Automotive Parts Litigation Class Action Settlement
Some dealerships may be entitled to substantial amounts of money
A class action has been brewing for some time against the OEMs for overpriced parts on new vehicles purchased by dealers. That case, brought on behalf of all dealers, has settled. As a result of that settlement, a dealership may be entitled to a substantial amount of money. The deadline to make a claim for a portion of the settlement funds was March 31, 2016 and has recently been extended to May 15, 2016. If a dealer decides to file a claim, they will need to start reviewing sales files as soon as possible to determine how many qualified vehicles they sold.
The Scali Law Firm reviewed the www.AutoDealerSettlement.com correspondence for the settlement and spoke with the settlement administrator for this case. This is a legitimate class-action lawsuit and settlement of about $59 million dollars over price fixing on automotive wire harnesses and other auto parts (OSS, inverters, and switches) sold to dealers and already installed in new vehicles or sold as OEM parts inventory. Most of the vehicles/parts were made between 2000-2010. Affected vehicle makes include Nissan, Infiniti, Volkswagen, and especially Toyota (which had more affected models than any other make). Essentially, dealers overpaid for vehicles and parts because the parts manufacturers colluded to increase the cost of their products. This has already been settled with these manufacturers and now the class-action attorneys are divvying up the settlement fund to themselves and qualified dealers who purchased certain vehicles or replacement parts.
Unfortunately, it is difficult to estimate how much any one dealership or group would receive for participating in this class action. Attorney’s fees and administrative costs are expected to reduce the $59 million dollar settlement amount by about 1/3, leaving $40 million remaining. The settlement administrator will then use a point system to determine each dealer’s proportional share of the settlement funds and only about 40% of the settlement funds will be used in these initial distributions. Hundreds of dealers will be fighting over an estimated $16 million dollars in settlement funds. But making a claim may be worth the effort.
As an example of the settlement points system, a dealer who bought an applicable vehicle (e.g. a 2005 Toyota Avalon) will receive 100 points. Or if the dealer purchased the same model within three subsequent years (e.g. a 2006-2008 Avalon), they will receive 50 points. If the dealer purchased a 2005 Avalon wire harness system for their parts inventory, they will receive 10 points. Once all the points are calculated for each dealer participating in the multi-state litigation, the settlement administrator will split up roughly $16 million dollars proportionally by how many vehicles and parts each dealer sold. The minimum expected payment to a qualified dealer is $350.00. But there is no current way of estimating how much any one dealer should expect to receive. It is very difficult to say how many dealers will participate in the settlement and the Settlement Administrator was not able to give us any information on how many dealers qualify and how many are expected to sign up by May 15, 2016.
If SMCDA members want to file a claim, they will need to have someone review and identify all of the new cars that they sold that are on one of the below lists of vehicles (e.g. a 2005 Toyota Avalon), or are the same make and model within three subsequent years of a qualified model (e.g. a 2006-2008 Avalon). This is probably require several hours of reviewing files to identify all of the qualified vehicles and how many of each vehicle you sold. Additionally, parts invoices will be needed to prove OEM parts purchases.
Here are the lists of qualified vehicles:
And here is the form for submitting a claim (which must be filled out before May 15, 2016):
Unfortunately, the Settlement Administrator needs to know how many dealerships will be participating before they can estimate a range of settlement agreements and they will not know that information until after the deadline to file claims, on May 15, 2016, has passed.
For more information or questions, please contact the SMCDA office.