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A Michigan federal judge has dismissed two lawsuits challenging a $217 million special assessment imposed on property owners to fund the reconstruction of four dams destroyed in 2020 floods, ruling that homeowners had ample opportunity to object in state court.

U.S. District Judge Matthew F. Leitman ruled Thursday that plaintiffs, including the Heron Cove Association and individual homeowners, cannot relitigate their failed state court claims in federal court, dealing a major blow to their bid to overturn the special tax.

Dam Disaster Leads to Multi-Million Dollar Battle

The lawsuits stem from the catastrophic collapse of the Edenville Dam in May 2020, which unleashed historic flooding that also overwhelmed the Sanford Dam, devastating homes and businesses across Midland and Gladwin counties.

To fund the $400 million dam restoration effort, the Four Lakes Task Force, a state-appointed oversight body, devised a special assessment plan to cover $217 million of the costs over a 40-year period—a move that sparked outrage from some property owners.

Legal Challenge Falls Flat in Federal Court

The Heron Cove Association and individual homeowners initially sued in state court, arguing that the tax unfairly burdened property owners while providing minimal benefits beyond what the general public would receive.

After their state court claims failed, the plaintiffs repackaged their arguments and brought the fight to federal court—only to have Judge Leitman dismiss the case, citing due process protections in the original proceedings.

"The same issues were raised, and the same parties had a full and fair opportunity to litigate these matters," Judge Leitman wrote in his opinion.

Takings Claims Rejected

Plaintiffs also argued that the special assessment amounted to an unconstitutional taking under federal law. But Judge Leitman ruled that they failed to prove the tax "substantially exceeds the benefits conferred" to any property.

"The plaintiffs’ one-sentence claim that the assessment is ‘substantially excessive’ lacks factual support," he wrote, calling it a mere repetition of legal jargon rather than a valid argument.

Appeal to Michigan Supreme Court Looms

Despite the setback, plaintiffs aren’t giving up. The Heron Cove Association blasted the ruling, arguing it prematurely assumes how the Michigan Supreme Court will decide a pending state-level appeal.

Meanwhile, Four Lakes Task Force President Dave Kepler hailed the ruling as a major victory for the dam restoration effort.

"We remain hopeful for a positive resolution to the Supreme Court appeal," Kepler said.