The headlines are predictable. They scream about "injustice" and "lack of accountability" because a federal judge ruled that the State of Michigan isn't financially liable for the 2020 Edenville and Sanford dam failures. The common consensus is that the government escaped a multi-billion dollar bill on a technicality, leaving victims in the mud.
That narrative is wrong. It is more than wrong; it is dangerously naive.
If we want to actually stop the next dam from bursting, we need to stop treating the state as an infinite insurance policy for private failure. The ruling by U.S. District Judge Paul Maloney isn't a miscarriage of justice. It’s a cold, hard dose of reality that the infrastructure sector desperately needs to swallow. We have spent decades pretending that "regulation" is a magical shield that transfers all risk from private owners to the public till. It isn't.
The Myth of Regulatory Liability
The core of the lawsuit was the "Inverse Condemnation" theory. The plaintiffs argued that by failing to properly oversee the dams, the state effectively "took" their property when the water hit.
I have seen this movie before. In the world of high-stakes civil engineering and public works, there is a pervasive delusion that if a government agency stamps a permit, they own the risk. They don't. The Michigan Department of Environment, Great Lakes, and Energy (EGLE) may have been bureaucratic, slow, and perhaps even incompetent in their oversight, but they did not own the Edenville Dam. Boyce Hydro did.
When a private entity owns a critical piece of infrastructure, the responsibility for its physical integrity sits squarely on their balance sheet. Turning the regulator into a co-defendant every time a private asset fails creates a "moral hazard" so large it could swallow the Great Lakes.
If the state were held liable for every failure of a regulated private asset, the government would have to be the de facto insurer for every elevator, every private bridge, and every backyard septic tank in the country. That is a recipe for total systemic paralysis.
The Engineering Reality: You Can't Regulate Safety Into Existence
Let’s talk about the actual mechanics of what went wrong. The Edenville Dam failed because of "static liquefaction." For the non-engineers: the soil inside the embankment turned into a liquid because it was saturated and overstressed.
- The Competitor's Take: The state should have known.
- The Insider's Reality: Determining the internal stability of an earthen dam built in 1924 is a forensic nightmare.
You can't just look at a dam and see liquefaction potential. You need deep boreholes, piezometers, and expensive longitudinal studies. Boyce Hydro, the owner, fought the regulators at every turn. They claimed they didn't have the money for the upgrades. They played a game of "regulatory chicken," daring the state to shut them down and deal with the fallout.
When the state finally stepped in to take over the oversight from federal authorities (FERC), they were handed a ticking time bomb. The "lazy consensus" says the state should have defused it immediately. My experience in the field tells me that when you inherit a century-old disaster-in-waiting, your options are "bad" and "worse."
If Michigan had forcibly breached the dam earlier to prevent a flood, they would have been sued for destroying the lakefront property values of the very people who are now suing them for the flood. The state was in a no-win scenario. By dismissing the lawsuit, the court is acknowledging that the state cannot be the "guarantor of last resort" for private negligence.
The Business of Neglect
We need to stop pretending that these dams are "public" assets. They were private power plants. Boyce Hydro was a business.
The tragedy in Mid-Michigan is a textbook example of what happens when we allow "vampire infrastructure"—assets that generate private profit while externalizing all maintenance costs and catastrophic risks onto the public.
- Profit Extraction: The owner collects revenue from power generation or property premiums.
- Maintenance Deferral: Every dollar spent on the spillway is a dollar out of the owner's pocket.
- The Hand-off: When the repair bill exceeds the asset value, the owner declares bankruptcy and walks away.
By suing the state, the victims were effectively trying to get the taxpayers of Detroit, Grand Rapids, and Traverse City to pay for the sins of a private company in Wixom Lake. It sounds harsh, but why should a school teacher in the Upper Peninsula pay for the failure of a private dam owner's spillway?
If we hold the state liable, we are signaling to every other private dam owner in the country that they don't need to save for a rainy day. Literally. If it breaks, the state will pay the victims. That is a perverse incentive structure that guarantees more collapses.
Stop Asking "Who Will Pay?" and Start Asking "Who Will Own?"
The "People Also Ask" sections of the internet are filled with questions like, "Can I sue the government for flood damage?" or "Who is responsible for dam safety?"
The brutal, honest answer is: You are. If you buy a house downstream from an earthen dam built during the Coolidge administration, you are assuming a specific risk profile. You cannot outsource that risk to a state agency with a limited budget and a handful of inspectors.
The unconventional advice? We need to move toward a "Public-Private Responsibility" model where infrastructure is bonded. If you own a dam, you should be required to hold a massive insurance bond that pays out automatically upon failure. If you can't afford the insurance, you don't get to keep the dam. We don't let people drive cars without insurance; why do we let them hold back billions of gallons of water above populated towns without it?
The court’s decision forces a shift in focus. Instead of looking for a deep-pocketed government scapegoat, we have to look at the law that allows private owners to hide behind LLCs while their infrastructure rots.
The False Security of the Permit
Most people think a government permit means something is "safe." It doesn't. A permit means the paperwork meets a minimum threshold.
In my time working with environmental compliance, I’ve seen thousands of pages of reports that are essentially "theatre." They provide the illusion of safety while ignoring the fundamental physics of the structure. The Michigan regulators were focused on lake levels and mussel shells—the things they were legally mandated to care about. They weren't focused on the internal friction angle of the sand inside the dam.
Is that a failure of the agency? Yes. Is it a legal "taking" of property? No.
If we change the law to make the state liable for every permit it issues, no permits will ever be issued again. The entire construction industry would grind to a halt overnight. No one in state government would take the risk of signing off on a project if it meant the state’s general fund was on the line for the next century.
The Hard Path Forward
The Michigan ruling is a brutal reminder that the "Safety Net" is full of holes.
We are currently sitting on a national "D" grade for infrastructure. There are thousands of "high-hazard" dams across the United States. Many of them are privately owned and in worse shape than Edenville.
If we want to fix this, we have to stop the litigation cycle and start the liquidation cycle.
- Seize the assets: If a private owner can't meet safety standards, the asset should be seized immediately, not after years of court battles.
- Assess the residents: If you live on a lake created by a dam, you are a stakeholder. You have to pay for the dam's upkeep through special assessment districts. No more free rides on "private" lakes maintained by "public" grace.
- Forensic Engineering: We need to fund actual physical testing, not just "visual inspections" which are the industry standard for "we didn't actually look at the structural integrity."
The victims of the 2020 flood deserve sympathy, but they don't deserve a payout from the state’s taxpayers. That money belongs to the future—to the bridges that haven't fallen yet and the roads that aren't yet crumbled.
Holding the state liable for the Edenville collapse would have been a populist victory but a systemic disaster. It would have codified the idea that the public is the ultimate "bag holder" for every failed private venture.
Judge Maloney did the brave thing. He followed the law instead of the emotion. He told the world that the State of Michigan is a regulator, not a parent. It’s time we started acting like adults and realized that if we rely on the government to protect us from every private failure, we will eventually run out of both protection and money.
The dam broke. The company failed. The state didn't stop it. That is a tragedy. But making it the state's financial burden would have been an even bigger catastrophe for the long-term stability of our entire civilization’s infrastructure.
Stop looking for a settlement and start looking at the map. If you live below a private dam, you are on your own. Act accordingly.
