COLDWATER, MI (WTVB) – A Coldwater man and his Detroit area law firm have taken their case to the Michigan Court of Appeals after a Circuit Court judge ruled against them last month in a 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 July 7, 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.
Royal Oak attorney Gregory D. Hanley is already appealing another suit filed against the City of Holland for collection of a similar fee.
A decision on the appeal is not expected until next year.
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