Fieger files suits seeking $500 million on behalf of Midland-area flood victims

Attorney Geoffrey Fieger filed two proposed class-action lawsuits Thursday seeking $500 million for Midland-area flood victims, claiming the owner of the dams and the State of Michigan were negligent in maintaining them.

The lawsuits were filed in Midland Circuit Court against Boyce Hydro Power, the owner of the Edenville and Sanford Dam. Also named are members of the Hydro Trust including Lee W. Mueller, Michael d’Avenas, Stephen B. Hultberg and co-trustee JPMorgan Chase & Co.

The suits claim federal regulators had demanded changes to the design of the Edenville Dam since at least 1993. They also allege the defendants were intermingling funds between themselves and the trust assets of Boyce Hydro in the operations of the dams.

By July 2004, it became known the Edenville Dam would not be able to handle a major flood due to inadequate spillway capacity, one lawsuit states.

"While federal regulations require hydroelectric dams to be designed to withstand anticipated flooding scenarios, the Edenville Dam was only capable of withstanding about half such an amount," according to the suit.

"Between the time they first assumed ownership and responsibility for the dam and the present, Defendants refused to pay for much-needed repairs and upgrades, despite knowing full well that the Edenville Dam could fail at any moment, endangering life and property downstream."

The state took jurisdiction over the dam from federal regulators in 2018 but was the subject of dueling lawsuits filed in late April and early May, a little more than two weeks before the dam burst.

Thursday filing states Federal Energy Regulatory Commission determined that Boyce Hydro "knowingly and willfully refused to comply with major aspects of its license" and had "repeatedly failed to comply."

State officials have said years of disinvestment in infrastructure combined with heavy rains and high winds were factors in the 96-year-old dam's failure. EGLE officials declined to comment on pending litigation.

"These dams were so well known to the authorities in terms of their noncompliance in the 2018 desertification, which turned them back over to the state... They all knew this was a disaster," Fieger told The Detroit News. "It's similar to a lot of the infrastructure in Michigan. It’s amazing that a bridge hasn’t fallen down."

► More: More Midland-area residents sue over dam breach, flooding

Fieger expects the damages will eventually exceed $5 billion as most of the residents are uninsured, he told The News.

"One of my clients that called today with over $500,000 in damages," said Fieger, who has been contacted by more than 100 clients. "Realistically, we're talking about a finite class... somewhere between 7,500 to 15,000 people that will eventually be involved."

Fieger said Boyce Hydro started a series of corporations to protect liability for each one of its dams and doubts they have enough insurance to cover the losses.

"We have to locate where their money is and we have located a JPMorgan account that's related to a trust," Fieger said. "There are shells to hold some of its money and unfortunately, it's not going to be enough in this one Boyce enterprise so I'm positive this will go to the bankruptcy court."

Boyce Hydro Power LLC and JPMorgan Chase declined to comment on the lawsuits.

Shortly after the Edenville Dam broke on May 18, the floodwaters overwhelmed the Sanford Dam, which also failed to prevent the floodwater from hitting Midland. The flood forced 11,000 Midland County residents to evacuate and surrounding homes were underwater or severely damaged by the historic incident.

Waters crested at 35 feet by the following day and as of Thursday, had not fully receded. Floodwaters had reached as far west as Shields, which is located 6 miles west of Saginaw and downstream of Midland.

Boyce Hydro Power said in a statement issued last week that Michigan officials wanted to raise the Wixom Lake water levels in April to appease lakeshore residents. The state denied that it pressured the owners to do so.

Boyce Hydro was also sued in 2012 by Tobacco Township, which alleged in a suit that the Edenville dam required "significant repairs and new construction," according to the new lawsuits.

"The rainfall in Midland wasn’t that great, however they had filled the dam so high to satisfy people 'living on the lake' that even a relatively minor rainfall, topped it off," Fieger said. "The rainfall in Midland wasn’t unheard of — it wasn’t a 500-year rainfall, but it was a 500-year flood. 

"A calamity and a tragedy occurred. It will affect the lives of people for years and years and on top of the COVID crisis," he said. "They deserve justice."

srahal@detroitnews.com

Twitter: @SarahRahal_