On Friday, September 11, 2009, the Michigan Supreme Court peremptorily reversed the Court of Appeals' decision in Oneida Charter Township v. City of Grand Ledge. In Oneida, the City of Grand Ledge and the Oneida Charter Township entered into a long-term contract by which the City of Grand Ledge provided water service to some of the residents of the township and charged those residents twice the rate it charged City of Grand Ledge residents. Nearly 25 years later, the township sued claiming that under MCL 123.141, the City of Grand Ledge cannot charge township residents more than the city's actual cost of providing the water. The township advanced the argument that the statute, read as a whole, prohibits the City of Grand Ledge from charging township residents more than its actual cost. Grand Ledge responded that the statute explicitly excludes municipalities, like Grand Ledge, that serve less than 1% of the State's population, and that the actual cost requirement applies only to water department customers, not suppliers. The Eaton County Circuit Court agreed with Grand Ledge and dismissed the township's case with prejudice. The Court of Appeals reversed and adopted the township's reasoning. The Michigan Supreme Court reinstated the circuit court's ruling, and explained that the actual-cost requirement in MCL 123.141 does not apply to the City of Grand Ledge. Our previous summary of the Court of Appeals decision is here.
Disclaimer: WNJ represented the prevailing petitioner, City of Grand Ledge, in the Michigan Supreme Court.
