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Flint, MI– Discussion of the $641.25 million water settlement continued at Thursday night’s recessed council meeting, with several attorneys present to answer the council’s questions.
On Dec. 14, council will have to vote to either approve or reject the city of Flint’s $20 million contribution to the state’s settlement.
At the beginning of the meeting, the council voted to allow each council member 10 minutes to ask questions per round, allowing as many rounds as needed.
Council members asked questions about the risks of not accepting the settlement, lawyer fees, insurance, costs to the residents, and estimations for how much money individuals will actually get. Here are some of their questions and answers:
Does the city have any protection, considering the water crisis happened under the leadership of the emergency managers of the State of Michigan?
Attorney Rick Berg, who is representing the city in the lawsuit, called Councilwoman Monica Galloway’s question a “very complex legal question.”
“The law itself associates the city and the emergency managers,” Berg said. “The emergency manager law says that the city is responsible for the emergency managers and to defend them in the case.”
What happens if the council votes to approve the city’s $20 million contribution to the settlement? Does that get the city out of litigation?
Attorney Corey Stern, who represents individuals injured in the water crisis, said that regardless of what council votes, the court still needs to vote to approve the settlement.
“Voting to put the $20 million in does not guarantee that there’s a settlement for anybody,” Stern said. “Nor does it take away your right or anybody else’s right to oppose all the things in the settlement that you may not like.”
He said the residents of Flint could still say, at some point in federal court, that they are dissatisfied with the settlement and voice their opinions whether they think the structure is unfair or people aren’t getting enough.
“Even if you put the $20 million in, there’s just as good a chance that the judge determines that it’s not a good settlement…but the $20 million is really just a vote to give the city an opportunity to get out,” Stern said.
What happens if the council votes not to approve the contribution to the settlement? What will it mean for homeowners or taxpayers in the city?
“If you vote no, that means that the settlement agreement is null and void for the city,” Berg said. “Basically, the city drops out of the settlement.”
From there, he said, the lawsuits will continue against the city.
“The city will have to continue to defend those lawsuits, which means, of course, that has all of the legal fees that it costs to defend those lawsuits,” Berg said. “It will probably take a number of years before all of those lawsuits get fully resolved against the city.”
Berg said it was possible the city could defend some lawsuits successfully, but could also lose some of them.
“If the city has large judgments against it, in the millions, or even theoretically, billions of dollars, after a number of lawsuits and a number of years…those judgments would have to be put on the taxes,” Berg said. “And that’s what affects the citizens, because they end up paying for the city’s liability because the law requires the city to assess taxes if they can’t pay judgments.”
Berg gave an example:
If Flint is held to be liable to Mr. Bob Smith for $1 million, but doesn’t have that money to write a check, then “the city has to put that $1 million on the taxes.”
Berg said that tax assessment will increase every property owner’s property taxes, “and so would the next judgment, and so would the next judgment, and so would the next judgment.”
Berg said the settlement is valuable to the city and the citizens, “because it avoids that possibility.”
Is it possible that attorney fees in the state of Michigan could be 33.3% of the 641.25 million?
Stern said that was a fact.
Why can’t the lawyers expose the hypothetical numbers of how many people fall into each category and how much money they might get?
Stern gave estimates for how many people would fall into some of the categories:
Children six and under at any point in time during the water crisis, who will receive 65% of funds: 12,000 – 14,000.
Children seven to 11 at any point in time during the water crisis, who will receive 10% of funds: 12,000 – 14,000.
Children 12 to 17 at any point in time during the water crisis, who will receive 5% of funds: 12,000 – 14,000.
Councilman Eric Mays asked the attorneys if they did the math, and said that he came up with his own estimations.
He assumed lawyer fees to be 20-25% of the settlement, and used $400 million as his total fund amount.
“If you got 31,000 water customers, property owners, and you’ve got 3% for that category…have you did the arithmetic of 3% of $400 million? I have,” Mays said.
That math would amount to $387 per property owner. For children six and under, assuming there are 14,000, that amounts to about $18,571 per person. For children seven to 11, assuming there are 14,000, that amounts to about $2,857 per person. For children 12 to 17, assuming there are 14,000, that amounts to about $1,428 per person.
Mays supposed there would be 40,000 adults in the adult category, who are set to receive 15% of the funds. That math amounts to $1,500 per person.
Attorney Theodore Leopold, a court-appointed Interim Co-Lead Counsel in the Flint Water Cases, told Mays that they were waiting for the judge’s preliminary approval of the settlement to provide those hypothetical numbers.
He also said that the “number may change in terms of not knowing what the take rate will be.”
“It’s highly unlikely, there’s gonna be 100% take rate, it’s highly unlikely it’s going to be a 75% take rate,” Leopold said. “But, we should get the numbers as if it is 100%, or if it is probably more realistically…30, 35, 50% take rate.”
What are some examples of how to show proof of injury?
Stern shared some examples of what has been proposed, but said the judge has the power to change them:
- Do they have any records of lead in their blood?
- Do they have any records of cognitive deficits either from their school, testing, or a program that’s been going on in Flint for a number of years?
- Do they have any records of lead in their bones?
- Do they have any records of a home that has lead or galvanized pipes?
- Do their parents swear that they were formula fed when they were babies?
- Do they have any records of premature birth of premature birth weights when they were young?
What input did the team of lawyers get from those affected by the water crisis? Who was responsible for the distribution of the formula for the settlement?
Leopold said from the class action case perspective, there were “10 or so people that represent the entire community.”
He said they had to keep those representatives informed of what they were doing, and then those representatives had to sign off on the settlement saying they believed it was “best for the community.”
Stern said from his perspective, he’s had hundreds of his clients, mostly children, “evaluated by neuropsychologists, pediatricians and economists to try and determine a value,” over the past five years of litigation.
As for the formula, Leopold said Judge Levy appointed four subclass counsel independently to represent adults, property, minors and businesses.
“They negotiated how that money would be split up amongst that group,” Leopold said.
What happens if someone five years from now finds out they’ve had effects from lead poisoning? Can they bring back a lawsuit?
Stern said the short answer to that question is yes, but the longer answer depends on their age.
“There’s a statute of limitations in Michigan that provides how long anybody has to file a lawsuit,” he said. “In Michigan, you have, I think it’s one year after your 18th birthday. So if I was a child that was born…in 2010, and I was exposed to the water in 2014, I would have until my 19th birthday which would be 2029.”
Is this settlement all we can expect to get?
Stern said this settlement is just “part of the puzzle, not the whole puzzle.”
He went on to list different organizations not involved with the settlement but part of the lawsuit.
- He said Veolia has around $400 million in insurance that Flint could potentially get.
- He said The Environmental Protection Agency has thousands of cases filed against it.
- He said the engineering company, LAN, did work for the city and is not in the settlement.
“You can have whatever feelings you do about the total amount or about the $20 million,” he said. “The reality is this is just the beginning.”