January 15, 2004

The Michigan Court of Appeals (Court) has denied a motion by Flanders Industries, Inc., (Flanders) to reconsider a November 18, 2003, ruling denying Flanders reimbursement of $5.8 million in costs and legal fees incurred in a 1992 state-ordered cleanup of its Menominee-based manufacturing facility and hazardous paint sludge wastes in Green Bay.

The Court's action, issued January 9, 2004, affirms its ruling in November, which supported a 2002 Court of Claims' decision upholding the 1992 state-ordered Unilateral Administrative Order (UAO) requiring Flanders to perform the cleanup.

The UAO was issued under the former Michigan Environmental Response Act, 1982 PA 307, as amended by the Department of Environmental Quality’s (DEQ’s) predecessor, the Department of Natural Resources (DNR).

The UAO was issued after the DNR determined that the volume and toxicity of paint waste constituted sufficient threat to warrant issuance of the UAO.

The paint waste encompasses an area of approximately 8,000 square feet of bay bottom covered with paint sludge accumulations averaging three feet in thickness and containing high concentrations of lead and other hazardous substances.

The DEQ is authorized under state law to issue a UAO for sites posing the highest degree of threat to the public health, safety, welfare, or the environment.

Under a UAO, a recipient must comply with its requirements before gaining the ability to legally challenge its issuance, since such legal challenges would result in delays of necessary cleanup activities. Flanders performed the cleanup of the submerged bottomlands and, after unsuccessfully seeking to challenge issuance of the UAO, ultimately fully complied with the requirements of the UAO to perform a cleanup of their entire Menominee facility. Flanders satisfactorily complied with their obligations under the UAO in January 2001.

After gaining compliance with the UAO, Flanders sought reimbursement of their cleanup costs of $5,850,259 and all necessary legal costs incurred in seeking reimbursement. Flanders’ cost reimbursement action against the state in the Court of Claims ended when that court dismissed all counts of Flanders cost reimbursement action against the state in 2002.

The most recent January 2004 Court of Appeals decision supported the earlier November 2003 Court of Appeals opinion, affirmed the lower court’s motion to dismiss Flanders’ claims against the state, and ended Flanders opportunity to prevail in the Court of Appeals.

Editor’s note: DEQ news releases are available on the department’s Internet home page at www.michigan.gov/deq.

Revised January 15, 2004 by Scott Olin