East Lansing Residents Receive $8 Million Settlement in Franchise Fee Dispute

East Lansing Residents Eligible for Share of $8 Million Settlement in Franchise Fee Lawsuit

EAST LANSING, MI – East Lansing ratepayers who paid the Board of Water & Light (BWL) electric bills between April 2, 2019, and April 30, 2025, can now submit claims to recoup their portion of an $8 million settlement.This landmark resolution follows a Michigan Supreme Court ruling that deemed the city’s imposition of a 5% “franchise fee” on BWL bills an illegal “disguised tax.”

The court found that the city improperly directed these funds from the BWL to its general fund. Eligible residents were notified via text message on Monday, July 14, with a link to a legitimate claims portal.

The settlement website, eastlansingelectricsettlement.com, provides comprehensive details about the lawsuit’s background, legal documents, frequently asked questions, and assistance for filers.

Residents who have not yet received their unique claim ID and PIN,but believe they are eligible,can reach out for support by emailing [email protected] or calling [phone]. The deadline to submit a claim is September 2, 2025.

The settlement website anticipates payouts to be “over $500.00,” though individual amounts may vary based on the total number of claims filed. A final court approval hearing for the settlement is scheduled for October 10. The Abood law firm,which represented the class in the lawsuit,and Simpluris,the administrator of the settlement distribution,have confirmed the legitimacy of the claims process.

What specific timeframe of franchise fee payments qualify residents for a refund in the East Lansing settlement?

Understanding the East Lansing Franchise Fee Lawsuit

East Lansing residents are set to receive a portion of an $8 million settlement stemming from a long-running dispute over improperly assessed franchise fees charged by the city. The lawsuit, initially filed in 2021, alleged that the city overcharged residents for services like cable television, internet, and phone through inflated franchise fees. This victory represents a notable win for consumer rights and accountability in municipal governance. The settlement impacts approximately 25,000 East lansing households.

Breakdown of the Franchise Fee dispute

The core of the dispute revolved around how East Lansing calculated its franchise fees. These fees,typically a percentage of a subscriber’s bill,are meant to compensate the city for the use of public rights-of-way by utility companies. Plaintiffs argued the city improperly calculated these fees, exceeding legally permissible limits and effectively acting as an illegal tax.

Here’s a simplified look at the issues:

Illegal Tax Claim: The lawsuit contended the fees weren’t legitimately tied to the cost of managing public rights-of-way, but where rather used for general city revenue.

Fee Calculation Errors: Allegations included inaccurate calculations of the cost of services provided by utility companies, leading to inflated fee percentages.

Lack of Openness: Residents claimed a lack of transparency in how the city steadfast and applied the franchise fees.

Impact on Utility Bills: The overcharged fees directly translated to higher monthly bills for East Lansing residents.

Who is Eligible for a Refund?

Eligibility for a refund is generally automatic for current and former East Lansing residents who paid franchise fees between January 1, 2018, and December 31, 2023. Specifically:

Current Residents: Refunds will likely be applied as a credit to future utility bills.

Former Residents: Those who have moved since 2018 will receive a check in the mail. Residents must have a valid forwarding address on file wiht the utility companies or the city to ensure proper delivery.

Proof of Residency: While not typically required for automatic refunds,documentation may be requested in specific cases to verify residency during the relevant period.

How the $8 Million Will Be Distributed

The $8 million settlement will be distributed among eligible residents based on their individual franchise fee payments during the class action period (2018-2023). The exact amount each household receives will vary depending on their service provider (e.g., comcast, AT&T) and the duration of their service.

Here’s a projected distribution timeline:

1. Court approval: Final court approval of the settlement was granted in July 2025.
2. Claim Processing: The settlement administrator is currently processing claims and verifying eligibility.
3. Refund Distribution: Refunds are expected to be distributed to eligible residents beginning in late 2025 and continuing into early 2026.
4. notice to Residents: Residents will receive a direct notification outlining their individual refund amount and distribution method.

The Role of Class Action Lawsuits in Consumer Protection

This case highlights the power of class action lawsuits in protecting consumers from unfair or illegal practices. class actions allow individuals with similar grievances to pool their resources and collectively challenge powerful entities, like municipalities.

Key benefits of class action lawsuits include:

Accessibility to Justice: Individuals may not have the financial resources to pursue legal action on their own.Class actions level the playing field.

Deterrence: Successful lawsuits can deter similar misconduct by other entities.

Efficiency: Consolidating numerous individual claims into a single case streamlines the legal process.

Significant Recoveries: Class actions frequently enough result in substantial settlements or judgments, providing meaningful relief to affected consumers.

Similar Franchise Fee Disputes Across Michigan

East Lansing isn’t alone in facing franchise fee challenges. Several other Michigan cities have been subject to similar lawsuits alleging improper fee assessments. these include cases in:

Ann Arbor: A similar dispute resulted in a settlement in 2022.

Royal Oak: Litigation is ongoing regarding franchise fee practices.

Livonia: Residents have filed complaints regarding transparency in fee calculations.

These cases demonstrate a growing trend of scrutiny over municipal franchise fee practices throughout the state.

Resources for East Lansing Residents

City of East Lansing Website: https://www.cityeastlansing.com/ (check for updates on the settlement)

Settlement Administrator: Contact information will be provided to eligible residents via mail and on the city website.

Michigan Attorney General’s Office: https://www.michigan.gov/ag (For consumer protection information)

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