State’s high court digs into Milwaukee’s deep tunnel (UPDATE)

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The state Supreme Court on Thursday took up ground-water seepage, rotting timber pilings and years of court battles over whether a public entity can be held liable for millions of dollars of alleged private property damages.

Justices heard oral arguments on a complex legal case involving the deep tunnel, the Milwaukee Metropolitan Sewerage District’s immense, miles-long system of sewage and stormwater channels that run through bedrock 300 feet below Milwaukee.

MMSD has operated the public works project since it went online in 1993, and for the past decade, attorneys have brought a string of lawsuits over the section of tunnel that runs 160 feet east of the Boston Store in downtown Milwaukee.

MMSD “drilled a horizontal hole through downtown Milwaukee that’s a mile long and has no lining,” said Mark Cameli, an attorney who works for Reinhart Boerner Van Deuren SC, Milwaukee.

Cameli and colleague Rebecca Kennedy represent the store’s owners, Bostco LLC and Parisian Inc. They said that because the tunnel is not lined, its cracks for years have sucked ground water out of the water table beneath the Boston Store, exposing the foundation’s old wooden pilings to air so that they have rotted and shifted.

“This was shameful conduct,” Cameli said. “They did nothing. They still have done nothing.”

MMSD has told a different story, contending its permit from the state Department of Natural Resources lets it have a positive inward water gradient to prevent stormwater and sewage from seeping out of the tunnel. The district further argues the timber pilings have been breaking down since the 1950s and that 72 were repaired — 11 twice — before the tunnel even existed.

“There is no evidence here there was deterioration of the section of tunnel at issue,” Michael Halfenger, representing MMSD for Foley & Lardner LLP, said Thursday.

Since 2006, Bostco and Parisian have sued MMSD in Milwaukee County Circuit Court and a Court of Appeals seeking millions of dollars in damages and arguing the district should prevent future harm by installing a concrete lining in the section of the tunnel running north and south of the store.

“Where they lined their tunnels, they function well,” Cameli said. “But they decided they could deal with this issue by patching it.”

That project would cost an estimated $10 million and would require MMSD to close down its entire 28.5-mile tunnel, MMSD officials have said. If they did that, they argued, even light rainfall would cause sewage to run into Lake Michigan and local rivers.

MMSD senior attorney James Petersen also has said there is no point in lining the one-mile section of tunnel because ground water seepage has decreased and the water table has stabilized to its pre-construction level.

But a Milwaukee jury disagreed. In 2006, it decided MMSD’s negligence in maintaining the tunnel caused $2.1 million in costs to the store. The jury awarded Bostco a total of $6.3 million in past and future damages.

Circuit Court Judge Jeffrey Kremer later overturned the verdict based on a Wisconsin statute that caps municipal liability for tort claims at $100,000. But in 2007, a second circuit court judge, Jean Di Motto, ordered the district to install the concrete lining.

The appellate court reversed that decision in May 2011. In addition, the appeals court upheld the lower court’s decision to cap MMSD’s total damages payment at $100,000.

Bostco attorneys now are seeking a ruling from the state’s high court that would force MMSD to pay damages and install the lining.

“The duty of government is an absolute duty to do whatever is necessary to abate harm,” Kennedy said. “When government is on notice of ongoing harm, it has an absolute duty to correct it.”

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