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Bottler taps into trouble in Michigan
Jilted in Wisconsin, Perrier successor is caught in court fight
By Dan Egan
Milwaukee Journal Sentinel
01/12/04



The bitter fight over Perrier's plans to pump spring water into plastic bottles and ship it to grocery stores all over the Midwest isn't really over.

The battle, which pitted environmentalists worried that such an operation would harm area wetlands and waterways against economic boosters thirsty for Perrier's jobs, has spilled into Michigan.

And a judge's recent ruling there indicates that the Wisconsin conservationists' fears might have been dead-on.

Perrier dumped Wisconsin in favor of a Michigan site in May 2001 after fierce public opposition to its proposal to draw as much as 720,000 gallons a day from a spring in Adams County, near Wisconsin Dells.

"People were much more receptive in Michigan," Perrier Group of America CEO Kim Jeffrey said in the days following the company's announcement that it would not build in Wisconsin. "We're going to have a very successful operation in another state, which will give the people in Wisconsin an opportunity to see who we are. I don't think that enough people did their homework on who we are."

Turns out Perrier, which is owned by Nestle, had been doing its homework. The Swiss-owned food giant was simultaneously courting the State of Michigan for the same facility. And when Wisconsinites balked at the prospect of the private sector bottling and profiting from what many saw as a public - and fragile - resource, Perrier pounced in Michigan.

A year later, Perrier, now known as Nestle Waters, opened its Ice Mountain bottling plant in Mecosta County, north of Grand Rapids. Today the $150 million operation employs 147 people with a $7 million payroll.

But its future couldn't be cloudier.

On Nov. 25, Mecosta County Circuit Judge Lawrence Root ruled in favor of a Michigan citizens group that sued to stop pumping from the spring, out of concern that it would harm a nearby stream.

"Nestle's pumping operations at the Sanctuary Springs must stop entirely," the judge wrote in his 68-page ruling. "I cannot identify a pumping rate that, in this complex system, will not have actionable adverse effects on these plaintiffs."

Those were the very worries held by some landowners near the proposed Wisconsin site.

"What is happening over there is exactly what we were concerned about happening here," said Glenn Stoddard, an attorney for the Wisconsin citizen group that sued over Perrier's plans in Adams County. "And that is, by drawing down all these spring waters, they are negatively impacting the surface waters in the area."

Root gave plant operators 21 days to shut down the pumps.

The order, which the judge acknowledged was "dramatic and drastic," caught many in Michigan off guard.

"We felt the evidence clearly showed there was no adverse environmental harm occurring," said Nestle spokeswoman Deborah Muchmore.

Just hours before the shutdown order was to take effect, Nestle got a reprieve from the Michigan Court of Appeals, and the plant can continue to operate until its appeal flows through the courts.

Nestle wasn't alone in its worries about the economic impact of idling the bottling plant. Gov. Jennifer Granholm's administration also weighed in when the Michigan Department of Environmental Quality filed a legal brief supporting Nestle's request for a stay of Root's ruling.

That the ruling put Nestle in a dicey situation, said Jim Olson, attorney for the group that sued, is nobody's problem but Nestle's.

"It was a huge gamble," Olson said of Nestle's decision to build before the court case was resolved. "The company has been one step ahead of the law the whole time, and taking risks from day one. They moved very fast."

Nonsense, said Muchmore.

"The company didn't move forward with the building of the facility until it had all its permits in hand," she said. "What Mr. Olson is referring to is the fact that he and his (clients) were threatening a lawsuit, and I don't think most companies can make good, sound business practices based on a pending lawsuit."

But Root offered little sympathy for the economic crunch he was about to put Nestle in.

"The prediction (threat?) that Nestle employees will lose their jobs and the community lose a valuable corporate citizen and taxpayer is entirely in the control of the decision makers at Nestle," the judge wrote. "They can develop alternative water sources that do not present the kind of risks that this one does and, after an initial capital outlay, continue bottling and selling water. They came into this situation aware of the risks and must now regroup to deal with the consequences of losing."

Muchmore says there are no alternatives if the company is denied use of its four wells, which have the capacity to pump about 575,000 gallons a day.

"We'd have to shut (the bottling plant) down," she said.

Nestle blames low rainfall

Root's ruling hinged, in part, on the idea that the wells Nestle used to tap the spring would lower the water volume in a nearby stream. That, in turn, would damage streamside, or riparian, property owners.

"In cases where there is a groundwater use . . . that is shown to have a hydrological connection to a surface water body to which riparian rights attach, the groundwater use is of inferior legal standing than the riparian rights," the judge wrote.

Muchmore says much of Nestle's appeal is based on new data that show the company's withdrawals have little, if any, impact on the stream and other area waterways.

"It looks as though Ice Mountain was blamed for effects that were actually the result of way-below-average rainfall," Nestle attorney Michael Haines said in a prepared statement.

Olson called the judge's ruling "so important, so historic."

"In this modern day, with the global thirst for water, a court has decided private companies aren't going to be able to exploit the integrity of lakes and streams," he said.

Nestle, however, cautioned that the ruling "is extreme and holds serious and far-reaching implications."

"If Ice Mountain's insignificant effect is considered a violation of MEPA (Michigan Environmental Protection Act), then what water user - industrial, commercial, golf course or farmer - would not be in similar violation?" asked Haines.

Caution from judge

Conservationists contend that the ruling will have no such effect on those industries. Root also insisted it should not be interpreted too widely.

"This case is not about preserving the Great Lakes or allowing or prohibiting any diversion from them. . . . This case is not a one-person 'referendum' on the merits of the beverage bottled-water industry. . . . This case is not about the redistribution of wealth. . . . Finally, this case is most certainly not about public opinion or political pressure," Root wrote in the preamble of his ruling.

But for many people, the case is about all those things.

Although Muchmore noted that the amount of water Nestle is tapping is minuscule compared with the volume used for things such as agriculture and public drinking supplies, she said some people just tend to seize upon it as an issue.

"Frankly, I think there is, by some people, a stigma against bottled water, and there is some amount of concern over large companies," Muchmore said.

But, she said, those stigmas won't hold water in court.

"This thing is far from over," she said.

The case goes back to Root's courtroom Tuesday.

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