Flint, MI– A federal judge’s new ruling will allow McLaren Hospital to reduce their contributions to the Flint water settlement by $15 million, despite lack of support from Flint City Council.
“The McLaren Defendants’ decision to walk away (or not) is the McLaren Defendants’ decision alone,” U.S. District Court Judge Judith Levy wrote in her decision, issued Oct. 20. “Similarly, the McLaren Defendants’ decision to contribute to the settlement, and the amount of the contribution, is between them and Plaintiffs – not the Flint Defendants.”
The settlement, announced in August of last year, would resolve all litigation related to the water crisis against the State of Michigan, the City of Flint, Rowe Engineering, and McLaren Hospital.
The State of Michigan is contributing $600 million, the City of Flint is contributing $20 million, Rowe Engineering is contributing $1.25 million, and McLaren Hospital was originally set to contribute $20 million.
In the settlement agreement, McLaren was given the right to walk away from the settlement if people who allege exposure to Legionella at McLaren Flint Hospital do not register to participate. McLaren considered walking away as many of those people did not register, but proposed a compromise.
McLaren, as well as other settling parties, discussed the possibility of allowing the hospital to remain part of the settlement at a reduced contribution. Rather than $20 million, they would contribute $5 million.
This proposal was brought to the Flint City Council in September. On Sept. 13, the council voted to “drop” the resolution– neither approving it or denying it.
At that time, it seemed as though the council’s lack of approval left McLaren with only two options: contribute the full $20 million, or walk away entirely. That’s no longer the case.
On Oct. 20, Levy issued a 24-page opinion and order essentially allowing McLaren to reduce their contributions. She also ruled that the Flint City Council’s vote is irrelevant.
In her order, Levy wrote that the City of Flint’s assertion that the council must approve the amendment is faulty, and “reflects a misinterpretation of the Amended Master Settlement Agreement and of Michigan contract law.”
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