Don't Call Us About Lawsuit Settlement: Royal Oak

ROYAL OAK, MI — Royal Oak residents may have recently received a legal notice in the mail about the settlement of a class action lawsuit against the city regarding how it billed customers for its share of the George Kuhn Drain debt service and other stormwater charges. The city’s message? Don’t call us.

According to Royal Oak officials, the settlement fund is being administered by an agent approved by the court. The city is not involved in processing individual claims or making individual payments and can’t answer questions about the amount of the claim, the date of payment or any other matter regarding residents’ claims.

The city is directing residents to contact plaintiff's attorney, Kickham Hanley PLLC. Royal Oak advises residents to use the website as the legal firm will not accept phone calls in the matter.

The suit stems from how Royal Oak charged customers between 2008 to 2017. Last month, the city decided to settle the lawsuit rather than continuing to fight, the Royal Oak Daily Tribune reported.

City officials said they based charges on water consumption. The plaintiff contends this should have been done as an addition to the property tax bill, based on property value, or by a method on the amount of stormwater runoff generated by a property.

Royal Oak denied the method used was improper but agreed to a settlement of the claim and will change how it bills for the Kuhn debt by July 1, 2018. City officials they will create a settlement fund for the benefit of persons and entities who were water and sewer customers between February 14, 2008 and January 31, 2017. If you received a legal notice, you may be entitled to a portion of the settlement fund, officials said.

Nearby communities such as Ferndale and Birmingham settled similar class action suits by the same law firm on the same issue more than two years ago, paying out $4.2 million and $2.8 million, respectively, the Daily Tribune reported. Royal Oak initially fought the suit and won a dismissal of the case in December 2015 in Oakland County Circuit Court.

The plaintiff, however, won an appeal and forced Royal Oak leaders to rethink their position. “In a worst case scenario the potential amount of money at risk could be $50 million to $60 million dollars,” City attorney David Gillam told the Daily Tribune, adding that rulings in similar cases have favored the plaintiffs.

“It’s a little frustrating knowing we have to settle any lawsuit,” Mayor Michael Fournier told the newspaper, “especially after believing for decades we billed everything the right way.”

Photo by Steve Johnson via Flickr Commons