NEWS

Indiana BMV settlement includes $6 million for law firm

By Tim Evans
tim.evans@indystar.com

The $30 million settlement in a class-action lawsuit against the Bureau of Motor Vehicles includes refunds of $3 to $15 for a majority of Hoosier motorists — and a $6 million payday for the Indianapolis law firm that uncovered the agency’s overcharges.

The settlement, approved earlier this month by Marion Superior Court Judge Heather Welch, also includes three refund options for the estimated 4.5 million drivers who, from March 7, 2007, to June 27, were charged more than what state law allows when they obtained or renewed driver’s licenses.

Only drivers who were under the age of 75 when they obtained or renewed licenses during that time frame are eligible for the refunds. Drivers 75 and older at the time were not overcharged.

Refunds will be provided in the form of credits on future transactions or checks, which can be requested through a link on the BMV website or by calling (800) 248-0084.

Any remaining drivers who are due a refund, but have not collected it via a transaction or check request, will be sent a check when a final accounting is conducted in three years.

“We will abide by the terms and conditions of the settlement,” BMV spokesman Josh Gillespie said.

The BMV said it erred in calculating license fees. Money to cover the refunds will come from funds the agency has on hand.

The settlement resolved a lawsuit filed in March by Irwin B. Levin of the Indianapolis law firm Cohen & Malad on behalf of Tammy Raab. The suit was filed in Marion Superior Court after research by the law firm revealed the BMV was charging more than allowed under Indiana law when Hoosiers obtained or renewed driver’s licenses.

Welch granted the case class-action status, naming Cohen & Malad as counsel for the class, and a settlement was negotiated this fall. The deal was finalized after a hearing Nov. 12.

Levin said his firm’s fee in the case was substantially lower than fees Cohen & Malad typically collects in class-action cases. The $6 million represents about 21 percent of the settlement, he said, while a fee of about 33 percent is closer to the norm.

The firm’s fee also takes nothing away from victims, who will be reimbursed 100 percent of the amount they were overcharged.

“Of all the cases we’ve done,” Levin said, “this is the smallest percentage” of a settlement the firm has received.

And, Levin said, the law firm’s work probably saved Hoosiers millions of dollars more.

“This may be the most unique class-action case in Indiana,” Levin said. “That’s because these types of lawsuits are usually brought when it is apparent something is wrong. But in this case, the state was unaware of the problem until we brought it to their attention.”

If the overcharges had not been uncovered, Levin said, it is likely that Hoosiers would have continued to pay more than the law allowed for driver’s licenses. He said one expert estimate submitted as part of the case indicated the overcharges could have run as high as an additional $10 million over the next year.

The BMV admitted in June that it had been overcharging drivers and reduced license fees at that time.

The lawsuit also prompted Gov. Mike Pence to order an independent review of other BMV charges. That examination revealed the agency had been overcharging for some additional services while undercharging for others, although the agency did not release a financial accounting for those errors.

The BMV will reimburse those other overcharges, which were not subject to the class-action lawsuit settlement, only through discounts on future transactions. However, the agency will not make any effort to recoup fees lost through undercharges.

Levin said the case has generated more than cash for the law firm.

“We’ve received more ‘thank-yous’ from people on the street in this case than any other case I’ve done,” he said. “People recognize somebody has to hold government accountable, and we are proud to have done that.”

Call Star reporter Tim Evans at (317) 444-6204. Follow him on Twitter: @starwatchtim.