Federal Judge Dismisses Lawsuits Over Michigan Dam Tax Assessments

MIDLAND, Mich. — A federal judge has dismissed two lawsuits challenging a $217 million special assessment imposed on property owners to help fund the reconstruction of four mid-Michigan dams destroyed in the 2020 floods. The ruling is a setback for homeowners who argue they are unfairly burdened by the tax.

Legal Challenge Against Special Assessments

The Heron Cove Association (HCA), a group of property owners, filed lawsuits against Gladwin and Midland counties, as well as the Four Lakes Task Force, disputing the special tax. The lawsuits alleged constitutional violations and claimed the assessments were unjust, providing little benefit to affected homeowners.

On March 20, U.S. District Judge Matthew Leitman dismissed all claims, stating that the plaintiffs had already been given an opportunity to contest the tax in state court.

Flood Disaster and Costly Recovery Efforts

The legal dispute arose from the catastrophic collapse of the Edenville Dam in May 2020, which caused historic flooding and widespread destruction across Midland and Gladwin counties. The failure also led to damage at the Sanford Dam, further compounding the devastation.

To fund the estimated $400 million cost of rebuilding the dams, the Four Lakes Task Force developed a special assessment plan that requires property owners in the Four Lakes Special Assessment District to cover approximately 55% of the expenses. The assessment, amounting to $217.7 million, is to be paid in annual installments over 40 years.

Judge Rejects Constitutional Claims

The HCA initially challenged the assessments in Midland County Circuit Court, arguing that the tax was excessive and unfair. After the state court upheld the assessments, the group took the fight to federal court. However, Judge Leitman ruled that the case could not be re-litigated, reaffirming that property owners had a fair opportunity to argue their case at the state level.

“The same issues were raised, and the same parties had a full and fair opportunity to litigate these matters,” Leitman wrote in his decision.

Additionally, the plaintiffs claimed the tax constituted an unconstitutional taking under federal law. The judge rejected this argument, stating they failed to prove that the assessment “substantially exceeds the benefits conferred” to their properties.

Ongoing Appeal to Michigan Supreme Court

The Heron Cove Association expressed disappointment with the ruling and indicated they will continue to fight the assessment in Michigan’s highest court.

“This case raises fundamental concerns about due process and the proper application of Michigan law,” said Michael Homier, attorney for the HCA. “We are committed to ensuring these matters receive full and fair consideration.”

Meanwhile, the Four Lakes Task Force sees the ruling as a step forward for the dam reconstruction effort.

“We remain hopeful for a positive resolution to the Supreme Court appeal,” said Task Force President Dave Kepler.

Next Steps in Dam Reconstruction

With the legal victory in federal court, the Task Force has secured permits for the restoration of the Edenville Dam. However, progress depends on the Michigan Supreme Court’s final decision on the pending state-level appeal.

Officials from Midland and Gladwin counties have not yet commented on the ruling. Task Force representatives stated they will provide an update on the dam project’s status next week.