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United States v. Muskegon, County of

Citation: 32 ELR 20827
No. No. 00-1170, 298 F.3d 569/(6th Cir., 07/23/2002)

The court holds that two consent decrees that addressed, among other things, the amount of pollutants to be discharged into a sewage treatment system were fair and reasonable and did not breach or unconstitutionally impair a county's preexisting contractual obligations to a company that used the system. The company helped finance the construction and subsequent upgrading of the sewage treatment system and was a beneficiary of a service agreement declaring that the intent and purpose of the system was to provide the maximum possible service to each contractee. When the county attempted to adopt an ordinance that limited the amount of pollutants allowed to be discharged into the system, the company and other users of the system sued the county, arguing that the ordinance violated their service agreements. The state court found for the company and the county was enjoined from enforcing the ordinance. While an appeal of the state court judgment was pending, the U.S. Environmental Protection Agency (EPA) brought suit against the county and state based on the county's failure to have a proper industrial pretreatment program in place. The county claimed that the failure was due in part to the service agreements. The county, therefore, terminated all service agreements with companies and municipalities in the county. The county and municipalities then negotiated a new service agreement that incorporated an ordinance similar to the one previously enjoined by the state court. A consent decree between the county and municipalities that incorporated the new agreement, including the new ordinance, was entered in district court. EPA also entered into a consent decree with the state and county that incorporated the new ordinance. The company then appealed the district court's entry of the decrees.

The court first holds that although the company did not consent to the decrees, the district court did not abuse its discretion in finding the decrees fair and reasonable. The court next holds that the district court properly found that the termination of service agreements did not breach or unconstitutionally impair preexisting contractual obligations of the county to the company. Although some provisions in the ordinance are in conflict with provisions of the original service agreement, the impairment of the service agreement was not substantial. Additionally, the original service agreement with the company was lawfully terminated, and the company failed to show that enforcement of the ordinance resulted in curtailment of the company's discharges of industrial pollutants into the system prior to the effective date of the termination.

The full text of this decision is available from ELR (11 pp., ELR Order No. L-553).

Counsel for Appellee
Joan M. Pepin
Environment and Natural Resources Division
U.S. Department of Justice, Washington DC 20530
(202) 514-2000

Counsel for Appellant
Paul T. Sorenson
Warner, Norcross & Judd
111 Lyon St. NW, Grand Rapids MI 49503
(616) 752-2000

[OPINION OMITTED BY PUBLISHER IN ORIGINAL SOURCE]