$25M Flint Water Crisis Deal Heads Off Impending Trial

Flint residents and the last remaining engineering defendant in sprawling litigation over the city's water crisis announced Thursday they had reached a $25 million deal that would avoid an upcoming trial, with the engineering firm saying more than half of Flint residents will get a payout.

Veolia North America and a class of 45,000 Flint property owners, businesses and adults announced the settlement separately Thursday morning, less than two weeks before a trial was set to begin in Ann Arbor.The settlement with Veolia brings the total amount of settlements reached on behalf of Flint plaintiffs to more than $655 million, class attorneys said. The class action resulted in a landmark $625 million settlement against the state of Michigan in 2021. The class also settled with private engineering firm Lockwood Andrews & Newnam in October for $8 million. The class sought final approval of that settlement earlier this week.

The class alleged in 2016 that Veolia failed to identify corroding pipes and warn government officials, exacerbating the water crisis. Had Veolia recommended remediation, the class said, the contamination could have ended sooner. The residents have said Veolia had a duty to warn users of the water when it voluntarily took on an investigation of Flint's water.

Veolia has maintained that state and local government actors are to blame for the crisis, saying it was hired as a consultant months after the city switched to using Flint River water. Veolia said it made recommendations to the city, which were ignored by officials. The firm has also alleged that the city withheld data from it.

The agreement includes payment of $1,500 per individual minor claimant represented by class counsel, not to exceed $1.5 million, according to Veolia.

The class and Veolia had been preparing for a monthslong issues trial in front of a Michigan federal jury, scheduled to start Feb. 13. On Thursday, they jointly filed a stipulation to stay the case pending final approval of the settlement, which U.S. District Judge Judith E. Levy granted.

Ted Leopold, co-lead class counsel at Cohen Milstein Sellers & Toll PLLC, said in a statement that the settlement is an important step to help bring a close to the "horrible year of nightmares for the Flint community."

"Our fight for justice continues as we look to hold the EPA, the final bad actor in this long and difficult saga, accountable," Leopold said.

Paul Novak of Weitz & Luxenberg PC, an attorney for the plaintiffs, said Thursday the deal is one more step in getting justice for the citizens of Flint. 

"Our next priority will be to obtain judicial approval of the settlement and, upon approval, expeditiously disseminate settlement funds to the people of Flint," Novak said. 

A Veolia spokesperson said the company welcomes moving forward with the settlement and said it "did nothing wrong in Flint," reiterating its position that the crisis was caused by government officials.

"The people of Flint and all who were affected deserve justice," the company said in a statement. "It is a disgrace that nearly a decade since the crisis was set in motion, still no person who was actually responsible has been held accountable."

The settlement announced Thursday does not resolve claims against Veolia by individual plaintiffs, the firm said, and claims from four individual children continue.

The four children and Veolia and Lockwood Andrews & Newnam went to trial in 2022, with the children alleging the firms fell short of their professional standard of care and prolonged the water crisis. The four children drank Flint water and say they were poisoned by lead.

That landmark bellwether case ended in a mistrial in August 2022 after jurors said their mental and physical health reached a breaking point after six days of deliberation. The trial lasted for six months and featured multiple experts and family members of the children. The jury heard from geochemists, water engineers, neurologists and other experts.

The city was in dire financial conditions and was going through a string of state-appointed emergency managers when it decided to leave its long-standing Detroit Water and Sewerage Department hookup, which took water from Lake Huron, and go instead to the Flint River. Rivers are less chemically stable than lakes, and the Flint River was known to be more acidic in general than Lake Huron, the jury at the time heard. The water ended up leaching lead from the inside of pipes and bringing it into buildings in Flint, the jury was told.

Flint made the water supply switch in April 2014. Residents complained about water quality throughout the rest of the year. The city of Flint hired Veolia months later to conduct a limited-scope drinking water quality analysis. Veolia has said that the city did not provide all the data, including test results showing high lead levels.

In March 2015, Veolia recommended corrosion control, but residents allege Veolia did not warn the city the water was unsafe and needed immediate attention. The residential water supply was switched back to the Detroit Water and Sewerage Department later that year.

Veolia argued at the time that it did what it was hired to do — a weeklong assessment of the water system, followed by recommendations.

The next bellwether trial with the children is expected to begin in October.

In the now-canceled February trial, numerous experts and former officials who were previously named in the suit but have since settled were expected to testify.

The trial was set to address five questions: Did Veolia breach its duty of care? If so, did that breach of care contribute to causing or prolonging the contaminated water in Flint? Were the contaminated water conditions capable of causing harm to Flint residents and properties? Were the harmful water conditions in Flint a result of Veolia or Lockwood Andrews & Newnam's breach? And did any nonparty contribute to causing or prolonging the contaminated water conditions, and if so, at what percentage of fault?

Over the last few months, Veolia and the class were hammering out with the court what topics they could present to the jury and who could testify. Recently, Judge Levy, who would have presided over the trial, ruled that Veolia could point fingers at other nonparties, such as government leaders and federal agencies, for fault in the crisis. Veolia alleged other officials knew about the contaminated water and did not try to immediately fix it or warn residents.

The firm proposed numerous nonparties at fault, such as the U.S. Environmental Protection Agency and some of its staff, U.S. Department of Justice Civil Division attorneys, the state of Michigan, former Gov. Rick Snyder and his senior staff, the Michigan Department of Environmental Quality and more. The jury could have assigned percentages to the nonparties at fault.

Judge Levy also ruled that the jury could have seen data regarding children's blood toxicity levels during the water crisis, even though the data was for children up to 6 years old, and that age group was not part of the class. Judge Levy said that data was among the only evidence available about changes in blood levels during the water crisis class period.

The class could have cited a case study on engineering ethics, a board of ethics review that laid out firms' ethical requirement to report to appropriate authorities any risks to public health and safety. The class also could have included testimony about Veolia's motive or intent to take on the Flint project, Judge Levy ruled last month.

In October, Judge Levy said an epidemiologist proposed by the residents as an expert wouldn't be able to provide testimony about the effects of lead exposure on fetuses in the trial, finding that testimony would not have been relevant to the class claims. In January, the judge also excluded a plaintiffs' expert who was set to testify that the corrosive water caused hair loss and skin rashes, saying the expert's reliance on a single nonrandom study rendered the expert's opinions unreliable.

In a separate action not involving Veolia or Lockwood Andrews & Newnam, civil rights and environmental groups allege the city of Flint is still not done investigating or replacing lead service lines for residents and hasn't determined which homes need additional restoration work. The groups have said the city has failed to implement the terms of a $97 million settlement agreement to replace pipes. The city said the pandemic impacted its ability to conduct outreach and do construction. The city also said last year that it had just under 2% of lead service line replacements to complete.

Criminal charges against Snyder and other officials for their alleged role in the Flint water crisis were unsuccessful. The Michigan Supreme Court in October declined to revive criminal charges against Snyder, effectively closing the state's prosecution of officials accused of botching the city's response to the toxic water.

The Michigan Supreme Court also overturned the indictments of former Michigan Department of Health and Human Services officials Nancy Peeler and Nicholas Lyon and a former aide to Snyder, Richard Baird.

After that ruling, other state courts began to dismiss the charges against other charged officials, including Snyder's former chief of staff Jarrod Agen, former Flint emergency managers Gerald Ambrose and Darnell Earley, and Eden Wells, former chief medical executive at the state Department of Health and Human Services.

According to the city's report last August, Flint has had seven years of complying with lead standards in the Safe Drinking Water Act.

The EPA has proposed replacing all lead pipes throughout the country within the next 10 years.

Pitt McGehee Palmer Bonanni & Rivers PC's Michael Pitt, interim co-lead counsel for the class, said in a statement that the settlement can help the community move forward.

"From the beginning, our efforts were focused on centering the Flint community and ensuring that the outcome was fair and equitable for these amazing people who have suffered greatly over the past few years," Pitt said. "We're glad to see this settlement reflecting our efforts and goal of setting this community up to move forward and rebuild."

Class plaintiffs are represented by Cohen Milstein Sellers & Toll PLLC, Pitt McGehee Palmer Bonanni & Rivers PC, Weitz & Luxenberg PC, Susman Godfrey LLP, Motley Rice LLC, the Law Offices of Teresa A. Bingman PLLC, Bronstein Gewirtz & Grossman LLC, Law Offices of Deborah A. Labelle, the NAACP, Goodman Hurwitz, Trachelle C. Young & Associates PLLC, The Dedendum Group, McKeen & Associates PC, Law Office of Cirilo Martinez PLLC, Shea Aiello PLLC, Cynthia M. Lindsey & Associates PLLC, McAlpine PC and Abood Law Firm.

Veolia is represented by Michael A. Olsen of Mayer Brown LLP and James M. Campbell and Alaina Devine of Campbell Conroy & O'Neil PC.

The case is In re: Flint Water Cases, case number 5:16-cv-10444, in the U.S. District Court for the Eastern District of Michigan.