COLDWATER, MI — The Michigan State Court Administrator’s Office has appointed Calhoun County Circuit Judge John Hallacy to preside the class-action lawsuit against the City of Coldwater and its Board of Public Utilities (CBPU).
The appointment follows the recusal of newly seated Branch County Circuit Judge Zach Stempien , who cited potential conflicts of interest due to his personal and professional ties with city officials.
Hallacy, an experienced jurist who has served on the 37th Judicial Circuit since 2015, will now oversee the legal challenge brought by approximately 7,000 utility customers.
The lawsuit centers on a decades-old 6.5% payment-in-lieu-of-taxes (PILOT) fee that generates roughly $3 million annually for the city’s general fund. Plaintiffs, represented by attorney Gregory D. Hanley, allege the city has been overcharging residents by calculating the fee based on gross revenue rather than the “gross income” specified in a 1960 voter-approved charter.
This miscalculation allegedly resulted in more than $12.9 million in “unjust enrichment” for the city between 2020 and 2024.
Judge Hallacy’s first major action will be presiding over a motion-to-dismiss hearing scheduled for June 11, 2026.
Until then, the case remains in a state of flux; Branch County Probate Judge Kirk Kasian recently issued a temporary stay on the discovery process to avoid placing an “undue burden” on city resources before a ruling on the dismissal is made.
While the legal battle continues, the city maintains that its collection practices are legally sound, and CBPU customers will continue to pay the fee as the case potentially stretches into 2027.
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