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Court denies application for temporary restraining order against BMV

September 16, 2016

The Marion Superior Court has denied an application for a temporary restraining order and preliminary injunction against the Indiana Bureau of Motor Vehicles that would have forced the BMV to set aside funds in the pool of money it is using to refund millions of customers to pay attorney fees for the plaintiffs in a class-action suit against the BMV.

In an order filed Tuesday, the Marion Superior Court denied the application that had been filed on behalf of the plaintiffs in the case Tammy Raab v. Kent W. Abernathy and the Indiana Bureau of Motor Vehicles. The motion , which was filed Sept. 9 by Irwin Levin, managing partner at Cohen & Malad LLP and plaintiff’s counsel in the class action, said the BMV was refunding nearly $30 million to roughly 5 million customers without notice or approval from the court.

The refunds came after it was discovered that the BMV had been overcharging millions of customers for services for years. The refunds have been credited to customers’ accounts and can be applied to future BMV transactions or sent to customers as checks, the bureau said last week.

The application for a temporary restraining order and preliminary injunction sought to force the BMV to set aside about one-third of the $30 million common fund to pay attorney fees for the plaintiff, an action Levin said is legally required when a lawsuit such as the class action against the BMV results in the creation of a common fund. Right now, the attorney fees in the suit are already more than $1 million, Levin said.

But the BMV countered, writing in its response that it was already administering refunds to overcharged customers before the suit was filed. Further, counsel for the BMV wrote that the common fund Levin referenced didn’t exist, and the refund money is instead being offset against the anticipated future revenue related to the fee at issue.

“We and the BMV are gratified that the court recognized that the request made by the plaintiff's class action attorneys would have been bad for Indiana taxpayers. The class action attorneys are the only ones who would have benefited from the proposal, and we are pleased that it was denied,” attorney Carles A. Hayes, partner at Bingham Greenebaum Doll LLP and counsel for the BMV, said in an email.

Although the court denied the application for a temporary restraining order, Levin said he was confident the BMV will still be forced to set aside money in the common fund to pay the plaintiff’s attorney fees.

“The law is very clear that the class members should get their cost back and the fees should be paid from those refunds,” he said.

Levin said the matter will also come up again at the trial set to begin on Sept. 28. The plaintiffs are suing the BMV for close to $90 million.
 

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