September 3, 2014 at 5:54 pm

Bankruptcy judge orders mediation on Detroit water shutoffs

A worker for Homrich turns off access to water Wednesday at a home in Detroit. The city restarted shutoffs for nonpayment this week. (Joshua Lott / Getty Images)

Detroit — U.S. Bankruptcy Judge Steven Rhodes has delayed a decision on whether to block Detroit from continuing water shut-offs for residential customers with chronically unpaid bills.

Rhodes on Wednesday ordered a group of plaintiffs suing the city over the shut-offs to go to mediation with Detroit officials and try to resolve their dispute.

After hearing arguments Tuesday over a request for a temporary restraining order, Rhodes said he’s delaying a decision until a hearing at 8:30 a.m. on Sept. 17 to give both sides two weeks to negotiate a settlement.

“The court concludes that in the meantime it is in the best interest of all concerned to order the parties into mediation,” said Rhodes, who is overseeing Detroit’s bankruptcy.

Rhodes appointed the Eastern District of Michigan chief bankruptcy court judge, Phillip Shefferly, to be the mediator in the dispute.

At Tuesday’s hearing, Rhodes had indicated he would rule on the restraining order request by day’s end.

Rhodes’ order Wednesday referenced his original August 2013 order setting a mediation process in Detroit’s bankruptcy, which stipulated all information shared in closed-door negotiations shall remain “privileged and confidential.”

Detroit’s water department stepped up shutoffs in March of those 60 days behind or owing more than $150. About 15,000 customers had service shut off in April-June.

The city has faced international criticism for the shutoffs.

Rhodes has said the shut-off program is bad for Detroit’s reputation.

Alice Jennings, attorney for plaintiffs who filed suit in July to stop the water shut-offs, argued in bankruptcy court Tuesday morning that a restraining order is needed until the city improves its communication with residential customers with medical emergencies.

Jennings said residents with small children, elderly parents or life-threatening medical conditions face an “imminent” danger if their water is shut off.

The Associated Press contributed.