August 20, 2020

Michigan on Thursday agreed to pay $600 million to resolve allegations that its mismanagement exposed residents and property owners in the city of Flint to harmful lead-tainted water, a deal that would route the bulk of the money to impacted minors.

The partial settlement resolves claims in state and federal court against Michigan officials, including former Gov. Rick Snyder, who were accused of switching the source of Flint's water despite information cautioning them against doing so. They were also accused of concealing the public health emergency that stemmed from the lead-tainted water flowing into the homes of the mostly minority community and failing to act to fix it.

"No amount of money can bring full justice to what this community has gone through, and what these individuals in the community have gone through, but in our system of government — our civil system — this is the best that we can do and we hope this will provide some closure and some comfort ... to the community," Theodore Leopold of Cohen Milstein Sellers & Toll PLLC, who represented the plaintiffs, told Law360 on Thursday.

The litigation, which began more than five years ago, took a turn in July when the state high court allowed the proposed class action to proceed. A May ruling by the Sixth Circuit also said Snyder and other public officials could not claim qualified immunity.

Leopold said there could be tens of thousands who receive payouts, adding that it's a relief to have finally reached an agreement for his clients.

A victims compensation fund will be set up and will provide 79.5% of the funds to minors, the bulk of which will go to those who were 6 years old or younger when they were exposed to the lead-tainted water, which can harm childhood development. Another 18% will go to the "adults and property damage" group. Smaller payments will be made to businesses for economic loss and for other relief, according to a summary provided by the state.

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The agreement, the result of 18 months of negotiations, will be widely advertised and will allow residents to submit a claim, according to the plaintiffs' attorneys. About $12 million will also go to the school system, and $35 million will be set aside for minors that don't make an immediate claim but might when they are older, according to Leopold. Attorney fees have yet to be determined.

Payouts will be based on a damage grid that will consider the level of injury, according to Leopold. For example, minors who "show personal injuries, blood or bone lead levels, or who lived in homes with lead service lines" may be eligible for a greater payout, according to Michigan's summary of the settlement.

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In the litigation, plaintiffs alleged that after Flint's water supply was switched, official neglect continued through much of that year, with officials covering up the problem and working to discredit information detailing elevated lead levels in children's blood. Officials eventually acknowledged the issue and the move to switch the source of the city's water was reversed, according to the plaintiffs.

In the July decision by a divided Michigan Supreme Court, Justice Richard H. Bernstein wrote in the lead opinion that the plaintiffs' allegations involve "one of the most troublesome breaches of public trust in this state's history" and brought "catastrophic consequences" for the residents' "health, well-being and property."

The Sixth Circuit also said in May that Snyder and other public officials must face allegations that they violated the constitutional rights of the Flint residents because they were allegedly indifferent to the harm caused by the city's water crisis. The majority said the officials could not claim qualified immunity because they allegedly violated the residents' bodily integrity, a protected constitutional right, and did so with "deliberate indifference."

"At every turn, we defeated the state of Michigan," Leopold said, adding that the Michigan defendants probably submitted 10 to 15 appeals in both state and federal court. "We defeated them in every one of the appeals."

The complete story can be accessed here.