Lansing to pay $1.25 million after residents sued over sewage that flooded their basements

LANSING — Lansing City Council has agreed to pay a $1.25 million settlement, most of which will go to residents who sued six years ago after sewage flooded their basements.

Lansing resident DeAnna Ray-Brown spearheaded the class-action lawsuit against the city after smelly, untreated sewage flowed into her basement during a June 2013 storm.

The city failed to properly maintain its sewer system, the lawsuit argued, causing feces, dirt, stormwater and other pollutants to flood south Lansing homes.

Most of the settlement money, $950,000, will be divided among the homeowners who sued and their lawyers. The total number of plaintiffs is about 400, Lansing City Attorney Jim Smiertka said.

An additional $300,000 will pay for drain improvements to prevent sewer backflows at plaintiffs' homes.

RELATED: Why millions of gallons of sewage-tainted runoff still flow into Lansing's rivers

'The smell was horrible'

Ray-Brown said it took days to clear four feet of sewage-tainted water from her finished basement after the 2013 storm. The dirty water destroyed carpet, furniture and her washer and dryer, she said.

Ray-Brown, now the owner of a local cheesecake business, was unemployed at the time, which compounded the financial hardship. 

"The smell was horrible," Ray-Brown said. "It was a traumatizing experience."

Most of all, Ray-Brown worried about the health of her anemic and asthmatic teenage son, whose bedroom was in the basement.

After the city initially denied compensation, Ray-Brown said she knocked on more than 200 doors, asking her neighbors to join a class-action lawsuit.

Ray-Brown said she was disturbed to see elderly neighbors living in flooded homes where mold was flourishing.

"It was not about the money," said Ray-Brown, who has lived her entire life in the Coachlight Common subdivision on Lansing's south side. "I felt like we were being ignored."

The settlement, which allows Lansing to avoid admitting fault, still needs to be entered into Ingham County Circuit Court and to be approved by a judge. 

Lansing sues in attempt to recoup money

Meanwhile, Lansing has filed several lawsuits of its own in an attempt to recoup some money.

The city sued its insurer, Starr Indemnity & Liability Company, in 2016 after Starr denied Lansing's claim for compensation at the flooded homes. That case has been tied up, pending the outcome of the class-action suit against Lansing.

Lansing filed another lawsuit this month targeting a company that manages insurance claims on the city's behalf.

Lansing argued Gallagher Bassett Services, Inc. breached its contract with the city because the company failed to give Lansing's insurer proper notice of claims. That failure prompted Starr to deny coverage to Lansing in response to Ray-Brown's lawsuit, the city argued.

Gallagher Bassett is a Delaware-based corporation with an office in East Lansing. A company spokesman declined to comment on the ongoing litigation Tuesday.

The 2019 lawsuit asks for at least $75,000 from Gallagher Bassett, the minimum amount necessary to sue in federal court.

How Lansing will pay for settlement

Assuming Lansing fails to win its lawsuits, the city will cover most of the settlement from its sewer fund.

The majority of revenue to that fund comes from sewer fees, which are set to increase 3% on July 1. Council members Carol Wood and Patricia Spitzley voted against the settlement Monday, arguing it was unfair for ratepayers to shoulder the cost.

Lansing uses its sewer fund to bankroll infrastructure projects, including ongoing efforts to separate storm and sanitary sewers. Lansing's sewer separation project, once billed as a 30-year endeavor, is decades behind schedule.

In parts of Lansing, sewage and storm water still flow through the same pipes. Those combined pipes overflow during heavy rains, causing raw sewage to spill into creeks and rivers.

Just last week, Ingham County health officials warned people to avoid contact with the Grand River, Red Cedar River, Sycamore Creek and Rayner Creek because of bacteria from sewage.

More local news:

Health official: No contact order stands for Grand River, Red Cedar, nearby creeks

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Contact Sarah Lehr at (517) 377-1056 or slehr@lsj.com. Follow her on Twitter @SarahGLehr. 

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