Carson City Hospital v. Quick-Sav Food Stores Ltd

STATE OF MICHIGAN

COURT OF APPEALS

CARSON CITY HOSPITAL, UNPUBLISHED

April 28, 2016

Plaintiff-Appellant,

v No. 325187

Gratiot Circuit Court

QUICK-SAV FOOD STORES, LTD, d/b/a LC No. 13-011830-CE

BEACON & BRIDGE MARKET,

Defendant-Appellee.

Before: SAWYER, P.J., and MURPHY and RONAYNE KRAUSE, JJ.

PER CURIAM.

Plaintiff Carson City Hospital, which owns and operates the Ithaca Family Health Clinic,

appeals as of right the trial court’s order granting summary disposition in favor of defendant

Quick-Sav Food Stores, Ltd., d/b/a Beacon & Bridge Market, pursuant to the doctrine of primary

jurisdiction.1 The dismissal was without prejudice. This case stems from a gasoline leak in

connection with an underground storage tank (UST) located on the market’s property, resulting

in the release of at least 800 gallons of petroleum into the surrounding environment, including

the clinic’s property. Invoking the discretionary doctrine of primary jurisdiction, the trial court

decided to defer, at least for now, to the expertise and ongoing involvement of the Michigan

Department of Environmental Quality (MDEQ), which was acting pursuant to Chapter 8 of the

Natural Resources and Environmental Protection Act (NREPA), MCL 324.101 et seq., in

addressing the release and resulting contamination. The trial court denied the market’s

alternative motion for summary disposition under MCR 2.116(C)(8), as well as the clinic’s

partial motion for summary disposition under MCR 2.116(C)(10), on the basis that they were

rendered moot given the court’s jurisdictional ruling. We affirm.

I. FACTUAL AND PROCEDURAL HISTORY

The market operated a gas station and store, bordered to the north by the clinic. The

market had two, 10,000 gallon USTs holding gasoline. In April 2010, the MDEQ inspected the

market in relation to the USTs, checking for compliance with the NREPA. The MDEQ found a

1

Hereafter, we shall refer to plaintiff as the “clinic” and defendant as the “market.”

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violation relative to the testing of a line leak detector, with the market being temporarily

approved to continue operations, subject to correction of the violation within a month and annual

testing of the line leak detectors. There does not appear to be any documentation in the record

concerning any follow-up on that matter. The gasoline release at issue occurred thereafter on

October 3, 2011, and the following passage comes from a Final Assessment Report (FAR), dated

October 18, 2012, which was prepared for the MDEQ by August Mack Environmental, Inc., on

behalf of the market:

As described in the Initial Assessment Report (IAR) submitted to the . . .

MDEQ on January 20, 2012, a suspected release was reported on October 3,

2011[,] associated with a broken leak detector. No visible product was detected in

the observation wells at that time. Following an examination of the tank system, it

was determined that the leak took place via a broken leak detector in the sump

containing the submersible pump for the premium fuel . . . UST. The damage was

promptly repaired by . . . [the market] and a tightness test was conducted

following the repairs.

In October 2011, the presence of petroleum vapors was reported in several

homes and businesses in the vicinity of the Site and the release was considered

“confirmed” by the MDEQ. The observation wells in the vicinity of the UST

system were subsequently pumped to remove impacted groundwater. A second

tank tightness test was conducted on October 21, 2011, and the tanks and lines

were confirmed tight. No free product was identified during the repairs or

subsequent environmental activities.

The City of Ithaca continued to receive sporadic complaints of petroleum

vapors in homes and businesses in the vicinity of the Site in October and

November 2011. The source of the vapors appeared to be associated with

impacted groundwater in the vicinity of the UST that entered the sewer or sewer

utility trench.

The market’s FAR indicated that air monitoring and sampling had revealed unacceptable

concentrations of benzene, a hydrocarbon and constituent of crude oil, inside the clinic, and a

mitigation system was installed in the clinic in January 2012, followed by ongoing air

monitoring and sampling. The FAR also revealed that soil sampling had been conducted,

entailing the examination and analysis of soil borings, along with groundwater testing, with

respect to the market and the clinic’s properties. The FAR concluded, “Based on the findings of

the investigative activities, petroleum COC [constituents of concern] impacted soil and

groundwater is present in the northern portion of the Site and the southern portion of the north

adjacent property (Ithaca Family Health [Clinic]).” In a “notice to impacted parties of corrective

action” prepared by the market on an MDEQ form and addressed to the clinic, the clinic was

informed that a gasoline release had occurred at the market, that the release had impacted the

clinic’s property, that the groundwater at the clinic was contaminated with petroleum, and that

soil at the clinic was also contaminated with petroleum.

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Sean Robinson, a project manager with AKT Peerless Environmental Services (AKT),

conducted environmental-assessment and document-review activities for the clinic, and in

Robinson’s affidavit of environmental condition, dated August 12, 2014, he averred:

On September 26, 2012[,] soil sampling was conducted by AKT . . .

within the [clinic] building. During sampling, the concrete floor within a[] [clinic]

patient examination room was penetrated to allow an evaluation of the underlying

soils. Upon penetration of the concrete floor, a strong and clearly discernible odor

of gasoline was immediately identified by AKT . . . and [clinic] staff throughout

the [clinic] building. Soil samples collected from immediately beneath the [clinic]

exhibited obvious evidence of the presence of gasoline. Soil samples were

submitted by AKT . . . to an independent laboratory for qualitative analysis of the

presence of gasoline related chemical constituents. The laboratory results

indicated the presence of various gasoline constituents above the MDEQ Risk

Based Screening Levels . . . in accord with . . . Part 213 of the NREPA, which

indicates the presence of soil contamination directly beneath the [clinic] building.

. . . There is no documentation that the soil contamination identified during the

AKT . . . investigation has been reduced.

The laboratory results were attached to Robinson’s affidavit. In regard to the leak on

October 3, 2011, Robinson opined that “[t]he series of events would suggest that inappropriate

leak detection testing and maintenance resulted in the release and increased the duration and

volume of the gasoline released.” Robinson also asserted that the market’s FAR had not been

completed within one year of the gasoline release as mandated by Part 213 of the NREPA, MCL

324.21301a et seq. He also averred that given the suspected release date of October 3, 2011, and

the confirmed release date of October 21, 2011, the confirmation did not occur within the 14-day

timeframe required by Part 211 of the NREPA, MCL 324.21101 et seq.

The market’s FAR set forth a remediation strategy and corrective action plan (CAP),

which encompassed the recordation of deed restrictions in regard to the market’s property,

limited excavation and removal of impacted soil along the market’s northern boundary and in the

area of the USTs, the installation and operation of a multiphase vapor extraction and air sparging

system, and monitored natural attenuation. The market’s notice sent to the clinic, referenced

earlier, listed the following proposed corrective actions concerning the clinic’s property: deed

restrictions; groundwater capture and treatment; limited soil excavation; and soil vapor

extraction.

The clinic alleged in its complaint that the market’s FAR “was not accepted as final by

the MDEQ” and that the MDEQ permitted the market “to resubmit a second, amended FAR” on

April 9, 2013. It does not appear that the market’s amended FAR was ever made part of the

lower court record. However, an amended FAR was clearly prepared on behalf of the market

and submitted to the MDEQ, given that an MDEQ letter dated May 30, 2013, and addressed to

the market referred to an MDEQ audit of a FAR received by the MDEQ from the market on

April 10, 2013. The letter revealed that the MDEQ’s Remediation and Redevelopment Division

had conducted an audit of the FAR pursuant to the NREPA, which audit consisted of a review of

the FAR, as amended, examination of district file documents, and peer review. The audit

resulted in a conclusion that the corrective actions and testing enumerated in the FAR that had

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been undertaken by or on behalf of the market in addressing the release and that were proposed

in the future were not in compliance with Part 213 of the NREPA. And the audit letter, in

denying and criticizing the FAR, identified an extensive number of asserted deficiencies,

detailing and explaining the deficiencies, along with setting forth recommendations that might

correct the deficiencies. The audit letter directed the market to “provide a written commitment

within 21 days to revise and resubmit the report[,]” and it informed the market that “[t]he

commitment should include a schedule for conducting the additional corrective action activities

and revised report submittal.” The audit letter further indicated that if the market disagreed with

the audit, the market could submit a petition for review to the Response Activity Review Panel

or submit a petition for an administrative contested-case hearing. At the time that summary

disposition briefs were filed below, July and August 2014, the parties indicated that a FAR

approved by the MDEQ had not yet been issued. Indeed, the record does not reveal whether the

market had submitted a revised FAR or whether it had even submitted a written commitment to

revise its FAR. Nothing in the record suggests that the market had filed a petition for review or

contested-case hearing, challenging the audit.

In Sean Robinson’s affidavit, he indicated that the market had financed the installation of

a vapor mitigation system at the clinic, which prevented the accumulation of unsafe vapors

within the clinic and vented the vapors outside. Robinson claimed, however, that the vapor

mitigation system was merely an interim measure and was not intended or designed to remediate

the contamination. He averred that all of the cleanup planning advanced by or on behalf of the

market in order to achieve regulatory compliance would, if carried out, still leave significant soil

and groundwater contamination at the clinic. Robinson opined that “[b]ased on the contents of

various documents and correspondence[, including the audit,] prepared regarding the release,

there has been no implicit or explicit plan to effectively remediate gasoline contamination to pre-

release conditions.” He averred that the contamination placed legal obligations on the clinic

itself, reduced the value of the clinic’s property, and decreased the potential alternatives

concerning the future use of the clinic’s property.

On September 9, 2013, the clinic filed the instant lawsuit against the market. The general

allegations addressed the history of the release, the nature of the contamination, and the market’s

remediation and corrective action efforts, with the clinic essentially asserting that the market was

liable for the release and resulting contamination and that the market’s response had been

woefully inadequate, as reflected in the MDEQ’s audit, all leading to extensive injuries and

damages to the clinic’s property and its operations. Count I of the complaint alleged economic

damages and costs incurred by the clinic due to the contamination of its property. Count II

alleged reckless and wrongful conduct by the market and entitlement to compensation for the

contamination under Part 201 of the NREPA, MCL 324.20101 et seq. Count III alleged gross

negligence by the market in relation to the release and response. Count IV alleged a claim of

trespass, given the petroleum’s intrusion on the clinic’s property. Count V alleged that the

market had created a nuisance by way of the release and contamination. Count VI alleged

statutory liability under MCL 324.20126a and strict liability. And count VII sought a

preliminary and permanent injunction to halt the market’s sale of gas until it could demonstrate

the ability to properly maintain the USTs and to compel the market to clean up and eliminate the

contamination of the clinic’s property.

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The market filed an answer and affirmative defenses, which included an assertion that the

clinic’s claims were under the primary jurisdiction of the MDEQ. The market subsequently filed

a motion for summary disposition, arguing that the clinic’s complaint should be dismissed under

MCR 2.116(C)(4) (lack of subject-matter jurisdiction) pursuant to the doctrine of primary

jurisdiction, which would still allow the clinic to bring suit in the future after the MDEQ had

finalized its management of the matter. In the alternative, the market argued that the action

should be dismissed under MCR 2.116(C)(8) (failure to state a claim). The market contended

that there is no independent cause of action for economic damages and costs (count I), that Part

201 of the NREPA no longer applied to leaking USTs (count II), that the clinic had not alleged a

present-physical-injury element as necessary to succeed on a negligence or gross negligence

claim (count III), that there was no intent to intrude, nor did the contaminants qualify, for

purposes of showing trespass (count IV), that there was no basis for a nuisance claim, given the

lack of a significant interference with the clinic’s use and enjoyment of its property (count V),

that strict liability did not apply (count VI), and that the MDEQ was the proper entity to address

equitable-type relief (count VII).

Before responding to the market’s motion for summary disposition, the clinic filed a

motion to extend the case schedule, attaching two notices of intent to sue that were served on the

Attorney General and the director of the MDEQ, with one notice indicating a plan to amend the

complaint in this action to add state parties and the other indicating an intent to file a separate

action that named state parties as defendants. Thereafter, on August 12, 2014, the clinic filed a

motion for partial summary disposition under MCR 2.116(C)(10) with respect to liability for the

release and contamination. On August 25, 2014, the market filed a brief in opposition to the

clinic’s motion for partial summary disposition. In late August and mid-September 2014, the

clinic filed a response brief to the market’s motion for summary disposition and a reply brief to

address the market’s response to the clinic’s motion for partial summary disposition. We shall

discuss below the clinic’s arguments posed in its response brief with respect to the doctrine of

primary jurisdiction, but only to the extent that the arguments are raised again in the clinic’s

appellate brief.

At a hearing on September 15, 2014, the trial court was prepared to entertain the

competing motions for summary disposition and the clinic’s motion to extend the case schedule.

At the hearing, the clinic’s counsel told the trial court that it might wish to only address the

motion to extend the case schedule, given that it concerned potentially adding third parties in an

amended complaint. The trial court then stated that it would “enter an amended scheduling

conference order,” which never did occur, and that it would take the summary disposition

motions “under advisement,” while allowing the motions to be renoticed for hearing after

expiration of “the scheduling conference order.” The trial court responded, “Okay,” when the

clinic’s counsel observed that the extension of the case “schedule would be to incorporate to

make sure we have all the parties in the overall litigation.” There was no substantive argument

on the motions for summary disposition, and no written order actually emanated from this

hearing.

On October 2, 2014, the clinic filed a motion for leave to amend its complaint to add the

MDEQ, the MDEQ’s director, and certain unknown contractors and vendors of the MDEQ as

defendants in the action. The clinic attached a proposed amended complaint reflecting the new

parties and entailing modifications and additions to the existing allegations. On October 28,

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2014, the trial court, absent any new hearing, issued a written opinion on the competing motions

for summary disposition.2 The trial court granted the market’s motion for summary disposition

under MCR 2.116(C)(4), without prejudice, pursuant to the doctrine of primary jurisdiction,

reasoning as follows:

This Court is satisfied that the primary jurisdiction doctrine should be

applied in this case as a matter of judicial discretion. The following factors

counsel the Court to do so.

First, MDEQ was the agency properly engaged by the parties at the outset

of this dispute.

Second, that agency has specialized expertise and resources in addressing

environmental contamination and site remediation.

Third, as demonstrated by the attachments to the pleadings in this case that

agency has devoted a significant amount of time and effort to determine factually

the cause of the release and the extent of the damage.

Fourth, deferring to the MDEQ primary jurisdiction will provide a

measure of uniformity and consistency in administrative regulation of

environmental hazards.

Fifth, deferring to the agency will effectuate coordination of judicial and

agency resources in dealing with the multitude of aspects of a single event.

Sixth, separation of judicial and legislative/executive powers is fostered by

the Court awaiting the outcome of administrative investigations, remedies, and

sanctions[.]

Seventh, judicial resolution of issues legislatively entrusted to MDEQ

could adversely intrude upon the administrative body’s responsibilities.

Finding them to be moot given the primary jurisdiction ruling, the trial court proceeded to

deny the market’s motion for summary disposition under MCR 2.116(C)(8) and the clinic’s

motion for partial summary disposition under MCR 2.116(C)(10).

On November 18, 2014, the clinic filed a motion for rehearing and reconsideration. In

the motion, the clinic noted its earlier motions to extend the case schedule and to amend the

complaint, questioning the court’s failure to abide by its own ruling from the bench back on

September 15, 2014. The clinic also indicated in the motion for rehearing and reconsideration

that it had filed a separate action, lower court docket no. 14-11926-CE, against the market, the

2

The record does not reflect that the trial court had ruled on the clinic’s motion to amend its

complaint, nor had an amended scheduling order been entered.

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MDEQ, the MDEQ director, and unknown MDEQ vendors and contractors, which apparently

mimicked the proposed amended complaint in the present action. The clinic complained that the

trial court, absent following through on extending the case schedule and permitting an amended

complaint, proceeded to issue its opinion and order relative to the summary disposition motions

“without notice or oral arguments.” The clinic also assailed the trial court’s primary jurisdiction

ruling. On December 4, 2014, the trial court issued a short opinion and order denying the

clinic’s motion for rehearing and reconsideration. The trial court noted that it had reviewed the

pleadings in the separate action against the market, the MDEQ, and the MDEQ-related parties

(hereafter referred to as the “2014 case”). The trial court concluded that the clinic was not

entitled to relief under MCR 2.119(F), that the instant case was closed, and that the 2014 case

remained pending.3 The clinic appeals as of right, challenging the trial court’s order summarily

dismissing the action under MCR 2.116(C)(4) pursuant to the doctrine of primary jurisdiction.

II. ANALYSIS

A. STANDARD OF REVIEW

“The applicability of the doctrine of primary jurisdiction presents a question of law,

which this Court reviews de novo.” Attorney General v Blue Cross Blue Shield of Mich, 291

Mich App 64, 84; 810 NW2d 603 (2010); see also Travelers Ins Co v Detroit Edison Co, 465

Mich 185, 205-206 n 18; 631 NW2d 733 (2001); Psychosocial Serv Assoc, PC v State Farm Mut

Auto Ins Co, 279 Mich App 334, 336; 761 NW2d 716 (2008). MCR 2.116(C)(4) provides for

summary disposition when a “court lacks jurisdiction of the subject matter.” However, the

doctrines of primary jurisdiction and subject-matter jurisdiction are not the same. MCR

2.116(C)(4) is inapplicable in regard to primary jurisdiction, “not only because the doctrines are

distinct, but also because invocation of primary jurisdiction is not the equivalent of summary

disposition as the latter represents a final disposition of a claim while the former merely defers a

claim to an administrative agency.” Travelers Ins, 465 Mich at 205-206 n 18. Indeed, “the

3

The lower court record contains transcripts of a motion for summary disposition held on

December 15, 2014, and a continued motion for summary disposition held on February 3, 2015,

which, although marked on their cover pages as pertaining to this case, actually concerned the

2014 case, as evidenced by the discussion and statements made at the hearings. The 2014 case

was also summarily dismissed, but apparently only with respect to the state parties, on the basis

that the Court of Claims alone had jurisdiction over the issues related to those parties. This

Court dismissed the clinic’s appeal of right in the 2014 case, explaining that the trial court’s

order granting the state parties summary disposition was not a final order appealable by right,

because it did not dispose of the claims against the market. Carson City Hosp v Quick-Sav Food

Stores, Ltd, unpublished order of the Court of Appeals, entered December 2, 2015 (Docket No.

328619). The motion panel stated that “it is immaterial if the substantive content of those claims

[against the market] is entirely or substantially the same as that of the claims appellant brought

against that party in the prior case at issue in the pending appeal in Docket Number 325187 [our

case and appeal] because an order in that prior case simply did not – and could not have –

disposed of claims in this case.” Id.

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doctrine of primary jurisdiction is not a defense, but rather a doctrine of judicial deference and

discretion[.]” Id. at 211. Accordingly, the trial court erred in citing MCR 2.116(C)(4) in its

opinion, but the error was harmless, MCR 2.613(A), given that it did not ultimately affect the

court’s analysis and imposition of the doctrine of primary jurisdiction.

B. THE DOCTRINE OF PRIMARY JURISDICTION

“The doctrine of primary jurisdiction is grounded in the principle of separation of

powers” and “has been compared to the political question doctrine and the exhaustion doctrine,

both of which are also concepts rooted in separation of powers principles.” Travelers Ins, 465

Mich at 196. The Travelers Ins Court elaborated:

The doctrine of primary jurisdiction . . . reflects practical concerns

regarding respect for . . . [an] agency's legislatively imposed regulatory duties.

Adhering to the doctrine of primary jurisdiction reinforces the expertise of the

agency to which the courts are deferring the matter, and avoids the expenditure of

judicial resources for issues that can better be resolved by the agency. A question

of primary jurisdiction arises when a claim may be cognizable in a court but

initial resolution of issues within the special competence of an administrative

agency is required. [Id. at 197 (citations and quotation marks omitted).]

The doctrine of primary jurisdiction reflects a recognition by the courts that legislatively-

created administrative agencies are intended to be repositories of expertise and special

competence uniquely equipped to examine facts and develop public policy within a particular

field. Id. at 198. Our Supreme Court further explained:

Several reasons have been advanced for invocation of the primary

jurisdiction doctrine. First, the doctrine underscores the notion that administrative

agencies possess specialized and expert knowledge to address issues of a

regulatory nature. Use of an agency's expertise is necessary in regulatory matters

in which judges and juries have little familiarity. Thus, the doctrine is principally

applicable to controversies involving regulatory agencies. A second consideration

relates to respect for the separation of powers and the statutory purpose

underlying the creation of the administrative agency, the powers granted to it by

the legislature, and the powers withheld. This justification includes the principle

that courts are not to make adverse decisions that threaten the regulatory authority

and integrity of the agency. Third, the doctrine exists to promote consistent

application in resolving controversies of administrative law. By application of the

doctrine,

“[u]niformity and consistency in the regulation of business entrusted to a

particular agency are secured, and the limited functions of review by the judiciary

are more rationally exercised, by preliminary resort for ascertaining and

interpreting the circumstances underlying legal issues to agencies that are better

equipped than courts by specialization, by insight gained through experience, and

by more flexible procedure.” [Id. at 198-199 (citations omitted).]

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There is no fixed formula for applying the doctrine, and in all cases the question with

respect to whether the doctrine should be applied is whether the reasons for the doctrine’s

existence are present and whether the purposes served by the doctrine would be aided by its

application in the particular litigation. Id. at 198. Primary jurisdiction is concerned with judicial

deference and discretion, it is not a matter of whether there will be judicial involvement in

resolving a case, but instead pertains to when it will occur and where it will start, and primary

jurisdiction must be considered by courts of general jurisdiction whenever concurrent original

subject matter jurisdiction relative to a disputed issue exists in both a court and administrative

agency. Rinaldo’s Constr Corp v Mich Bell Telephone Co, 454 Mich 65, 70; 559 NW2d 647

(1997). Under the doctrine of primary jurisdiction, referral to an administrative agency is proper

for preliminary resort to ascertain and interpret the circumstances underlying the legal issues to

be decided by the courts. Attorney General, 291 Mich App at 87-88. But before invoking the

doctrine, “a court must find that the administrative agency to which referral is sought has

concurrent jurisdiction over the issues raised.” Id. at 88.

C. NREPA PROVISIONS

Chapter 8 of the NREPA governs USTs, and the chapter is comprised of Part 211, MCL

324.21101 et seq., which concerns UST regulations, and Part 213, MCL 324.21301a et seq.,

which regards leaking USTs. MCL 324.21301a(1) states that Part 213 “is intended to provide

remedies using a process and procedures separate and distinct from the process, procedures, and

criteria established under part 201 [general environmental remediation] for sites posing a threat

to the public health, safety, or welfare, or to the environment, as a result of releases from

underground storage tank systems.”4 Subject to a variety of seemingly inapplicable exceptions,

“persons [who] are liable under” Part 213 include “[t]he owner or operator [of a UST system] if

the owner or operator is responsible for an activity causing a release . . . .” MCL

324.21323a(1)(a). In establishing this liability under § 21323a, the MDEQ has the burden of

proof. MCL 324.21323a(6). MCL 324.21307 dictates the initial response actions to be taken by

an owner or operator upon confirmation of a release from a UST, setting forth various duties and

obligations. MCL 324.21308a requires preparation of an IAR5 by or on behalf of the owner or

operator. When initial response actions “have not resulted in completion of corrective action,”

4

Amendments and additions were made to Part 213 pursuant to 2012 PA 108 and 446, which

was after the petroleum release occurred in this case. However, the “liability provisions” in Part

213, as amended in 2012, are to “be given retroactive application.” MCL 324.21301a(2). Part

201 on environmental remediation had effectively filled a variety of gaps in the pre-2012 version

of Part 213, with 2012 PA 108 and 446 directly addressing those gaps by adding language and

provisions to Part 213 while removing any further applicability of Part 201 as to UST leaks. Any

differences between the pre- and post-2012 versions of Part 213 are not relevant in resolving the

issue on appeal, and again, new liability provisions were made retroactive, thereby covering the

2011 gasoline release.

5

As referenced earlier, an IAR is an Initial Assessment Report, and the market’s FAR mentioned

that its IAR had been submitted to the MDEQ on January 20, 2012, approximately three months

after the release.

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the owner or operator must have a CAP prepared “to address contamination at the site.” MCL

324.21309a(1).6 Pursuant to MCL 324.21311a(1), within 365 days of the discovery of a release,

the owner or operator must complete a FAR that includes the CAP required under MCL

324.21309a and submit it to the MDEQ. Here, the market submitted a FAR dated October 18,

2012, to the MDEQ, and it contained a CAP. When corrective action is finalized and completed,

the owner or operator is required to submit a closure report to the MDEQ. MCL 324.21312a. A

closure report had not yet been prepared or submitted in this case at the time of summary

disposition, given that the MDEQ had exercised its audit authority under MCL 324.21315,

denied the amended FAR pursuant to the audit, and was awaiting a revised FAR or some other

action by the market.

Pursuant to MCL 324.21319a(2), the MDEQ “may issue an administrative order to an

owner or operator that is liable under section 21323a requiring that person to perform corrective

actions relating to a site, or to take any other action required by” Part 213 of the NREPA. Under

MCL 324.21323, the Attorney General, on behalf of the MDEQ, has authority to commence a

civil action seeking a temporary or permanent injunction, the recovery of costs incurred by the

state for taking corrective actions, an award of damages for injury done to the state’s natural

resources, a declaratory judgment with regard to liability for future corrective actions, and a civil

fine for noncompliance with Part 213. MCL 324.21323b(1)(b) and (c) provide that “a person

who is liable under section 21323a is jointly and severally liable for . . . [a]ll costs of corrective

action reasonably incurred under the circumstances by any . . . person[,]” and for “[d]amages for

the full value of injury to, destruction of, or loss of natural resources, including the reasonable

costs of assessing the injury, destruction, or loss resulting from the release.” The suit may be

“brought by the state or any other person.” MCL 324.21323b(7). Equitable relief against an

owner or operator relative to Part 213 is available to a person in a court action under MCL

324.21323j.

D. DISCUSSION

In its complaint, the clinic sought, under various theories and causes of action, equitable

remedies, including orders for the market to take remedial measures and corrective actions so as

to fully and properly address the contamination, damages to cover response costs incurred by the

6

Corrective action activities undertaken pursuant to Part 213 must be conducted in accordance

with the process outlined in the RBCA, so as to protect the public health, safety, and welfare, as

well as the environment. MCL 324.21304a(1). The RBCA is “the American society for testing

and materials . . . document entitled standard guide for risk-based corrective action applied at

petroleum release sites[.]” MCL 324.21303(f). A “corrective action” is defined in MCL

324.21302(h) as follows:

[The] investigation, assessment, cleanup, removal, containment, isolation,

treatment, or monitoring of regulated substances released into the environment

from an underground storage tank system that is necessary under this part to

prevent, minimize, or mitigate injury to the public health, safety, or welfare, the

environment, or natural resources.

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clinic, damages for alleged business and property-value losses, and declaratory relief relative to

the market’s obligations in connection with ongoing and future corrective actions and costs

associated with the contamination. Given the relief sought by the clinic, we are compelled to

conclude that the trial court properly invoked the doctrine of primary jurisdiction. Were the

litigation solely concerned with civil liability and basic causation issues, then perhaps it would

have been appropriate for the trial court to exercise its jurisdiction, where the MDEQ’s role at

the time of summary disposition would not have necessarily affected resolution of or conflicted

with those matters.7 However, considering the stage of the MDEQ’s involvement at the time of

summary disposition, litigation entailing a potential award of damages to compensate the clinic

for response costs, lost business, or diminution in property value, as well as equitable or

declaratory relief with respect to remediation and corrective actions, was simply premature and

could have undermined and conflicted with determinations yet to be made by the MDEQ. When

summary disposition was granted, the market had not submitted a FAR or CAP that found

approval with the MDEQ. Therefore, the full extent of corrective actions and remediation

demanded of the market by the MDEQ remained unknown and could have eventually been

inconsistent with or adverse to equitable relief ordered by the trial court had it exercised

jurisdiction or inconsistent with or adverse to monetary damages awarded on the basis of

response costs and business and property-value losses. For example, on the issue of damages for

an alleged loss in the value of the clinic’s property, the possibility existed that the MDEQ would

approve a FAR/CAP submitted by the market that bore directly on the property’s value by

decreasing or eliminating the contamination if successfully executed by the market or its

contractors, thereby making any damage assessment by the trier of fact problematic. With

respect to judicial declaratory relief regarding the market’s ongoing and future obligations

concerning the contamination, a real danger would have existed of inconsistencies arising

between rulings by the trial court and directives set forth by the MDEQ, threatening the MDEQ’s

regulatory authority.

There can be no reasonable dispute that the MDEQ is the repository of expertise and

special competence in regard to a petroleum release from a UST, as reflected in Part 213 of the

NREPA, and that it is uniquely equipped to examine the facts of a release and to address and

guide the proper response to a release. Travelers Ins, 465 Mich at 198. The MDEQ is

specifically charged with applying, implementing, executing, and enforcing Part 213. A failure

to invoke the doctrine of primary jurisdiction under the circumstances would have been

disrespectful to the principle of separation of powers and the purpose underlying the creation of

the MDEQ. Id. at 199. Further, for the reasons discussed above, invocation of the doctrine by

the trial court promoted the concepts of consistency and uniformity in the application of

7

The clinic does not challenge the trial court’s ruling denying its motion for partial summary

disposition under MCR 2.116(C)(10) in regard to the issue of liability. We note that our review

is focused on the period in which summary disposition was argued and granted, and our

resolution of the issue of primary jurisdiction is confined to that temporal context. A great deal

of time has passed since then, and if circumstances have changed in regard to the MDEQ

proceedings that might bear on the application of the doctrine of primary jurisdiction today, it is

a matter for the trial court to entertain in a renewed or revived action by the clinic

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resolving controversies entangled by administrative law. Id. Under the trial court’s ruling, the

judiciary’s role was more rationally exercised, given preliminary resort to the MDEQ for

ascertaining and construing the circumstances underlying the legal issues posed in this case,

primarily in regard to issues concerning and impacting the equitable, declaratory, and monetary

relief sought by the clinic. Id.; Attorney General, 291 Mich App at 87-88. The trial court did not

err in applying the doctrine of primary jurisdiction.

We shall briefly address the appellate arguments posed by the clinic. The clinic initially

contends that the trial court had sole, not concurrent, jurisdiction over its common-law and

equitable claims, which were ripe for adjudication. This argument misconstrues the directive in

Attorney General, 291 Mich App at 88, that before invoking the doctrine of primary jurisdiction,

“a court must find that the administrative agency to which referral is sought has concurrent

jurisdiction over the issues raised.” (Emphasis added.) As observed in In re Application of Int’l

Transmission Co, 304 Mich App 561, 573; 847 NW2d 684 (2014), “[p]rimary jurisdiction ‘does

not involve jurisdiction in the technical sense.’ ” (Citation omitted.) Both Travelers Ins and

Rinaldo’s Constr, opinions issued by our Supreme Court, spoke in terms of concurrent

jurisdiction over disputed issues, not causes of action. Travelers Ins, 465 Mich at 197; Rinaldo’s

Constr, 454 Mich at 70. The MDEQ, of course, does not have jurisdiction to adjudicate causes

of action such as trespass, nuisance, and gross negligence, or even a civil action provided for in

Part 213. The clinic has not directed us to any authority indicating that the doctrine of primary

jurisdiction requires an administrative agency to have jurisdictional authority identical to that

possessed by a court on every element of a cause of action. Rather, as pertinent to this case, it

sufficed that the MDEQ had jurisdiction over issues concerning a leak from a UST, including

determining the proper response to a petroleum leak from a UST and the resulting

contamination, assessing IARs, FARs, and CAPs proffered by owners and operators of UST

systems, and directing actions to protect the environment and public health, safety, and welfare.

The clinic argues that the doctrine of primary jurisdiction cannot be employed in the

context of a tort claim or allegations of tortious conduct. In addressing the doctrine relative to

the Michigan Public Service Commission (MPSC), the Supreme Court in Rinaldo’s Constr, 454

Mich at 75, observed that “[t]he complexities of the regulatory scheme will generally not be

implicated where the plaintiff's claim is for personal injury, property damage not covered by the

[MPSC] tariffs, or other tortious activity, because the regulatory scheme is not designed to

address these matters.” (Emphasis added.) See also Mich Basic Prop Ins Ass’n v Detroit Edison

Co, 240 Mich App 524, 535; 618 NW2d 32 (2000) (rejecting application of the doctrine where

the plaintiffs had alleged that DTE “had a duty to handle electrical power transmission

equipment in a safe and reasonable manner and that [DTE] breached this duty resulting in a fire

that damaged the insured's property”). As reflected in Rinaldo’s Constr, the general rule is not

inflexible or insurmountable, such that the complexities of a regulatory scheme will never be

implicated in regard to a tort action. And for the reasons discussed at length earlier in this

opinion, the complexities of Part 213 of the NREPA are indeed implicated in connection with the

tort remedies sought by the clinic in this case, keeping in mind the open-ended status of the

MDEQ proceedings at the time of summary disposition. The regulatory scheme in Part 213 is

designed to address matters regarding the nature and extent of corrective actions in combating

contamination from leaking USTs, which necessarily has a direct bearing on the tort remedies

sought by the clinic. Such an interrelationship simply did not exist in Rinaldo’s Constr and Mich

Basic Prop.

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The clinic’s argument that the MDEQ cannot provide an administrative remedy for its

tort claims, i.e., an award of damages, again misses the point that the doctrine of primary

jurisdiction does not require an administrative agency to have all of the tools wielded by a court

in fashioning a remedy. The clinic also contends that the MDEQ cannot provide equitable relief.

This argument lacks merit. The entire framework of Part 213 under which the MDEQ demands,

monitors, evaluates, audits, and can reject CAPs and FARs effectively gives the MDEQ control

to direct the actions and conduct of an owner or operator reminiscent of a trial court’s equitable

powers. Moreover, as recited above, the MDEQ has the authority to issue administrative orders

requiring corrective actions related to a contaminated site. MCL 324.21319a(2). And the

MDEQ itself is authorized to enter private property at reasonable times to take corrective action.

MCL 324.21326(2)(f).

The clinic next maintains that the MDEQ failed to timely enforce the NREPA against the

market, creating an urgency for a court to adjudicate the clinic’s common-law and equitable

claims. We can somewhat sympathize with the clinic, considering that, as best we can glean

from the record, there did not appear to be much if any movement on the preparation of an

acceptable FAR/CAP from the date of the audit letter until the order granting summary

disposition was entered nearly 15 months later. However, in light of very little discussion on the

matter by the parties below in their briefs and pleadings, and a lack of documentary evidence on

the subject, we simply do not know what transpired between the MDEQ and the market during

that span of time. As a general observation, we do believe that a lack of timeliness in exercising

statutory duties by an administrative agency should be a consideration in deciding whether to

apply the doctrine of primary jurisdiction, along with the more important criteria enumerated in

Travelers Ins, 465 Mich 185. In the instant case, however, we can only speculate with respect to

apparent delays in the administrative process, and the factors to be contemplated in determining

whether the doctrine of primary jurisdiction should be invoked weigh heavily in favor of

applying the doctrine. We also note that there existed avenues for the clinic to press the MDEQ

into action, including MCL 324.21323j(1)(c) and (2), which allow a person adversely affected by

a UST release to pursue a civil action in circuit court against MDEQ directors for purposes of

obtaining an order requiring the MDEQ to perform nondiscretionary acts or duties mandated by

Part 213.8

The preceding discussion concerning the doctrine of primary jurisdiction and

administrative delay does give us some pause with respect to statute of limitations issues. In

Travelers Ins, our Supreme Court indicated that a trial court invoking the doctrine has the

discretion to simply stay the judicial proceedings, retain jurisdiction, and await anticipated

administrative determinations, or it can dismiss the case without prejudice, as occurred here, “if

8

The clinic’s proposed amended complaint that never came to fruition sought declaratory relief,

mandamus, and superintending control against the MDEQ for an alleged failure to enforce Part

213 of the NREPA. To the extent that the clinic suggests that the proposed amended complaint

was accepted and part of this lawsuit, we reject the suggestion. The trial court ultimately did not

grant the clinic’s motion for leave to amend its complaint, and the court’s summary disposition

ruling clearly did not encompass the proposed amended complaint, only the original complaint.

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the parties would not be unfairly disadvantaged.” Id. at 207. A stay of proceedings, as opposed

to a dismissal without prejudice, would alleviate any potential problems with regard to a claim

becoming time-barred while administrative proceedings were being conducted. The clinic,

however, presents no argument seeking reversal of the dismissal without prejudice on the basis

that a stay would have been the more appropriate mechanism to implement the doctrine of

primary jurisdiction. Nor does the clinic raise any concerns about the statute of limitations

applicable to its various claims.9 We decline to sua sponte examine whether a stay should have

been ordered by the trial court.

Finally, the clinic devotes a significant portion of its appellate brief to arguing that each

of the counts alleged in its complaint were legally sound and valid. The issue regarding whether

the clinic stated claims upon which relief could be granted, MCR 2.116(C)(8), is not relevant at

this time in light of the fact that the trial court denied the market’s motion for summary

disposition under MCR 2.116(C)(8) as moot and that the market has not cross appealed the

ruling or argued that MCR 2.116(C)(8) provides an alternative basis to affirm.10

III. CONCLUSION

The trial court did not err in invoking the doctrine of primary jurisdiction in this case,

given the unresolved matters existing within the parameters of the MDEQ proceedings

concerning the full extent of the remedial measures and corrective actions to be demanded and

taken in connection with the UST release, which necessarily has a bearing on issues regarding

the remedies sought by the clinic in the lawsuit. Any continued litigation in the trial court could

have unacceptably resulted in equitable, declaratory, or monetary relief inconsistent with or

9

We note that the statute of limitations on bringing a cause of action specifically under Part 213

is found in MCL 324.21323l, which provides, in pertinent part:

The limitation period for filing actions under this part is as follows:

(a) For the recovery of corrective action costs and natural resources

damages . . ., within 6 years of initiation of physical on-site construction activities

for the corrective action at the property by the person seeking recovery, except as

provided in subdivision (b).

(b) For 1 or more subsequent actions for recovery of corrective action

costs . . ., at any time during the corrective action, if commenced not later than 3

years after the date of completion of all corrective action at the property.

10

Although we question the trial court’s conclusion that the clinic’s motion for partial summary

disposition under MCR 2.116(C)(10) and the market’s motion for summary disposition under

MCR 2.116(C)(8) were rendered moot with the primary jurisdiction ruling, considering that such

motions can result in a definitive “with prejudice” ruling on an element or pleading, which is not

the case with primary jurisdiction, the parties do not challenge the mootness determination.

-14-

adverse to steps taken and decisions made by the MDEQ in exercising its administrative

authority in connection with the petroleum release and contamination.

Affirmed. No costs awarded under MCR 7.219.

/s/ David H. Sawyer

/s/ William B. Murphy

/s/ Amy Ronayne Krause

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