Municipal stormwater charges; Headlee Amendment, Const 1963, art 9, § 31; User fee or tax; Bolt v Lansing; Regulatory purpose; Proportionality; Voluntariness; Presumptions of constitutionality & reasonableness; Comprehensive rate study; Dry weather inflow & infiltration (DWII); Readiness-to-serve charge; Industrial waste control charge; Summary disposition; Motion to strike experts; Discovery sanctions; Dean v Tucker; Great Lakes Water Authority (GLWA)

The court held that plaintiffs failed to create a fact question as to whether defendant-city’s stormwater charge was an unconstitutional tax or unreasonable utility fee, and failed to rebut the presumption of reasonableness governing the readiness-to-serve and industrial waste control charges, but that the trial court did not abuse its discretion by refusing to strike plaintiffs’ experts. Plaintiffs-commercial property owners challenged the city’s stormwater charges under the Headlee Amendment and other theories. On appeal, the court first concluded that whether the stormwater charge constituted a tax or user fee was a question of law, not one for the jury. Applying Bolt, it determined that plaintiffs failed to overcome the presumptions of constitutionality and reasonableness. As to regulatory purpose, their expert analysis did not constitute “‘a comprehensive rate study—or some similar evidence demonstrating that the disputed rates excessively compensated the [city] for the related utility services’” and instead depended on assumptions and extrapolation. Their challenge to inclusion of DWII costs failed for the same reason because they produced no study establishing the city’s actual direct and indirect costs. As to proportionality, without a comprehensive rate study, plaintiffs’ claims concerning GLWA charges and DWII costs were “speculative and cannot defeat the presumption of reasonableness.” The city’s failure to charge itself for its own roads also did not overcome the presumption, and plaintiffs received a particularized benefit because properties with greater impervious acreage “burden the system more and receive a greater benefit from the removal of more stormwater runoff.” Although the charge was effectively involuntary, “‘the lack of volition does not render a charge a tax’” where the other Bolt factors strongly indicate a fee. Plaintiffs’ experts likewise failed to overcome the general presumption that the stormwater rates were reasonable because their analysis “cannot substitute for a comprehensive rate study that takes into account the city’s actual direct and indirect costs.” The same evidentiary deficiency applied to the readiness-to-serve and industrial waste control charges. But the trial court permissibly declined to strike plaintiffs’ experts because their late disclosures were justified by the city’s own delayed production of methodology documents. Affirmed in part, reversed in part, and remanded.