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Michigan Court Defers to Regulator’s Concurrent Jurisdiction in Underground Storage Tank Cleanup

In a decision highlighting a practical challenge in pursuing tort claims against some underground storage tank (“UST”) owners and operators, the Michigan Court of Appeals held that a trial court could nix a lawsuit stemming from a leaking UST while state regulators were already involved in an ongoing cleanup.  See Carson City Hospital v. Quick-Sav Food Stores, Ltd., No. 325187, 2016 WL 1719047 (Mich. Ct. App. Apr. 28, 2016).

The Michigan Department of Environmental Quality (“MDEQ”) confirmed a release from a UST system at Defendant’s gasoline station in October 2011.  Defendant conducted a site investigation and found soil and groundwater contamination at the station and on neighboring properties, including at a medical clinic next door. Defendant engaged MDEQ in formulating a response, remediation, and monitoring plan pursuant to state regulations, although MDEQ had not approved a final corrective action plan as of late 2014.

The owner of the neighboring medical clinic brought suit against the gasoline station in September 2013, seeking damages and injunctive relief to address the contamination affecting the medical clinic property.  The trial court granted a defense motion to dismiss, citing the doctrine of “primary jurisdiction,” which allows a court to defer primary jurisdiction to a regulatory agency better positioned to apply its expertise to the issue.  The court ruled that the MDEQ had primary jurisdiction to address issues related to leaking USTs, based on the agency’s expertise and the authority the legislature delegated to the agency.  So long as MDEQ was involved in addressing such issues, the court could defer the lawsuit as a matter of discretion and judicial deference to the agency.  The dismissal was without prejudice, and the court noted that “it is not a matter of whether there will be judicial involvement in resolving a case, but instead pertains to when it will occur and where it will start.”  Id. at *7 (emphasis added).

On appeal, the Court of Appeals upheld the trial court’s decision, holding that the trial court properly applied the primary jurisdiction doctrine.  Here, the Court held that applying the doctrine and deferring to MDEQ’s concurrent jurisdiction fulfilled the policy objectives of protecting the separation of powers, allowing the agency with the expertise and the regulatory authority over UST operators to do its job, and avoiding inconsistent results.  With no MDEQ-approved remediation plan yet in place, “the full extent of corrective actions and remediation demanded of [Defendant] remained unknown and could have eventually been inconsistent with or adverse to equitable relief ordered . . . or adverse to monetary damages awarded on the basis of response costs and business and property-value losses.”  Id. at *11.  The Court also emphasized that, because the trial court dismissed without prejudice, Plaintiff was free to re-file its claims after the administrative process ran its course.

© 2020 Beveridge & Diamond PC National Law Review, Volume VI, Number 146

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About this Author

Graham C. Zorn Environmental, Toxic Tort, Products Liability Litigation Attorney Beveridge & Diamond Washington, DC
Principal

Graham Zorn focuses his practice on environmental, toxic tort, and products liability litigation.

His representative experience includes extensive work on a series of complex products liability and toxic tort cases related to alleged groundwater, and litigation over lead in drinking water. He has represented individual businesses, trade associations, and municipalities in litigation, as well as in compliance, enforcement, and counseling matters involving the Clean Air Act, the Clean Water Act, CERCLA and other state and federal environmental statutes. He also counsels domestic and...

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Daniel M. Krainin Environmental Litigation Attorney Beveridge & Diamond New York, NY
Principal

Dan deploys more than two decades of environmental litigation experience to resolve clients’ legal and business challenges.

Primarily focused on environmental and toxic tort litigation, Dan helps clients successfully resolve groundwater contamination, hazardous waste site remediation, natural resource damages, permit defense and product-related matters. He enjoys using his skills as a litigator to help clients solve environmental problems.

Among his many wins, Dan successfully led a team that defeated an emergency challenge to a permit that Dan’s client needed to continue its operations. The favorable result that Dan and his team achieved allowed the client to avoid losing millions of dollars’ worth of production.

In a toxic tort case involving an alleged international conspiracy, Dan led a successful briefing effort that resulted in early dismissal of all claims against his clients, saving them from protracted litigation and protecting their reputation.

While focusing his practice on litigation, Dan also provides practical and actionable advice designed to minimize environmental risk and potential liabilities. 

An active member of various bar associations, Dan is a past chair of the American Bar Association’s Environmental Litigation and Toxic Torts Committee, and currently co-chairs the New York State Bar Association Environment Section’s Toxic Torts Committee. Dan has also served as a member of the firm’s Management Committee.

Before joining Beveridge & Diamond, Dan clerked for The Honorable Carlos R. Moreno, U.S. District Judge for the Central District of California. Prior to attending law school, Dan served as editor-in-chief of the environmental news service Greenwire.

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Eric L. Klein Environmental Litigation Attorney Beveridge & Diamond Boston, MA
Principal

Eric makes complex subjects simpler.

He is an environmental litigator in the Boston office of Beveridge & Diamond, with a national practice representing major companies and municipalities in a wide variety of matters including environmental and mass torts, class actions, and federal citizen suits under environmental statutes including the Clean Water Act, the Safe Drinking Water Act, and the Clean Air Act. He has handled cases in state and federal courts throughout the United States, litigating complex civil and commercial matters before juries, trial and appellate courts,...

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