Grosse Pointe City settles sewage backup lawsuit

By: K. Michelle Moran | Grosse Pointe Times | Published December 21, 2018


GROSSE POINTE CITY — For the estimated 200 or more residents and businesses that experienced basement sewage backups in Grosse Pointe City on Aug. 16, 2016, some legal and financial relief is coming.

At press time, the City and lawyers representing many of the impacted businesses and residents had tentatively agreed on what City Attorney Chuck Kennedy said was a $1 million settlement in a class action lawsuit against the City. Kennedy and John Gillooly, the attorney who represented the City in court, announced the settlement after a closed session that followed the Dec. 17 Grosse Pointe City Council meeting.

“We’re still negotiating some terms,” said Steven Liddle, an attorney representing the plaintiffs, but he added that the case is essentially settled.

City Manager Pete Dame said that once the Wayne County Circuit Court has authorized the distribution fund, the settlement “will be paid in a lump sum to the plaintiffs,” with the City paying about $950,000 and the City’s insurance carrier covering the remaining $50,000. The City’s portion of the settlement is expected to come from the Water and Sewer Fund, officials said.

Gillooly said $500,000 would be paid out in 2018 and $500,000 would be paid out in 2019.

In many of these cases, communities end up paying multimillion-dollar settlements, said Gillooly. Last year, Grosse Pointe Farms settled a lawsuit over 2011 sewage backups for $4 million, for example.

Gillooly said this was “such a good settlement” for all parties.

“We were able to negotiate a per-house number that was significantly lower than what other cities are paying,” he said. “Instead of eating up (the settlement) in attorney fees, let’s put the money in the hands of residents.”

While the exact amount might vary per home, Gillooly said the settlement comes to about $5,000 per home. To be eligible for a claim, impacted residents would have needed to file a claim form with the City by the deadline to do so in 2016. As long as those affected filed a claim, they’re eligible for a portion of the settlement, even if they weren’t one of the plaintiffs in the lawsuit, Gillooly said.

Liddle said he was pleased with the City’s decision to settle.

“The City is doing the right thing,” he said. “Nobody in these types of cases think people are faking damages.”

Instead, Liddle said it comes down to a question of liability. He said municipalities have an automatic right of appeal, but too often, “It encourages governments to kick the can down the road. The City of Grosse Pointe didn’t do that, and I applaud that.”

Gillooly said the 2016 basement backups were “the only (such) event that’s happened in 60 years” in the City.

According to a report released Oct. 17, 2016, by the City, the City’s engineers determined that the Neff Road pump station equipment was working properly and the three large stormwater pumps “did initially work as programmed.” However, the report goes on to state that the control panel on the initial pump overheated, which caused that pump to shut down.

Then, a temporary power outage shut down the remaining two large stormwater pumps. As the report explains, given the loss of the three pumps and “such high intensity rainfall in (a) short period of time, backups began to occur. When the second two pumps were manually restarted per standard protocol, the water level was brought down to normal.” According to the National Weather Service, the storm resulted in 2.78 inches of rainfall being recorded at Detroit City Airport.

Officials said more than 200 property owners reported basement flooding following strong storms that started the night of Aug. 15 and lasted into the early morning hours of Aug. 16.

Although the report notes that the City had gone decades without experiencing major flooding and called this “an extremely rare consequence of a high intensity rainfall in a short duration of time combined with the three pumps going out,” City officials took steps to prevent future backups. These included adopting an “enhanced protocol” to staff the pump station after hours when rain is predicted; repairing the control panel that overheated on the first pump; and planning testing with DTE Energy and updating the controls in response to the power outage.

Victims of the 2016 backups should watch their mail for a letter from Liddle’s firm, Liddle & Dubin P.C., with regard to claiming their part of the settlement.

“The residents will be receiving a notice,” Liddle said.