BMV criticizes law firm’s court order; firm says it’s trying to protect customers

September 13, 2016

The Indiana Bureau of Motor Vehicles is criticizing an Indiana law firm for a court order the BMV says will “take money out of Hoosiers’ pockets,” but the attorney who filed the order said the request is meant to protect Hoosiers who are suing the BMV.

The BMV announced Friday that an additional $28.75 million in overcharge refunds had been credited to roughly 5 million customers across Indiana. The announcement came after a class-action lawsuit, Tammy Raab v. Kent W. Abernathy and the Indiana Bureau of Motor Vehicles, was filed against the bureau after it was discovered that it had been overcharging millions of customers for several years.

Although former BMV commissioner Donald Snemis said in 2014 that all previous overcharges had been refunded, the proceedings in the lawsuit later revealed that there were hundreds of other overcharges that had not been refunded. Because of the efforts of the plaintiffs in the lawsuit and their legal counsel, a common fund of roughly $30 million was created to credit the refunds to BMV customers, said Irwin Levin, a managing partner at Cohen & Malad LLP Indianapolis and lead counsel in the suit against the BMV.

The BMV said Friday that the refunds were credited to customers’ accounts over the last few months and that the credits could either be put toward a BMV transaction or sent to customers as a check.

However, in a court order filed by Levin in Marion Superior Court Friday morning, counsel for the plaintiffs wrote that the BMV was administering refunds through the common fund without notice or approval from the court. Further, the counsel wrote that because their efforts had led to the creation of the common fund, the BMV is required to set aside part of those funds to reimburse the members of the class-action suit and pay for the fees incurred during the litigation process — an amount that is already exceeding $1 million, Levin said.

If the BMV continues to distribute the refunds without accounting for the attorney fees, then Levin said the plaintiffs in the suit will be forced to bear a disproportionate amount of those fees. Thus, Levin and his firm are seeking a preliminary injunction to require the BMV to set aside a portion of the common fund for attorney fees. The plaintiffs have not determined the exact amount of fees it will request to be reimbursed for, but the order Levin filed on Friday said it will not exceed one-third of the fund.

“By cashing in credits without setting aside any amount for fees and costs of the litigation that resulted in the creation of the common fund, defendants are creating irreparable harm to the members of the Class who do not have their credits cashed in before the judgment in this case, because those Class members will be left to shoulder a disproportionate share of the expenses incurred in the litigation that resulted in the common fund,” the court filing said.

Adam Krupp, chief legal counsel for the BMV, took aim at the court order and at Levin, in particular, on Friday, saying in a statement through the BMV that the actions Levin requested through the preliminary injunction would essentially be the same as taking money away from Hoosier taxpayers.

“BMV has been issuing refunds since before the current lawsuit, which Mr. Levin claimed was filed to benefit BMV’s customers. Mr. Levin also claimed to be representing the best interests of Hoosier taxpayers,” Krupp said. “It is stunning and inappropriate for Mr. Levin, or any lawyer, while claiming to represent Hoosiers’ best interests, to directly seek to take money out of Hoosiers’ pockets.”

But Levin dismissed Krupp’s accusations, saying that he is not trying to take money out of taxpayers’ pockets or stop them from receiving their refunds. He also said he was not taking the attacks personally, but instead said Krupp’s words come from a place of being caught red-handed.

“The BMV was caught with its pants down,” Levin said. “You would hope that they would say, ‘Wow, we made a mistake,’ but they didn’t.”

Levin also said he thinks the timing of the refunds raises a red flag – the refunds were announced on Sept. 9, less than three weeks before the start of the trial on Sept. 28.

“The BMV has been at war with its customers since 2013, and they now know that the trial is only weeks away,” he said. “This is an example of government at its worst.”

In a response filed in the Marion Superior Court on Monday, counsel for the BMV wrote that the plaintiffs in the class-action suit make no attempt to satisfy the requirements for injunctive relief–which they wrote is only appropriate when there is potential for irreparable harm—and cannot do so. A claim for money is not considered irreparable harm under Indiana law, they said. And if there were an injury in the case, it would be on the lawyers, not the class members, BMV lawyers wrote.

“Plaintiff’s application is a clear manifestation of plaintiff’s counsel’s willingness to place their own desire to be paid above the interests of their own clients—the certified plaintiff class,” BMV attorneys wrote.

BMV attorneys said that injunctive relief is used to preserve the status quo, which, in this case, is the fact that the BMV has refunded all verified overcharges—something that the attorneys said was already being done before the lawsuit was filed in 2013, despite plaintiffs’ claims that the lawsuit led to the refunds. If the preliminary injunction is granted, then the plaintiffs would be altering status quo to set aside money for attorney fees, not for the members of the class, they wrote.

Further, BMV counsel said the plaintiffs’ counsel has not been precluded from filing a request for an award of fees. Such request would be premature because plaintiffs’ counsel has neither settled nor prevailed in this case, so the request for injunctive relief is premature.

BMV attorneys also argue that the common fund the plaintiffs’ court order says the refunds are being allocated from does not exist. Instead, BMV attorneys said that the refunds are being offset against the anticipated future revenue related to the fee at issue.


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