UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF MICHIGAN

SOUTHERN DIVISION

_________________________________

IN RE AUTOMOTIVE PARTS MASTER FILE NO. 12-md-02311

ANTITRUST LITIGATION HONORABLE SEAN F. COX 

 

_________________________________

 

In re: AUTOMOTIVE WIRE HARNESSES Case No. 12-cv-00102

In re: INSTRUMENT PANEL CLUSTERS Case No. 12-cv-00202 

In re: FUEL SENDERS Case No. 12-cv-00302 

In re: HEATER CONTROL PANELS Case No. 12-cv-00402 

In re: BEARINGS Case No. 12-cv-00502 

In re: OCCUPANT SAFETY SYSTEMS Case No. 12-cv-00602

In re: ALTERNATORS Case No. 12-cv-00702 

In re: ANTI-VIBRATION RUBBER PARTS Case No. 12-cv-00802 

In re: WINDSHIELD WIPERS Case No. 12-cv-00902 

In re: RADIATORS Case No. 12-cv-01002 

In re: STARTERS Case No. 12-cv-01102 

In re: AUTOMOTIVE LAMPS Case No. 12-cv-01202 

In re: SWITCHES Case No. 12-cv-01302 

In re: IGNITION COILS Case No. 12-cv-01402 

In re: MOTOR GENERATORS Case No. 12-cv-01502 

In re: STEERING ANGLE SENSORS Case No. 12-cv-01602 

In re: HID BALLASTS Case No. 12-cv-01702 

In re: INVERTERS Case No. 12-cv-01802 

In re: ELECTRONIC POWERED STEERING Case No. 12-cv-01902 

 ASSEMBLIES

In re: AIR FLOW METERS Case No. 12-cv-02002 

In re: FAN MOTORS Case No. 12-cv-02102 

In re: FUEL INJECTION SYSTEMS Case No. 12-cv-02202 

In re: POWER WINDOW MOTORS Case No. 12-cv-02302 

In re: AUTOMATIC TRANSMISSION FLUID Case No. 12-cv-02402 

 WARMERS

In re: VALVE TIMING CONTROL DEVICES Case No. 12-cv-02502 

In re: ELECTRONIC THROTTLE BODIES Case No. 12-cv-02602 

In re: AIR CONDITIONING SYSTEMS Case No. 12-cv-02702 

In re: WINDSHIELD WASHERS Case No. 12-cv-02802 

In re: CONSTANT VELOCITY JOINT BOOTS Case No. 12-cv-02902 

In re: SPARK PLUGS Case No. 12-cv-03002 

In re: AUTOMOTIVE HOSES Case No. 12-cv-03202 

In re: SHOCK ABSORBERS Case No. 12-cv-03302 

In re: BODY SEALING PRODUCTS Case No. 12-cv-03402 

Case 2:13-cv-01502-SFC-RSW ECF No. 142 filed 09/30/20 PageID.5056 Page 1 of 12
In re: INTERIOR TRIM PRODUCTS Case No. 12-cv-03502 

In re: BRAKE HOSES Case No. 12-cv-03602 

In re: EXHAUST SYSTEMS Case No. 12-cv-03702 

In re: CERAMIC SUBSTRATES Case No. 12-cv-03802 

In re: POWER WINDOW SWITCHES Case No. 12-cv-03902 

In re: AUTOMOTIVE STEEL TUBES Case No. 12-cv-04002 

In re: ACCESS MECHANISMS Case No. 12-cv-04102 

In re: MINIMODULES Case No. 12-cv-04302 

In re: SIDE DOOR LATCHES Case No. 17-cv-13005 

 

 

THIS DOCUMENT RELATES TO:

 Automobile Dealership Actions

 

OPINION AND ORDER DENYING CERTAIN AUTOMOBILE DEALERSHIP

SETTLEMENT CLASS MEMBERS’ MOTION TO ENFORCE PLANS OF 

ALLOCATION WITH REGARD TO RESERVE FUND ELIGIBILITY

Before the Court is Automobile Dealership Settlement Class Members’

(“Members”) Motion to Enforce Plans of Allocation with Regard to Reserve Fund Eligibility

(See ECF No. 590 in 12-102). The Members include 35 Dealerships under the Wolfe

Automotive Group, Kings Nissan & Kings Infiniti, and Young Automotive Group LLC

umbrella. Members seek to share in the pro rata payment from the reserve funds set

forth in the Plans of Allocation, including those Settlements in which they were not

Claimants. The Court heard argument on September 22, 2020, and at the conclusion of

the hearing, took this matter under advisement. For the reasons that follow the Court

DENIES the motion. 

I. FACTUAL AND PROCEDURAL BACKGROUND

Members purchased hundreds of thousands of new vehicles containing the

components parts at issue in this litigation. (See e.g. ECF No. 590 in 12-102, Attachment

1, Decl. of Emma K. Burton at ¶ 2). Although Members did not submit claims in the

Rounds 1 and 2 Settlements, they submitted valid Proofs of Claim prior to the January 21,

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2019, Round 3 Settlements filing deadline. (Burton Decl. ¶¶ 3-5). The Claims

Administrator processed and approved Members’ claims in Round 3.

According to the Declaration of Scott DiCarlo, the Senior Project Manager with the

Claims Administrator, (ECF No. 593 in 12-102), ,Round 1 Settlements resulted in

approximately $58 million from 23 separate settlement classes arising from settlements

with 10 defendants. (ECF No. 397 in 12-102). For example, Defendant Hitachi

Automotive Systems, Ltd.’s settlement involved nine parts and, therefore, nine different

settlement classes. (See e.g. Notice of Motion and Memorandum of Law in Support for

Preliminary Approval of Proposed Settlement with Hitachi Automotive Systems, Ltd. 

and Provisional Certification of Settlement Classes, 2:12-cv-00702, ECF Doc. No. 35,

Attach. 1 - Settlement Agreement (E.D. Mich. Apr. 3, 2015). Moreover, the class periods

identified for each of the Hitachi Round One settlement classes differ from settlement

classes in other settlements because each settlement is based on factors relating to the

defendant, parts, and conduct at issue. Id. Pursuant to the court-approved notice,

dealerships had until March 31, 2016, to file a valid proofs of claim.

The notices authorized by the Court for the Round One settlements alerted

automobile dealerships that they would only share in those settlements if they filed a valid

Proof of Claim by March 31, 2016: 

To remain in the Settlement Classes, you do not need to take any further

action at this time. However, to share in the Settlement Funds, your

dealership will be required to submit a Proof of Claim form that will be

available on the Settlement Website at www.AutoDealerSettlement.com,

and to submit it by March 31, 2016 (for more information see Question 8,

below). If you choose this option, your dealership will share in the net

proceeds of the proposed Settlements if its Proof of Claim is timely, valid,

and your dealership is entitled to a distribution under the Plans of Allocation

(described below in response to Question No. 9) and if and to the extent

that the proposed Settlements are approved by the Court. Your dealership

will be bound by the judgment and release to be entered by the Court as 

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described below (the “Judgment”). To be valid, your dealership’s request 

must contain the information required by the Proof of Claim form and be 

postmarked, or submitted electronically, by March 31, 2016. 

(See e.g. 2:12-cv-00102, ECF Doc. No. 394, p. 4). The notice clearly informs the

recipients that sharing in the settlement proceeds requires a timely Proof of Claim. 

Round 2 Settlements involved 40 separate classes, 10 defendants, and

$125,000,000. To participate in the Round Two Settlements, dealerships were required

to file a Proof of Claim by April 28, 2017. The notice that follows instructed dealerships

how to proceed using the same language used in Round 1, and set a submission date of

April 28, 2017. It likewise informed class members, “In order to receive payment, you

need to file a valid claim.” (See ECF No. 503 at 3 in 12-102, Order Authorizing 

Dissemination of Class Notice and Scheduling Hearing for Final Approval of

Settlements; ECF No. 499 at 29, Motion for Final Approval of Settlements (Second

Group). 

In sum, each settlement with a Defendant resulted in one or more settlement

classes because each part sold by a Settling Defendant created a separate settlement

class. (See e.g. Doc. No. 397 p. 15 in 12-102). Also the class periods identified in the

settlement classes were not uniform. Because of the large number of settlements as well

as the number of Defendants in this litigation, Class Counsel opted to defer notice and

the corresponding claims process until Class Counsel determined that an appropriate

number of settlements occurred. Only after multiple settlements were reached did Class

Counsel request leave to provide notice. 

This procedure, which was approved by the Court, kept expenses lower. 

Moreover, under the settlement plans approved by the Court, after class members

submitted claims they were permitted to “rely on that Proof of Claim and do nothing

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further to participate” in future settlements with Defendants. Consequently, claims

submitted in earlier rounds were automatically processed in subsequent rounds. 

To date, settlements have been aggregated four times with four corresponding

notice periods. With each round of settlements, Class Counsel requested that reserve

funds be set aside “for future allocation and distribution to eligible Settlement Class

members.” (See ECF No. 519-1 in 12-101 at 78). The reserve funds were created to

account for “information not currently available about affected, parts, models, and

brands,” and any funds not needed for the stated purpose would be “distributed on a pro

rata basis to members of the Settlement Classes in their respective cases.” (ECF No.

443 in 12-102). 

After Class Counsel requested permission to distribute the reserve funds from the

first three rounds of settlements, Members contacted Class Counsel and the Claims

Administrator regarding the distribution. (ECF No. 590 in 12-102, Decl. of Emma K.

Barton, ¶¶ 8,9). A follow-up phone call between Members and the Claims Administrator

confirmed that it was not clear whether Members were eligible to receive reserve funds

from all the settlements, and the Claims Administrator offered to raise the reserve fund

eligibility with Class Counsel. (Id. Barton Decl. ¶ 9). On July 10, 2020, Class Counsel

notified Members that they were not eligible for reserve funds from Rounds 1 and 2

Settlements. Although subsequent discussions took place, the Members and Class

Counsel did not reach an agreement as to Members’ eligibility. 

In sum, the parties disagree as to whether Members, as members of the

settlement classes in Rounds I and 2 Settlements that did not file claims and did not

receive any portion of the initial distribution, are entitled to receive a pro rata share of the

Reserve Funds. 

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II. ANALYSIS

A. Members Are Not Entitled to a Share of the Cumulative Reserve Funds for

Which They Were Not Claimants Under the Allocation Plan

The parties disagree as to whether Members are entitled to distributions from the

Round 1 and Round 2 Settlement reserve funds, which have not yet been made. 

Members contend that a plain reading of the Plans of Allocation shows that all class

members who submitted valid claims are entitled to their pro rata share of the cumulative

funds held in reserve. Because Members were identified as settlement class members1

and filed claims in Round 3 Settlements, they meet the definition. In contrast, Class

Counsel seeks to restrict reserve fund distribution to a particular round’s claimants. 

The resolution of this dispute does not turn on whether Members were potential

class members in the first two Settlement Rounds. The court-approved notices advised

dealerships that they could only receive money from Round 1 and Round 2 Settlements if

they filed valid claims by the deadlines. Moreover, the Allocation Plans clearly state: “In

order to receive a payment, you need to file a valid claim.” Members likely had valid

claims, but they did not file them in accordance with the notices governing Rounds 1 and

2 Settlements. Moreover, Members did not and have not provided evidence to the Court

explaining why they failed to file timely proofs of claim. In short, the Court agrees with

Class Counsel that the allocation of the reserve funds turns on whether a class member

1

Members also argue that Class Counsel use of the term–“class members,”

rather than “claimants” supports their position. The Court disagrees. Class Counsel

modified the term class member to include “eligible”. Moreover, had Class Counsel

used claimant, the description would have to be modified by terms such as eligible or

verified or timely. A claimant is anyone who files a claim, including claims that were

unverified. The term would not allow anyone who filed a claim to partake in a share of

the settlements. 

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filed claims in those particular settlements, and Class Counsel clearly represented that

when the reserve funds were distributed it would be to eligible Dealerships. (ECF No.

519 in 12-101). The reserve funds are not separate from the settlements–but a further

distribution of existing settlements, for which Members failed to file claims. The

aggregation of settlements into rounds created by Class Counsel does not alter the

essential facts. 

B. Principles of Equity and Fairness Do Not Require Allocation of Reserve

 Funds to Members

The parties disagree as to whether Members’ claims to the reserve funds can be

characterized as late, and if they are, whether equitable distribution and the fiduciary duty

owed by Class Counsel to all class members regardless of timing issues requires

allocation of those reserve funds to Members. The Court discusses the arguments

below. 

1. Timeliness of Claims

Members argue that their request for reserve funds is timely because (1) they

submitted timely claims in Rounds 3 and 4 Settlements, and (2) are not seeking

recompense from the distributions already made in Rounds 1 and 2 Settlements despite

being members. The argument falls flat. 

The Court assesses whether claims are late in terms of compliance with claims

deadlines. Here, Members did not file proofs of claim in the Round 1 Settlements. The

deadline–March 31, 2016, has long since passed. Likewise, the Round 2 Settlements

required proofs of claim to be filed by a deadline long since passed–April 28, 2017. 

Although the settlement plans allowed class members submitting claims to rely on their

proof of claim in future settlements with Defendants, as they were processed

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automatically, there is nothing in the settlement plans that would allow a proof of claim in

a latter round to relate back to an earlier settlement. Therefore, the Court finds Members’

claims to reserve funds from Rounds 1 and 2 Settlements are late.

2. Equitable Considerations

The parties next argue whether Members should participate in the distribution of

reserve funds regardless of timing issues. Members assert that given the method by

which settlement rounds were established, the fiduciary duty owed to Members by Class

Counsel, and the lack of any resulting prejudice to class members, equities favor allowing

Members’ participation. Class Counsel argues that the circumstances of this case

undermine any argument that Members should participate in the distribution of reserve

funds based on equity and fairness. 

The Supreme Court held that in deciding whether to accept late claims, courts

consider “all relevant circumstances” including the danger of prejudice to other class

members, the length of the delay and effect on judicial proceedings, the reason for the

delay, and whether the late claimant acted in good faith. Pioneer Inv. Servs. v. Brunswick

Assoc. Ltd., 507 U.S. 380, 395 (1993).

After considering all of the circumstances and case law relevant to the resolution

of Members’ position, the Court concludes that there is no justification for the delay and

allowing Members to participate in the distribution of the reserve funds from Rounds 1

and 2 would prejudice class members. In In re Dairy Farmers of Am., Inc. Cheese

Antitrust Litig., No. 09-3690 (N. D. Ill. 2016), for example, the class counsel supported

allowing nine late-filed claims because the claims processing would not be delayed, and

the claims were filed within weeks to several months of the deadline. In contrast, DiCarlo,

a Senior Project Manager for the Claims Administrator, has represented that the delay

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here could last 18 months and would preclude distribution of any money from any

settlement until every claim was processed. (DiCarlo Decl. ¶ 24). DiCarlo’s detailed

description of the process by which the allocation plans were used to calculate the pro

rata shares of dealerships that filed claims, and the painstaking process for valuing the

claims is uncontested. (DiCarlo Decl., ¶¶ 20, 21). The administrative costs would

necessarily increase if Members were allowed to participate. In addition, the delay by

Members here was not months, but years. 

The late claim allowed in In re Orthopedic Bone Screw Prods. Liab. Litig., 246 F.3d

315, 319-20 (3d Cir. 2001), involved a potential member who did not learn of the

settlement in time to file the initial registration as required by the claim process, but did

file a timely proof of claim. The court allowed the claim, and 100 similar claims, observing

that the claims constituted “a minuscule fraction of the total settlement class,” that the

inclusion was not prejudicial because the administration and distribution were still

underway, and the inclusion would neither disrupt nor delay the process. The court

further found that the individual showed excusable neglect and good faith because he

had not received direct notice. Id. at 328-29. Again, in the case before this Court,

Members did not file timely proofs of claim in Rounds 1 and 2, and the evidence

demonstrates that Members received multiple copies of the Round 1 and Round 2

Settlement notices via email and hard copy. (ECF No. 593 in 12-102, Class Counsels’

Response Brief, DiCarlo Decl. ¶¶ 32-34). Members do not contend otherwise.2

2

In fact, the Claims Administrator, KCC, identified at least 96 Round 1 settlement

emails sent to employees of the Wolf Automotive Group, including managers,

executives, salespeople, and others on September 15, 2015. All were delivered

successfully. KCC sent 96 Round 2 Settlement notices on September 9, 2016, but 14

were bounced. KCC then mailed notices to 7 of the 21 listed Wolfe Automotive Group

dealers in Rounds 1 and 2. (DiCarlo Decl. ¶ 32). KCC identified emails sent to 8

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The late claims filed and allowed by the court in In re Agent Orange Prod. Liab.

Litig., 69 F. Supp. 1250, 1263 (E.D. N.Y. 1988), caused no significant administrative

costs, and that court found that late claims would be “de minimus” compared to timely

claims. In contrast, here, the number of eligible class members would increase

dramatically, by 1500, because just over 3400 Dealership class members submitted

claims in Round 1 whereas approximately 5000 submitted claims in Round 3. The Court

does not find the increase de minimis; it could result in an increase of 50%, depending on

how the number of claims and dealerships are calculated. (DiCarlo Decl. ¶ 25).

In addition to the distinctions between the matter at hand and those addressed by

the cases cited above, the Court recognizes that the reserves were created to account for

potential changes to the allocation based upon new information about parts and models

targeted by the conspiracies, not as a back-up to cover late claims. (See DiCarlo Decl. ¶

2); See also ECF No. 394-1, pp 5-9 in 12-102). Class Counsel made clear that “In the

event and to the extent that the reserve fund is not needed to cover payments described

above, any funds remaining in the reserve fund after future allocations will be paid to

eligible dealerships based on their pro rata share of the settlement funds and the eligible

claims filed.” Nothing in the reserve fund explanation to the Court suggests that they

were created to account for the situation in which Members find themselves.

employees of Young Automotive Group LLC regarding Round 1 Settlement, which were

delivered successfully. KCC successfully emailed notice of Round 2 Settlements to 21

employees; eight successfully. KCC mailed paper notice to 8 dealerships in both

Rounds. The same occurred regarding Kings Nissan and Kings Infiniti, Inc.: 26 emails

were successfully delivered in Round 1, and 3 emails in Round 2. Paper notices were

also sent to both dealerships. (Id. at ¶ 34). 

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Nor does the Court find Class Counsel has violated its fiduciary duty to protect all

class members’ interests by arguing against Members. Members contend that Class

Counsel is protecting early filers at Members’ expense, arguing that Class Counsel has

measured Members’ interests against so-called “early filers.” Members mischaracterize

the status of eligible dealerships in Rounds 1 and 2 Settlements–they are timely filers, not

early filers. Moreover, reserve funds were put in escrow years ago with the stated

purpose of allowing dealerships with timely proofs of claim to receive an initial advance. 

Considering the amount of time that has passed between the claims deadlines in Rounds

1 and 2, and distribution of the reserves, as well as the purpose of the reserve funds, the

Court rejects Members’ position that Class Counsel is not meeting their fiduciary duty to

class members. Notably, Class Counsel does not take the position that eligible class

members have some justifiable expectation to a particular payout and would be

prejudiced on that basis by approval of Members’ late claims. Their position turns on

factors such as the lack of evidence that Members pursued their claims diligently. 

Deadlines are necessary for finality, and here ignoring those deadlines would delay

distribution 18 months or more and increase administrative costs. DiCarlo has

represented to the Court that a distribution of the reserve funds was in the works, likely to

occur within a month. The claims already have been reviewed, validated, and tabulated. 

The equities do not favor Members, who are not unsophisticated consumers and have not

even provided an explanation for their delay. They certainly have not established good

cause for the position in which they find themselves. 

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III. CONCLUSION

The plan language of the Allocation Plans limited participation in the settlements to

those class members that filed timely and valid claims. The equities here do not favor

opening the reserve funds to Members relative to Rounds 1 and 2 Settlements. 

Therefore, the Court DENIES Members’ motion. 

IT IS SO ORDERED.

Dated: September 30, 2020 s/Sean F. Cox 

Sean F. Cox 

 U. S. District Judge 

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