Case 2:12-md-02311-SFC-RSW ECF No. 2205, PageID.39856 Filed 04/25/22 Page 1 of 35
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`UNITED STATES DISTRICT COURT
`EASTERN DISTRICT OF MICHIGAN
`SOUTHERN DIVISION
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`IN RE AUTOMOTIVE PARTS
`ANTITRUST LITIGATION
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`Master File No. 12-md-02311
`Honorable Sean F. Cox
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`THIS DOCUMENT RELATES TO:
`ALL END-PAYOR ACTIONS
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`END-PAYOR PLAINTIFFS’ MEMORANDUM IN OPPOSITION TO
`ENTERPRISE FLEET MANAGEMENT, INC.’S MOTION TO ENFORCE
`END PAYOR SETTLEMENTS AND STRIKE STIPULATION
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`Case 2:12-md-02311-SFC-RSW ECF No. 2205, PageID.39857 Filed 04/25/22 Page 2 of 35
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`STATEMENT OF ISSUES PRESENTED
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`1. Can Crowell & Moring LLP obtain recovery under the
`settlement agreements for
`its client, Enterprise Fleet
`Management, Inc., where neither entity is a settlement class
`member and where neither entity sought leave of the Court to
`intervene to assert their arguments?
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`No.
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`2. Should the Court strike its order entering a stipulation
`between Settlement Class Counsel, Class Action Capital,
`LLC, and its clients where: (i) the stipulation is consistent
`with the settlement agreements and plan of allocation; (ii) the
`stipulation is limited to the signatories; and (iii) as an entity
`that is not included in the settlement classes, Enterprise Fleet
`Management Corp. has no standing to challenge them?
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`No.
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`i
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`Case 2:12-md-02311-SFC-RSW ECF No. 2205, PageID.39858 Filed 04/25/22 Page 3 of 35
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`TABLE OF MOST CONTROLLING AUTHORITIES
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`Request Foods, Inc. v. Am. Roland Food Corp., No. 1:11-CV-128, 2012 WL
`13018611 (W.D. Mich. Sept. 12, 2012).
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`ii
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`Case 2:12-md-02311-SFC-RSW ECF No. 2205, PageID.39859 Filed 04/25/22 Page 4 of 35
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`TABLE OF CONTENTS
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`2.
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`STATEMENT OF ISSUES PRESENTED ................................................................. i
`1.
`Can Crowell & Moring LLP obtain recovery under the
`settlement agreements for its client, Enterprise Fleet
`Management, Inc., where neither entity is a settlement
`class member and where neither entity sought leave of
`the Court to intervene to assert their arguments? ........................ i
`Should the Court strike its order entering a stipulation
`between Settlement Class Counsel, Class Action
`Capital, LLC, and its clients where: (i) the stipulation
`is consistent with the settlement agreements and plan
`of allocation; (ii) the stipulation is limited to the
`signatories; and (iii) as an entity that is not included in
`the settlement classes, Enterprise Fleet Management
`Corp. has no standing to challenge them? ................................... i
`TABLE OF MOST CONTROLLING AUTHORITIES .......................................... ii
`INTRODUCTION ..................................................................................................... 1
`BACKGROUND ....................................................................................................... 3
`I.
`The End-Payor Actions Always Contemplated a Settlement
`Class Definition Limited to End-Payors. .............................................. 3
`Settlement Class Counsel’s November 2019 Email to Crowell
`Is Irrelevant, Was Not Relied Upon, And Is Not Inconsistent
`With the Settlement Class Definition. ................................................... 8
`III. Settlement Class Counsel Entered into a Stipulation with
`Another Third-Party Claims Filer and Its Clients that Is Not
`Binding on EFM and is Consistent with a Settlement Class
`Definition Limited to End-Payors. ...................................................... 10
`IV. The FMCs, Including EFM, Operate in a Manner that
`Excludes them from the Settlement Classes. ...................................... 12
`ARGUMENT ........................................................................................................... 13
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`II.
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`Case 2:12-md-02311-SFC-RSW ECF No. 2205, PageID.39860 Filed 04/25/22 Page 5 of 35
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`I.
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`II.
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`EFM Is Not Entitled to Relief Since It Is Not A Settlement
`Class Member. ..................................................................................... 14
`A.
`The Settlement Agreements Limit the Settlement Class
`to End-Payors. ........................................................................... 14
`EFM is Properly Excluded from the Settlement Class
`Because FMCs Are Not “End-Payors” of a Leased
`Vehicle. ..................................................................................... 16
`Treating EFM As An EPP Settlement Class Member
`Creates Double Recovery Problems And Was Never
`Contemplated. ........................................................................... 16
`The Motion is Procedurally Improper Since EFM Has Neither
`Sought Nor Been Granted Leave to Intervene. ................................... 18
`III. Estoppel Does Not Prevent Settlement Class Counsel From
`Asserting EFM’s Exclusion From the Settlement Classes. ................ 19
`IV. The CAC Stipulation Supports Settlement Class Counsel’s
`Position and Is Consistent With the Plan of Allocation. ..................... 20
`A. Movant Does Not Have Standing to Challenge the
`Stipulation. ................................................................................ 21
`The CAC Stipulation Does Not Violate Illinois Brick. ............ 22
`The CAC Stipulation Does Not Violate the Plan of
`Allocation. ................................................................................. 24
`CONCLUSION ........................................................................................................ 25
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`B.
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`C.
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`B.
`C.
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`Case 2:12-md-02311-SFC-RSW ECF No. 2205, PageID.39861 Filed 04/25/22 Page 6 of 35
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`TABLE OF AUTHORITIES
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` Page(s)
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`Cases
`Franklin Cty. v. Travelers Prop. Cas. Ins. Co. of Am.,
`No. CIV.A 3:08-52-DCR, 2008 WL 4787401 (E.D. Ky. Oct. 30, 2008) .......... 18
`Illinois Brick Co. v. Illinois,
`431 U.S. 720 (1977) .....................................................................................passim
`In re Automotive Parts Litig.,
`997 F.3d 677 (6th Cir. 2021) .................................................................... 3, 14, 23
`In re Class 8 Transmission Indirect Purchaser Antitrust Litig.,
`140 F. Supp. 3d 339 (D. Del. 2015) ...................................................................... 5
`In re Methionine Antitrust Litig.,
`204 F.R.D. 161 (N.D. Cal. 2001) .......................................................................... 5
`In re Optical Disk Drive Antitrust Litig.,
`2016 WL 467444 (N.D. Cal. Feb. 8, 2016) ........................................................ 23
`In re Polyurethane Foam Antitrust Litig.,
`168 F. Supp. 3d 985 (N.D. Ohio 2016) .............................................................. 23
`Livonia Prop. Hldgs., L.L.C. v. 12840-12976 Farmington Rd. Hldgs., L.L.C.,
`717 F. Supp. 2d 724 (E.D. Mich. 2010) ............................................................. 21
`Lyngaas v. Curaden AG,
`436 F. Supp. 3d 1019 (E.D. Mich. 2020), aff’d sub nom. 992 F.3d 412
`(6th Cir. 2021) ..................................................................................................... 23
`Marino v. Ortiz,
`484 U.S. 301 (1988) ............................................................................................ 21
`Old Kent Bank v. Sobczak,
`243 Mich. App. 57 (2000) .................................................................................. 14
`Paul v. Detroit Edison Co.,
`94 F. Supp. 3d 880 (E.D. Mich. 2015) ......................................................... 19, 20
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`Case 2:12-md-02311-SFC-RSW ECF No. 2205, PageID.39862 Filed 04/25/22 Page 7 of 35
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`Request Foods, Inc. v. Am. Roland Food Corp.,
`No. 1:11-CV-128, 2012 WL 13018611 (W.D. Mich. Sept. 12, 2012) ............... 15
`Stromberg v. Qualcomm, Inc.,
`14 F.4th 1059 (9th Cir. 2021) ............................................................................. 24
`Toldy v. Fifth Third Mortg. Co.,
`No. 1:09 CV 377, 2010 WL 2640021 (N.D. Ohio June 29, 2010) .................... 18
`Welsh v. Wachovia Corp.,
`191 F. App’x 345 (6th Cir. 2006) ....................................................................... 22
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`Case 2:12-md-02311-SFC-RSW ECF No. 2205, PageID.39863 Filed 04/25/22 Page 8 of 35
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`INTRODUCTION
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`End-Payor Plaintiffs (“EPPs”), by and through their Court-appointed counsel
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`(“Settlement Class Counsel”), respectfully submit this memorandum in opposition
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`to the motion made by Crowell & Moring LLP’s (“Crowell”) on behalf of non-party
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`Enterprise Fleet Management, Inc. (“EFM”) to participate in the settlements as if it
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`were a settlement class member. ECF No. 2192. Fleet Management Companies
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`(“FMCs”) such as EFM are companies in the business of leasing vehicles to their
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`business customers. In addition to submitting claims on behalf of EFM, Crowell has
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`submitted claims on behalf of EFM’s customers based on many of the same vehicles.
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`Plainly, the FMC customers are at the end of the chain of distribution and are the
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`members of the class. For the reasons set forth below, the motion should be denied.
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`First, the Settlement Agreements were made on behalf of settlement classes
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`of end payors. This is obvious both on the face of the Settlement Agreements, see,
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`e.g., Exhaust Systems, ECF No. 112-1, PgId.3818 (defining Releasors as “End-
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`Payor Plaintiff Class Representatives and the Settlement Class Members”), and by
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`reference to the underlying complaints, which explain that the “members of the
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`proposed Classes purchased [the affected parts] indirectly” as “an owner or lessee
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`of a new Vehicle” and that “in a multiple-level chain of distribution, passing on
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`monopoly overcharges is not the exception: it is the rule,” Id., PgId.3816. The
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`settlement class definitions also include the exclusionary term “not for resale,”
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`Case 2:12-md-02311-SFC-RSW ECF No. 2205, PageID.39864 Filed 04/25/22 Page 9 of 35
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`which excludes all entities except end-users. The record in these cases demonstrate
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`that the settlement classes are limited to end payors.
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`Second, FMCs, such as EFM, cannot automatically be deemed settlement
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`class members, particularly where they make claims for vehicles they lease. EFM
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`does not contest that the vehicles it seeks to recover upon in this litigation are those
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`it purchased to lease to its corporate customers; it is therefore not the end-user in the
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`chain of distribution. This is illustrated by the fact that even the sample lease
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`agreement provided by a FMC passes all risk of loss on to the lessor, as well as all
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`“costs, expenses, fees and charges.” ECF No. 2192-6, PgId.39781-82.
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`Third, movant’s interpretation is contradicted by the record in these cases.
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`Nothing in the settlement agreements, plan of allocation, or any other filing made in
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`these cases contemplate that two persons or entities could make a claim to share in
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`the settlements based on the same vehicle. Movant’s interpretation would in fact
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`contradict the pro rata scheme in the Plan of Allocation that provides for payment
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`on a per-vehicle and per-part pro rata basis.
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`In sum, if granted, the motion filed by Crowell on behalf of EFM would do
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`violence to the standard principles of claims administration by raising fundamental
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`questions about fairness of notice to end-payor purchasers—the only settlement class
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`members specified in the settlement agreements. It would also cause substantial
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`additional delay to an already-complicated claims administration process.
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`Case 2:12-md-02311-SFC-RSW ECF No. 2205, PageID.39865 Filed 04/25/22 Page 10 of 35
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`Movant’s attempt to overturn a negotiated stipulation between EPPs and the
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`nation’s largest FMCs—a stipulation that recognizes the limitation of the
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`settlement classes to end-payors—should also be rejected. EFM does not have
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`standing to challenge the stipulation since it is not a settlement class member and is
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`not bound by the agreement. The stipulation, which resolves a disputed question,
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`does not violate Illinois Brick Co. v. Illinois, 431 U.S. 720, 723 (1977), a case that
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`only applies to a litigated class and not to a settlement class. As the Sixth Circuit has
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`recognized, “Illinois Brick is a question of antitrust standing . . . It is not a question
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`that bears on the interpretation of the settlement agreements.” In re Automotive Parts
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`Litig., 997 F.3d 677, 683 (6th Cir. 2021) (hereinafter “Yamashita”). The stipulation
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`is likewise consistent with the plan of allocation and does not contemplate that
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`overlapping claims could be submitted based on the same vehicles. The motion
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`should be denied.
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`BACKGROUND
`I. The End-Payor Actions Always Contemplated a Settlement Class
`Definition Limited to End-Payors.
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`The district court granted final approval of the settlements in four successive
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`rounds.1
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`1 Final approval was granted on June 20, 2016 (Round 1), September 25, 2017
`(Round 2), November 8, 2019 (Round 3), and September 23, 2020 (Round 4). ECF
`No. 2101, PgId.38264. Preliminary approval was granted months before each final
`approval hearing took place.
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`3
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`Case 2:12-md-02311-SFC-RSW ECF No. 2205, PageID.39866 Filed 04/25/22 Page 11 of 35
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`As is acknowledged in the motion, EPP settlement class members only
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`include “persons and entities that . . . purchased or leased a new Vehicle [or
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`replacement parts] in the United States not for resale.” ECF No. 2192, PgId.39741.
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`The settlement classes are defined in the settlement agreements, described in the
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`class notices for each round of settlements, and outlined in the Plan of Allocation
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`repeatedly approved by the district court. See, e.g., Exhaust Systems, ECF No. 112-
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`1, PgId.3819 (Meritor Settlement); ECF No. 2005-2, PgId.36628 (Plan of
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`Allocation). On their face, the settlement agreements do not entitle FMCs—entities
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`who purchase large volumes of vehicles not for their own use but to immediately
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`lease them to their end-user customers—to share in the settlements. Entities who
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`purchase vehicles for the purpose of immediately re-leasing them were never
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`intended to be included in the settlement classes. Reiss Decl. ¶ 4. The intent not to
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`include them is particularly obvious when viewed in proper context.
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`Other Provisions within the Settlement Agreements: The settlement
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`agreements at issue all contain consistent language stating that the agreements “shall
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`be construed and interpreted to effectuate the intent of the parties, which is to
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`provide, through this Agreement, for a complete resolution of the relevant claims
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`with respect to each Releasee as provided in the agreement.” See, e.g., Exhaust
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`Systems, ECF No. 112-1, PgId.3841 (Meritor Settlement). Releasors are defined in
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`the settlement agreements as “End-Payor Plaintiff Class Representatives and the
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`Settlement Class Members.” Id., PgId.3818. The settlement agreements also
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`expressly reference each respective complaint. Id., PgId.3816. Those complaints
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`note the “members of the proposed Classes purchased [the affected parts] indirectly”
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`as “an owner or lessee of a new Vehicle.” See, e.g., Exhaust Systems, ECF No. 70
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`¶ 100. They further explain that “in a multiple-level chain of distribution, passing on
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`monopoly overcharges is not the exception: it is the rule.” Id. ¶ 200.
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`Settlement Class Counsel’s Prior Filings: Throughout the course of this
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`long-pending litigation, Settlement Class Counsel have consistently taken the
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`position that the classes they represent include only those at the end of the
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`distribution chain and not entities higher up in the chain, such as automobile dealers.
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`See, e.g., Exhaust Systems, ECF No. 36 (response to motion to dismiss). This
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`position is consistent with the case law addressing potential conflicts of interest
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`among multiple levels of indirect purchasers in antitrust class actions. See In re
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`Methionine Antitrust Litig., 204 F.R.D. 161, 167 (N.D. Cal. 2001) (denying class
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`certification in part because plaintiffs sought to represent two levels of indirect
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`purchasers and noting “Plaintiff does appear to have a conflict with the class
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`members to whom it resold methionine”); In re Class 8 Transmission Indirect
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`Purchaser Antitrust Litig., 140 F. Supp. 3d 339 n.7 (D. Del. 2015) (finding a conflict
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`where “truck resellers within the class have an interest in proving that they passed-
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`through zero overcharges in order to recover 100% of the damages attributed to each
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`resale, while the downstream purchasers have an opposite interest”).
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`Settlement Class Counsel repeatedly explained in the motions for final
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`approval that the settlements benefited the End-Payor Purchaser Class because
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`“Defendants would offer expert testimony challenging the impact of their conduct”
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`and End-Payor Purchasers would have to show the “Settling Defendants’ illegal
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`overcharges were passed through multiple levels of indirect purchasers.” See, e.g.,
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`Exhaust Systems, ECF No. 171, PgId.6197. This is consistent with an intent to
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`represent only the end-payors—and not indirect purchasers that subsequently resold
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`or leased vehicles to the end-payors.
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`The Class Notice: Each Class Notice clearly explains that “you are included
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`in the Settlement Classes … if …you bought or leased a qualifying new vehicle in
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`the U.S. (not for resale).” ECF No. 2002-6, PgId.36559. The Class Notices also make
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`clear that only “Purchasers or lessees of qualifying new vehicles”—not resellers or
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`lessors—“may be members of the Settlement Classes entitled to monetary
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`recovery.” Id., PgId.36569. This is further consistent with an intent to exclude
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`entities like EFM that lease vehicles to end-payors.
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`The Plan of Allocation: The approved Plan of Allocation also makes clear
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`that “Authorized Claimants will share and share alike on a pro rata basis in the Net
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`Settlement Funds” and “Allowed Claim Amounts for each Authorized Claimant will
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`Case 2:12-md-02311-SFC-RSW ECF No. 2205, PageID.39869 Filed 04/25/22 Page 14 of 35
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`be determined separately for each Automotive Part.” See, e.g., Exhaust Systems,
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`ECF No. 2002-2, PgId.36521-2. This indicates that only one settlement payment will
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`be made for each qualifying Automotive Part. The Plan of Allocation does not permit
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`(or even contemplate) multiple payments for the same vehicle to multiple levels of
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`indirect purchasers within the vehicle distribution chain.
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`The Structure of the In re: Automotive Parts Antitrust Litigation: This
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`litigation contains two separate groups of indirect purchaser plaintiffs: the “Auto
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`Dealer Class” and “End-Payor Class.” The Auto Dealer Settlement Class includes,
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`“Dealers who indirectly purchased certain component parts and/or purchased new
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`vehicles containing [the] component parts.”2 “Dealer” or “Automobile Dealer” is
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`defined as “an entity or person authorized to engage in the business of selling
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`and/or leasing new vehicles at retail in the United States.” Id. To the extent that
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`FMCs, like EFM, are authorized to sell or lease new vehicles in the United States—
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`by virtue of their actual vehicles sales and leases to end-payors—they are potential
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`members of the Auto Dealer class.
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`The Court’s Orders Approving the Settlements: Crowell and EFM
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`acknowledge that, in approving the settlements, the Court understood that the
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`settlement classes in these actions were limited to end-payor plaintiffs. For example,
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`2 First Phase Notice in Auto Dealer Action,
`http://www.autodealersettlement.com/media/692505/v4_auto1_notice_091715_fin
`al.pdf (last visited April 20, 2022).
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`Case 2:12-md-02311-SFC-RSW ECF No. 2205, PageID.39870 Filed 04/25/22 Page 15 of 35
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`the Court stated that the settlements “identif[y] those jurisdictions that allow EPPs,
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`who are indirect purchasers, to seek money damages or restitution.” In re Wire
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`Harness, No. 12-cv-00103-SFC, ECF No. 512, PageID.17218 (Aug. 9, 2016); see
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`also ECF No. 2192, PgId.39750 (where this quote is cited by Crowell and EFM).
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`II. Settlement Class Counsel’s November 2019 Email to Crowell Is
`Irrelevant, Was Not Relied Upon, And Is Not Inconsistent With the
`Settlement Class Definition.
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`Crowell first raised a question about FMCs in an email dated October 17,
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`2019. ECF No. 2192-3, PgId.39771. In that email, Crowell asked Settlement Class
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`Counsel to confirm, inter alia, that “fleet management companies who purchase (and
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`hold title to) new vehicles are . . . not otherwise excluded from the class by virtue of
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`leasing their vehicles out to customers under long term leases.” Id., PgId.39770. The
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`very fact that Crowell raised this question undercuts the argument that the settlement
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`agreements unambiguously include FMCs as class members. In raising this question,
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`neither Crowell nor EFM provided Settlement Class Counsel with any actual lease
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`terms. Langham Decl. ¶ 4. Despite this, Settlement Class Counsel responded as
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`follows on November 9, 2019:
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`As discussed on our call, we will address many of the
`issues related to fleet management companies on a case-
`by-case basis. However, assuming for purposes of this
`response that the fleet management company at issue
`purchased new vehicles and retained title to those new
`vehicles while leasing them to customers under long term
`leases, those fleet management companies would be
`included in the class.
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`Case 2:12-md-02311-SFC-RSW ECF No. 2205, PageID.39871 Filed 04/25/22 Page 16 of 35
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`Id.; see also ECF No. 2192-3, PgId.39770 (emphasis added).
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`Settlement Class Counsel did not “confirm that fleet management companies
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`such as EFM” “were included in the End Payor settlement class” as Crowell now
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`contends. ECF No. 2192-2 at PgId.39762, ¶ 4 (Burton Decl.); see also Langham
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`Decl. ¶ 5. Settlement Class Counsel did not state that in all cases FMCs that leased
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`their vehicles to customers under long term leases would be included in the
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`settlement class. Id. And, importantly, Settlement Class Counsel never stated that
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`there could be multiple claimants and multiple recoveries for a single vehicle. Id.
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`Instead, Settlement Class Counsel emphasized the “case-by-case” nature of the
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`analysis involving FMCs, acknowledging that there may be some cases in which
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`FMCs could recover as end-payors. Id. Crowell did not seek further follow-up and
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`did not ask for more information. Id. ¶ 6.
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`Three days after receiving that email, Crowell filed a claim on behalf of EFM.
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`ECF No. 2192-5, PgId.39774 ¶ 3. It later supplemented EFM’s claim on March 16,
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`2020. Id.; see also Reiss Decl. ¶ 5, Ex. D. EFM is the only FMC represented by
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`Crowell. Id. ¶ 6. And the March 16, 2020 claim form is the only one on file for EFM.
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`Id. To Settlement Class Counsel’s knowledge, all of the vehicles claimed by EFM
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`are subject to long-term lease agreements; none were claimed or purchased for
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`EFM’s own use or account. Id. In total, EFM seeks to recover for 1,043,056 vehicles
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`and 2,618,908 replacement parts. Id. ¶ 7. Both before and after filing EFM’s claim,
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`Case 2:12-md-02311-SFC-RSW ECF No. 2205, PageID.39872 Filed 04/25/22 Page 17 of 35
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`Crowell filed a litany of claims on behalf of true end-payors, including many who
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`are on information and belief EFM’s customers. Id. ¶ 8. Regardless, these claims
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`seek compensation for the same vehicles (identified by VIN) as EFM.
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`Once the claims-filing deadline passed, the Claims Administrator began the
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`process of de-duplicating claims by VIN number. Reiss Decl. ¶ 9. Of the 1,043,056
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`vehicles claimed by EFM, 503,316 of them—48.25%—were also claimed by
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`another entity and most—more than 500,000 of them—were claimed by another
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`entity who is also represented by Crowell. Id. In many cases, in fact, Crowell filed
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`not one, not two, but three separate claims for a single vehicle. Reiss Decl. ¶ 9.
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`Settlement Class Counsel alerted Crowell to this specific problem in January 2022.3
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`Langham Decl. ¶ 7 at Ex. A. Settlement Class Counsel also asked Crowell for EFM’s
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`lease agreements, which Crowell initially declined to provide. Langham Decl. Id.
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`¶ 8. In any event, Crowell’s motion does not and cannot identify EFM or any other
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`party’s detrimental reliance on Settlement Class Counsel’s email. See, e.g., ECF
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`No. 2192.
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`III. Settlement Class Counsel Entered into a Stipulation with Another Third-
`Party Claims Filer and Its Clients that Is Not Binding on EFM and is
`Consistent with a Settlement Class Definition Limited to End-Payors.
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`Third-party claims filer Class Action Capital, LLC (“CAC”) previously filed
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`3 This undercuts Crowell’s claim that it has received “no correspondence or
`communication . . . denying, limiting, or otherwise indicating that its claim is not in
`good standing.” ECF No. 2192-2, PgId.39763 ¶ 4.
`10
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`Case 2:12-md-02311-SFC-RSW ECF No. 2205, PageID.39873 Filed 04/25/22 Page 18 of 35
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`a Motion to Enforce Settlement Agreements relating to claims filed by four of the
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`five largest FMCs, all of whom it represents. ECF No. 2149. CAC and Settlement
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`Class Counsel negotiated a resolution to that motion through a stipulation entered
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`by the Court. ECF No. 2182. The stipulation recognized that “[a] dispute has arisen
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`as to whether FMCs that purchased vehicles and then leased those vehicles (as
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`lessors) to FMC Customers (as lessees) are members of the EPP Settlement Classes
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`and entitled to recover from the EPPs’ class settlements.” The stipulation further
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`recognized that “two persons or entitles cannot both have a claim to share in the net
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`settlement funds based on the purchase or lease of the same vehicle,” and set forth
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`procedures for addressing FMC claims. See generally id.
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`Those procedures established that in those instances where both FMCs and
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`their customers filed otherwise valid and timely claims for the same vehicle, FMC
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`customers and not FMCs would be paid. Id., PgId.39704. To address the concern
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`that FMCs may have filed claims on behalf of their customers who did not file their
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`own claims, the stipulation allows for FMC customers to recover through the FMCs
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`in the event no duplicate customer claim was actually filed by the ultimate end-
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`payor. Id. In such cases, the “FMC Claimants shall be required to pass on the
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`recoveries they obtain from the net settlement funds to the FMC Claimants’
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`customers [minus capped fees agreed to between the FMC and its customers].” Id.
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`Following entry of the stipulation, Settlement Class Counsel discussed the
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`Case 2:12-md-02311-SFC-RSW ECF No. 2205, PageID.39874 Filed 04/25/22 Page 19 of 35
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`issue with Crowell and offered Crowell’s clients the same treatment as defined in
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`the stipulation. Langham Decl. ¶ 11. Settlement Class Counsel emphasized that
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`payment of claims to multiple levels of the chain of distribution was inconsistent
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`with the text and intent of the class definition. Id.
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`Crowell, on behalf of its clients, did not agree to be bound by the terms of the
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`stipulation, which patently does not bind any party other than the signatories. ECF
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`No. 2182. Instead, given that EFM is not an end-payor and did not make any
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`qualifying purchases, it is not a class member and its claims will be denied.
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`IV. The FMCs, Including EFM, Operate in a Manner that Excludes them
`from the Settlement Classes.
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`There is little dispute about the general operation of the FMC business model.
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`FMCs purchase large volumes of vehicles to satisfy customer demand for large
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`quantities of new vehicles, often ordering thousands of vehicles at a time through
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`orders placed directly with OEMs. Langham Decl. ¶ 12. Although the FMC-client
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`relationship can vary, as a general matter, FMCs “provide fleet management services
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`to businesses that operate fleets of vehicles.” ECF No. 2182, PgId.39700. “In certain,
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`but not all instances, FMCs purchased new vehicles and then leased those vehicles
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`to their customers” and “[i]n other instances, FMC Customers purchased or leased
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`new vehicles directly from an automobile dealer or other third party either on their
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`own or with an FMC’s administrative assistance, and the FMC performed fleet
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`management services to the FMC customers relating to those vehicles.” Id.
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`Case 2:12-md-02311-SFC-RSW ECF No. 2205, PageID.39875 Filed 04/25/22 Page 20 of 35
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`As the motion acknowledges, FMC leases mostly take the form of Open-End
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`or Terminal Rental Adjustment Clause (“TRAC”) leases. ECF No. 2192-5,
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`PgId.39775 ¶¶ 5 & 6.4 When FMCs lease vehicles under open TRAC leases, the
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`lease generally provides that the lessor will sell the vehicle at the end of the lease
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`term and share the profits or losses of the sale with the FMC Customer.5 The FMCs
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`purchase the vehicles specifically for purposes of leasing the vehicle to their
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`customers under an open-ended lease agreement that contemplates that the vehicle
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`will be sold as part of the same transaction. Exs. to ECF No. 2149 (sample leases
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`from some of the largest EFMs). EFM’s website explicitly mentions that it is a resale
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`expert, stating “[n]o other company buys and sells more vehicles than enterprise”
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`and noting that “[i]n 2017, Enterprise sold more than 1.1 million client vehicles.”6
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`Although EFM has redacted its own sample lease agreement, lease agreements from
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`the largest FMCs confirm that FMC customers make lease payments pegged to the
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`new vehicle purchase price, plus the FMC’s administrative fees. Exs. to ECF
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`No. 2149 (Element, at Art. 7; Wheels, at 2).7
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`ARGUMENT
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`4 See also Langham Decl., ¶ 13, Exhibit C at 30-31 (Deloitte (2018): Fleet Leasing
`& Management in North America).
`5 Langham Decl., ¶ 12, Exhibit B at 2 (Fleet Financials (2016): Open-End vs.
`Closed-End Leasing).
`6 https://www.elementfleet.com/fleet-services/car-light-duty/vehicle-remarketing.
`7 Element does not contend that its business model operates any differently than the
`other FMCs. See generally ECF No. 2192.
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`Case 2:12-md-02311-SFC-RSW ECF No. 2205, PageID.39876 Filed 04/25/22 Page 21 of 35
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`I. EFM Is Not Entitled to Relief Since It Is Not A Settlement Class Member.
`A. The Settlement Agreements Limit the Settlement Class to End-
`Payors.
`Crowell and EPPs agree that the language of the settlement agreements govern
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`whether EFM is a member of the Settlement Classes. ECF No. 2192, PgId.39735.
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`Because settlement agreements are a type of contract, their interpretation is governed
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`by state contract law. See Yamashita, 997 F.3d at 681 (“A settlement agreement is a
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`contract governed by principles of state contract law, here Michigan law.”). “Under
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`Michigan law, ‘[t]he primary goal of contract interpretation is to honor the intent of
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`the parties.’” Id. (quoting Old Kent Bank v. Sobczak, 243 Mich. App. 57, 63 (2000)).
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`Crowell incorrectly alleges that FMCs like EFM are settlement class members
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`under the “plain language of the settlements.” ECF No. 2192, PgId.39741. But this
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`reading requires the Court to improperly look at the settlement class definition
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`without consideration of the “contract as a whole.” Yamashita, 997 F.3d at 681. For
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`example, the settlement agreements make clear that only end-payors are covered.
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`See, e.g., Exhaust Systems, ECF No. 112-1, PgId.3818 (defining Releasors as “End-
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`Payor Plaintiff Class Representatives and the Settlement Class Members”). The
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`settlement agreements also specifically reference each respective complaint. Id.,
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`PgId.3816. Those complaints explain that the “members of the proposed Classes
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`purchased [the affected parts] indirectly” as “an owner or lessee of a new Vehicle”
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`and that “in a multiple-level chain of distribution, passing on monopoly overcharges
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`Case 2:12-md-02311-SFC-RSW ECF No. 2205, PageID.39877 Filed 04/25/22 Page 22 of 35
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`is not the exception: it is the rule.” Id. ¶ 200; See also Exhaust Systems, ECF No. 70
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`¶¶ 100, 200 & ECF No. 171, PgID.6197 (noting “EPPs would have to show that the
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`. . . Settling Defendants’ illegal overcharges were passed through multiple levels of
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`indirect purchasers”). The motion ignores this when it asserts that “whether FMCs
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`are ‘end payors’ under antitrust law is wholly irrelevant here i