Michigan reaches over $500M settlement in Flint water crisis civil suits

The state of Michigan has reached a more than $500 million settlement that would put to rest lawsuits arising out of the Flint water crisis, two sources with knowledge of the agreement confirmed Wednesday. 

The sources weren't authorized to speak publicly on the matter, which is a significant development in a years-long legal fight that's garnered national attention.

The state of Michigan has reached a more than $500 million settlement that would put to rest lawsuits arising out of the Flint water crisis, two sources with knowledge of the agreement confirmed Wednesday.

Details about the settlement arising out of the Flint lead-contaminated water crisis are expected to be spelled out Friday. The deal comes after several years of litigation in which Flint residents pursued damages from the state for the lead-contaminated water piped into many households.

The settlement would be one of the largest in the state's history.

Marc Edwards, the Virginia Tech professor and water expert who tested city water at Flint households and helped expose the lead contamination, responded quickly to the news of a settlement. 

"If money is how government expresses sorrow for its crimes — this is a big apology," Edwards said.

Flint Mayor Sheldon Neeley was not part of the settlement discussions, but he said Wednesday that he is "anxiously awaiting closure."

"We’re just staying positive and moving our community forward in a positive direction," said Neeley, who was a city councilman during the water source switch to the highly corrosive Flint River in 2014.

Flint Councilman Eric Mays called the settlement a “good start.” 

“I always believed we would be somewhat successful in the civil lawsuits,” Mays said Wednesday. “I will hold my breath and wait till Friday.

“I believe a major portion of that (money) will go towards kids 5, 6 years old in that age group,” added the councilman, who is a member of the class-action civil lawsuit. “I will be waiting to see what the attorney fee portion might be out of that.”

Ryan Jarvi, a spokesman for Michigan Attorney General Dana Nessel, declined to provide details or confirm a settlement had been reached Wednesday night.

Flint Councilman Eric Mays

Nessel's office and Gov. Gretchen Whitmer's office have been engaged in ongoing mediation effort in Flint water cases for more than 18 months, Jarvi said.

"We and the other parties are bound by a federal court order to maintain the confidentiality of detailed settlement and mediation communications until we reach a certain point," Jarvi said. "We have not yet reached the point where we can discuss a potential settlement."

Nessel said last year that she was in discussions regarding the negotiations with Whitmer and legislative leaders about the settlement, which will likely require lawmakers to appropriate state funds.

The governor's office isn't at the point where it can discuss a potential settlement in the case, Whitmer's spokeswoman Tiffany Brown said Wednesday. 

"Since taking office, the governor's and the attorney general's teams have been working steadily to reach a resolution of the Flint water cases, and they continue to do so," Brown said. 

Through June 2019, Michigan was the subject of 79 Flint related lawsuits in state and federal court. Over the years, some suits have been consolidated for case management purposes.

It is not clear whether the settlement expected Friday resolves all of the civil suits filed against the state or a majority of them.

The state also had filed its own civil suit against engineering companies that had been hired by the Flint government as consultants when the city switched its water source. Nessel has said she expected any settlement from the lawsuits against Veolia and LAN would offset what the state would eventually pay in the state and federal civil litigation.

The settlement comes as the state faces what experts say could be up to a $3 billion hole in next year's budget because of decreased tax revenue during the coronavirus pandemic. 

The state has a fund that it draws settlement money from, but never one of this proportion. The settlement amount calls for the involvement of the Legislature to appropriate more money toward the agreement. 

Between 2015 and 2019, the state has pulled $15.1 million from the Lawsuit Settlement Proceeds Fund — a fund containing settlements in favor of the state — for Flint water investigations and legal defense costs alone, according to a January 2019 report by the House Fiscal Agency.

Between 2008 and 2018, the state paid $441.4 million in settlements across all departments, according to a Senate Fiscal Agency report.

The largest settlement in the past 10 years that comes close to the expected Flint deal appears to be an agreement reached in February requiring the Michigan Department of Corrections to pay $80 million to settle a lawsuit with former juvenile offenders who contended they were sexually abused in Michigan prisons. In 1996, the Corrections Department also reached a $100 million resolution in a separate case in which female prisoners alleged sexual misconduct and harassment by male officers.

Michigan Attorney General Dana Nessel

The Flint lawsuits were prompted after the state had appointed a series of emergency managers to operate the city of Flint after years of financial distress. Under state oversight, the city's water source was switched in April 2014 from water provided by the regional Detroit Water and Sewerage Department system to the Flint River. Flint was switched back to the Detroit system in October 2015.

The more acidic river water was not treated with anti-corrosion chemicals upon the advice of Michigan environmental department experts. A panel formed by former Gov. Rick Snyder found that the series of events led to the acidic river water corroding aging city water lines, resulting in the leaching of lead into the drinking water.

Experts have argued the contamination also resulted in two outbreaks of Legionnaires’ disease that resulted in at least 13 deaths in the Flint area. 

The expected settlement comes nearly two months after a divided Michigan Supreme Court ruled a class-action lawsuit against the state — one of many civil suits filed after the water contamination — could proceed on the argument that Flint residents should be able to recover the value of their property alleged to have been improperly taken due to the contamination. 

Todd Flood, the former special prosecutor for the criminal cases under then-Attorney General Bill Schuette.

Todd Flood, the former special prosecutor for the criminal cases under then-Attorney General Bill Schuette, praised the civil side attorneys and officials “for their steadfast efforts in making sure the victims are whole in the city of Flint and for Gov. Gretchen Whitmer closing this deal and making sure that victims were taken care of.”

“I worked hard with Noah Hall on the civil side of this case to make sure that we could do everything we could,” Flood added. “And that’s the first step in the process of justice."

In June 2019, Solicitor General Fadwa Hammoud dropped all pending criminal cases in Flint in to reboot the probe that had begun under Schuette. Hammoud replaced Special Assistant Attorney General Noah Hall with assistant attorney generals working to defend the state from civil lawsuits.

Nessel had ceded authority over the criminal cases to Hammoud to build a conflict wall between the civil cases, which Nessel oversaw, and the criminal cases, which fell under Hammoud’s purview.

Trials for former Michigan Department of Health and Human Services Director Nick Lyon and former Chief Medical Executive Eden Wells on manslaughter and other charges were dismissed. Charles also were dropped against six other state and Flint officials.

Hammoud’s investigation is still ongoing.

The state needs to shift its focus to criminal prosecutions next and revive charges, Mays said.

"The second step (of justice) will be coming, I’m sure," former special prosecutor Flood said, "with the criminal side of the case. I’m prayerful that that will come.”