Building owner pushes groundwater fight to high court (UPDATE)

E-L Enterprises Inc. claims a building it owns at 272 N. 12th St. in Milwaukee was damaged because of the MMSD's construction of the Deep Tunnel storage chamber. (Photos courtesy of Kerkman & Dunn)

By Marie Rohde

The value of groundwater is at the heart of a Milwaukee legal debate an attorney wants to take to the U.S. Supreme Court.

E-L Enterprises Inc., owner of an old building at 272 N. 12th St., claims the Milwaukee Metropolitan Sewerage District violated the company’s constitutional rights in the 1980s by draining water from beneath the building during construction of the 19-mile Deep Tunnel, a storage chamber built to avoid sewage dumping during storms.

Once the groundwater was gone, the wood pilings that supported the building began to rot, and the building began to sink. That caused cracks and other structural damage to the building, the owners claim.

Jerome Kerkman, a lawyer representing E-L, is asking the nation’s high court to take the case but acknowledged the chances are slim. Fewer than 4 percent of the petitions for review are accepted, he noted.

Wood pilings such as those beneath the E-L building are a common and effective support for structures, said Mahmoud Maamouri, a professor of structural engineering at the Milwaukee School of Engineering who is not involved in the case.

“Wood will perform fine if it is completely wet or completely dry,” he said. “The problem develops when it begins to dry out. The oxygen allows microorganisms to develop, and they eat the wood and the water.”

Two other similar cases resulted in verdicts against the sewerage district. Those also are being appealed.

In 2006, a jury awarded the owners of the Boston Store on Wisconsin Avenue $9 million for damages caused by a drawdown of groundwater. The judge later reduced the award to $100,000.

A second judge who inherited the case ruled the Deep Tunnel must be lined in concrete. An appeal of both the reduction in the amount of the award and the order to line the tunnel is pending. The outcome of the E-L case could affect the outcome of this case, but lawyers for the property owner say there are other issues.

In 2009, a judge awarded the owner of Pre-Pac Produce Distributors Inc., 107 E. Lincoln Ave., $1.08 million for damages caused by the depletion of the groundwater and resulting building damage. Both James Petersen, MMSD’s lawyer handling the case, and Brent Nistler, a lawyer for Pre-Pac, said the E-L decision has no effect on that case.

State law gives government agencies immunity from damages resulting from most decisions. The E-L claim, though, is not for the damages done but for MMSD’s taking of the water.

A Milwaukee County Circuit jury awarded E-L Enterprises a $309,388 verdict in 2007.  Judge Richard Sankovitz told MMSD to pay the companyís attorney fees and costs, bringing the total to $624,375.

An appellate court upheld the lower court findings. But in July, the Wisconsin Supreme Court tossed out the case, in part, because E-L failed to prove the value of the extracted groundwater.

E-L’s Kerkman and MMSD’s Petersen said if the U.S. Supreme Court does not hear the case, it cannot be filed in federal district court.

“The issue,” Kerkman said, “is that the sewerage district took my client’s property without compensation.”

But Petersen said he would be surprised if the case made it past the front door of the high court’s chambers.

“I don’t think the U.S. Supreme Court would find a national issue in the case,” Petersen said.