3 Flint residents challenge $202 million attorney fee plan

Beth LeBlanc
The Detroit News

A Washington D.C.-based law center representing three Flint residents is challenging the $202 million attorney fee request in the water crisis settlement, arguing the amount should be millions of dollars less. 

Hamilton Lincoln Law Institute's Center for Class Action Fairness is challenging pro bono the proposed attorney fees, which would shift about 32% of the $641 million settlement away from Flint residents and to the lawyers who have represented them over the past several years. The residents are claiming damages for lead contamination of the drinking water and Legionnaires' disease cases linked to the water source shift.

The group is asking U.S. District Judge Judith Levy to demand more transparency regarding the attorney costs that merited the 32% request and allow Michigan Attorney General Dana Nessel to weigh in on the proposed attorney fees. 

The city of Flint switched its drinking water source to the Flint River, seen here with the Flint Water Plant in the background, in April 2014. Three Flint residents are now contesting attorney fees being requested in a $641 million civil litigation settlement agreement.

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Part of the $641 million settlement announced last year stops Nessel's office from commenting on proposed attorney fees unless Levy asks directly for Nessel's input.

The attorney fee proposal has "scant detail" regarding the costs that triggered the request, Hamilton Lincoln Law Institute attorney Frank Bednarz wrote in a Monday filing. The fee plan, Bednarz added, fails to show how such a fee "could possibly be fair to Flint residents who need this money to help them grapple with oft-debilitating, ruinous, and violent consequences of lead exposure for their entire lives."

Bednarz and the law institute's Center for Class Action Fairness were "serial objectors" who failed to recognize the hours of work and existing agreements with individual plaintiffs that prompted the $202 million request, said Hunter Shkolnik, co-liaison counsel for the individuals in the case. 

The Flint settlement is not strictly class action, but a unique mixture of residents in a class action suit, residents who had filed personal injury claims with individual lawyers and unrepresented individuals who joined after the settlement was announced. 

Under the $202 million proposal, about 6% of the total settlement would go to Shkolnik and three other attorneys who served as lead counsel for individual and class plaintiffs in the case. Shkolnik and others representing individual residents would get up to 27% of their client's share. Unrepresented individuals would pay up to 27% of their share for the cost of processing their claims. All of the money would be put into a qualified settlement fund to be meted out to lawyers by a court-appointed special master.

Michigan court rules allow attorneys to charge contingency fees up to one-third of the award in a personal injury or wrongful death suit. But typical fee awards for megafund class action suits range from 10 to 12% of the total settlement, the Center for Class Action Fairness said in the motion. 

"The Legislature in Michigan, not related to the Flint litigation, not related to any other litigation, has allowed attorneys who represent people to receive one-third compensation when it involves personal injury," Shkolnik said. "This is in essence one of the biggest personal injury cases in Michigan historically.”

Corey Stern, co-liaison counsel with Shkolnik, said the majority of the settlement money will go to individually represented residents who agreed with their lawyers ahead of time on contingency fees up to 30%. This situation makes the class action fairness center's involvement in what is largely a case involving individual plaintiffs frustrating, he said. 

"It's misguided," Stern said. "The class action fairness center has no right to opine about the fees of the individuals who hired me.”

Michael Pitt, co-lead counsel for residents involved in the class action suit, argued people upset over the attorney fees should look to the state that repeatedly challenged restitution for Flint residents up to the U.S. Supreme Court and then through 18 months of settlement negotiations.

"During those 18 months, the representatives of the state came to the table with an olive branch in one hand and a sword in the other,” Pitt said. "If the state of Michigan had their way, the people of Flint would have nothing, zero.

"The amount of the attorney fees that was generated was in large part driven by the state of Michigan’s intransigence," he said.

The Center for Class Action Fairness argued the attorneys leading the civil lawsuits over the past several years have failed to provide enough hourly billing and fee sharing agreements to merit a $202 million award. The center also contended the percentage fees for unrepresented individuals participating in the settlement was too high. Such an award would cause repercussions that would "echo for decades," Bednarz said. 

Among the claims in the center's filing is that one firm misclassified dozens of hours of work as having been completed by $500/hour associates when it could have been done by temporary employees.

Earlier this month, Nessel told lawmakers Levy would make the final determination on what attorney fees are appropriate, but she estimated the eventual attorney fees would be much lower than proposed.

Attorneys often start off with a high number with the understanding that the court will eventually lower the amount, the attorney general said.

"For a case of this nature and a settlement of that nature, is that a very high number? I would suggest it seems like it," Nessel said of the $202 million proposal. "If I was Judge Levy, I would be putting a lot of time, effort and energy into making those attorneys justify those fees."

eleblanc@detroitnews.com