Federal judge grants preliminary approval to $641M Flint settlement
U.S. District Judge Judith Levy granted preliminary approval Thursday to the $641 million settlement agreement between Flint residents and the state of Michigan over the city's water crisis.
The landmark settlement is likely the largest in Michigan state history, affecting tens of thousands of people and resolving more than 100 cases in state and federal courts involving the lead contamination of the city's drinking water, Attorney General Dana Nessel's office has said previously.
"Litigation has its benefits, but also its limitations, and the preliminary approval of this settlement does not affect or preclude other avenues of redress," Levy wrote in her ruling. "This litigation — however it concludes — need not be the final chapter of this remarkable story."
Under the settlement, 80% of the money will go to children who were minors when first exposed to Flint River water after the city switched its drinking water source in 2014. Another 18% of the net funds will be spent on claims from adults and for property damage. And about 1% will go to claims for business losses.
Nessel said the preliminary approval moved the historic settlement "one step closer to providing Flint residents with the financial relief that they may have otherwise never received if the legal back-and-forth were to continue in the courts."
"While final approval remains pending, the settlement can provide people with security that their claims will be heard and not tied up in legal proceedings for an indefinite period of time," Nessel added.
Levy's preliminary approval triggers a period when people can decide whether to participate in the deal. If they do, they can "formally object to aspects of the settlement and set forth any reasons why it should not be afforded final approval," the judge's order said.
Under the order, potential participants in the settlement have until March 29 to register. A motion for final approval must be filed by May 27.
"The court has heard from some Flint residents who have expressed frustration with aspects of this settlement," Levy wrote. "Though the court’s role in responding to these concerns is limited, these impacted individuals may join the settlement and still continue in the political process to seek the justice they have told the Court this settlement does not provide.
"Those affected will have to decide whether the risks of litigation — and there are many — outweigh the benefit of a certain resolution with the settling defendants.
Attorney Corey Stern, who is the lead counsel for the plaintiffs and a partner at Levy Konigsberg out of New York, says the preliminary approval offered reckoning for the victims of the Flint water crisis.
“This settlement promises to deliver restitution for the families, and children most especially, whose lives were senselessly and permanently damaged because they were denied their basic right to safe, clean drinking water," he said.
Stern underscored the importance of moving forward with the lawsuits against the remaining defendants, which include the U.S. Environmental Protection Agency and private companies like Veolia, which he said failed to report known dangers, and JP Morgan, which he said loaned money to the city knowing it could result in unsafe drinking water.
Veolia has argued it was retained to address trihalomethane levels in the water more the nine months after Flint's water source was changed and that Flint officials rejected most of the company's recommendations.
"If we want to ensure that what happened in Flint never happens again, then the fight cannot end after this settlement," Stern said. "There are still individuals and companies who have faced no consequences for their involvement in creating and perpetuating the water crisis. There must and will be more justice to come.”
Former Mayor Karen Weaver, who took office in November 2015 at the pinnacle of the Flint water crisis and issued the city's state of emergency declaration, said officials anticipated the judge's settlement pre-approval. The next phase is critical, she said, because now is the time for residents, if they hadn’t already, to take a serious look at what the deal entails and speak out if they do not agree with it.
"You're in the fourth quarter. You’ve got to make some serious decisions,” Weaver said.
For Flint resident Floyd Bell, who has two grandchildren affected by the water crisis, including one who lives with him, reaching the settlement agreement is exciting.
“It's been five and a half or six grueling years and it's been a long time,” Bell said.
He said his grandson was about 18 months old when he was exposed to the water and seemed to be functioning okay until he reached school age, when problems started to develop.
“You can teach him something one day and the next day it's like blink,” Bell said. “It just brings tears to my eyes. All I can do is keep teaching over and over.”
Bell plans to set aside enough money for his grandson when he comes of age, but also expects much of it will go toward educational needs as he grows up.
“We want that money to go to him, and helping him develop, whatever he wants to develop just to help him,” he said.
Cynthia Haynes, who is planning to opt in to the agreement for her 11-year-old son, said she doesn’t believe the settlement amount is enough, but understands the judge’s decision. She said she will be happy to start moving forward with their lives.
“A lot of people ... they’re like, you know, 'we're done. We're just going to get our money, and we're moving,'” she said.
Haynes said she wants to see more help for those with ongoing needs, especially as children like her son approach their teenage years and are likely to face obstacles from passing classes to staying out of the criminal justice system.
“I'm worried about what if he wants to go out and get in trouble for something either minor or big," she said. “It's not over with."
Levy also addressed concerns raised by the Flint City Council, whose members had questioned whether the state's contribution to the agreement was sufficient and whether the settlement should more explicitly cover residents' water bills.
But the court doesn't have the ability to require one of the parties to contribute more, Levy said.
“We know it's not enough money,” Weaver said, adding that some of the documentation needed for individuals to file claims is burdensome and is generating concern that some people will fall through the cracks. “The amount doesn't match what has happened to people in the city of Flint.”
Weaver said she told state officials during her time in office that the price should be $1.5 billion. Residents also deserve health care coverage that follows them even if they leave Michigan, replacement of home plumbing and appliances and changing policy to eliminate food desert issues facing the city, she said.
“You need to look at making this community whole and giving people the resources, the services and support we need and deserve as a result of what happened to us at the hand of government,” Weaver said.
In December, the Michigan Legislature approved bipartisan bills to issue bonds to cover the state’s $600 million share of the settlement. Lawmakers plan to repay the borrowed money through an annual appropriation of $35 million over the next three decades.
Levy also said in her order that settlement funds allocated for property claims will go to those who owned a residence, rented a residence or were obligated to pay water bills for a residence.
"That is, the property fund covers any type of economic-loss claim related to the property — whether it be damage to pipes or payment of bills for water," the judge wrote.
In a Thursday statement, Ted Leopold, court-appointed co-lead counsel and partner at Cohen Milstein Sellers & Toll, encouraged those who believe they may be eligible for financial relief to visit flintwaterjustice.com.
"We want every victim of the reckless and harmful behavior that led to this crisis to achieve and receive a full measure of the justice they deserve," Leopold said.
cmauger@detroitnews.com