Case 2:16-cv-10277-DML-SDD ECF No. 203 filed 10/01/18 PageID.

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IN THE UNITED STATES DISTRICT COURT

FOR THE EASTERN DISTRICT OF MICHIGAN
SOUTHERN DIVISION

CONCERNED PASTORS FOR SOCIAL

ACTION, et al.,
Case No. 16-10277
Plaintiffs,
v. Hon. David M. Lawson

NICK A. KHOURI, et al., Mag. J. Stephanie Dawkins Davis

Defendants.
/

PLAINTIFFS’ POST-HEARING BRIEF REGARDING MOTION TO

ENFORCE PARAGRAPHS 29 AND 30 OF SETTLEMENT AGREEMENT
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After the Court’s August 21 hearing on Plaintiffs’ three motions to enforce

the Settlement Agreement, Plaintiffs obtained new information that renders the

relief requested by Plaintiffs in this motion no longer necessary. For the first time,

and despite many prior requests to the City for the information, Plaintiffs obtained

results from the statistical model developed by a team at the University of

Michigan predicting the likely number of lead and galvanized steel service lines in

Flint. Also after the hearing, the City provided Plaintiffs with new, revised

information about its average costs of completing excavations and pipe

replacements.

Based on this new information, Plaintiffs no longer dispute the specific

conclusions in the City’s Paragraph 30 Report that (i) it is not reasonably likely

that there were more than 18,000 lead and galvanized steel service lines at eligible

households in Flint as of March 2017; and (ii) the Agreement’s $97 million in

available funding “can reasonably be expected to cover the costs” of completing

the required excavations and replacements under the Agreement. See Settlement

Agmt. (Agmt.) ¶ 29, ECF No. 147-1. Although Plaintiffs still disagree with other

parts of the City’s analysis and projections, see infra pp. 8-9, in light of the new

information, Plaintiffs withdraw their Motion to Enforce Paragraphs 29 and 30 of

the Agreement (ECF No. 166).1

1
Plaintiffs notified counsel for the City of their intent to withdraw this motion.

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Plaintiffs recognize that these developments may trouble the Court;

Plaintiffs are themselves troubled that substantial judicial and party resources were

invested in resolving this matter. While Plaintiffs regret that the investment was

necessary, the dispute would not have arisen had the City timely produced

accurate, complete, and up-to-date information in response to Plaintiffs’ reasonable

requests. Cf. Agmt. ¶ 118 (requiring the City to timely respond to Plaintiffs’

information requests).

Unfortunately, however, the information exchanged as part of this motion

practice confirms a new violation of the Agreement: the City is conducting

thousands of excavations at homes for which City records indicate full copper

service lines, rather than at homes that are likely to have lead or galvanized steel

service lines. The City’s misfocus on excavating lines that are most likely not

hazardous undermines the Agreement’s central purpose: to protect Flint residents

by removing all lead and galvanized steel service lines in the City. The City’s

policy decision not to prioritize excavations at homes most likely served by

hazardous service lines means that, absent a course correction, at least hundreds of

lead and galvanized steel pipes will likely remain in the ground and in use after the

City completes its 18,000th excavation. Plaintiffs plan to promptly pursue the

Agreement’s dispute resolution process to address and remedy this violation.

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STATEMENT OF FACTS

I. The August hearing on Plaintiffs’ motions to enforce

On August 21, 2018, the Court heard argument and witness testimony

concerning Plaintiffs’ three motions to enforce, including their motion disputing

the conclusions in the City’s Paragraph 30 Report. See Notice of Mot. Hr’g, ECF

No. 182; Notice of Mot. Hr’g, ECF No. 178. At the hearing, Plaintiffs’ data

scientist, Dr. Stacy Woods, testified that the City failed to “use the data that it had

available to it” to make a “reliable,” statistically sound prediction about the likely

number of hazardous service lines in Flint. Aug. 21, 2018 Hr’g Tr. (Tr.)2 42:16-18;

see id. at 26:18–27:7, 42:21–43:10.

Dr. Woods also explained the efficacy of using a statistical predictive model

to evaluate all the data available to the City to generate reliable predictions about

the number and locations of lead and galvanized steel service lines in Flint. Id. at

67:10-19; see Woods Decl. ¶¶ 18-20, ECF No. 166-3. She explained, however, that

she did not have data on all of the variables the City claimed would influence the

likelihood of finding lead and galvanized steel service lines. Tr. 64:5-15. For its

part, the City denied that it had access to any predictive model, including the

model created by a team at the University of Michigan. Id. at 104:8-13. Contra

2
Relevant excerpts of the hearing transcript are attached as Exhibit 1 to this
Post-Hearing Brief.

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Schwartz Decl. ¶¶ 13, 16, 24-25. The Court indicated that if Plaintiffs obtained

enough information to conduct a statistical modeling exercise to answer the

questions in Paragraph 29, they could “present evidence” to further pursue their

motion to enforce. Tr. 142:20-24.

The parties’ witnesses also testified about how the City is prioritizing

addresses for excavations. A few days before the hearing, the City produced a

spreadsheet reflecting the results of its 2018 excavations through July 31, including

information about the composition of each service line indicated by the City’s

historical records. Suppl. Chaudhary Decl. Exs. 1, 1-1, ECF No. 187-2. Although

Alan Wong, the manager of the City’s pipe replacement program, confirmed on

cross-examination that the City “reviews historical water card data before it

conducts an excavation,” Tr. 121:17-19, as of July 31, the City had nonetheless

conducted 75% of its 2018 excavations at addresses where historical records

showed full copper service lines, id. at 32:2–33:4. The City’s dataset shows that

records indicating full copper service lines have been correct more than 99% of the

time. 2d Suppl. Woods Decl. ¶¶ 4-5, ECF No. 187-3. In short, the City has made

what its witness called a “policy decision,” Tr. 124:18, 130:1-8, not to prioritize for

excavation those homes in Flint most likely to need service line replacements.

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II. Newly obtained analysis from the Schwartz and Abernethy model

After numerous unsuccessful attempts before the August 2018 hearing to

obtain information concerning the University of Michigan statistical model, see,

e.g., Tr. 113:23–114:1, Plaintiffs were able to speak with Professors Eric Schwartz

and Jacob Abernethy after the hearing for the first time. Drs. Schwartz and

Abernethy confirmed that they had developed a statistical model in 2016 to predict

the presence of lead and galvanized steel service lines at homes across Flint, as

described in the attached declaration from Dr. Schwartz. Schwartz Decl. ¶ 12. Drs.

Schwartz and Abernethy also stated that in both 2017 and 2018 they provided the

model results to the City and offered to help the City use the model’s predictions to

guide its excavations. See id. ¶¶ 16, 19-25. But see Tr. 145:16–146:13 (statement

of the City’s counsel William Kim that the University of Michigan professors had

not provided the modeling data and algorithms to the City). Plaintiffs then

provided the professors with updated outcomes from the City’s 2018 excavations,

as recently provided to Plaintiffs by the City.

Drs. Schwartz and Abernethy ran their model with the updated data for the

subset of households in Flint with active water accounts (i.e., “replacement eligible

households,” see Agmt. ¶ 11). Schwartz Decl. ¶ 39. The model predicts that there

were likely 10,836 lead and galvanized steel service lines in Flint at replacement

eligible households as of March 2017. Id. ¶ 41.

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This did not end the inquiry, as Paragraph 29 of the Agreement also requires

the City to evaluate whether $97 million in available funding “can reasonably be

expected to cover the costs” of completing the required excavations and

replacements. Agmt. ¶ 29. Using the cost assumptions in the Paragraph 30 Report,

Drs. Schwartz and Abernethy calculated that it will cost the City $72.9 million to

complete an additional 91573 excavations and replace 48094 pipes. Schwartz Decl.

¶¶ 51-52. Adding this figure to the $37.25 million the City spent as of February

2018, see Par. 30 Report 2, ECF No. 172-4, yields a total cost of more than $97

million. If that figure were accurate, it would trigger a requirement for the State to

seek additional funding for pipe replacements under Paragraph 32. Agmt. ¶ 32.

Following the hearing, however, the City informed Plaintiffs that their actual

costs in 2018 were dramatically lower than the costs predicted in the Paragraph 30

3
Plaintiffs’ cost calculations reflect the remaining required work as of the date
of the City’s Paragraph 30 Report (February 2018), notwithstanding that the City’s
excavations and pipe replacements (and thus expenditures) have been ongoing
since that time. As of February 2018, the City had conducted 8843 excavations.
Thus, as of that time, the City was required to complete an additional 9157
excavations (18,000 – 8843 = 9157). The City’s reported figure (9173) is based on
a subtraction error. Pls.’ Mot. to Enforce Settlement Agmt. (Mot.) 7-8 n.6, ECF
No. 166.
4
This figure (4809) reflects the difference between the model’s total predicted
number of lead and galvanized steel service lines at eligible households as of
March 28, 2017 (10,836), and the number of pipe replacements completed between
that date and date of the Paragraph 30 Report’s submission in 2018 (6027). See
Schwartz Decl. ¶ 41.

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Report. Compare Par. 30 Report 4 fig.1, ECF No. 172-4 (showing 2018-2019

averages for entries in “UNIT COST” column of $2605 per “Supplemental

Excavation” and $4985 per “Service Line Replacement”), with Tallman Decl. Exs.

A (reporting $1788.37 per traditional excavation), and B (reporting $4197.86 per

pipe replacement). The City expects its excavation and replacement costs to remain

low for the duration of 2018 and into 2019. See Tallman Decl. Ex. C.

The professors therefore also calculated what the remaining estimated

excavations and pipe replacements will cost using the City’s new cost figures.

Based on those revised cost numbers, the City will need roughly $53.1 million to

complete 9157 more excavations and 4809 pipe replacements. Schwartz Decl.

¶¶ 53-55. Adding this figure to the $37.25 million the City spent prior to 2018

yields a total projected cost of less than $97 million. Id. ¶ 55.5

Both of these budget projections assume that the City will (a) prioritize its

excavations towards those homes most likely to be served by a hazardous service

line so as to maximize its “hit rate” and uncover all 4809 remaining service lines

needing replacement; and (b) conduct only traditional excavations (not cheaper

hydro-excavations), as is the City’s current practice. Tallman Decl. Exs. D, E.

These assumptions are important because, as discussed below, the City is not

presently prioritizing excavations at homes most likely to have lead and galvanized

5
$53,056,675 + $37,250,000 = $90,306,675 (less than $97 million).

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steel service lines.

The professors’ new modeling confirms that the City is not conducting its

excavations at addresses for which the information available indicates the presence

of lead and galvanized steel service lines. Schwartz Decl. ¶ 60. To the contrary, the

data indicates that the City’s 2018 excavations found lead and galvanized steel

pipes at a lower rate than the City would have found if it were randomly

conducting excavations. Id. ¶ 62.

ARGUMENT

Based on the new information from the Schwartz and Abernethy model, and

the City’s newly revised cost estimates—both obtained after the hearing—

Plaintiffs no longer dispute the City’s conclusions that (i) it is reasonably likely

that fewer than 18,000 lead and galvanized steel service lines existed in Flint at

eligible households as of the Agreement’s execution; and (ii) the Agreement’s $97

million in guaranteed funding can reasonably be expected to cover the costs of

completing the City’s excavation and pipe replacement obligations under the

Agreement. Thus, there is no longer a disagreement as to the validity of these two

conclusions in the City’s Paragraph 30 Report, nor a continuing need for the relief

Plaintiffs’ motion initially requested—that the City be required to hire a statistician

and revise its Report to reflect a data-driven analysis. See Mot. 27-30.

This new information, however, has revealed a significant problem with the

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City’s pipe replacement program. The City is failing to conduct excavations at

addresses where it should expect to find lead and galvanized steel service lines. See

supra pp. 4, 7-8. Instead, the City is conducting thousands of excavations where it

should expect to find—and more than 99% of the time does find—full copper

pipes. Supra p. 4. The City’s failure to excavate at those addresses most likely to

have pipes needing replacement explains why its actual “hit rate” for 2018 has

been so low (only 16% as of August 1). See Aug. 3, 2018 Wong. Decl. ¶ 10, ECF

No. 181-1. Indeed, the City’s failure to target lead and galvanized steel service

lines has artificially deflated its hit rate. See Tr. 33:22–34:13, 65:10-23;

cf. Schwartz Decl. ¶¶ 62-65.

The City’s approach is both troubling and puzzling, given its presumed

interest in promptly replacing all lead and galvanized steel lines. It also violates the

Agreement and undermines the parties’ central intent in executing it. See Tallman

Decl. Ex. F; City Defs.’ Resp. to Pls.’ Mot. to Enforce Settlement Agmt. 7, ECF

No. 157 (referring to replacement of all lead and galvanized steel service lines in

Flint as the Agreement’s “main purpose”). If the City continues down this path, at

least hundreds of lead and galvanized steel service lines will likely remain buried

and in service when the City completes its 18,000th excavation, leaving many Flint

families in harm’s way. See Schwartz Decl. ¶ 65.

The actions the City must take to remedy this newly identified violation are

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distinct from the relief sought through the instant motion (ECF No. 166). This is so

notwithstanding that the facts underlying this violation overlap with the issues that

prompted the motion relating to the City’s Paragraph 30 Report, and that the

evidence of this violation only emerged through information exchanged between

the parties during litigation over the Paragraph 30 dispute and through testimony at

the August 2018 hearing. Plaintiffs intend to promptly pursue the dispute

resolution process to separately address the City’s failure to conduct excavations

under the Agreement at homes it has reason to believe are served by lead or

galvanized steel service lines.

CONCLUSION

For the foregoing reasons, concurrent with filing this Brief, Plaintiffs will

file a Notice withdrawing their Motion to Enforce Paragraphs 29 and 30 of the

Settlement Agreement (ECF No. 166).

Dated: October 1, 2018 Respectfully submitted,

/s/ Sarah C. Tallman /s/ Michael J. Steinberg

Sarah C. Tallman Michael J. Steinberg (P43085)
Natural Resources Defense Council Bonsitu Kitaba (P78822)
20 North Wacker Drive, Suite 1600 American Civil Liberties Union Fund
Chicago, IL 60606 of Michigan
(312) 651-7918 2966 Woodward Avenue
stallman@nrdc.org Detroit, MI 48201
(313) 578-6814
Dimple Chaudhary msteinberg@aclumich.org
Natural Resources Defense Council bkitaba@aclumich.org
1152 15th Street, NW, Suite 300
Washington, DC 20005

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(202) 289-2385 Counsel for Plaintiff American Civil

dchaudhary@nrdc.org Liberties Union of Michigan

Michael E. Wall
Natural Resources Defense Council
111 Sutter Street, 21st Floor
San Francisco, CA 94104
(415) 875-6100
mwall@nrdc.org

Counsel for Plaintiffs Concerned

Pastors for Social Action, Melissa
Mays, and Natural Resources Defense
Council, Inc.

Jolie D. McLaughlin
Natural Resources Defense Council
20 North Wacker Drive, Suite 1600
Chicago, IL 60606
(312) 995-5902
jdmclaughlin@nrdc.org

Of counsel for Plaintiff Natural

Resources Defense Council, Inc.

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CERTIFICATE OF SERVICE

I hereby certify that on October 1, 2018, I electronically filed Plaintiffs’

Post-Hearing Brief Regarding Motion to Enforce Paragraphs 29 and 30 of

Settlement Agreement and accompanying exhibits with the Clerk of the Court

using the ECF system.

/s/ Sarah C. Tallman

Sarah C. Tallman
Natural Resources Defense Council
20 North Wacker Drive, Suite 1600
Chicago, IL 60606
(312) 651-7918
stallman@nrdc.org

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