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Here's how Flint families will get paid in water crisis settlement

Beth LeBlanc
The Detroit News

The process of distributing $600 million to more than 33,000 Flint water victims will likely take months to complete, and it's unlikely the money for the settlement will be available until the beginning of 2021. 

The settlement will encompass all Flint children who were younger than the age of 18 at the time of the water switch in April 2014 as well as adults who were personally injured by lead contamination or Legionnaires' Disease or whose property was damaged.

Some businesses also will be able to seek compensation for lost money, according to the preliminary settlement formally announced Thursday.

Flint water crisis protesters gather outside of the Michigan State Capitol in January 2016. So far, more than 33,450 people have filed a claim or intend to bring a claim in a $600 million civil settlement of about 100 lawsuits, according to Attorney General Dana Nessel's office. But the number is expected to grow as people figure out whether they qualify for claims.

If the $600 million settlement were divided equally among Flint's roughly 100,000 residents, each would receive $6,000. But that is not the way the agreed-upon settlement will work. 

Under the agreement, not all claims will be treated the same. Payouts from the settlement will be made based on a formula that directs more money to younger claimants and to those who can prove greater injury, a formula that is expected to be outlined more clearly after the settlement is approved. 

Plaintiffs' lawyers in the case said they would "strongly recommend" that Flint residents accept the settlement but "nobody will be forced to participate in this compensation." The distribution process likely will begin within 45 days or soon after the settlement has been finalized, said Michael Pitt, interim class counsel for the plaintiffs. 

"The claims process that will be developed, that's in the works, will be made available without any discrimination, no favoritism and it will feature an opt-out opportunity," Pitt said.

"This means that if the compensation plan is not a good fit for any member of the Flint community, they can exclude themselves from the compensation plan. They can pursue other options against the state."

People interested in filing a claim can do so by calling 866-536-0717, texting "Flint" to 47177 or visiting www.flintwaterjustice.com. As details for filing a claim become available, they will be listed at www.flintsettlementfacts.org.

"As many of us know in litigation, especially civil litigation, we can’t do divine justice," said Ted Leopold, co-lead class counsel. "We can’t go back many years ago and make sure this didn’t happen. ... But we can provide some semblance of justice.”

So far, 33,459 people have filed a claim or intend to bring a claim, according to Attorney General Dana Nessel's office. But the number is expected to grow as people discern whether they qualify under the settlement terms. 

As it stands, about 80% of the settlement will go to individuals who were minors when first exposed to contaminated water, including 65% for kids 6 and younger, 10% for children aged 7 to 11 and 5% for youth ages 12 to 17. While all minors will get a share of the settlement, some will get a greater amount depending on the extent of their injuries.

Of the remaining roughly 20% of the settlement, 15% will go to adults with injuries sustained in the crisis, 3% for adults with property damage, 0.5% for economic losses to businesses and 2% for special education services. 

About $35 million will be set aside in a trust fund for "forgotten children," those in foster care or others who may not have an opportunity to apply for compensation. Those individuals can apply for compensation from the fund when they reach the age of 19. 

The cut of the settlement that will go to the 20 to 30 lawyers involved in the lawsuits for the past five years will be determined by Federal Judge Judith Levy, but Leopold said the portion will be "significant and substantial."

Flint's population at the time of the water crisis was about 100,000, including up to 30,000 minors. Minors are automatically included in the compensation and technically are not considered claimants, but any adults, property owners or businesses are considered claimants.

"Everyone is going to have equal access to this program," Pitt said. "It makes no difference whether you are represented by an attorney or not. ... If you meet the profile, that is what you’re going to get.”

Levy will review all the issues, "gripes" and details of the settlement plan and decide whether the deal is "fair and reasonable" and "in the best interest of the Flint community" in the next 45 days, Pitt said. 

Attorney Michael Pitt

After the settlement is approved and a claims process is established, an administrator will vet claims and supporting documents, and then disperse the money to qualified individuals based on their significance of the injury and the number of people participating in the settlement.

"The first step is to educate," Pitt said. "We’re going to spend a lot of time educating the community about the plan, how it operates and how everybody can participate.”

In addition to phone and text options, individuals will eventually be able to access online claimant forms. Pitt and Leopold, who now have an office in Flint, encouraged residents to use those distance options to comply with COVID-19 restrictions. 

"We're here not only to advocate and help people but those people who have no representation, we're happy to pursue and help them in any way, shape or form we can," Leopold said. 

The Legislature is expected to appropriate the money in one lump sum payment so it is available early next year in an escrow account, Pitt said.

The state is "finalizing" where in the state budget the money will be pulled from and likely won't have the funding details complete until the settlement is finalized, said Tiffany Brown, a spokeswoman for Gov. Gretchen Whitmer. 

Whitmer's office is "confident that the options available to the state are fiscally prudent, and it is our intent to minimize any impact to taxpayers," Brown said. 

The state, which is facing a $1.5 billion to $3 billion shortfall next year, has a small settlement fund from which it usually pays litigation costs, but that fund is dwarfed by the Flint agreement.

As a result, the Legislature will be required to appropriate the money from somewhere in else the state budget. The state's rainy day fund has a balance of about $840 million and the state's annual budget usually rests around $60 billion.

"At a minimum, it certainly poses one more challenge that the residents of Michigan will face as we move forward with the budget soon," said Sen. Jim Stamas, the Midland Republican who chairs the Senate Appropriations Committee. 

eleblanc@detroitnews.com