New Flint Water Crisis Suit Claims Banks Are At Fault for Underwriting Flint’s Bond

Plaintiffs who were reportedly harmed during the Flint Water Crisis filed a complaint on Wednesday in the Eastern District of Michigan alleging that three banks, J.P. Morgan Chase & Co.; Wells Fargo Bank, N.A.; and Stifel, Nicolaus, and Company, Incorporated were partially at fault for the injuries they received from lead and other pollutants spread through Flint, Mich.’s water system because they underwrote a bond sale which the city used to alter its water system. 

Wednesday’s complaint was a short form complaint, which incorporated charges from the “Master Complaint” found in the consolidated case regarding the Flint water crisis. The plaintiffs in the case consisted of a 51-page list of children, many of whom were involved in the other Flint Water Crisis lawsuits, children were reportedly more impacted more by the lead in the water. The complaint alleges that the plaintiffs suffered lead poisoning, cognitive deficits because of exposure to lead, and emotional damage. 

Although many lawsuits have been filed regarding the crisis, specifically against government agencies and environmental engineering companies, this is the first lawsuit to be filed against banks. Exhibit B to the complaint contained allegations specific to the banks, including that the institutions “underwrote a 2014 municipal bond sale, which aided and abetted the perpetration of the violation of Plaintiffs’ firmly established constitutional right to bodily integrity.” 

The bond sale reportedly enabled Flint to participate in the Karegondi Water Authority (KWA) and build the KWA pipeline, which led to Flint using water that contained lead and other chemicals. The complaint purported that the city would not have been able to participate in the construction of the pipeline without the funds from the banks. 

The document said, “J.P. Morgan Chase, Wells Fargo, and Stifel knew about the farce that was the Administrative Consent Order, in addition to other facts, such as  that the Flint River would be used as an interim source of drinking water for Flint for the foreseeable future, as well as the hazards to human health presented by the Flint River’s highly corrosive water and Flint’s aging network of lead service lines.” 

Purportedly the banks agreed to underwrite the bond, despite their knowledge that Flint’s residents would be “consuming raw, untreated, and deleterious water” after the April 2014 switch of water systems. Without this action from the banks, the city would reportedly have needed to continue purchasing water and the children would not have consumed lead. 

The plaintiffs in this action are represented by Levy Konigsberg LLP.