City of Detroit $4.45M Water Rate Class Action Settlement

Individuals who received water services from the City of Detroit between Aug. 1, 2022, and May 31, 2026, and used an average of at least 1.0 MCF (thousand cubic feet) of water per month during that period may be eligible to claim a refund from a class action settlement.

The City of Detroit agreed to pay $4.45 million to settle a class action lawsuit alleging the city’s tiered water rates resulted in certain higher-volume users being charged more than the actual cost of providing water service.

Who are the class members?

Class members must meet the following criteria:

• They are a person or entity who received water services from the City of Detroit between Aug. 1, 2022, and May 31, 2026.
• They used an average of at least 1.0 MCF of water per month during that period.
• They paid or incurred charges for water service to the City of Detroit.

How much are City of Detroit settlement payments?

The settlement administrator will distribute the net settlement fund among eligible class members based on the proportion of water charges each paid during the class period compared to the total charges all class members paid. The settlement divides eligible class members into three groups based on their customer status and account balance as of Aug. 26, 2026:

• Group 1: Current water customers as of Aug. 26, 2026, with outstanding balances equal to or greater than their pro rata share of the net settlement fund will receive a credit against their outstanding balance.
• Group 2: Current water customers as of Aug. 26, 2026, with no outstanding balance or with an outstanding balance less than their pro rata share of the net settlement fund will receive a credit applied to future water charges.
• Group 3: Former water customers as of Aug. 26, 2026, who do not have an outstanding balance equal to or exceeding their pro rata share will receive a pro rata cash refund.

In addition to monetary compensation, the settlement also includes a temporary reduction in the Tier 2 water rate from Jan. 1, 2027, through June 30, 2027. The city will reduce the Tier 2 rate by $6.22 per MCF, bringing it to $44.99 per MCF during this period. This rate reduction is valued at approximately $39 million for the affected period and subsequent years through June 30, 2030, based on historical Tier 2 usage.

How to claim a settlement payout

• Current water customers as of Aug. 26, 2026, do not need to take any action. The City of Detroit will automatically apply their credit to their water account over a six-month period.
• Former water customers as of Aug. 26, 2026, must submit a claim to receive a cash refund. They can file a claim online or download and print a PDF claim form.pdf), complete it and mail it to the settlement administrator. Those submitting claims for more than one account or service must submit a separate claim form for each.

Settlement administrator's mailing address: City of Detroit Water Settlement Administrator, 1650 Arch St., Suite 2210, Philadelphia, PA 19103

The claim deadline is Aug. 26, 2026.

What proof or documentation is necessary to submit a claim?

Current water customers with valid claims do not need to take any action.

Former customers seeking a cash refund must submit a claim form and provide:

• Their name and contact information
• The water and sewer service address if different from their mailing address
• The period during which they paid charges to the City of Detroit
• Their water and sewer account number, if known
• The login ID and PIN from the settlement notice they received

Those submitting claims for more than one account or service must submit a separate claim form for each.

Payout options

• Current customers will receive a credit applied to their water account over a six-month period.
• Former customers will receive a cash refund by check mailed to the address provided on the claim form.

$4.45 million settlement fund

The $4,450,000 settlement fund will include:

• Settlement administration costs: Amount not specified
• Attorneys’ fees: Up to $1,780,000
• Attorneys' expenses: To be determined
• Service award to class representative: Up to $20,000
• Payments to eligible class members: Remainder of the fund

Important dates

• Deadline to opt out: Aug. 21, 2026
• Deadline to file a claim: Aug. 26, 2026
• Fairness hearing: Sept. 25, 2026

When is the Ajax Metal Processing v. City of Detroit payout date?

The settlement administrator will issue credits and refunds once the court resolves any appeals and grants final approval of the settlement.

Why is there a class action settlement?

The lawsuit alleged the City of Detroit’s tiered water rates resulted in certain high-volume users being charged more than the actual cost of providing water service.

The city denied these allegations but agreed to settle to avoid the risks and costs of continued litigation.

Sources

1. Class notice.pdf)
2. Settlement website FAQ
3. Settlement agreement.pdf)