The $641 million settlement is one of the biggest in Michigan history but could grow even larger with future negotiations.
DETROIT (CN) — A federal judge granted preliminary approval Thursday to a massive settlement for Flint residents who were poisoned by contaminated water.
The settlement is currently worth more than $641 million and has been described as the “most complex settlement I’ve ever seen” by U.S. District Judge Judith Levy, a Barack Obama appointee who is overseeing the negotiations.
“Generally, a settlement between an adult plaintiff and a defendant does not require court approval. But because this settlement presents a hybrid structure that includes a class component for unrepresented adults—and involves a substantial number of potential claims of Minors—preliminary approval of certain aspects of the proposed settlement is both appropriate and necessary,” Levy wrote in an opinion released Thursday morning.
She stressed it was a partial settlement and did not mark the end of future litigation.
“There may be no amount of money that would fully recognize the harm the residents of Flint have experienced, including their anxiety, fear, distrust, and anger over the events of last seven years,” the judge wrote. “Litigation has its benefits, but also its limitations, and the preliminary approval of this settlement does not affect or preclude other avenues of redress.”
The parties to the settlement include the state of Michigan, the Michigan Department of Environmental Quality, former Governor Rick Snyder the city of Flint, McLaren Regional Medical Center and city contractor Rowe Professional Services Co.
Levy noted some victims who were frustrated by the terms of the agreement would be able to join the settlement class while they still pursued their claims that were not addressed. However, she warned them to weigh the risks of future litigation versus the terms of the current settlement.
A fairness hearing is scheduled for July in order to hear input from the affected victims, a minimum of 45 days after the motion for final approval is submitted.
Attorney Ted Leopold, co-lead counsel for the plaintiffs and partner at Cohen Milstein Sellers & Toll, applauded the judge’s preliminary approval but said there is still more to accomplish.
“We are very pleased and happy with Judge Levy’s order today of preliminarily approving the settlement. We have a lot more hard work ahead of us both on the settlement and the continued litigation with the remaining unsettled defendants. We will continue to fight for the citizens of Flint until a full measure of justice is obtained for them,” he wrote in an email.
Leopold told Levy at a hearing last month that he had “worked harder on this case than any other.”
Michael Pitt, court-appointed co-lead counsel and partner at Pitt McGehee Palmer Bonanni & Rivers, shared Leopold’s optimism.
“With today’s order…the people of Flint are one step closer to receiving some of the compensation they deserve,” Pitt said in a statement. “A team of more than 30 highly skilled and motivated lawyers continue to work to hold the two remaining private engineering companies and the EPA accountable for the grievous harm they caused the people of Flint.”
The two engineering firms that have not yet settled are Veolia North America and Lockwood, Andrews & Newman. Each allegedly failed to give appropriate professional advice, adding to the widespread lead contamination of Flint’s water in 2014. Separate litigation against the U.S. Environmental Protection Agency will continue as well.
At last month’s hearing, 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.
Attorney Corey Stern, appointed to represent individual claimants, said he had 5,000 clients, 2,700 of whom are children. While the settlement was not perfect, he said it had 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 at the December hearing.
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.
The lead contamination crisis began in April 2014 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.
Snyder, Michigan’s former Republican governor, was criminally charged last week in Genesee County District Court for willful neglect of duty for his role in the catastrophe and pleaded not guilty to the allegations.
His lawyer Brian Lennon, a partner at Warner Norcross + Judd, said in a hearing on Monday that the charges were filed in the wrong court. Lennon told Judge William Crawford the indictment is “fatally flawed” because state prosecutors “charged in the wrong venue” since Snyder was not based in Flint during the contaminated-water crisis.