Do not settle
Dept of Civil Right automatically start a mediation process.
http://www.michigan.gov/mdcr/0,4613,7-138-42240_43561-153173--,00.html
Dept of Civil Right is not a law enforcement agency. A complain is not a lawsuit. See http://www.michigan.gov/mdcr/0,4613,7-138-42240_43561-153171--,00.html
Just keep saying no. The other party has no solid case. No lawyer will take their case so the chance of their suing you is remote.