Judge Asked to Sign Off on $641M Settlement in Flint Water Crisis

A water tower is seen in Flint, Mich. (AP Photo/Carlos Osorio, File)

DETROIT (CN) — Attorneys urged a federal judge Monday to grant preliminary approval of a massive settlement benefitting Flint residents poisoned by contaminated water, as local government officials wrestle with accepting their part of the deal.

More than 100 attorneys were present at the hearing but only a handful spoke and debated the merits of the agreement that would compensate thousands of victims for the injuries caused by the presence of lead in the city’s drinking water supply.

U.S. District Judge Judith Levy, a Barack Obama appointee, said the $641 million agreement is the “most complex settlement I’ve ever seen.”

Attorney Ted Leopold, co-lead counsel for the plaintiffs, told the judge he had “worked harder on this case than any other.” Leopold stressed that while the victims included in the deal would be treated fairly, he acknowledged there could be intense negotiations in future litigation with other groups.

Attorney Corey Stern, appointed to represent individual claimants, said he had 5,000 clients, 2,700 of whom are children. While the settlement isn’t perfect, he said, it has his full support.

Stern said the hundreds of millions of dollars that would be paid to victims would quickly be reinvested in the city and flow through the community. He also said it was just the beginning.

“$641 million is a significant amount of money, but more is coming,” he said.

But attorney Todd Weglarz, who represents residents who contracted Legionnaires’ disease caused by low chlorine levels in the municipal water system, expressed concern about the allocation of funds.

“It’s impossible to tell what living victims are going to get,” he said.

Miriam Wolock, appointed by the court as guardian ad litem to review the settlement, methodically went through the details. She said the process to appoint a representative for child victims was consistent with court rules and noted that there was even an “other” provision for children who could not be categorized easily and required representation.

Wolock also said there were “multiple layers of protection” for minor claimants. If they were awarded less than $5,000, the money would be paid to a conservator. If the payment is higher than $5,000, it could go to a special needs trust, a settlement preservation trust or a structured settlement.

“It’s fair and in the best interests” of the victims, she told Levy.

The judge said she would try to have an opinion ready by mid-January but cautioned that it could be delayed by further negotiation.

On Thursday, Flint City Council members voted to hire their own attorney to advise them on the settlement and handle any of their objections with the court. The council postponed a vote to approve the use of $20 million from an insurance carrier to pay their share of the settlement as members expressed apprehension about leaving any victims behind. They have until Dec. 31 to decide.

First Ward Councilman Eric Mays told MLive.com that the settlement “could leave so many people out,” saying it shouldn’t be forced “down our throats.”

Flint still faces more than 100 lawsuits that could strain its finances to a breaking point if they’re not resolved. Mayor Sheldon Neeley said the city could face bankruptcy and urged the members to vote yes on the settlement.  

“We definitely don’t want to miss the opportunity for residents to receive the benefit of the $20 million, non-taxpayer dollars, to be added to the total sum,” he told Michigan Radio. “The state has made it clear that they will be moving forward without us, without the $20 million, if the council does not give an affirmative vote. And that’s the only issue before the city council.”

Flint City Council President Kate Fields said she planned to vote to approve the settlement.

One of the largest in state history, the preliminary settlement proposed payments for Flint citizens and businessowners affected by poisoned water from a $600 million fund and promised 80% of the money would be directed to victims who were under 18 years old at the time of the crisis.

Under the terms of the updated settlement, 79.5% of the funds will be apportioned to minor children and a $35 million fund will be established for future minor claimants. Adult victims and property damage claims will account for 18% of the money and less than 1% is allocated for business losses. Another 2% will be used for a dedicated fund to offer special education to those who developed long-term neurological damage from the dirty water.

Last week, Michigan legislators cemented a plan to borrow $600 million to finance the state’s portion of the proposed agreement. Democratic Governor Gretchen Whitmer indicated she approved of the plan that authorizes a loan from a state economic development fund.

The lead contamination crisis began when a state-appointed emergency manager switched the city’s drinking water supply from Lake Huron water treated in Detroit to Flint River water treated at the Flint Water Treatment Plant. Michigan Department of Environmental Quality officials admitted they failed to require corrosion-control chemicals as part of the water treatment process.

Flint recently announced the completion of its lead and copper testing required under the federal Safe Drinking Water Act more than a month ahead of schedule. 

“The team truly came together to overcome all obstacles and successfully complete this testing,” Mayor Neeley said in a statement. “We will continue moving forward in a positive direction on behalf of the residents of the city of Flint.”

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