Judge clears way for $15M reduction to Flint water settlement

Beth LeBlanc
The Detroit News

The Flint City Council cannot prevent McLaren Hospital from lowering its contribution to the Flint water crisis settlement by $15 million, a federal judge ruled Wednesday. 

U.S. District Judge Judith Levy in her ruling Wednesday said, if it wished, McLaren Health Care could decrease its contribution to the $641.25 million settlement from $20 million to $5 million, despite objections from the City Council. 

The settlement, which still is pending final approval from Levy, is made up of a $600 million share from the state of Michigan, $20 million from the city of Flint, $20 million from McLaren Regional Medical Center and $1.25 million from Rowe Professional Services Co. 

The Flint water tower near the Flint Water Plant in Flint, Mich. on Jan. 13, 2021.

In recent weeks, McLaren asked the court for the reduction because many of the plaintiffs with claims against McLaren had not joined the settlement. The plaintiffs unwilling to join the settlement means the hospital system will have to engage in ongoing litigation and potentially additional money judgments even after the settlement is complete.

The city of Flint, a defendant in the civil litigation, had argued that because it is party to the settlement, the City Council would need to approve McLaren's change for it to take effect. When the council was presented with a resolution to approve McLaren's changes, it tabled the issue and insisted the hospital system couldn't change its contribution until it voted. 

Levy discarded Flint's arguments Wednesday. 

"The Flint City Council may not halt a codefendant from contributing funds to the QSF (Qualified Settlement Fund) for the benefit of the plaintiffs, nor may the Flint defendants prevent this court from interpreting the terms of the AMSA (Amended Master Settlement Agreement)," she wrote. 

Participation in the agreement was voluntary, Levy said, and the Flint City Council voted in favor of contributing $20 million in December 2020, independent of McLaren's initial decision to contribute $20 million. 

"None of the settling parties are imposing something 'new' on the Flint defendants," Levy wrote. "To the contrary, the Flint City Council is seeking to impose its own non-decision on other parties, including the individual Flint defendants."

Levy said Flint's objection to McLaren's decision is "difficult to understand," especially considering many of the individuals who would benefit from McLaren's $5 million contribution "are also city council members' own constituents — and even some of its members."