Michigan wins $120 million judgment against dam owner

• Federal judge rules dam owner liable for nearly $120 million in damages
• Lee Mueller, the owner, did not contest the finding but had filed for bankruptcy in 2020
• The failure of the two dams caused $200 million in damage in May 2020

A federal judge ruled Monday that the former owner of the failed mid-Michigan dams that collapsed in 2020 is liable for nearly $120 million in damages to the state.

The ruling by U.S. District Court Judge Paul Maloney comes nearly two months after he agreed with Michigan Attorney General Dana Nessel’s legal team that former owner Lee Mueller had ignored known weaknesses that led to the May 2020 dam failures.

The resulting floods wiped out roads, damaged or destroyed 2,500 homes and businesses and drained two lakes, Wixom and Sanford, which are now muddy fields intersected by the Tittabawassee river.

Related:

• Nessel: Edenville dam owner knew of flaws 10 years before breach
• Judge: Midland dam owners ignored problems, caused ‘environmental disaster’
• Two heirs bought Midland dams as a tax shelter. Tragedy followed.

The state has since allocated $200 million to shore up the dams and restore the two lakes. 

The $120 million in damages approved by Maloney were based on “natural resource” damage to Michigan’s fisheries and freshwater mussels, not the damage to homes and businesses or for the repair of the dams.

The state’s attorneys said they could have documented more damages but appeared to acknowledge that getting money from Mueller would be difficult given that he filed for bankruptcy in 2020. 

In an October filing, the state’s attorneys said they “recognize that investing more of their time, or the Court’s time, into further increasing that figure will likely not result in any greater return to the people of the State of Michigan.”

Mueller, through his attorneys, had told the court he would not contest a ruling on damages. On Tuesday, Nessel issued a statement saying the judgment "is important, both as a measure of accountability to the community Mueller devastated and as a deterrent to other owners of critical infrastructure."

Maloney ruled earlier that Mueller’s actions led to “one of the worst environmental disasters that the state of Michigan has ever experienced.” Evidence showed that Mueller knew the Edenville Dam embankment might fail as early as 2010, a full decade before it did so in catastrophic fashion.

The Federal Energy Regulatory Commission revoked Boyce Hydro’s license to generate electricity in 2018 because it had failed to heed its demands for safety fixes.

Mueller repeatedly told regulators — first federal, and then from the state — that he did not have enough money to make the repairs. 

But a former safety engineer for Mueller’s dam company, Boyce Hydro, told officials that Mueller was spending money on a music festival and building a marina rather than shoring up known deficiencies with the Edenville dam.