U.S. ‘incompetency’ led to Edenville Dam failure, couple claims in lawsuit

Victims of the Michigan’s Edenville Dam catastrophe are suing the federal agency that oversees hydropower dams, alleging its regulators never should have granted Boyce Hydro a license to operate the dam.

In a lawsuit filed in the U.S. District Court for the Eastern District of Michigan, lawyers for Dan and Cathy Allen of Sanford argue the Federal Energy Regulatory Commission showed “gross incompetency and deliberate indifference” by negligently giving then-dam owner Boyce Hydro LLC permission to generate power without first making sure the company could safely operate the dam.

Had the agency scrutinized Boyce more closely, lawyers claim, it would have known Boyce lacked “the financial ability, competency or good faith motivation to make the dam safe or to protect the residents and property owners living downstream.”

The lawsuit, filed late Friday, also blames FERC for failing to order a drawdown of the reservoir behind the dam when weather reports indicated major rain was coming to mid-Michigan last May.

A FERC spokesperson declined to comment on the Allens’ claims.

In response to a Congressional inquiry last June, FERC Chairman Neil Chatterjee acknowledged that the agency would normally be required to pre-approve license transfers, but Boyce was “an exception” because the company bought its dams out of foreclosure.

The Allens claim the agency is responsible for severe damage to their home on Sanford Lake when the Edenville Dam failed May 19 amid heavy rainfall, triggering a second failure at the downstream Sanford Dam. The suit is asking for $1.25 million in damages.

“They could have done something, they should have done something, and they chose to do nothing,” Cathy Allen, 63, said an interview with Bridge Michigan. 

After floodwaters filled the Allens’ basement and rose four feet deep on the ground floor, the pair were forced to move into a hotel. Cathy’s mother, who had lived in the home with them, moved into an assisted-living facility.

All told, the dam failures and subsequent flooding caused an estimated $200 million in damages to more than 2,500 homes in Midland, Gladwin and Saginaw counties.

Public documents show federal regulators knew for decades that the Edenville Dam’s spillway couldn’t pass a severe flood. But while they issued increasingly stern directives to Boyce and prior owners to bring the dam in compliance, they hesitated to step in when Boyce claimed it couldn’t afford fixes.

The Allens are represented by Michael Pitt of Pitt McGehee Palmer & Rivers, the Royal Oak firm behind a massive lawsuit against the EPA tied to the Flint water crisis.

The lawsuit comes after the Allens filed a tort claim with FERC last year, an action that amounts to a direct request for damages from the agency.

FERC Executive Director Anton Porter had denied the claim, according to documents Pitt provided Bridge. Porter argued that Boyce, not the agency, is liable for damages caused by the disaster.

In an interview with Bridge, Pitt said his firm is preparing to file similar claims for nearly 400 additional clients.

The lawsuit joins a host of others tied to the disaster, but Pitt said it is the first to target FERC. Other suits blame state regulators and dam owner Boyce Hydro, LLC for their role in the disaster.

While the bevy of complaints filter through the legal system, an independent team is still investigating what caused the Edenville Dam to fail. Pitt chalked it up to a regulatory “merry-go-round” in which Boyce took advantage of state and federal officials’ hesitation to enforce safety regulations.

As a result, he said, “people’s lives are ruined.”

“Their dream houses are destroyed, their financial security is up in the air, some don’t know where they're going to go and how they're going to carry out the rest of their lives.”

After decades of warnings that the dam fell short of federal safety standards, FERC regulators finally revoked the dam’s license in September 2018.

That punted regulatory duties to state officials who said they didn’t know whether Edenville met Michigan’s weaker flood control standards, because FERC withheld the documents they needed to make a determination.

The dam failed while state officials awaited a report that later deemed the dam deficient even by Michigan’s weaker standard.

The Allens have taken out a second mortgage to cover the cost of repairing their home. Cathy’s mother will remain in assisted living, an agonizing choice the Allens made to avoid further disrupting her life.

“I feel like I’ve lost my mother,” Cathy said. “The whole point of us combining households was that she would live out the rest of her days with us.”

Their neighborhood, Cathy said, “is a ghost town.” Two nearby homes have been razed. Many others sit vacant. A boat the Allens bought to spend their golden years on the lake sits in dry storage.

“This is not what we wanted for our retirement,” she said.

The Edenville failure sparked renewed attention to the weak dam safety laws, a chronic lack of funding to fix or remove dams, staffing shortages within the state dam safety office, and regulatory hesitancy that allow hazards to fester at Michigan’s dams.

Two separate review teams have proposed a host of potential solutions. A state task force report released this week included 86 recommendations, from changing state law to strengthen dam safety standards, to freeing up money to fix problem dams.

Legislative leaders told Bridge they are reviewing the report.