Hennepin County has agreed to pay $1 million to settle a lawsuit by a mentally ill inmate who stabbed himself in both eyes last year after being held in the county jail for 40 days without proper psychiatric care.

The settlement is believed to be the largest for medical neglect of an inmate in a Minnesota jail or prison. The terms are expected to be formally approved by U.S. Magistrate Arthur Boylan next week, according to a source with direct knowledge of the case. The County Board of commissioners was briefed on the terms last week in a closed-door meeting. Attorneys for Schuler and the county declined to comment pending Boylan’s hearing.

Michael Schuler, who had a long history of mental illness and self-inflicted wounds, was arrested in March 2012 for missing a court date and used a pencil to stab himself in his cell two months later.

Since then, his case has been cited by criminal justice and mental health authorities as an example of the way Minnesota has criminalized mental illness, with hundreds of people winding up in county jails for even basic misdemeanors rather than being sent into residential psychiatric care. On a typical day, the Hennepin County jail holds 100 to 200 inmates with serious psychiatric disorders — sometimes one quarter of the overall inmate population — and some languish in jail for months, according to a Star Tribune investigation published in September.

Hennepin County Sheriff Rich Stanek, who has acknowledged that the jail is not an appropriate place for the mentally ill to be treated, declined to comment on the case.

Stanek played a lead role in lobbying the 2013 Legislature for a law that now requires inmates to be placed in state mental health facilities within 48 hours after they’ve been committed by a judge.

Missed court date

Schuler, who is now blind in his right eye and severely impaired in the other, used a pencil to stab himself in his cell in May 2012, according to court records reviewed by the Star Tribune.

The records also show that Schuler was denied antipsychotic medications at one point, and they detail his steady mental deterioration during weeks of incarceration with minimal psychiatric evaluation.

Before his arrest, authorities knew as far back as 2009 that Schuler had a history of mental illness, including numerous drug overdoses, self-inflicted stab wounds and chronic suicide ideations.

He had been hospitalized on three occasions between 2008 and 2011 in South Dakota, and eight times in Hennepin County hospitals, according to his medical records.

Schuler was arrested in 2012 for missing a court date, which itself happened because he was under inpatient psychiatric care at the Hennepin County Medical Center at the time.

A psychiatrist at the hospital said Schuler should remain hospitalized because he was in “imminent danger of causing injury to himself or others,” but he was overruled by administrators and discharged, records show. As Schuler was leaving, he was arrested by police and booked into the jail.

Records also show that Schuler complained of mounting anxiety while jailed and asked for medication — and that his antipsychotic medications were deliberately withheld at one point due to “behavioral issues.”

By the time Schuler was discharged from the medical center following treatment for his eye injuries and psychiatric care, his medical bills totaled more than $400,000.

Schuler now is living in a Twin Cities residential setting and is stable, according to people familiar with his well-being.