The company hired in 2021 to manage the claims process for the $626.25 million Flint drinking water federal court settlement has resigned, in the latest setback as tens of thousands of Flint residents harmed by poisoned drinking water still wait to get paid.
Archer Systems LLC submitted a terse letter of resignation as administrator and trustee of the settlement fund to U.S. District Judge Judith Levy May 5, noting that under the settlement agreement it could resign at any time for any reason or for no reason at all.
Archer, which is headquartered in Houston Texas, was paid nearly $4.7 million for its initial work but has received no additional payments since March 2022. The company did not state a reason for resigning in the letter.
Levy, the federal judge handling the case from her Ann Arbor courtroom, and Deborah Greenspan, the Washington, D.C., attorney hired to help Levy manage the case as a “special master,” declined to comment.
Levy issued a May 21 order naming Epiq Class Action & Claims Solutions Inc., an Oregon company hired by the court at the end of August to help create a claims payment system, as administrator and trustee of the settlement fund, replacing Archer. Costs related to processing claims now total at least $30.5 million. The court record does not say how much Epiq will be paid.
Archer representatives did not respond to requests for comment made by telephone to a company representative May 27 or a text message sent through a form on the company website the same day. But on May 29, Robert Marcino, chief project officer for Archer Systems, said in an email to the Detroit Free Press that the parties in the case, including Archer Systems, agreed “it was in the best interests of settling claimants” to align the roles of the paying agent and the fund administrator under one company — Epiq.
Archer’s departure is not a complete surprise. Early in 2023, after the company had a lead role in compiling mountains of claims data, processing it, and loading it into a claims review program, officials discovered accuracy problems with the system and essentially had to start over, Greenspan said in earlier court filings. Around that time, three other firms were brought in to assist Archer Systems. Payments to Archer ceased but nearly $9.4 million has since been paid to Wolf Garretson LLC of Ohio, assisted by Pattern Data of North Carolina, and nearly $6.5 million has been paid to Alvarez & Marsal Disputes and Investigations of Washington, D.C., records show.
Between 25,000 and 30,000 Flint residents and businesses who have made verified claims to receive settlements from the massive fund were initially told they could expect to receive payments in March 2023. Those target dates were later pushed back to December 2023 and December 2024. Since then, no new target date has been offered by Greenspan, whose Blank Rome law firm has so far been paid just under $8 million from the settlement fund.
“It’s not fair to the people of Flint; they deserve better,” said attorney Val Washington, a Flint resident and retired Genesee County circuit judge who has clients in the case and said he still purchases distilled water to brush his teeth.
“The frustration level is very high. You’ve got people who should have gotten paid who have now died. You’ve got other people who should have gotten money who have moved away. It’s very frustrating and disappointing for those of us who still live here in Flint.”
Flint’s water crisis began when a state-appointed emergency manager switched the city’s drinking water supply. It was intended as a temporary, cost-saving measure, but turned out to be a disastrous mistake. The Michigan Department of Environmental Quality has acknowledged it failed to require needed corrosion-control chemicals as part of the water treatment process. Before the 2014 water switch, the Flint City Council had backed a plan to join the Karegnondi Water Authority pipeline to Lake Huron as a new water source, though members have said they thought the city would stay on Detroit water until the new pipeline was completed.
After Flint River water began flowing, corrosive water caused lead to leach from joints, pipes and fixtures, causing a spike in toxic lead levels in the blood of Flint children and other residents.
The combined mass tort and class-action suit was filed in 2016 and Levy gave final approval to the settlement in November 2021. But approving and paying claims has dragged since then.
On the positive side of developments, while a $600 million settlement from the state of Michigan still makes up the bulk of the settlement fund, Veolia North America, which was hired by Flint as a water consultant during the water crisis, agreed to a $53 million settlement with individual claimants in February after the company one year earlier agreed to a $25 million settlement in the class-action portion of the lawsuit and a $1.3 settlement with close to 900 individual claimants who were minors at the time of the lead poisoning. Another Flint contractor, Lockwood, Andrews & Newnam, hired in 2013 to help get the city’s water treatment plant ready to treat water from the Flint River, agreed to an $8 million settlement in 2024.
Those settlements bring the total fund close to $714 million, but those later settlements are tracked in separate accounts and not commingled with the original fund, because they mostly came with different terms about who is eligible to be paid under each.
Those later settlements also came with their own associated attorney expenses and fees. So far, Levy has authorized the payment of more than $14.1 million in attorney expenses, which are in addition to the costs related to the claims process. And although the original plan was that no attorneys would get paid until Flint residents got paid, Levy has authorized the early release of more than $40.8 million in attorney fees, which are expected to total well over $200 million.
Still, there are signs the complex and protracted claims process might be nearing an end.
In April, Levy authorized the first payment to an actual victim of the 2014 lead poisoning of Flint’s drinking water supply — $1.5 million to survivors of a Flint resident who died from Legionnaires’ Disease, a serious type of pneumonia linked to the water crisis. The court order for the wrongful death claim did not identify the person who died or their personal representative “to protect the privacy of claimant and any surviving heirs,” according to court records. As many as nine other wrongful death claims related to Legionnaires’ Disease are being processed. Court records say attorney fees and potential liens from creditors will reduce the amounts heirs ultimately receive from those awards.
But the wrongful death cases represent only one small category of multiple types of Flint claims. For the vast majority of claims, many of which could be awarded as little as $1,000 unless the claimant can show specific injuries, all claims must be fully vetted, processed and approved and all appeals must be finalized, before any claims are paid.
That provision of the settlement agreement, which is not standard in large mass tort and class-action lawsuits, has drawn criticism from at least one of the attorneys involved.
“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 and as quickly as possible,” Ted Leopold, a Florida attorney who is co-lead class counsel in the case, told the Free Press in 2024. However, “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.”
Danny Wimmer, a spokesman for Attorney General Dana Nessel, whose office played a major role in negotiating the settlement agreement, declined to comment last year on Leopold’s criticism, except to say Nessel “disagrees with many of Mr. Leopold’s characterizations.”
Interest earned on the settlement fund — pegged at $45 million a little over one year ago — could also help Flint victims. Lawyers in the case have asked for close to a one-third cut of the interest, on top of their share of the settlement fund, a request Nessel’s office has opposed. Levy in 2023 referred that dispute to Greenspan, who has yet to make a recommendation to the judge.
Litigation continues against the U.S. Environmental Protection Agency, which on May 19 lifted a nearly decade-old emergency order related to Flint drinking water standards.
Flint switched back to Detroit water in October 2015, but the risk remained because of damage to the city’s water distribution infrastructure.
Work to replace lead service lines to Flint households, funded largely by the federal and state governments, is largely completed.
This story has been updated to add new information.
Contact Paul Egan: 517-372-8660 or pegan@freepress.com.
This article originally appeared on Detroit Free Press: Claims manager resigns from Flint civil settlement as residents wait to get paid
Reporting by Paul Egan, Detroit Free Press / Detroit Free Press
USA TODAY Network via Reuters Connect
