 10% of the customer taps sampled, a water supplier must undertake additional corrective measures to control corrosion within the water system.
In 1978, the EPA granted the State of Michigan initial primacy to administer the federal Safe Drinking Water Act, which was extended to include the federal lead and copper rule after its promulgation in 1991. The federal rule was re-promulgated as a state rule under the Michigan Safe Drinking Water Act, and over the years municipal water suppliers have successfully applied the rule and its treatment standards to their drinking water systems. In April 2014, this changed when the city of Flint switched its drinking water source from treated water received from Detroit and sourced from Lake Huron and the Detroit River to the Flint River. The city did not apply corrosion control treatment to the Flint River water resulting in lead exposures and a public health emergency.
A History of the new Lead & Copper Rules
In March 2017, in response to the Flint drinking water crisis, DEQ submitted a Request for Rulemaking to the Office of Regulatory Reform (“ORR”) to amend the federal rule. From the outset, the press reported DEQ’s additional requirements proposed in Michigan’s lead drinking water regulation to be the “toughest in the nation.” ORR authorized DEQ to proceed with rulemaking.
As a first step in the rulemaking process, DEQ formed a stakeholder group and held stakeholder meetings from July to December 2017. Plaintiffs, along with other municipal water suppliers and interested groups, participated in these meetings. It was during the stakeholder process that DEQ unveiled its intent to require municipal water suppliers to access private property and remove and replace all privately owned lead service lines at the municipality’s expense. The municipal stakeholders pointed out that this would impose a huge financial burden on the water suppliers without providing any source of funding.
In January 2018, despite the funding and other concerns expressed by the municipal water suppliers, DEQ published draft Rules. As required by the Michigan Administrative Procedures Act, DEQ also prepared a Regulatory Impact Statement and Cost-Benefit Analysis (“RIS”) for the Rules. As part of the RIS, DEQ was obliged to provide specific information in response to a long list of questions. This information included, among other things: 1) a comparison of the Rules to parallel federal and state regulations; 2) a determination as to whether the Rules conflict with existing law; 3) an identification of the behavior to be altered and the harm to be addressed by the Rules; 4) an analysis of the impacts of the Rules on businesses, groups and individuals; and 5) a discussion of possible alternatives to the Rules. Importantly, the RIS also obligated DEQ to include an estimate of the costs imposed by the Rules (i.e., a cost-benefit analysis).
From February 8, 2018 through March 21, 2018, a public comment period was held on the proposed Rules and the accompanying RIS. Plaintiffs, along with other municipal water suppliers and associations, provided detailed comments challenging the legal, scientific, and technical foundation for the Rules and the adequacy of the RIS. Plaintiffs and other commenters pointedly remarked that, as expressed in the RIS, DEQ had grossly underestimated the cost to be imposed on municipal water suppliers by the Rules. DEQ did not respond to most of Plaintiffs’ comments and offered no response whatsoever in the public record to address Plaintiffs’ concerns over the cost of the Rules. In fact, DEQ did not change one word in their RIS cost summary for the Rules after reviewing Plaintiffs’ comments. In May 2018, DEQ sent the Rules to the Joint Committee on Administrative Rules (JCAR) and, after several changes proposed by JCAR, the Rules became final on June 14, 2018.
As noted above, the most troublesome “new” requirement embedded in the Rules is the mandate requiring water suppliers to bear the cost of removing and replacing private lead service lines. The Rules fail to identify any state funding source for this work. During both the stakeholder meetings and the public comment period, Plaintiffs presented evidence that the overall line replacement costs associated with the Rules would exceed $2.5 Billion over 20 years. This estimate was based on the need to remove 500,000 lead service lines statewide, at an average cost of $5,000 per line. DEQ accepted this estimate going so far as to prepare a draft RIS referencing the $2.5 Billion cost; but the Agency changed course during the rulemaking phase suggesting line replacement under the Rules would cost only $499 Million over 20 years. DEQ claimed only 99,733 lead lines would require replacement under the Rules. Detroit alone has over 125,000 lead service lines.
Also of concern for municipal water suppliers is the schedule in the Rules for lead line replacement. By requiring that all lead lines be replaced in 20 years, municipal water suppliers may be compelled to ignore major public health issues like water main breaks, sewer backups, bacterial contamination, and sinkholes, in favor of prioritizing lead line removal and replacement. Plaintiffs argued strenuously that water suppliers should retain the flexibility and authority to set community priorities in Asset Management Programs (“AMP”) subject to DEQ review and approval. Each community AMP would identify the municipality’s commitment to rehabilitate, repair, and replace drinking water infrastructure, including lead service lines, in accordance with the specific public health needs and budgetary limitations of the community. Regrettably, the Rules as finalized greatly reduce the availability and diminish the importance of community-specific AMPs.
Another problematic assumption baked into the Rules is that property owners will readily grant water suppliers permission to access private property to remove lead service lines. The experience of many water suppliers, however, paints a more complicated picture with access frequently denied, and/or unreasonable conditions imposed on the water suppliers to gain access. Lastly, the Rules invoke myriad constitutional and statutory questions, including potential Headlee and Bolt v. City of Lansing issues. Although raised during the public comment period, responses to these concerns were not provided by DEQ as part of the rulemaking.
Based on the financial burden imposed by the Rules, and the perceived numerous legal and technical deficiencies embodied in the Rules, Plaintiffs filed their lawsuit with the Court of Claims. DEQ thereafter filed a motion for summary disposition, and Plaintiffs asked to amend their complaint to add a Headlee count. On July 23, the court granted the Plaintiffs’ motion to add a Headlee count but expressed skepticism about its merits. On the same day the court held a hearing on the Defendants’ dispositive motion, and on July 26, the court granted the Defendant’s motion for summary disposition finding the Rules to be constitutionally, procedurally, and substantively valid. On the issue of cost, the court maintained that nothing prevents municipal water suppliers from spreading the cost of replacing the privately owned lead service lines system wide on all users of the system. 
Presently, the Headlee count remains before the Court of Claims, and Plaintiffs are considering their appellate opportunities regarding the rest of the litigation. In the meantime, the Rules remain in effect and municipal water suppliers are left with the thorny task of how best to protect the health of their customers, while complying with the Rules, and yet keeping within funding and budget limitations.
*For an earlier discussion the Lead & Copper Rule see Viewpoint: Assessing Michigan’s Response to the Flint Water Crisis: The Lead and Copper Rule and Executive Directive 2018-3 by Nick Leonard in the MELJ's fall 2018 issue.
 State of Michigan Court of Claims, Case No. 2018-000259-MZ.
 Mich Admin Code, R 325.10102 et seq.
 On February 20, 2019, Governor Whitmer signed Executive Order No. 2019-06 reorganizing DEQ, renaming it the Department of Environment, Great Lakes, and Energy. The Executive Order became effective on Monday, April 22, 2019. The department is referred to as “DEQ” throughout this article.
 42 USC 300f et seq.
 40 CFR Part 141, Subpart I.
 MCL 325.1001 et seq.
 Smith, Michigan Pushes To Have Nation's Toughest Lead Water Rules, NPR, (Nov. 13, 2017); Moehlman, Michigan moves toward the toughest lead in drinking water rule in the nation, Michigan Radio, (Feb. 27, 2018).
 MCL 24.245(3); Executive Order No. 2011-5.
 Id.; Exec. Order, Art V.1 (p 5).
 Mich Admin Code R 325.10604f(5)(c); R 325.10604f(6)(e).
 Const 1963 art 9, §§ 25 and 29.
 Bolt v. City of Lansing, 459 Mich 152 (1998).
 Opinion Regarding Defendant’s February 1, 2019 Motion For Summary Disposition Pursuant To MCR 2.116(C)(8), State of Michigan Court of Claims, Case No. 2018-000259-MZ.
 Id., p 14.#EnvironmentalLawJournal#Legislation#WaterLaw#Viewpoint#ChemicalsandToxicSubstances#CourtOpinions