DETROIT — As the claims process for the $626 million settlement for victims of the Flint water crisis continues and Flint residents wait for their awards, a Detroit area federal judge recently granted the payment totaling $47 million in attorney fees and expenses.
In a court order earlier this month, U.S. District Judge Judith Levy authorized the release of a portion of the attorney fees and litigation costs, meaning law firms involved in the protracted litigation will be reimbursed for expenses incurred during the process as well as a portion of their fees.
Levy's ruling will release $39 million in fees to the law firms who led the settlement negotiations that resulted in a $600 million award from the State of Michigan, along with an additional $25 million contributed by the City of Flint, Rowe Engineering, and Flint's McLaren Hospital. Litigation against those entities and the eventual settlement negotiations took place over four years, spanning two different governors. The settlement deal was announced by Gov. Gretchen Whitmer in August 2020.
The $7 million in expenses will be paid to dozens of lawyers from a number of different firms for direct costs incurred during the litigation process. Those lawyers were required to submit receipts for the money that was spent.
"As set forth in ... the Settlement Agreement, 'Counsel for Individual Plaintiffs and Class Members shall be reimbursed and paid solely out of the FWC Qualified Settlement Fund,'" Levy wrote in the May 12 order, noting that the court had determined the methodology for attorney fees and expenses in an opinion issued in February 2022.
For those affected by the Flint water crisis, it will likely be months before any payments start going out. The claims process, overseen by court-appointed special master Deborah Greenspan, involves claims filed by more than 40,000 residents.
Initially, Greenspan said the claims work would be completed this spring, but delays and problems with a third-party consultant became clear late last year. Now, the process is expected to last through the rest of the year. In recent weeks, award notices have started going out to residents notifying them of the status of their claims and alerting them to any issues that might need to be addressed.
Since the settlement was announced in 2020, many Flint water crisis victims have criticized the size of the award from the State of Michigan, saying it doesn't amount to the harm caused by the water contamination crisis, which was sparked by a botched water supply switch overseen by state and local officials.
Some residents have also criticized the size of the attorney fees, saying those costs eat into an already underwhelming settlement award for victims who are still recovering from the man-made disaster.
Criticism about Flint water crisis-related attorney fees has not been isolated to the civil cases. Criminal defense attorneys from at least a half dozen law firms and consultants from other third-party contractors have made tens of millions of dollars defending former Gov. Rick Snyder and a slate of government officials against criminal charges and investigations carried out by Michigan's Office of Attorney General. The charges have since been dismissed. Those attorney fees have been paid by the State of Michigan.
The release of the attorneys' fees came after a series of judgments and procedural rulings in recent weeks that finalized the settlement. Those recent steps cleared the way for payments to Flint water crisis victims and the lawyers, but a cumbersome claims process marked with delays has left residents still waiting for their awards.
In total, the common benefit fees that will soon be released to the lawyer account for roughly 6% of the settlement. The payments Levy authorized this month will not include contract fees between lawyers and their clients. Those fees will not be awarded until the claims process has concluded and awards are finally dispensed to residents. In a previous ruling, Levy capped contract fees at 25%.
Roughly a dozen Flint residents appealed the judge's ruling on the attorney fees, saying the court used a flawed methodology in assigning the fees. Those appeals were denied this spring by the U.S. 6th Circuit Court of Appeals, with the judges affirming Levy's order.
