By Steve Neavling
DETROIT, June 5 (Reuters) - Once teeming with 1.9 million people during its industrial peak in the 1950s, Detroit is now falling apart and attracting dozens of lawsuits that serve as a chronicle of urban decay: exposed manholes, malfunctioning traffic lights and broken sidewalks.
The breakdown in infrastructure is a major reason why the self-insured city is sued more than 700 times a year and has to pay out roughly $26 million to plaintiffs.
A significant portion of the legal tab - about $22 million a year - has resulted from settlements, budget records show. The settlements are negotiated by city lawyers, but ultimately must be approved by the city council.
Now Detroit's emergency manager, Kevyn Orr, an attorney appointed to turn around the city's troubled finances, is seeking to break the pattern.
The state appointed Orr to take over the city's finances to try to avoid Detroit running out of money and filing what would be the largest municipal bankruptcy in U.S. history.
To put an end to the relatively easy money for plaintiffs, Orr in late May rejected a handful of settlements that Detroit's city council had recently approved.
"Kevyn is worried about the frequency with which the city is settling frivolous cases," Orr's spokesman Bill Nowling told Reuters on Tuesday.
"He believes the legal division is not trying enough cases. There have been overgenerous settlements and lawsuits that should have been tried."
Several city council members declined comment or did not return phone calls, and Mayor Dave Bing could not be reached.
The city's law department has 20 attorneys assigned to lawsuits. Only a handful of high-profile or specialty cases are outsourced, city records show.
Most settlements over the past year were for $22,000 or less and involved minor injuries on public property, a review of the cases shows.
Some high-profile cases have been settled in short order. In December 2011, for example, former mayoral aide Rochelle Collins received a $200,000 settlement in a whistleblower case that legal experts criticized at the time.
The settlement came just six months after Collins filed suit and threatened to expose unethical behavior in the mayor's office. Three of the city's nine council members voted against the settlement, saying it was politically motivated.
Orr's intervention is aimed at reducing the number of settlements, particularly in cases deemed to be without merit.
"We're taking a serious look at the cases to determine whether settling is in the best interest of the city," Nowling said. "We're not going to tolerate frivolous cases."
Also on HuffPost:
Michigan Gov. Rick Snyder
Gov. Snyder had campaigned aggressively for Michigan voters to keep PA 4, the emergency manager law. After it was repealed, a similar law was passed through (along with right-to-work and other legislation) in December. In a Nov 2012 interview with The Huffington Post, Gov. Rick Snyder argued against cities in Michigan like Detroit filing for bankruptcy. "Theoretically, if you were able to do Chapter 9 in an efficient fashion, in a structured fashion, where you had everything lined up, you could actually address some of those issues, probably in a more total approach. But the track record, so far, has been pretty dismal. And the associating stigma of what it does, trying to get people to go there in the interim, is even worse."
Andy Dillon, Treasurer, State of Michigan
Dillon headed the six-member financial review team which declared the city in a state of emergency. <a href="http://www.detroitnews.com/article/20130219/METRO01/302190407">At a press conference</a> to announce the team's findings, Dillon said, "We believe there's a financial emergency in the city and that there's no plan in place to correct the situation." "We gave the city every chance to avoid the outcome we're recommending to the governor today."
Detroit Mayor Dave Bing
An hour after a state-appointed financial review team unanimously declared that the city of Detroit was in a state of financial emergency, Mayor Dave Bing issued a statement that began with an admission that, yes, the city's finances are in a poor state. "Certainly I am not surprised by the findings of the State’s financial review team. My Administration has been saying for the past four years that the City is under financial stress. If the Governor decides to appoint an Emergency Financial Manager, he or she, like my Administration, is going to need resources -- particularly in the form of cash and additional staff."
State Senator Coleman A. Young II
Young issued this statement following the state review team's findings. “This is going to be a usurping of our democracy. I feel this was a set-up from the word go. If the State listened to reform measures suggested by citizens in the City of Detroit, we would not be in this situation. How can the State fix something they are culpable for? I am as outraged as I am heartbroken about this systematic dismantling and take-over of our City. The people will not let this stand, nor will I.”
Charles Pugh, Detroit City Council President
In 2011, Pugh said that city officials had the power to fix the city's finances. "“Talking about an emergency manager is a waste of breath,” <a href="http://www.mlive.com/news/detroit/index.ssf/2011/11/detroit_city_council_president_5.html">Pugh told MLive.</a> “We don’t need it. We’re working on a plan.”
State Sen. Bert Johnson, D-Detroit
In an <a href="http://www.mlive.com/opinion/index.ssf/2012/09/michigan_decides_2012_guest_co.html">editorial written in Sept. 2012 for MLive.com</a>, Sen. Bert Johnson urged Michiganders to vote "no" on the referendum over PA 4, the emergency manager law. "The presence of an EM eliminates, for the duration of the appointment, the rights of voters to elect local officials and displaces them at the time of the appointment. Governments occupied by an EM are inevitably subject to new costs and expenses, forced upon them by the state, without access to new revenue. Simply put, EMs are undemocratic individuals who can singlehandedly craft new laws and operate as an unfunded mandate on local government. PA 4 is unconstitutional and a slap in the face to our Founding Fathers."
L. Brooks Patterson, Oakland County Executive
At a Detroit Economic Club panel held during the 2013 NAIAS that included southeast Michigan's four most prominent political leaders, L Brooks Patterson told the crowd that an EM in Detroit was needed to start "kicking ass and taking names." He also said that <a href="http://www.mlive.com/news/detroit/index.ssf/2013/01/l_brooks_patterson_emergency_m.html">an EM was preferable</a> to the city going through bankruptcy. "You don't want to go through bankruptcy," Patterson said, according to MLive. "You're going to get some judge in Atlanta or somewhere who knows nothing about the region calling the shots."
Jo Ann Watson, Detroit City Councilmember
In a <a href="http://www.detroitmi.gov/CityCouncil/CouncilMemberJoAnnWatson/NewsReleasesandStatements.aspx">Jan. 2012 letter authored by Watson</a>, who has vigorously opposed the appointment of an EM, she offered many suggestions for lowering Detroit's debt. They included a bailout, renegotiating debt service payments and demanding that banks be held legally and fiscally responsible for issuing subprime mortgages that contributed to foreclosures in the city. "Public Act 4 joins the infamous litany of racist, repressive, right-wing, undemocratic policies that challenge the very framework of the Constitution of the United States," she wrote.
Wayne County Sheriff Benny Napoleon
Napoleon has formed an exploratory committee in regards to running for mayor of Detroit in 2013, but has not formally declared his candidacy. He issued a statement following the review team's findings, which included this text. “The worst kept secret in Detroit has been that the financial review team would likely come back with a report that recommends that an emergency financial manager be appointed here in Detroit. “I firmly believe that each and every community has a right to elect local leadership to address that community’s problem and I campaigned to repeal Public Act 4 with that belief,” he said. “That said, it is incumbent upon the local officials to recognize that there is a problem; how dire that problem is; and to make the tough decisions to address them. We have not done that here in Detroit, which is why we are having this conversation today."
Gary Brown, Detroit City Council President Pro Tem
Brown issued a written statement following the review team's findings. In part, he said the pace of change in Detroit<a href="http://www.huffingtonpost.com/2013/02/19/detroit-financial-emergency-state-review-team_n_2719112.html"> has been too slow.</a> "The political will has often not been there to make the necessary and bold fiscal reforms.. Without a doubt, we need the support and accountability that a State of Michigan partnership offers. We cannot address our legacy obligations alone. And, as Detroit goes, so goes Michigan."