Case 5:20-cv-12726-JEL-DRG ECF No. 1-2 filed 10/07/20 PageID.61 Page 1 of 726
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`EXHIBIT B
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`EXHIBIT B
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`Case 5:20-cv-12726-JEL-DRG ECF No. 1-2 filed 10/07/20 PageID.62 Page 2 of 726
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`INTRODUCTION
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`1.
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`Plaintiffs here assert claims against J.P. Morgan Chase & Co. (“J.P.
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`Morgan”), Wells Fargo Bank National Association (“Wells Fargo”), and Stifel,
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`Nicolaus & Company, Incorporated (“Stifel”) (Defendants are sometimes
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`collectively referred to herein as “Defendants” or “Defendant Underwriters.”)
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`Plaintiffs’ claims against Defendants, like other aspects of the Flint water
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`litigation, arise from the poisoning of Plaintiffs, who were all minors,1 residents
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`and water users of the City of Flint, during the period when Flint utilized the Flint
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`River as a primary water source without implementing proper corrosion controls.
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`2.
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`Generally speaking, the Flint water litigation has proceeded against
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`two groups of defendants: various government officials involved in the decision to
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`switch Flint’s drinking water source (“Government Defendants”) and certain
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`environmental engineering companies (“Engineering Defendants”). Further
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`investigation and discovery have revealed new defendants in a category of their
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`own: J.P. Morgan Chase, Wells Fargo, and Stifel, institutions that underwrote a
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`2014 municipal bond sale, which aided and abetted the perpetration of the violation
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`of Plaintiffs’ firmly established constitutional right to bodily integrity.
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`1
`Each of the Plaintiffs named herein were minors at the time of the
`underlying conduct made the basis of this complaint and their claims are not
`currently time-barred under Michigan law.
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`1
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`3.
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`In the spring of 2014, J.P. Morgan Chase, Wells Fargo, and Stifel
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`underwrote the bond sale that financed and enabled Flint’s participation in the
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`Karegnondi Water Authority (“KWA”). The City of Flint badly needed the funds:
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`it had a significant obligation and zero ability to meet it. Without the 2014 bond
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`financing, Flint would not have been able to bear its portion of the cost of
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`constructing the KWA pipeline, and the other KWA entities would not have been
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`able to bear the cost for Flint. In short, without the bond financing, Flint would not
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`have been able to join the KWA, and the KWA would not have been able to
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`commence construction.
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`4.
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`Against the backdrop of the need to secure financing for Flint’s
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`participation in the KWA, the Government Defendants used an Administrative
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`Consent Order regarding remediation of a lime sludge lagoon, which in theory
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`could be used by the Flint Water Treatment Plant (“WTP”),2 as a pretext for Flint’s
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`larger participating in the KWA bond sale financing: Remediating the lime sludge
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`lagoon might have cost between $1 million to $8 million; the bonds issued for
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`Flint’s contribution to the KWA, the real reason, was for approximately $85
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`million.
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`The lagoon had in-fact not been used for decades for its intended
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`purpose, but instead had been used during that period as a garbage dump. Flint had
`received at least two notices to clean the lagoon over the previous 15 years and had
`never taken action to do so because it had no real need to and did not have the
`money to do so.
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`2
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`5.
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`J.P. Morgan Chase, Wells Fargo, and Stifel knew about the farce that
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`was the Administrative Consent Order, in addition to other facts, such as that the
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`Flint River would be used as an interim source of drinking water for Flint for the
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`foreseeable future, as well as the hazards to human health presented by the Flint
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`River’s highly corrosive water and Flint’s aging network of lead service lines,
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`Flint’s inability to pay for necessary upgrades to the Flint WTP, the lack of even a
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`plan to upgrade the Flint WTP, the lack of any intention on the part of the
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`Government Defendants to implement corrosion control, and the fact that Flint’s
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`residents and water users would begin consuming raw, untreated, and deleterious
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`water shortly after the switch in April 2014.
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`6.
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`Yet, J.P. Morgan Chase, Wells Fargo, and Stifel agreed to underwrite
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`the bond financing that enabled the switch anyway. They agreed to and facilitated
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`a plan for Flint to leave the Detroit Water and Sewerage Department (“DWSD”)
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`and enter the KWA, and they knew that a necessary element of the plan was the
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`use of raw, untreated Flint River water as an interim drinking water source, which
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`would expose Flint’s residents and water users to lead-poisoning and legionella
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`bacteria. J.P. Morgan Chase, Wells Fargo, and Stifel each engaged in conscience-
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`shocking behavior by underwriting Flint’s participation in the KWA—and thus the
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`poisoning of Flint’s children, residents, and other users—knowing full well there
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`would be drastic and dire health consequences to the children of Flint.
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`7. Without the underwriting from J.P. Morgan Chase, Wells Fargo, and
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`Stifel, the City of Flint would have had no choice but to continue purchasing water
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`from DWSD, from whom it had been purchasing water for decades. If Flint had
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`continued purchasing water from DWSD, no children would have been lead-
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`poisoned and no lives would have been ruined, lost, and otherwise forever
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`changed.
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`8.
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`The additional claims and facts set forth as part of Plaintiffs’ short
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`form complaint are intended to supplement the facts set forth in the Amended
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`Master Long Form Complaint (ECF Dkt. 186) (“Amended Master Complaint”).
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`Additionally, Plaintiffs incorporate those facts set forth in the Amended Master
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`Complaint by reference. However, for the ease of the Court and the parties, some
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`of the most relevant facts from the Amended Master Complaint are repeated here.
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`JURISDICTION
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`9.
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`J.P. Morgan Chase is a Delaware Corporation with its principal
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`executive offices located at 383 Madison Ave., New York, New York 10017.
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`10. This Court may exercise specific personal jurisdiction over J.P.
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`Morgan Chase because the acts that form the basis of Plaintiffs’ complaint against
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`J.P. Morgan Chase occurred, in substantial part, in the State of Michigan, and
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`Plaintiffs’ claims against J.P. Morgan Chase arise out of relate to J.P. Morgan’s
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`4
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`substantial contacts in Michigan and purposeful availment of the benefits and
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`protections of Michigan’s laws.
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`11.
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`J.P. Morgan Chase
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`is subject
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`to personal
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`jurisdiction under
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`Michigan’s long-arm statute because the acts and omissions that form the basis of
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`Plaintiffs’ claims against J.P. Morgan Chase constitute the transaction of business
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`in Michigan, the doing or causing an act to be done, and consequences to occur, in
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`Michigan resulting in tortious harm to Plaintiffs, and entering into a contract for
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`services to be performed or materials to be furnished in Michigan by J.P. Morgan
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`Chase.
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`12. Wells Fargo is a nationally chartered bank with principal executive
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`offices at 101 North Phillips Avenue, Sioux Falls, South Dakota.
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`13. This Court may exercise specific personal jurisdiction over Wells
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`Fargo because the acts that form the basis of Plaintiffs’ complaint against Wells
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`Fargo occurred, in substantial part, in the State of Michigan, and Plaintiffs’ claims
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`against Wells Fargo arise out of relate to Wells Fargo’s substantial contacts in
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`Michigan and purposeful availment of the benefits and protections of Michigan’s
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`laws.
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`14. Wells Fargo is subject to personal jurisdiction under Michigan’s long-
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`arm statute because the acts and omissions that form the basis of Plaintiffs’ claims
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`against Wells Fargo constitute the transaction of business in Michigan, the doing or
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`causing an act to be done, and consequences to occur, in Michigan resulting in
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`tortious harm to Plaintiffs, and entering into a contract for services to be performed
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`or materials to be furnished in Michigan by Wells Fargo.
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`15. Stifel is a Delaware corporation with its principal executive office
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`located at 501 North Broadway, St. Louis, Missouri 63102.
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`16. This Court may exercise specific personal jurisdiction over Stifel
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`because the acts that form the basis of Plaintiffs’ complaint against Stifel occurred,
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`in substantial part, in the State of Michigan, and Plaintiffs’ claims against Stifel
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`arise out of relate to Stifel’s substantial contacts in Michigan and purposeful
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`availment of the benefits and protections of Michigan’s laws.
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`17. Stifel is subject to personal jurisdiction under Michigan’s long-arm
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`statute because the acts and omissions that form the basis of Plaintiffs’ claims
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`against Stifel constitute the transaction of business in Michigan, the doing or
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`causing an act to be done, and consequences to occur, in Michigan resulting in
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`tortious harm to Plaintiffs, and entering into a contract for services to be performed
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`or materials to be furnished in Michigan by Stifel.
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`18. This Court has subject matter jurisdiction of Plaintiffs’ claims against
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`J.P. Morgan Chase, Wells Fargo, and Stifel under 28 U.S.C. §§ 1331 and 1343.
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`19. Additionally, the Court may exercise supplemental jurisdiction over
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`Plaintiffs’ non-federal claim under 28 U.S.C. § 1367(a).
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`20. Venue is appropriate under 28 U.S.C. § 1391(b)(2) because a
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`substantial part of the events and omissions giving rise to Plaintiffs’ claims
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`occurred in this judicial district.
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`STATEMENT OF FACTS
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`21. From approximately 1964 to 2014, the City of Flint purchased water
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`from the DWSD.3 During this 50-year span, flint water users enjoyed safe, clean,
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`fresh water in their homes, businesses, schools, hospitals and other places of public
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`services.
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`22. Motivated principally by the actions, political pressure and efforts of
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`Genesee County Drain Commissioner Jeffrey Wright, in 2009, the communities of
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`Flint, Genesee County, Sanilac County, Lapeer County and the City of Lapeer,
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`formed the KWA to explore the development of a water delivery system that
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`would draw water from Lake Huron and serve as an alternative to water delivered
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`by the DWSD.
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`23. All parties to the KWA knew that the cost and amount of construction
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`would be significant.
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`3
`The DWSD is presently known as the Great Lakes Water Authority,
`and common abbreviated as “GLWA.” However, throughout the litigation of the
`Flint Water Cases, the entity has gone by its old name and the abbreviation
`DWSD. This Complaint will likewise use the abbreviation DWSD.
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`24. To supply Lake Huron water to its contracting members, the KWA
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`would be required to construct a lake water intake,4 sixty-three miles of pipe from
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`the intake plant to Flint, and two pump stations.
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`25. The projected construction cost of building the KWA water system
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`was approximately $300 million.
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`26. By the spring of 2013, Wright had secured 30-year commitments from
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`KWA member communities—except for Flint—to purchase millions of gallons of
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`water. These commitments were necessary in order to sell $280 million worth of
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`bonds to finance the project.
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`27.
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`In the spring of 2013, Officials from the State of Michigan, Genesee
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`County, Lapeer County, Sanilac County, and the City of Flint (collectively, the
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`“Issuers”) reached out to J.P. Morgan Chase, Wells Fargo, and Stifel to secure
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`financing through a bond sale for the KWA’s construction and a meeting was
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`scheduled to discuss the viability of the project and Defendant Underwriters’
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`participation in bonding to help fund it.
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`28. The State of Michigan and Flint officials that attended the meeting
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`expressed the goal of Flint joining the KWA.
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`29. Without the financing from J.P. Morgan Chase, Wells Fargo, and
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`Stifel, the City of Flint would not have been able to pay its portion to join the
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`Ultimately, the intake facility was financed from a $35 million bond
`sale in October 2013.
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`KWA and therefore would have had no choice but to continue purchasing water
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`from the DWSD.
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`30.
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`J.P. Morgan Chase was made aware of this fact during the meeting.
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`31. Wells Fargo was made aware of this fact during the meeting.
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`32. Stifel was made aware of this fact during the meeting.
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`33.
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`J.P. Morgan Chase, Wells Fargo, and Stifel agreed to underwrite the
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`bond sale.5
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`34. The underwriting ultimately became the “Series 2014A” bond sale.
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`35. When a municipality issues bonds, one method of conducting the
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`bond sale is through a negotiated dealer agreement.
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`36. This is called a “negotiated sale” because the issuer and the
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`underwriter work closely together and privately negotiate the terms of the bond
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`sale.
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`37. A negotiated bond sale fosters confidentiality between the issuer and
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`the underwriter.
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`5
`The terms of the agreement are set forth in a 2014 Official Statement
`of the Karegnondi Water Authority, Counties of Genesee, Lapeer, Sanilac, and
`State of Michigan, for $220,500,000 Water System Supply Bonds (Karegnondi
`Water Pipeline), Series 2014A, dated April 4, 2014, attached hereto as Exhibit 1,
`as well as in the Supplement to the Official Statement, dated May 1, 2014, attached
`hereto as Exhibit 2. The identities of the underwriters are noted on page 1 of both
`Exhibits 1 and 2.
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`38.
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` In a negotiated sale, the issuer sells all of the bonds to one or more
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`underwriters, and the underwriter or underwriters in turn resell them to investor
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`clients or on an open securities market.
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`39. The underwriter in a negotiated sale works closely with the issuer’s
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`financing team to determine the financing parameters, with the goal of attracting
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`investors to meet the issuer’s requirements.
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`40. Part of what the underwriter does in working with the issuer is to
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`tailor the bond sale’s terms to the interests of the underwriter’s institutional
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`investor clients.
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`41. One reason for using a negotiated sale instead of other sales methods,
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`such as a competitive sale, is because of the poor credit and limited financial
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`solvency of the issuer of the bonds.
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`42. Under the circumstances that existed at all material times, Flint had
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`poor credit and limited (if any) financial solvency.
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`43. However, because there is an absence of competitive bidding by
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`potential underwriters, the bond issuer in a negotiated sale typically has less
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`negotiating power.
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`44. An underwriter in a negotiated sale typically purchases the bonds on a
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`discount and becomes an interested party to the transaction.
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`45. Pursuant to MSRB Rule G-17, underwriters of municipal bonds have
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`a duty to deal fairly with all persons and not engage in deceptive, dishonest, or
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`unfair practices.
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`46. An underwriter implicitly represents that there is a reasonable basis
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`for the opinions the underwriter offers, and implicitly represents that the
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`underwritten project will be completed, including all subsidiary actions necessary
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`for the completion of the larger project.
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`47. Dealing fairly with all persons requires conducting a reasonable
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`investigation and determining reasonably ascertainable facts about the municipal
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`bond sale.
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`48.
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`In the United States, approximately $400,000,000,000 in municipal
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`bonds are issued annually.
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`49. A sizeable portion of these municipal bonds go to infrastructure
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`projects, including water utilities.
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`50.
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`In 2016 alone, nearly $38,000,000,000 in municipal bonds were
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`issued for water infrastructure projects.6
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`51. Any reasonable underwriter dealing in water infrastructure projects is
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`aware that America has an aging public water infrastructure, which often means a
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`significant amount of lead pipes and water service lines.
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`6
`See NACWA, Tax Exempt Municipal Bonds, available at:
`https://www.nacwa.org/advocacy-analysis/campaigns/tax-exempt-municipal-bond-
`resource-hub.
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`52. This was also the case at all times dating back to before 2013.
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`53. Additionally, any reasonable underwriter would be familiar with the
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`centralized water distribution that is common to public water utilities.
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`54. This was also the case at all times dating back before 2013.
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`55. Part and parcel of centralized water distribution is a centralized water
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`treatment facility that ensures the water distributed to customers and water users is
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`safe to drink.
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`56. Any reasonable underwriter either employs an internal public water
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`expert or else retains a consultant with significant public water expertise. The
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`expert has an intimate knowledge of regional water hydrology, public water
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`systems, engineering, water treatment, and water chemistry, among other things.
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`57. This was also the case at all times dating back before 2013.
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`58.
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`J.P. Morgan Chase employs such an internal public water expert or
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`retains such an external public water consultant who provides guidance and subject
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`matter expertise on municipal water infrastructure as a part of municipal bond
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`underwriting.
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`59. Wells Fargo employs such an internal public water expert or retains
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`such an external public water consultant who provides guidance and subject matter
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`expertise on municipal water infrastructure as a part of municipal bond
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`underwriting.
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`60. Stifel employs such an internal public water expert or retains such an
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`external public water consultant who provides guidance and subject matter
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`expertise on municipal water infrastructure as a part of municipal bond
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`underwriting.
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`61. One risk than an underwriter considers is potential litigation.
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`62. The Series 2014A bond sale was a negotiated bond sale.
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`63. Defendant Underwriters purchased the bonds at a substantial discount.
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`64. Defendant Underwriters purchased all of the bonds.
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`65. During the same time the Issuers were negotiating the bond sale with
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`J.P. Morgan Chase, Wells Fargo, and Stifel, Flint executed a financing contract
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`with the KWA on August 1, 2013.7 Flint would be required to pay its pro rata
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`portion of the $300,000,000 contract.
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`66. Flint’s share was about $85 million.
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`67. Flint was to be responsible for approximately 34.2% of the debt
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`service on the KWA’s construction.
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`68.
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`J.P. Morgan Chase, Wells Fargo, and Stifel were made aware of the
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`terms of the August 1, 2013 KWA financing contract.
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`69.
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`J.P. Morgan Chase, Wells Fargo, and Stifel were themselves provided
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`key information about the KWA system and then shared advice with the Issuers
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`7
`Exhibit 3.
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`See December 2017 Three Party Agreement, attached hereto as
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`about the KWA system, its components, and how the system and its components
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`would be financed.
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`70. Flint had little if any financial ability to meet its potential
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`commitments under the KWA.
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`71. Beginning in 2011, Flint was placed under the authority of an
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`emergency manager. It would remain under emergency management until 2015.
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`72. This was not the first time Flint had been placed under State economic
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`control: Flint was placed under State economic management for two years between
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`2002 and 2004.
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`73.
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`Indeed, Flint was a notable example of the economic hardship that
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`follows deindustrialization.
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`74.
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`In short, it was well known that Flint was a financially distressed city.
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`75.
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`It was clear that Flint would not be able to bear its portion—$85
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`million—of the KWA construction cost.
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`76.
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`Indeed, upon information and belief, throughout the underwriting
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`process, J.P. Morgan Chase, Wells Fargo, and Stifel each had unfettered access to
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`Flint’s financial records.
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`77. Without Flint’s participation in the KWA project, everyone involved
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`on the underwriting side, including executives, agents and employees of J.P.
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`Morgan Chase knew that it was doubtful that the project could be financed.
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`14
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`78. Without Flint’s participation in the KWA project, everyone involved
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`on the underwriting side, including executives, agents and employees of Wells
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`Fargo knew that it was doubtful that the project could be financed.
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`79. Without Flint’s participation in the KWA project, everyone involved
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`on the underwriting side, including executives, agents and employees of Stifel
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`knew that it was doubtful that the project could be financed.
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`80.
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`It was anticipated that if the financing for the KWA project was
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`secured by April of 2014, the project could be completed by the end of 2016.
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`81. Ultimately, the KWA pipeline was completed in November 2017.8
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`82. The construction timeline would prove crucial for Flint.
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`83. At all material times, J.P. Morgan Chase was aware that the Flint
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`River would be utilized as an interim water source beginning in April 2014 through
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`completion of the KWA.
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`84. At all material times, Wells Fargo was aware that the Flint River
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`would be utilized as an interim water source beginning in April 2014 through
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`completion of the KWA.
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`85. At all material times, Stifel was aware that the Flint River would be
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`utilized as an interim water source beginning in April 2014 through completion of
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`the KWA
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`8
`By that time, Flint was no longer part of the KWA. However, Flint is
`still contractually required to pay its portion of the debt service.
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`86. Unlike the finished water from DWSD, the water to be delivered to
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`Flint from the Flint River would be raw, requiring considerable treatment at the
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`Flint WTP.
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`87. At all material times this information was known by J.P. Morgan
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`Chase.
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`88. At all material times this information was known by Wells Fargo.
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`89. At all material times this information was known by Stifel.
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`90. All individuals involved in the decision-making process regarding
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`participation in the bond sale for J.P. Morgan Chase knew that if Flint stayed with
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`the DWSD as its water source, the Flint WTP would not have to be upgraded.
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`91. On the other hand, they all knew that if Flint went with KWA, the
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`Flint WTP would have to be upgraded to treat the raw water coming from Lake
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`Huron.
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`92. All individuals involved in the decision-making process regarding
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`participation in the bond sale for Wells Fargo knew that if Flint stayed with the
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`DWSD as its water source, the Flint WTP would not have to be upgraded.
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`93. On the other hand, they all knew that if Flint went with KWA, the
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`Flint WTP would have to be upgraded to treat the raw water coming from Lake
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`Huron.
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`94. All individuals involved in the decision-making process regarding
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`participation in the bond sale for Stifel knew that if Flint stayed with the DWSD as
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`its water source, the Flint WTP would not have to be upgraded.
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`95. On the other hand, they all knew that if Flint went with KWA, the
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`Flint WTP would have to be upgraded to treat the raw water coming from Lake
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`Huron
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`96. Likewise, when it became apparent that the Flint River would be used
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`as an interim water source, it was well known that the water would have to be
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`treated by the Flint WTP.
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`97. At all material times it was well known that the Flint WTP could not
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`handle the raw Flint River water without substantial upgrades.
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`98. At all material times this information was known by J.P. Morgan
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`Chase.
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`99. At all material times this information was known by Wells Fargo.
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`100. At all material times this information was known by Stifel.
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`101. The Flint WTP, which had originally been constructed in 1917, had
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`been “mothballed” in 1965 when Flint changed water sources from the Flint River
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`to pre-treated water provided by DWSD. Flint had opted for DWSD water in 1965
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`after a 1964 U.S. Geological Survey report noted high levels of chloride in the
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`17
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`Case 5:20-cv-12726-JEL-DRG ECF No. 1-2 filed 10/07/20 PageID.79 Page 19 of 726
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`Flint River, which raised concerns about the capacity of the Flint River to provide
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`safe drinking water under the then-current arrangement.
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`102. At all material times this information was known by J.P. Morgan
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`Chase.
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`103. At all material times this information was known by Wells Fargo.
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`104. At all material times this information was known by Stifel.
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`105. At all material times Flint’s water was thus seriously corrosive.
`
`106. At all material times this information was known by J.P. Morgan
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`Chase.
`
`107. At all material times this information was known by Wells Fargo.
`
`108. At all material times this information was known by Stifel.
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`109. In 2013 and 2014, Flint had an aging network of predominately lead
`
`piping and service lines.
`
`110. At all material times this information was known by J.P. Morgan
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`Chase.
`
`111. At all material times this information was known by Wells Fargo.
`
`112. At all material times this information was known by Stifel.
`
`113. In 2013 and 2014, Flint had a centralized water distribution network
`
`that flowed through the then-supplementary Flint WTP.
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`18
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`Case 5:20-cv-12726-JEL-DRG ECF No. 1-2 filed 10/07/20 PageID.80 Page 20 of 726
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`114. Any reasonable water expert would inquire into what upgrades had
`
`been made to the Flint WTP or what concrete plans were in the works to upgrade
`
`the Flint WTP in anticipation of utilizing the Flint River as a water source.
`
`115. There were in-fact no significant upgrades to the FWTP between 1965
`
`and 2014.
`
`116. At all material times J.P. Morgan Chase was aware that necessary
`
`upgrades to the Flint WTP had not been made and could not be made in time for
`
`the City’s utilization of the Flint River as a water source.
`
`117. At all material times Wells Fargo was aware that necessary upgrades
`
`to the Flint WTP had not been made and could not be made in time for the City’s
`
`utilization of the Flint River as a water source.
`
`118. At all material times Stifel was aware that necessary upgrades to the
`
`Flint WTP had not been made and could not be made in time for the City’s
`
`utilization of the Flint River as a water source
`
`119. Any reasonable expert would inquire into what Flint’s plan to
`
`implement corrosion control would be in anticipation of utilizing the Flint River as
`
`a water source.
`
`120. Upon information and belief, J.P. Morgan Chase was made aware,
`
`through its internal public water expert or its external public water consultant, that
`
`there was no practical way to implement proper corrosion controls to treat water
`
`
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`19
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`Case 5:20-cv-12726-JEL-DRG ECF No. 1-2 filed 10/07/20 PageID.81 Page 21 of 726
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`from the Flint River, in the short time before the Flint WTP was to become fully
`
`operational utilizing the Flint River as the primary water source for the citizens of
`
`Flint.
`
`121. Upon information and belief, Wells Fargo was made aware, through
`
`its internal public water expert or its external public water consultant, that there
`
`was no practical way to implement proper corrosion controls to treat water from
`
`the Flint River, in the short time before the Flint WTP was to become fully
`
`operational utilizing the Flint River as the primary water source for the citizens of
`
`Flint.
`
`122. Upon information and belief, Stifel was made aware, through its
`
`internal public water expert or its external public water consultant, that there was
`
`no practical way to implement proper corrosion controls to treat water from the
`
`Flint River, in the short time before the Flint WTP was to become fully operational
`
`utilizing the Flint River as the primary water source for the citizens of Flint.
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`123. Flint and State officials did not intend to and could not properly
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`implement corrosion control as part of the switch to Flint River water in the short
`
`time before the Flint WTP was to become fully operational utilizing the Flint River
`
`as the primary water source for the citizens of Flint.9
`
`
`9
`These officials would later represent (misleadingly) to the EPA that
`corrosion control was unnecessary because the Flint WTP was a “new source,” not
`a reactivated source.
`
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`20
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`Case 5:20-cv-12726-JEL-DRG ECF No. 1-2 filed 10/07/20 PageID.82 Page 22 of 726
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`124. Any reasonable water expert would understand
`
`that, without
`
`appropriate corrosion control technology or methods, highly corrosive water would
`
`strip away protective biofilm in lead pipes and cause lead to leach into the drinking
`
`water.
`
`125. At all material times this information was known by J.P. Morgan
`
`Chase.
`
`126. At all material times this information was known by Wells Fargo.
`
`127. At all material times this information was known by Stifel.
`
`128. In 2011, Flint officials commissioned a study to determine if the Flint
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`River could be safely used by the city as the primary source of drinking water.
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`129. The “Analysis of the Flint River as a Permanent Supply for the City of
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`Flint, July 2011” (“2011 Report”), prepared by two private engineering firms
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`cautioned against the use of the Flint River water and the dormant Flint WTP,
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`which would cost millions of dollars to upgrade.
`
`130. At all material times this information was known by J.P. Morgan
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`Chase, and J.P. Morgan Chase was provided access to the 2011 Report prior to its
`
`participation in the bonding process made the basis of this lawsuit.
`
`131. At all material times this information was known by Wells Fargo, and
`
`Wells Fargo was provided access to the 2011 Report prior to its participation in the
`
`bonding process made the basis of this lawsuit.
`
`
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`21
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`Case 5:20-cv-12726-JEL-DRG ECF No. 1-2 filed 10/07/20 PageID.83 Page 23 of 726
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`132. At all material times this information was known by Stifel, and Stifel
`
`was provided access to the 2011 Report prior to its participation in the bonding
`
`process made the basis of this lawsuit.
`
`133. Use of the Flint River as a primary drinking source was rejected in
`
`2011.
`
`134. At all material times this information was known by J.P. Morgan
`
`Chase.
`
`135. At all material times this information was known by Wells Fargo.
`
`136. At all material times this information was known by Stifel.
`
`137. Throughout 2012, DWSD presented to Kurtz, Wright, Dillon, Walling
`
`and
`
`the Governor compelling arguments, based on numerous studies,
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`demonstrating that from a cost and water reliability standpoint, Flint needed to
`
`continue to receive water from DWSD.
`
`138. At all material times this information was known by J.P. Morgan
`
`Chase.
`
`139. At all material times this information was known by Wells Fargo.
`
`140. At all material times this information was known by Stifel.
`
`141. In late 2012, the independent engineering firm of Tucker, Young,
`
`Jackson and Tull (“TYJT”) was hired to assess whether it would be cost-effective
`
`
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`22
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`Case 5:20-cv-12726-JEL-DRG ECF No. 1-2 filed 10/07/20 PageID.84 Page 24 of 726
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`for Flint to switch from water supplied by DWSD and join the KWA water
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`delivery system.
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`142. In February 2013, TYJT concluded that it would be more cost-
`
`effective for Flint on both a short term and long-term basis to continue to be
`
`supplied with water from DWSD.
`
`143. At all material times this information was known by J.P. Morgan
`
`Chase, and J.P. Morgan Chase was provided access to the 2013 TYJT Report prior
`
`to its participation in the bonding process made the basis of this lawsuit.
`
`144. At all material times this information was known by Wells Fargo, and
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`Wells Fargo was provided access to the 2013 TYJT Report prior to its participation
`
`in the
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