This settlement resolves claims that the City of Detroit's tiered water rates charged higher-volume users more than it cost to serve them. It does not cover every Detroit water customer: the class is limited to those who paid charges between August 1, 2022 and May 31, 2026 and averaged at least 1.0 MCF a month. Current City customers receive an automatic account credit with no claim form; former customers had to file for a cash refund.
Current Status
The claim window closes today, August 26, 2026 — but only one group has anything to file. Class members who are still City of Detroit water or sewer customers as of today do not need to submit anything; the City calculates the benefit from its own records and applies it as an account credit over six months. Class members who are no longer City water customers must submit a timely, valid claim by today to receive a cash refund instead. The settlement resolves Ajax Metal Processing, Inc. v. City of Detroit, Case No. 23-015314-CB, in the Wayne County Circuit Court.What Changed Recently?
The claim period for former customers is ending. The Court certified the lawsuit as a class action on September 12, 2025, and the parties have since reached a proposed settlement of $4,450,000, with notice going out to the class and the claim portal live on the official settlement website through August 26, 2026.The City disputes the claims, and no court has found that its water rates were unlawful. The settlement resolves the litigation without any such finding.
What the Case Is About
The City of Detroit bills retail water customers on an inclining block structure: a Tier 1 rate for usage at or below 0.6 MCF, and a higher Tier 2 rate for usage above that. MCF stands for one thousand cubic feet, which is roughly 7,480 gallons.The plaintiff, a Detroit metal processing company, alleged that the tiered structure results in charges to certain higher-volume users that exceed what it costs the City to serve them. That framing matters under Michigan law, where a municipal utility charge that overshoots the cost of providing the service can be challenged as a tax imposed without voter approval rather than a legitimate user fee. It is the same theory that has driven a long line of Michigan municipal utility cases.
The case is Ajax Metal Processing, Inc. v. City of Detroit, Case No. 23-015314-CB, before Judge Annette J. Berry in the Wayne County Circuit Court. The class is represented by Kickham Hanley PLLC of Royal Oak, Michigan. Those allegations remain allegations; the City denies them.
Who Qualifies?
This is the part worth reading twice, because the settlement is narrower than the phrase "Detroit water customers" suggests. You are a class member if you are a person or entity who both:- paid or incurred charges between August 1, 2022 and May 31, 2026 — the Class Period; and
- used an average of at least 1.0 MCF per month during that period.
Both conditions have to be met. The 1.0 MCF monthly average works out to roughly 7,480 gallons a month, which is well above what a typical household uses and comfortably above the 0.6 MCF Tier 1 threshold the case was built around. In practice the class is dominated by commercial, industrial, institutional and multi-unit accounts rather than ordinary residential ones.
The City's own records determine who is in. Receiving the notice means the City's records indicate you meet the criteria, and class members were identified from billing data rather than by self-identification.
How Much Can You Get?
There is no flat per-person figure, and there could not be one: the theory of the case is that Tier 2 volumetric charges overshot the cost of service, so the benefit scales with how much water you were billed for above the Tier 1 threshold during the class period. The larger your billed volume, the larger your share of the $4,450,000.How you receive it depends on which side of one date you fall:
- Class members who remained City water or sewer customers as of August 26, 2026 receive a Credit. The City calculates it and applies it to the account across six months. No claim form, no documentation, nothing to do.
- Class members who were no longer City water customers as of that date had to submit a timely, valid claim to receive a Refund in cash — the alternative being a credit applied to an account that no longer exists.
There is also a benefit that is not a payment at all. The settlement requires the City to temporarily reduce its Tier 2 water rate by $6.22 per MCF from January 1, 2027 through June 30, 2027, bringing the temporary Tier 2 rate to $44.99 per MCF over those six months. That is forward-looking relief on the bill itself, and it reaches whoever is being billed at Tier 2 rates during the window rather than only the class.
What Proof or Notice ID Is Required?
For current customers, none — there is no claim to file and nothing to prove. The credit is derived from the City's billing records and applied automatically.For former customers, the claim form is the requirement, and it is built around identifying the account rather than proving a loss. The calculation still runs off the City's records, so the work is establishing which account was yours and where to send the money, not assembling receipts. The notice mailed to class members is the practical starting point; anyone who believes they qualify but cannot locate theirs should use the contact route on the official settlement website.
What Is the Deadline?
August 26, 2026, for former customers filing online or by postmarked paper claim. The published materials give the date without specifying a cut-off time or a timezone, so treat the date itself as the deadline.Current customers have no deadline to meet, because they have nothing to file. The exclusion and objection deadlines are separate dates set out in the Notice; opting out means keeping the right to pursue your own claim against the City over these charges and giving up any credit or refund here.
How Do You Take Action?
Former customers file on the official settlement website, Detroit Water Settlement, which is the court-authorized site for this case. The City of Detroit's Water and Sewerage Department also publishes the Notice of Pendency and Settlement of Class Action among its DWSD legal notices.Current customers should do nothing except watch their bills over the six months after the settlement takes effect, and check that a credit appears.
What Happens Next?
The Court will consider whether to grant final approval at a fairness hearing; the date is set out in the Notice on the official settlement website. A hearing being held is not the same as approval being granted, and approval is not the same as money moving.No payment or credit date has been announced. The Tier 2 rate reduction is scheduled to run from January 1, 2027 through June 30, 2027. We will update this page when the Court rules and again if a distribution schedule is published.
Sources and Verification
- Official settlement website — Detroit Water Settlement, including the Notice of Pendency and Settlement of Class Action and the claim form.
- City of Detroit — Notice of Pendency and Settlement of Class Action.
- Detroit Water and Sewerage Department — DWSD legal notices.
- Michigan Courts — business court opinion in Ajax Metal Processing Inc. et al. v City of Detroit, No. 23-015314-CB.
Questions
Does every Detroit water customer qualify?
No, and this is the most common misreading of the settlement. The class is limited to people and entities who both paid or incurred charges between August 1, 2022 and May 31, 2026 and used an average of at least 1.0 MCF per month over that period. One MCF is one thousand cubic feet, roughly 7,480 gallons, so the threshold is about 7,480 gallons a month on average. The case was brought over Tier 2 rates, which apply above 0.6 MCF, so the class skews heavily toward commercial, industrial and institutional users rather than ordinary households.
I am still a City water customer. Do I need to file anything?
No. Class members who remained water or sewer customers of the City as of August 26, 2026 do not need to do anything to receive their benefit. The City calculates the amount and applies it to the account as a credit, spread over six months. The claim form exists for the other group: class members who were no longer City water customers as of that date had to submit a timely, valid claim to receive a cash refund instead of a credit they would have no account to receive.
What is the Tier 2 rate reduction, and does it benefit me even if I get nothing else?
Separately from the money, the settlement requires the City to temporarily lower its Tier 2 water rate by $6.22 per MCF from January 1, 2027 through June 30, 2027, bringing the temporary Tier 2 rate to $44.99 per MCF for those six months. That is forward-looking rate relief rather than a payment, and it flows to whoever is being billed at Tier 2 rates during that window — so a high-volume user who was not in the class, or who joined the system later, still sees the lower rate while it is in effect.
What exactly did the lawsuit allege about the rates?
The plaintiff alleged that the City's tiered retail water volumetric rates are inclining block rates — a Tier 1 rate for usage at or below 0.6 MCF and a higher Tier 2 rate for usage above it — and that the structure results in charges to certain higher-volume users that exceed the City's cost of serving those users. Under Michigan law a municipal utility charge that exceeds the cost of service can be challenged as a disguised tax rather than a fee. Those are allegations; the City disputes them and the Court has made no finding that the rates were unlawful.
How is the amount of a credit or refund calculated?
The benefit is not a flat per-person figure. It varies with what you were billed, because the theory of the case is that Tier 2 volumetric charges overshot the cost of service — so the more water you were billed for above the Tier 1 threshold during the class period, the larger your share of the $4,450,000. The City's own billing records drive the calculation, which is why current customers do not have to prove anything. The Notice on the official settlement website sets out the allocation method in full.
Free settlement alerts
Get notified when new class actions open to claims
Join thousands of readers who get the latest class action settlements you may qualify for — delivered straight to your inbox.
