10 years after lead poisoning, Flint residents still haven’t been paid from $626.25M fund

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10 years after lead poisoning, Flint residents still haven’t been paid from $626.25M fund:-LANSING— After a decade of public outrage over lead-tainted drinking water, Flint, Michigan residents haven’t received anything from a $626.25 million lawsuit settlement.

Even though others involved in the litigation have received millions from the 2020 settlement money, months of waiting remain.

10 years after lead poisoning, Flint residents still haven’t been paid from $626.25M fund

Claims administration officials initially predicted completion by March 2023. After that deadline, residents were told they might get compensation around Christmas. Attorney Deborah Greenspan, the “special master” helping the federal judge oversee the case, stated on Feb. 28 that initial claims review will be completed by June, followed by reconsideration and appeals.

Lawyers who want to collect before victims blame Michigan for arranging the settlement to pay claimants last. The state contributed $600 million to the settlement fund as defendant.

“We… would have preferred a streamlined process that allowed claims to be processed and paid out as they were completed and ensured everyone impacted by the crisis was paid as quickly as possible,” said Flint co-lead class counsel Ted Leopold, a Florida attorney. But “the state insisted on a grid in which the amount of every claim was dependent on every other claim and fairly high levels of documentation were required for each claim.”

Michigan Attorney General Dana Nessel’s spokesman, Danny Wimmer, said Leopold should not disclose closed-door settlement conversations but “disagrees with many of Mr. Leopold’s characterizations.”

The settlement states that no Flint claimant will be paid until all 90,000 claims on behalf of 46,000 Flint residents, including appeals, are settled. Some residents who filed claims have died or fled the state, lawyers said.

That delay is unusual. In many class-action or mass tort lawsuits, cautious payments are made to many claimants during the review process with the expectation of extra compensation when all claims are determined.

Carol Sewell, 68, blames Flint’s poisoned water for her brother’s 2016 near-death and her rheumatoid arthritis. In February, Sewell wrote to U.S. District Judge Judith Levy about her lead-tainted water heater, which she can’t afford to replace.

“We still purchase bottled water with our food stamps,” Sewell said. “I have yet to see rightness or justice in the Flint Water Crisis. It gave me an intractable fury.”

When a state-appointed emergency manager switched Flint’s drinking water supply from Detroit-treated Lake Huron to Flint River water treated at the Flint Water Treatment Plant in 2014, the water crisis began. The interim cost-cutting measure was a disaster. The Michigan Department of Environmental Quality said it failed to mandate corrosion-control chemicals for water treatment. Lead leached from pipes and fixtures into drinking water.

Levy, who approved the settlement in 2021, called the delays “frustrating” at a status conference in Ann Arbour last Wednesday.

“But I think in the end the quality of the work matters more than the speed, because if it were done in a sloppy, careless way, money would just be lost and would go to the wrong people,” said Levy. “That’s the last thing I would want to see happen.”

After Greenspan noted that lawyers “don’t get paid in advance,” Levy said they’ll get paid when Flint people do.

Lawyers will have to wait in queue with residents for most of their $200 million in fees, but they have been paid in advance. Top lawyers in the case, who worked on contingency for eight years, fed up waiting for payment. Levy accepted preliminary payments.

For claims review and other settlement concerns, Greenspan and contractors charge the fund frequently and get paid. Lawyers spent millions more after the deal was authorised.

In addition to pre-paid attorney costs and expenses, the fund has spent over $17 million in claims administration and related fees, more than double the $8 million paid last year, data indicate.

10 years after lead poisoning, Flint residents still haven't been paid from $626.25M fund

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Here are the biggest total payments that have been made from the settlement fund so far:

  • Partial legal fees of $40.8 million and $7.1 million attorney expenses.
  • Houston-based Archer Systems was recruited to set up the claims verification system and undertake other tasks for $4.7 million.
  • $5.5 million to Wolf Garretson LLC of Ohio, one of two primary firms suddenly brought in to aid when Archer’s system had major issues. A portion of that money went to North Carolina-based Pattern Data.
  • Blank Rome, Greenspan’s Washington, D.C. law firm, received $3.8 million.
  • Bringing on Wolf Garretson and Washington, D.C.-based Alvarez & Marsal Disputes and Investigations cost $1.9 million.
  • Miriam Wolock, a Michigan attorney and “master guardian,” received just under $600,000 to protect the children.

Greenspan attributed the delays to the claims process’s complexity, stating that there are 30 compensation categories, many residents have had trouble submitting essential paperwork, and many minors don’t have qualified representatives.

After collecting mountains of data, analysing it, and loading it into a claims assessment programme in January and February 2023, the claims administrator had to resume that task in March 2023 after inspectors found serious accuracy issues with the initial system, Greenspan said. Unexpected issues caused delays and cost increases.

Greenspan said her agency has since obtained 2.6 million water customer billing documents, 77,000 school enrollment records, 40,000 blood lead testing results, 8,300 birth certificates, and worked to simplify property ownership verification.

The Flint case is a “mass tort” case in which youngsters who were lead poisoned are treated more individually than in a class-action lawsuit.

Flint water crisis settlement fund growing

Some excellent news. The money pot grows.

Greenspan told the status conference that settlement fund interest will reach $45 million by mid-April. Other agreements include a $8 million deal with engineering firm LAN that is awaiting final approval and a $25 million provisional settlement with Boston-based Veolia North America, which Flint contracted to work on drinking water concerns.

However, lawyers want a large portion of the generated interest, and potential settlements incur additional fees.

Attorneys have requested $7.9 million in a motion related to the $8 million LAN settlement. On March 14, Levy will debate a motion that would leave Flint residents with $100,000.

Leopold said the proposed expenses “include amounts incurred in litigating the entire case and administering the settlements.” He claimed the proposed Veolia deal will have lower fees and expenses.

LAN case expenditures should be paid from settlement fund interest, according to the motion. Top solicitors have also requested a “common benefit fee” of 6.33%, or $2.8 million of $45 million in earned interest, identical to what was granted from the settlement fund.

Michigan AG: Delays ‘understandably a frustration for victims’

That’s contentious. In June, the Michigan Attorney General’s Office challenged lawyers’ request for a portion of earned interest, arguing it could pay for claims management. In a court brief, Assistant Attorney General Margaret Bettenhausen said any remaining interest should help Flint residents, not attorneys paid hefty fees.

After counsel informed the court that when the Michigan Attorney General’s Office signed the settlement agreement, it committed to take no position on attorney fees and expenses unless asked by the judge, the office has subsequently gone quiet.

No party has commented on the LAN settlement fees and expenses since Levy has not inquired. The special master and judge can review reported expenses privately.

Levy has referred earned interest dispute to Greenspan. The lawyers claim case law favours them. In September, Levy approved a $1.2 million common benefit fee payment to solicitors from a programming fund, giving them a fair share of the interest.

Michigan Attorney General spokesperson Wimmer said Nessel’s office is not involved in claims administration and the payment delay is “understandably a frustration to the victims.”

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