Legal claim blames federal regulators for Edenville Dam failure

Add the federal government to the list of parties targeted in legal claims over the dam failure that caused widespread flooding and property damage in mid-Michigan this spring.

Sanford couple Cathy and Dan Allen, whose home on Sanford Lake was severely damaged after the Edenville Dam failed May 19 amid heavy rainfall, filed a tort claim Monday against the Federal Energy Regulatory Commission seeking $1.25 million in damages.

The failures at Edenville and the downstream Sanford Dam and subsequent flooding caused $200 million in damages to more than 2,500 homes in Midland, Gladwin and Saginaw counties. The federal government has deemed the event a major disaster.

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The Allens claim FERC, which regulates the nation’s power-producing dams, shares blame for the catastrophe because it granted dam owner Boyce Hydro a license to generate power without first making sure Boyce could pay for dam upkeep at Edenville and three other mid-Michigan dams the company bought as a tax shelter in 2006. 

The claim also alleges FERC failed to “monitor the integrity” of the Edenville Dam to identify any insufficiencies, which “contributed to the dam’s demise.”

The Allens are represented by Michael Pitt of Pitt McGehee Palmer & Rivers, the Royal Oak firm behind a massive civil suit tied to the Flint water crisis. They are among hundreds of flood victims the firm is representing in lawsuits against Boyce and the Michigan Department of Environment, Great Lakes & Energy tied to the Edenville failure. Pitt said he intends to file claims against FERC on behalf of those plaintiffs, as well.

Other firms have also filed class-action lawsuits blaming Boyce and EGLE for the dam failure.

As Bridge has reported, federal regulators for decades warned Boyce and prior owners that the Edenville Dam’s design was not sufficient to withstand a severe flood. The agency repeatedly directed Boyce to upgrade the dam before revoking its license in 2018.

In a June 18 letter to members of Congress, FERC Chairman Neil Chatterjee acknowledged that the agency did not conduct a financial review of Boyce Hydro before granting the company a license. Because the company bought its mid-Michigan dams out of foreclosure in 2018, Chatterjee wrote that the sale fell under “an exception” to laws requiring FERC to pre-approve a license transfer.

“Nothing in the record at the time of the transfer cast doubt on Boyce Hydro’s ability to fulfill its regulatory and financial obligations,” Chatterjee wrote. Rather, Boyce indicated four years after taking ownership of the dam that it couldn’t pay for needed upgrades, Chatterjee wrote.

Pitt, the attorney, told Bridge that is “not a valid excuse,” and that FERC had a duty to determine whether Boyce had the finances and expertise to safely operate Edenville and its other Michigan dams.

By the time floodwaters arrived in mid-Michigan on May 19, Boyce still had not expanded the dam’s spillways. Oversight transferred to state regulators at the Michigan Department of Environment, Great Lakes & Energy, whose flood control standards are half as stringent.

The Allens — military veterans who bought their home on Sanford Lake from Cathy Allen’s parents in 2017 and built a handicap accessible addition so her parents could continue living there — claim floodwaters filled their basement and rose four feet deep on the ground floor after the Edenville dam failure sent water gushing downstream. 

“I can’t even tell you the horror of looking at the inside of our home,” Cathy Allen said. “Things that were in our basement were now upstairs in our living room.”

The house is now mold-ridden and uninhabitable, and will cost hundreds of thousands of dollars to repair — money the pair said they don’t have in their savings.

Dan and Cathy Allen are living in a Midland hotel while crews replace insulation and drywall. Cathy’s mother is in an assisted living facility. 

When their home is safe to inhabit, they will “camp out” on the second floor until they can come up with the money to finish repairs and purchase new appliances, cabinets and other belongings, Dan Allen said. Cathy’s mother will remain in the assisted living facility.

“That’s the impact that hurts the most,” Cathy Allen said, “is that we cannot afford to have my mother come back and live with us.”

Reached by Bridge Wednesday morning, a spokesperson for FERC declined to comment on the couple’s claim. The agency has a six-month window in which to either grant or deny the claim. If FERC denies the claim or fails to respond, the Allens can sue in federal district court.