COLDWATER, MI (WTVB) – A judge has dismissed a class-action lawsuit challenging the Coldwater Board of Public Utilities and the City of Coldwater over their collection of utility fees.
In an order filed in Branch County Circuit Court, specially assigned Calhoun County Circuit Judge John Hallacy threw out the case, ruling in favor of the municipality’s billing practices.
The legal challenge, initiated by Jason Mate on behalf of roughly 7,000 utility customers, claimed that the city improperly calculated a voter-approved 6.5% Payment in Lieu of Taxes (PILOT) fee. The plaintiff’s attorneys argued that by basing the fee on gross revenue rather than gross income, the city generated over $12 million in “unjust enrichment” for its general fund between 2020 and 2024.
In his decisive ruling, Judge Hallacy applied Michigan’s legal presumption that municipal utility rates are inherently reasonable.
He noted that under state law, a challenger must demonstrate evidence of fraud, bad faith, or arbitrary and capricious behavior to overturn such fees, thresholds that the plaintiff failed to meet.
Representatives for the City of Coldwater, who had consistently maintained that the lawsuit was entirely baseless, welcomed the dismissal. While the ruling protects the city’s current budgetary structures and ensures that the decades-old charter fee remains intact, legal analysts indicate that an appeal by the plaintiff could still extend the life of the dispute.
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