Director Chester on the Nestle Ice Mountain Decision

Agency: Environment, Great Lakes, and Energy

I would like to share with you, the citizens of the State of Michigan, my perspective and reasoning for supporting a stay in the litigation involving the Nestle Ice Mountain “Spring Water” Bottling Plant located in Mecosta County. I am providing this information so that you may make your own independent judgment regarding the matter. At the outset, I want to assure you that, even if we disagree on the course of action taken, I acted on my convictions and what I believed to be the best interests of the Department of Environmental Quality (DEQ) and the public.
On November 25, 2003, the Mecosta County Circuit Court issued an opinion in Michigan Citizens for Water Conservation v Nestle Waters North America, Inc. that has the potential of being one of the most important cases in terms of influencing and defining Michigan’s water law jurisprudence. The decision involves the interpretation and application of the common law and several environmental statutes, mainly the Michigan Environmental Protection Act (MEPA), the Inland Lakes and Streams Act (ILSA), and the Wetland Protection Act (WPA).

As mentioned above, the litigation involved the Nestle Ice Mountain Spring Water Bottling facility located in Mecosta County. The plant extracts groundwater from an aquifer that qualifies as a source of “spring water” under federal law. Nestle began production at the Mecosta County facility on May 23, 2002, but only after the DEQ conducted a MEPA review and after receiving the necessary permits authorizing a maximum pumping rate of 400 gallons per minute (gpm). The group Michigan Citizens for Water Conservation (MCWC) thereafter filed suit.  The circuit court held a disjointed trial beginning May 5, 2003 and ending July 3, 2003, totaling nineteen days of trial. The DEQ was not a party to the lawsuit.

The circuit court readily acknowledged the numerous complex technical and legal issues before it. In fact, the court candidly noted “[t]here is evidence in this record that, if accepted, could support either side’s position in the case.” Opinion, p.9. The court moreover acknowledged that “both sides agree that this case is a case of first impression, meaning that the rules here will be established in this opinion and appellate review of it.” Opinion, p. 42. On November 25, the court ruled in favor of MCWC and ordered Nestle to terminate all water withdrawals of “spring water” within 21 days of the date of the court’s opinion or by December 17, 2003. 

On Friday, December 12, 2003, the circuit court held a hearing on Nestlé’s request that the court stay its opinion pending appellate review of the case. The circuit court denied this request. Thereafter, on Monday, December 15, 2003, Nestle sought an emergency stay from the Michigan Court of Appeals to block shut down of the Mecosta County facility. Nestle informed the Court of Appeals that, if it did not receive the stay, it would lay off approximately 120 employees on December 17 and discontinue their pay after January 31, 2004. On Tuesday afternoon, December 16, 2003, the DEQ and Department of Labor and Economic Growth (DLEG) filed an amicus brief asking the Court of Appeals to grant the stay. Prior to filing the amicus, I and Deputy Director Skip Pruss had several conversations with legal counsel for MCWC regarding DEQ support of the stay. On the evening of December 16, the Court of Appeals issued a stay of the injunctive relief granted by the circuit court.

The short summary provided above cannot do justice to the myriad nuances and implications of the case. For those interested in the specific details of the DEQ/DLEG amicus, a copy of the amicus and the Court of Appeals’ Stay are available. Before filing the amicus, we asked ourselves the following question: are there compelling public policy, health or environmental considerations that warrant shutdown of the Nestle facility and concomitant layoffs pending review of the merits of the case by the Court of Appeals? We concluded there were not. The factors of greatest influence in reaching this conclusion were as follows:

• Supporting a stay provided the time and opportunity for the DEQ to pursue in a thoughtful and deliberate way significant policy considerations highlighted by the case – first and foremost being the need for comprehensive groundwater withdrawal and use legislation. Importantly, the DEQ could do so without weighing in on the merits of the case or otherwise prejudicing Plaintiffs’ opportunity to pursue its legal arguments before the Court of Appeals.

• Importantly for us, the circuit court made abundantly clear that “[t]his case is not about preserving the Great Lakes or allowing or prohibiting any diversion of water from them, either in the form of an absolute prohibition (which is unlikely) or in the form of restrictions on such.” Opinion, p. 3.

• As noted above, the circuit court readily acknowledged that the case is one of first impression for which there is no established legal precedent and, thus, one in which the final decision will be made by a higher court, i.e., the Michigan Court of Appeals or Michigan Supreme Court.

• As also noted above, the circuit court conceded that from an evidentiary standpoint there was evidence that supported both sides’ technical positions.

• The Mecosta facility has been in operation since May 2002, and even though the circuit court determined it was having a measurable impact on certain waters and wetlands, DEQ staff have confirmed that water levels in the impacted waters presently are at the highest levels they have been in three years, thereby mitigating concern over possible imminent harm associated with Nestlé’s continued operation at a reduced rate of 250 gallons per minute (gpm) averaged over a monthly time period.

• The filing of an amicus and the issuance of a stay allows the DEQ the opportunity to play an active role and apply its expertise in the review of monitoring data collected in the area of the potentially impacted waters to insure during the stay that no deleterious impacts or unacceptable harm occurs to the water bodies of concern. If adverse impacts are confirmed, the DEQ is committed to bringing these to the attention of the courts and parties.

• Although clearly an unintended consequence, the immediacy and potential permanence of the circuit court’s ruling, and the potential shutdown of the Nestle plant, purportedly had galvanized certain groups interested in “legislative fixes” that would likely weaken and perhaps gut key Michigan environmental laws, including MEPA, ILSA and the WPA. The DEQ is firmly and adamantly opposed to any weakening of these laws.

• We have been recently focused on issues concerning the scope of DEQ’s regulatory jurisdiction under the ILSA and WPA.  The circuit court’s specific criticism of the DEQ’s regulatory approach under these laws underscores the need for thoughtful review and a fair assessment of the impacts associated with our administrative processes.

Consideration of all of these factors, especially the fact that the stay does not affect the merits of the case, and given the lack of an imminent harm coupled with the DEQ’s willingness to assume a leadership role both in developing comprehensive groundwater use legislation and in reviewing monitoring data on the impacts of Nestlé’s operations during the stay, led me to conclude that supporting a stay was the correct course of action. I realize reasonable minds may differ, and offer my perspective for your consideration. Several days ago, Governor Granholm affirmed that we remain in agreement with all those in Michigan who believe strongly in the need for a comprehensive statutory framework for dealing with groundwater withdrawals like Nestle. We intend to begin development of such a comprehensive framework as soon as possible. Thank you.