Macomb Interceptor Drain Drainage District v. Kilpatrick
896 F. Supp. 2d 650
E.D. Mich.2012Background
- Macomb Interceptor sues forty defendants for federal and state claims related to the 15 Mile Interceptor Repair Project.
- Macomb asserts standing based on an Acquisition Agreement assigning Detroit DWSD rights to Macomb; also claims independent injury from inflated project costs.
- The Acquisition Agreement sections 2.4 and 2.9(b)(8) allegedly transfer City rights under contracts to Macomb, not tort or federal claims.
- Concurring Defendants move for summary judgment arguing Macomb lacks standing to pursue non-contractual claims; City of Detroit supports dismissal on standing grounds.
- Court grants summary judgment for moving defendants on non-contractual claims and denies Macomb’s motion to amend; directs show-cause on remaining non-contractual claims.
- Macomb’s proposed amended complaint adds fraud, conspiracy, and aiding-and-abetting claims, but is deemed futile due to standing limitations.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether 2.4 transfers non-contractual claims | Macomb argues assignment of all rights includes non-contractual claims | Assignment limits to contract rights under 2.4 | Assignment limited to contract rights; no non-contractual claims. |
| Standing based on injury independent of assignment | Macomb suffered independent antitrust/RICO injuries as purchaser and end-user | Indirect-purchaser doctrine bars such standing; only direct purchasers have standing | Macomb lacks antitrust/RICO standing as indirect purchaser. |
| Antitrust standing under Illinois Brick indirect-purchaser rule | Macomb asserts directly injured by inflated costs | City of Detroit was the direct purchaser; Macomb is indirect | Indirect-purchaser status bars antitrust claims. |
| RICO standing as indirect purchaser | RICO claims survive with indirect injury | RICO standing mirrors antitrust standing; indirect injuries barred | RICO claims lacking standing; barred. |
| Leave to amend given standing deficiencies | Amendment would cure standing issues and add claims | Amendment would be futile due to lack of standing | Motion to amend denied as futile. |
Key Cases Cited
- Illinois Brick Co. v. Illinois, 431 U.S. 720 (Supreme Court, 1977) (bar on indirect-purchaser pass-on damages; direct purchaser standing only)
- Hanover Shoe, Inc. v. United Shoe Machinery Corp., 392 U.S. 481 (Supreme Court, 1968) (overcharges and pass-on theory; direct purchasers proper plaintiffs)
- Associated Gen. Contractors of Cal., Inc. v. Cal. State Council of Carpenters, 459 U.S. 519 (Supreme Court, 1983) (five-factor standing test for antitrust claims)
- County of Oakland v. City of Detroit, 866 F.2d 839 (6th Cir., 1989) (discusses indirect-purchaser standing and duplicative liability concerns)
- Skotak v. Vic Tanny Intern., Inc., 513 N.W.2d 430 (Mich. Ct. App., 1994) (breadth of 'all' in contract language; limits of broad assignment)