The federal government and the Manitoba Association of Native Fire Fighters have been hit with a massive lawsuit over the handling of members of four First Nations that were flooded in 2011.

The $550-million class-action suit, filed by flood evacuees, claims that the federal government and MANFF were negligent in providing for their housing, care and welfare after their home reserves — Dauphin River, Little Saskatchewan, Pinaymootang (Fairford) and Lake St. Martin — were severely damaged by flooding.

The statement of claim, filed on July 4, alleges that the government failed to properly supervise MANFF and failed to act on complaints by flood evacuees about the non-profit agency's performance.

The lawsuit comes following a series of reports by the CBC News I-Team that found MANFF has been accused of not paying some of its bills to hotels, filing questionable overtime charges, and spending more than $1 million at a Winnipeg restaurant for late-night snacks over an eight-month period.

Allegations of negligence at MANFF, which the lawsuit says owed a "duty of care" to evacuees, include failing to ensure funds were spent on evacuee needs, failing to provide adequate accommodations, hiring inexperienced and incompetent staff, and failing to respond to complaints about mistreatment by MANFF staff.

Punitive damages are being sought as the lawsuit accuses both of the defendants and their staff of being "arrogant, callous, high-handed."

The owner of two hotels that house flood evacuees told the I-Team that MANFF co-ordinators had been negligent and even intimidating towards hotel staff and flood evacuees.

MANFF surrendered responsibility for long-term evacuation services in June, but the Canadian Red Cross has yet to take over those services. The Red Cross is currently assessing evacuee needs.

Officials with the Department of Aboriginal and Northern Affairs have confirmed that an investigation into MANFF by Deloitte Touche is ongoing.

Emails and calls to the federal department and MANFF have not been returned.

Read the statement of claim below: