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Michigan Supreme Court Lansing, Michigan

Opinion
SUPREME COURT ANGLERS OF THE AuSABLE, INC., MAYER FAMILY INVESTMENTS, LLC, and NANCY A. FORCIER TRUST, Plaintiffs-Appellants, v DEPARTMENT OF ENVIRONMENTAL QUALITY, DIRECTOR OF THE DEPARTMENT OF ENVIRONMENTAL QUALITY, and MERIT ENERGY COMPANY, Defendants-Appellees.

Chief Justice:

Justices:

Marilyn Kelly

Michael F. Cavanagh Maura D. Corrigan Robert P. Young, Jr. Stephen J. Markman Diane M. Hathaway Alton Thomas Davis

FILED DECEMBER 29, 2010 STATE OF MICHIGAN

Nos. 138863 to 138866

BEFORE THE ENTIRE BENCH DAVIS, J. In this case we determine whether defendant Merit Energy Company's plan to discharge contaminated water from an environmental cleanup site in the Manistee River watershed into a previously unpolluted site in the AuSable River watershed is an allowable use of water. We also determine in this case whether the Michigan Department

of Environmental Quality (DEQ) (which is now the Department of Natural Resources and Environment) can be sustained as a defendant in an action brought under the Michigan environmental protection act (MEPA), MCL 324.1701 et seq., when the DEQ is alleged to have authorized activity that will harm the environment. We hold that Merit's discharge plan is not an allowable use of water because it is manifestly unreasonable, and we further hold that the DEQ can be sustained as a defendant in a MEPA action when the DEQ has issued a permit for activity that it is alleged will cause environmental harm. Accordingly, we reverse the Court of Appeals' judgment in part and remand the case for reinstatement of the trial court's decision holding the DEQ accountable for violating MEPA.
I. FACTS AND PROCEDURAL HISTORY

This case arises out of Merit's proposed plan to discharge treated, but still partially contaminated, water from the Manistee River watershed into the AuSable River water system in an effort to clean a plume of contaminated groundwater. In 2004, Merit acquired the Hayes 22 Central Production Facility (CPF) located in Otsego County, Michigan. As a condition to purchasing the CPF, Merit entered into a settlement agreement with the DEQ to remediate the plume of contaminated groundwater that had originated from the CPF. The exact size of the plume, which at the time was continuing to expand, is unknown. The plume contains benzene, toluene, ethylbenzene, and xylenes and chlorides contained in brine, among other contaminants. The plume is known to have

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contaminated several residential drinking wells and may have contaminated other residential wells as it continued to expand. Merit evaluated a number of options for remediation and ultimately chose air stripping--a process that forces a stream of air through water, causing hydrocarbons to evaporate. 1 Merit submitted a corrective action plan to the DEQ to remediate 1.15 million gallons of plume water a day through the use of air stripping. The plan was to send the 1.15 million gallons a day through a 1.3-mile pipeline from the air-stripping site to be discharged into Kolke Creek. Kolke Creek forms the headwater system for the AuSable River watershed. Kolke Creek feeds into Bradford Creek, Lynn Lake, and the AuSable River. 2 The DEQ approved Merit's corrective action plan and issued a general permit and certificate of coverage allowing discharge of treated water from the air stripper into the wetland area flowing into Kolke Creek. The DEQ also granted Merit an easement through state-owned land to allow Merit to construct the pipeline from the air stripper to the discharge point.

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The air-stripping process does not remove any brines or chlorides from the water. Thus, although the water is cleaner at discharge than when it was first removed from the ground at the CPF, the water remains contaminated in some respects. The plaintiffs in this case are either riparian owners along these waterways or users of the waterways for recreational purposes such as fishing. The waterways are considered prime trout-fishing locations because of their purity and mineral content.

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Plaintiffs filed a complaint against Merit and the DEQ in the Otsego County Circuit Court. Plaintiffs alleged violations of surface-water law, riparian law, and

MEPA. Plaintiffs sought an injunction against the discharge plan. After a bench trial on plaintiffs' complaint, the trial court issued an opinion and injunction preventing Merit from discharging the air-stripped water into Kolke Creek. The court made detailed findings of fact and concluded that the proposed discharge plan would severely harm the AuSable River water system because of the increased flow of water and the increased level of substances not previously found in Kolke Creek. 3 It applied the "reasonable use balancing test" from Mich Citizens for Water Conservation v Nestl

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Michigan Law