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Conservation Impact of the Case: negative
Federated Ins. Co. v. Oakland County Road Comm’n, 475 Mich 286, 715 NW2d 846 (2006)
Year: 2006

Michigan LCV Analysis

This case involved leaking underground storage tanks and allocating the cost of cleanup, which under the Natural Resources and Environmental Protection Act (NREPA) should be paid by the entity responsible for the release of pollutants. The Court of Appeals upheld dismissal of a lawsuit to recover those costs because the plaintiff had not filed the lawsuit within six years of the leak, even though it filed within six years of finding out about the leak. The Attorney General filed an appeal with the Supreme Court, as it is permitted to intervene “in any action” and “at any time” and exercise the right of any of the parties in order to protect the interest of the state, in this case, the interest of the Michigan Department of Environmental Quality to properly enforce NREPA.

The Court did not allow intervention, though, because the party did not exercise the right to file for leave to appeal on time. However, the party is not required by statute to exercise the right in order for the Attorney General to intervene, only that the party has the right. By not allowing the Attorney General to intervene when he met the statutory requirements, the majority ignored it own precedent and the plain meaning of the statute to impose federal standing requirements not found in the Michigan Constitution. In doing so, it weakened an important environmental protection law and removed the historic ability of the attorney general to intervene on behalf of the public interest.

Please remember that rulings in environmental cases are often based on non-environmental considerations. The University of Michigan Law School did not participate in the rating process and takes no position regarding support or opposition for any judicial candidates.

Case Summary

Carl M. Schultz, Inc. paid to clean up petroleum that leaked into the soil of its property. It turned out that some of the petroleum had leaked from the Oakland County Road Commission’s neighboring property. Carl M. Schultz, Inc. and its insurer sued the Commission under the Natural Resources and Environmental Protection Act (NREPA) to recover the clean-up costs, but the lower courts dismissed the claim because it was not filed within the six-year statute of limitations period. Carl M. Schultz failed to file a timely leave to appeal, and the Michigan Attorney General attempted to appeal the case on its behalf as an intervenor representing the interests of the people of Michigan and the Michigan Department of Environmental Quality. The Court dismissed the appeal because the Attorney General was not an “aggrieved party” and therefore lacked standing to appeal.

What Happened

In 1988, Carl M. Schultz, Inc. noticed that an underground storage system located on its property had released petroleum into the soil. The Department of Natural Resources (DNR) told the company to fix the problem. The company constructed an on-site treatment system that began operation in 1992. Meanwhile, the Oakland County Road Commission released petroleum on adjacent property in 1991. Schultz began to suspect that some of this petroleum had crossed onto its property. This was later confirmed by the DNR.

In 2000, Schultz and its insurer sued the Oakland County Road Commission under the Natural Resources and Environmental Recovery Act (NREPA) to get the Commission to pay for some of the cost of cleaning up the petroleum on the company’s property. The trial court concluded that the action was barred by the six-year statute of limitations period in NREPA, and the Court of Appeals agreed.

The company and its insurer did not appeal to the Michigan Supreme Court in the required time. However, the Michigan Attorney General filed an appeal on behalf of the people of Michigan and the Michigan Department of Environmental Quality (MDEQ) (which had replaced the DNR by this time) even though neither the state nor the MDEQ had participated in the case before this point. The Attorney General justified this “intervention” by arguing that the Court of Appeals had misconstrued the relevant section of NREPA, and that the people of Michigan and the MDEQ would benefit from the Court setting the matter straight.

Legal Dispute

Can the Attorney General appeal as an intervenor on behalf of the people and the Michigan Department of Environmental Quality to have the Court clarify the meaning of a provision of the Natural Resources and Environmental Protection Act (NREPA) when the losing parties did not file an appeal on time?

Court Decision

The Court (Chief Justice Taylor, joined by Justices Corrigan, Young, and Markman) held that the Attorney General could not appeal in this case. The Court based its holding on the constitutional rule of “standing” that says that courts can only decide cases in which the “aggrieved party” has suffered a concrete and specific injury that could be addressed by a favorable decision by the court. In this case, the company and its insurer were the only aggrieved parties who could appeal, because they suffered an “injury” when the lower courts found that their claims were barred by the statute of limitations. The Attorney General had not suffered a concrete and particularized injury— he was merely disappointed in how the lower courts had interpreted the law. Therefore, the company and its insurer were the only aggrieved parties who could file an appeal, and because they had failed to appeal on time, the Court was required to dismiss the Attorney General’s appeal.

Justice Weaver, joined by Justices Cavanagh and Kelly, dissented. The dissenting justices thought that the Attorney General should have been allowed to appeal, even though the company and its insurer had not appealed on time, because the Attorney General represented the interests of two “aggrieved parties”—the people of Michigan and the MDEQ. First, the people of Michigan, acting through the Michigan Legislature, had expressed an interest in requiring environmental cleanup costs to be allocated in a certain way under NREPA, and were therefore harmed by the Court of Appeal’s improper interpretation of the statute allocating cleanup costs. Second, the MDEQ was harmed by the Court of Appeal’s interpretation of NREPA’s statute of limitations because this interpretation affected MDEQ’s ability to hold parties accountable for activities that harm the environment.

Judges That Ruled on this Case

Chief Justice Robert P. Young, Jr.

Chief Justice Stephen J. Markman

Justice Clifford Taylor

Justice Elizabeth A. Weaver

Justice Marilyn Kelly

Justice Maura Corrigan

Justice Michael F. Cavanagh

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