throbber
Case 2:12-md-02311-SFC-RSW ECF No. 2120-1, PageID.38479 Filed 03/03/21 Page 1 of 24
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`UNITED STATES DISTRICT COURT
`EASTERN DISTRICT OF MICHIGAN
`SOUTHERN DIVISION
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`
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`AUTOMOTIVE
`RE
`IN
`ANTITRUST LITIGATION
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`PARTS
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`THIS DOCUMENT RELATES TO:
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`ALL END-PAYOR ACTIONS
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`Master File No. 12-md-02311
`Honorable Sean F. Cox
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`
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`DECLARATION OF BRIAN A.
`PINKERTON IN SUPPORT OF
`END-PAYOR PLAINTIFFS’
`OPPOSITION TO FINANCIAL
`RECOVERY SERVICES,
`LLC’S MOTION TO COMPEL
`ACCEPTANCE AND
`PROCESSING OF VEHICLE
`DATA
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`I, BRIAN A. PINKERTON, declare under penalty of perjury:
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`1.
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`I am a Senior Project Manager at Epiq Class Action & Claim Solutions,
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`Inc. (“Epiq”) and a former Assistant Director of the Court-appointed claims
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`administrator, Garden City Group, LLC (“GCG”). GCG was acquired by Epiq in
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`2018. All references to “Epiq” herein incorporate the work performed while
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`operating as either GCG or Epiq.
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`2.
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`As the Project Manager for settlements reached by the End-Payor
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`Plaintiffs, I am responsible for the day-to-day supervision and management of the
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`claims-administration process. I am an attorney admitted to practice in the State of
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`1
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`Case 2:12-md-02311-SFC-RSW ECF No. 2120-1, PageID.38480 Filed 03/03/21 Page 2 of 24
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`Washington and have personally managed dozens of class action settlement
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`administrations, including consumer, wage and hour, and large antitrust class
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`actions. I have extensive experience handling large data sets and developing creative
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`strategies for reviewing and assessing complex data. I have served as the Project
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`Manager on this matter since October 2015, when the Court appointed Epiq to serve
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`as the claims administrator.
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`3.
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`I submit this declaration in support of End-Payor Plaintiffs’
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`Memorandum in Opposition to Financial Recovery Services, LLC’s Motion to
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`Compel Acceptance and Processing of Vehicle Data. No. 2:12-md-2311, Dkt. 2114.
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`The following statements are based on my personal knowledge and/or information
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`provided by other experienced Epiq employees working under my supervision and,
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`if called on to do so, I could and would testify competently thereto.
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`4.
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`Epiq is the premier provider for class action settlement administrations,
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`restructuring and bankruptcy matters, mass tort settlement programs, regulatory
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`settlements, and data breach response programs in the United States and
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`internationally. Epiq has efficiently and effectively managed class action settlement
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`administrations for more than three decades. Epiq’s team comprises attorneys,
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`paralegals, finance and banking experts, software engineers, in-house legal notice
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`specialists, graphic artists with extensive website design experience, and U.S.-based
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`contact center professionals hired, trained and managed by Epiq.
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`2
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`Case 2:12-md-02311-SFC-RSW ECF No. 2120-1, PageID.38481 Filed 03/03/21 Page 3 of 24
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`5.
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`Epiq was established in 1968 as a client services and data processing
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`company. Epiq has administered bankruptcies since 1985 and settlements since
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`1993. Epiq has routinely developed and executed notice programs and
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`administrations in a wide variety of mass and class action contexts including
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`settlements of consumer, antitrust, products liability, and labor and employment
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`class actions, settlements of mass tort litigation, Securities and Exchange
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`Commission enforcement actions, Federal Trade Commission disgorgement actions,
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`insurance disputes, bankruptcies, and other major litigation. Epiq has administered
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`more than 4,500 settlements, including some of the largest and most complex cases
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`ever settled.
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`6.
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`In class actions such as this, Epiq’s administration services include
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`administering notice requirements, designing direct-mail notices, implementing
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`notice fulfillment services, coordinating with the United States Postal Service,
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`developing and maintaining notice websites and dedicated telephone numbers with
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`recorded information and/or live operators, processing exclusion requests,
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`objections, claim forms and correspondence, maintaining class member databases,
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`adjudicating claims, managing settlement funds, and calculating claim payments and
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`distributions. As an experienced neutral third-party administrator working with
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`settling parties, courts, and mass action participants, Epiq has handled hundreds of
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`millions of notices, disseminated hundreds of millions of emails, handled millions
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`3
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`Case 2:12-md-02311-SFC-RSW ECF No. 2120-1, PageID.38482 Filed 03/03/21 Page 4 of 24
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`of phone calls, processed tens of millions of claims, and distributed hundreds of
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`billions in payments.
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`7.
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`As the Court-appointed claims administrator, Epiq is responsible for
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`the development and implementation of efficient, secure, and cost-effective methods
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`to properly handle the voluminous data and mailings associated with claims
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`administration, claims processing, and the disbursement of settlement funds in an
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`orderly manner that ensures the fair treatment of class members and all parties in
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`interest.
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`8.
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`Epiq’s duties include, among other things: (1) creating and maintaining
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`a dedicated settlement website, (2) disseminating the class notice to potential class
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`members, (3) mailing direct notice to individuals who request direct notice, (4)
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`establishing a dedicated P.O. Box for the settlements and handling mail received,
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`such as questions, objections, exclusion requests, requests for direct notice, and
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`inquiries from potential members of the settlement classes, and (5) maintaining a
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`toll-free helpline for potential members of the settlement classes.
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`9.
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`Now that the final claims submission deadline passed in this matter on
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`June 18, 2020, Epiq’s duties further include: (1) receiving and processing claims, (2)
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`determining whether claims have been timely filed, (3) determining whether claims
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`qualify for payment under any of the terms of the settlements and plan of allocation,
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`(4) analyzing whether claims are deficient or compliant with the Court’s orders, (5)
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`4
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`Case 2:12-md-02311-SFC-RSW ECF No. 2120-1, PageID.38483 Filed 03/03/21 Page 5 of 24
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`sending and handling notices of deficiency, (6) calculating the claim amounts of
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`qualifying claimants, (7) determining the qualifying claim amounts available to all
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`claimants, (8) determining the pro rata share of each qualifying claimant to be paid
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`out of the settlements, and (9) making recommendations for the payment or
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`disallowance of settlement shares to each qualifying claimant.
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`10. Under this Court’s Orders, only class members are entitled to submit
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`claims to share in the settlements. Specifically, only persons or entities who
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`purchased or leased a qualifying new vehicle, not for resale, or purchased a
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`qualifying replacement part during the applicable class periods can submit a claim.
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`11. Under this Court’s Orders, the last day to submit a claim was June 18,
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`2020. Specifically, in order to participate in the settlements, this Court’s Orders
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`required a class member to timely provide the following information in their claim
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`form regarding the class member’s purchase or lease of a qualifying new vehicle by
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`June 18, 2020:
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`(1) The make, model, model year, and VIN number of the qualifying
`new vehicle the class member purchased or leased;
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`(2) The date the class member purchased or leased the qualifying new
`vehicle; and
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`(3) The state where the purchase or lease was made or in which the
`class member resided or, for businesses that are class members, the
`state or state where the principal place of business was located at
`the time of the purchase or lease.
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`This information was explicitly required by the Plan of Allocation.
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`5
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`Case 2:12-md-02311-SFC-RSW ECF No. 2120-1, PageID.38484 Filed 03/03/21 Page 6 of 24
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`12.
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`The June 18, 2020, claims deadline was the third claims deadline as two
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`prior extensions had been granted by the Court.
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`13.
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`The operable Further Revised Plan of Allocation was approved by this
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`Court on December 20, 2019.
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`Entry of the Further Revised Plan of Allocation
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`14.
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`The Further Revised Plan of Allocation explained, in part, that:
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` As to businesses, only those Settlement Class Members who purchased
`or leased a new Vehicle or purchased a replacement Automotive Part
`in the states listed below, or had their principal place of business at the
`time of such purchase or lease in the states listed below, will be entitled
`to share in the Net Settlement Funds.
`
` If you did not indirectly purchase, or purchased for resale, any
`Automotive Parts during the applicable time periods or in any of the
`states listed below you will not be entitled to share in any of the Net
`Settlement Funds.
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` The Court may deny, in whole or in part, any claim if it determines that
`the claimant is excluded from the definition of the Settlement Classes
`or if there are legal or equitable grounds for the rejection of such claim.
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` All Class Members who fail to complete and submit a valid and timely
`Claim Form shall be barred from participating in distributions from the
`Net Settlement Funds (unless otherwise ordered by the Court), but
`otherwise shall be bound by all of the terms of the settlements,
`including the terms of the judgments entered and the releases given
`pursuant to the settlements.
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`15.
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`The Further Revised Plan of Allocation provides no mechanism for
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`allocating settlement funds based upon alleged subrogation claims.
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`6
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`Case 2:12-md-02311-SFC-RSW ECF No. 2120-1, PageID.38485 Filed 03/03/21 Page 7 of 24
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`December 2019 Notice
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`16.
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`The same day that the court approved the Further Revised Plan of
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`Allocation, the Court entered an Order Granting EPP’s Unopposed Motion for
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`Authorization to Disseminate Supplemental Notice to the Settlement Classes
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`(“December 2019 Supplemental Notice”).
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`17.
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`The December 2019 Supplemental Notice explained, in part, that:
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` Purchasers or lessees of qualifying new vehicles or indirect purchasers
`of any of the replacement parts listed in Question 6 may be members of
`the settlement Classes entitled to monetary recovery. Only those
`members of the Settlement Classes who, during the relevant time
`periods listed above, purchased or leased a vehicle or purchased a
`replacement part in, or while (1) residing in or (2) as to businesses,
`having the principal place of business located in the District of
`Columbia or the states listed below will be entitled to share in the
`monetary recovery.
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` [Y]ou will be required to submit a Claim Form to be eligible to receive
`a payment from any of the Settlement Funds. Claims may be submitted
`online at www.AutoPartsClass.com or by printing and mailing your
`completed form postmarked by March 16, 2020.
`
` Payments will be based on a number of factors, including at least the
`number of valid claims filed by all members of the Settlement Class in
`question and the number of (1) qualifying new vehicles purchased or
`leased or (2) qualifying replacement parts purchased.
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` In order to receive a payment from any of the Settlements (Round 1
`through Round 4), you will need to file a valid Claim Form (see
`Question 12).
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`18.
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`The Court’s December Supplemental 2019 Notice did not suggest in
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`any way that insurance carries could participate in the settlements based on
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`subrogation rights.
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`7
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`Case 2:12-md-02311-SFC-RSW ECF No. 2120-1, PageID.38486 Filed 03/03/21 Page 8 of 24
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`19.
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`The Court’s December Supplemental 2019 Notice did not provide that
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`automobile insurers could recover from the EPP Settlements as claimed subrogees
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`of certain class member insureds who may have received insurance payments for
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`vehicles that automobile insurers deemed a total loss due to automobile accidents.
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`20.
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`The Court’s December Supplemental 2019 Notice did not provide that
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`the recovery of a class member might be reduced by subrogation claims asserted by
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`an automobile insurer. Nor did it state or otherwise suggest that subrogation claims
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`of an automobile insurer would be included as a factor in determining payments to
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`class members.
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`Last Notice and June 18, 2020 Claims Deadline
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`21. On March 24, 2020, the Court entered an Order Granting EPP’s
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`Unopposed Motion for Extension of the Claims-Filing Deadline until June 18, 2020.
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`This allowed additional time for Authorized Claimants to file claims. But it did not
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`change the language in the December 2019 Supplemental Notice.
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`FRS
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`22.
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`Financial Recovery Services (“FRS”) is a third-party claims-filing
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`company. FRS does not claim to have purchased or leased any qualifying vehicle or
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`replacement part. FRS has not submitted any claim on its own behalf, and FRS has
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`not asserted that it is a class member.
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`8
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`Case 2:12-md-02311-SFC-RSW ECF No. 2120-1, PageID.38487 Filed 03/03/21 Page 9 of 24
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`23.
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`Instead, prior to the passage of the June 18, 2020 claims-filing deadline,
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`FRS submitted the names of 308 companies on whose behalf it was purportedly
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`acting to submit claims.1 Of the 308 companies named by FRS, seven of them were
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`on behalf of insurance companies.
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`FRS’ Only Timely Claims Submissions Were Related to Direct
`Purchases For Five of Seven Named Insurance Companies
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`FRS submitted timely claims information on behalf of five insurance
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`24.
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`companies: AIG, Utica Mutual Insurance Company, Mapfre USA Corporation,
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`Mercury Insurance Services, and Selective Insurance. Correspondence from FRS
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`indicates that the claims information submitted for these five insurance companies
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`is for purchases or leases of vehicles made for their own account. Nothing indicates
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`that these insurance companies were asserting any rights based on subrogation.
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`25.
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`FRS previously asserted that it submitted claims information on behalf
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`of two additional insurance companies: W.R. Berkeley Corporation and Liberty
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`Mutual Holdings. However, Epiq has no record of receiving any timely vehicle
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`claims information for these two companies at all with the exception of a single
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`vehicle listed for Liberty Mutual Holdings, a 1996 Mercedes-Benz M-Class—the
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`same vehicle also claimed by 147 other FRS clients.
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`1 In my prior declaration dated November 11, 2020, I noted that FRS had submitted 307 timely claims on behalf of
`others. However, in the time since my submission of that declaration, Epiq discovered one additional timely FRS
`submission.
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`9
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`

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`Case 2:12-md-02311-SFC-RSW ECF No. 2120-1, PageID.38488 Filed 03/03/21 Page 10 of 24
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`26.
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`FRS also has asserted that the insurance companies listed above (AIG,
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`Utica Mutual Insurance Company, Mapfre USA Corporation, Mercury Insurance
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`Services, Selective Insurance, W.R. Berkeley Corporation, and Liberty Mutual
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`Holdings) seek to share in the settlements as subrogees of class member insureds
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`whose vehicles were declared a total loss due to a collision or other accident.
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`However, FRS, has yet to submit any of the information that would be needed to
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`substantiate any claims based on subrogation, assuming any subrogation claims
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`would be allowable at all.
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`27.
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`FRS does not claim that the insurance companies are class members in
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`their capacity as insurers, or that any class definition includes insurance companies
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`that made insurance payments to class members for vehicles declared a total loss.
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`Thus, under the terms of the settlements and the plan of allocation, no insurance
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`company is entitled to a share in the settlements based upon payments made by the
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`insurance company to a class member pursuant to the terms of an insurance policy.
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`28.
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`In addition, neither the settlements, nor the plan of allocation makes
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`any provision for insurance companies to submit claims to share in the settlements
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`as subrogees of class member insureds who may have received insurance payments
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`relating to vehicles that an insurance company deemed a total loss. Thus, under the
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`terms of the settlements and the plan of allocation, there is no provision for any
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`insurance company to share in the settlements as a subrogee of any class member.
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`10
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`Case 2:12-md-02311-SFC-RSW ECF No. 2120-1, PageID.38489 Filed 03/03/21 Page 11 of 24
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`29.
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`To date, FRS has not submitted any proof of claims information on
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`behalf of any insurance company in support of any subrogation claim. Thus, any
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`proof of claim information submitted now would be several months late and properly
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`treated as untimely.
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`Other Submissions Made By FRS Prior to the June 18, 2020 Deadline
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`30. Not including the five insurance companies for whom timely claims
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`were made, FRS submitted registrations or so-called “placeholders” on behalf of 303
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`other companies. For all of these 303 claimants, FRS provided its own Florida-based
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`address on the claim form. With the exception of a handful of companies for which
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`it included a read only .pdf copy of its representation agreement, FRS did not
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`provide any address associated with the company for whom it purported to file the
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`claim.
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`31. Of those claims it submitted on behalf of 303 companies, FRS
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`submitted no information identifying the vehicle or part purchased whatsoever for
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`58 companies (nearly 20%). The claims contained no VIN numbers, no purchase
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`data, no make/model information, and no supporting documentation. As a Claims
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`Administrator, these claims are facially unsupported submissions and do not qualify
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`as claims complying with the Court’s notice.
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`32.
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`The remaining 245 companies for which FRS field claim forms claimed
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`only a single vehicle and included only the following information for that single car:
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`11
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`Case 2:12-md-02311-SFC-RSW ECF No. 2120-1, PageID.38490 Filed 03/03/21 Page 12 of 24
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`make, model, model year, place of purchase, and date of purchase.2 No VIN vehicle
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`numbers were provided relating to any of these purported claimants.
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`33.
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`Suspiciously, the claim forms submitted by FRS on behalf of 242 of
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`these 245 companies were universally comprised of one of the following three sets
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`of information, with only slight variations in “Date of Purchase” and “Model Year”:
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`Make
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`Model Model Year
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`Place of Purchase
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`Date of Purchase
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`Mercedes-Benz M-Class
`Chevrolet
`Camaro
`Mazda
`MPV
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`1996
`1995
`1990
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`Florida
`Florida
`Florida
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`1/1/1995
`1/1/1994 or 1/1/1995
`1/1/1990, 6/1/1990,
`or 1/1/1995
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`
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`The fact that 242 of the 245 company claims recycled the same three sets of standard
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`vehicle information was suggestive of fraud. For example, FRS identified a “1996
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`Mercedes-Benz M-Class” as the single vehicle purchased by 147 different claimants;
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`a “1995 Chevrolet Camaro” as the vehicle purchased by 83 different claimants; and
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`a “1990 Mazda MPV” as the vehicle purchased by 12 different claimants. Also
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`suggestive of fraud is the fact that all of these vehicles were allegedly purchased on
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`January 1st of the years in question.
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`34. Of the 245 companies in this category, I have only been able to confirm
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`that 13 have locations in Florida. And the vast majority of the 245 companies have
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`a business location that does not match up with the place of purchase claimed for the
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`2 This updates my November 11, 2020 declaration to provide additional details regarding the information in the
`original registrations.
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`
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`12
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`Case 2:12-md-02311-SFC-RSW ECF No. 2120-1, PageID.38491 Filed 03/03/21 Page 13 of 24
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`single vehicle identified in association with the company. This is problematic
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`because, in my experience as a claims administrator, one indicia of potential fraud
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`is that a company is located in a state that is different from the place of purchase.
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`The repetition of identical vehicles among purportedly different claimants and the
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`fact that all were listed as having been purchased in Florida, where FRS is located,
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`rather than in the states where the companies are located, indicates that it is unlikely
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`that these vehicles were actually purchased by these companies as FRS’s claim
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`submissions suggest.
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`35.
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`In addition, of the 245 companies in this category, it appears that at
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`least 22 companies were not even in existence during the year the single vehicle
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`associated with their claim was purchased. This is also suggestive of fraud.
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`36. Based on the only information that FRS timely provided, Epiq
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`determined that the 242 submissions with overlapping vehicle information were
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`insufficiently supported and suspicious and therefore did not qualify as claims
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`complying with the Court’s notice. The three other claims with one vehicle purchase
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`claimed identified unique vehicles and listed the place of purchase as either
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`California or New York. Only one of these three claims, the one for LA School of
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`Gymnastics, was supplemented after the claims-filing deadline. Notably, it was
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`supplemented to claim only one additional vehicle, a 2019 Ford Fusion Hybrid. The
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`suspicious nature of these claims as described in the foregoing paragraphs would
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`13
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`Case 2:12-md-02311-SFC-RSW ECF No. 2120-1, PageID.38492 Filed 03/03/21 Page 14 of 24
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`certainly require at the very least additional investigation to determine their
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`legitimacy.
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`37.
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`Just after the lapse of the June 18, 2020 claims-filing deadline, FRS
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`contacted Epiq’s staff and asked whether late claims were being accepted. FRS was
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`informed that any late information would be “marked as late, and will be treated in
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`accordance with the Court’s direction based on recommendations from the Parties.”
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`Untimely Supplemental Information Provided By FRS
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`38. Despite this knowledge, after June 18, 2020, FRS attempted to provide
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`untimely or new vehicle claims in the form of “supplements on three separate
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`occasions.” But these “supplements” were an improper attempt to submit thousands
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`of entirely new claims involving previously unidentified vehicles after the claims
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`deadline. Many of these claims were associated with companies for whom FRS had
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`previously filed an empty or single-vehicle claim.
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`39.
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`First, on December 22, 2020, FRS sent Epiq a link to an FTP site with
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`supplemental claims data for the following seven non-insurance company claimants:
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`(1) DPNY Hospitality (Claim No. 10048260); (2) Go Staff, Inc. (Claim No.
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`10181873); (3) LA School of Gymnastics (Claim No. 10131452); (4) Maintenx
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`International Service Management Group, Inc. (Claim No. 10014185); (5) Mountain
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`View Child Care (Claim No. 10182069); (6) Orora Packing Solutions (Claim No.
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`10068163); and (7) PK Enterprises (Claim No. 1007773).
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`
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`14
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`

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`Case 2:12-md-02311-SFC-RSW ECF No. 2120-1, PageID.38493 Filed 03/03/21 Page 15 of 24
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`40.
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`Second, on January 4, 2021, FRS sent Epiq a link to an FTP site with
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`supplemental claims data for the following fourteen non-insurance company
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`claimants: (1) BASF Corporation (Claim No. 10122334); (2) Bashas, Inc. (Claim
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`No. 10007417); (3) Brookdale Senior Living (Claim No. 10048171); and (4)
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`Capatain Ds, LLC (Claim No. 10070642); (5) Catholic Charities of Broome (Claim
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`No. 10048252); (6) Graceland University (Claim No. 10182140); (7) Hospital for
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`Special Surgery (Claim No. 10068180); (8) Illinois Tool Works (Claim No.
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`10178418); (9) Inter Con Security Systems (Claim 8187No. 10122362); (10) Kerry,
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`Inc. (Claim No. 10014110); (11) LKQ Corp. (Claim No. 10048214); (12)
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`MaineGeneral Health (Claim No. 10064127); (13) Providence College (Claim No.
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`10048187); and (14) The Great Atlantic and Pacific (Claim No. 1007807).
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`41.
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`In total, of the 21 claim “supplements” provided by FRS after the claim-
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`filing deadline for non-insurance company claims, FRS added claims for 12,204
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`additional vehicles.3 The thousands of newly-identified vehicles claimed by FRS
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`after the deadline dwarf the 19 total vehicles FRS identified on behalf of these same
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`claimants prior to the June 18, 2020 claim-filing deadline. Moreover, none of the
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`late claim “supplements” for the 21 claimants includes the vehicle initially listed on
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`the initial placeholder submission for the claimant.
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`3 The actual number is even higher since one of the spreadsheets sent by FRS could
`not be opened.
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`15
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`Case 2:12-md-02311-SFC-RSW ECF No. 2120-1, PageID.38494 Filed 03/03/21 Page 16 of 24
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`42.
`
` On January 4, 2021, a Project Coordinator from Epiq responded to one
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`of FRS’ late submissions and noted that “we are no longer accepting new data for
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`the settlements,” further stating that, although Epiq would “file the records
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`submitted,” “any new data will be considered untimely.” A follow-up email on
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`January 6, 2021, that was acknowledged by an FRS project manager again reiterated
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`that “any data submitted after the claims deadline will be considered untimely.”
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`43.
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`Third, on January 7, 2021, FRS sent Epiq an email with a “claim
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`addendum” for insurance company WR Berkley. No vehicle or parts purchase data
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`had previously been claimed for that insurance company.
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`44.
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`FRS improperly submitted “supplements” consisting of scores of
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`untimely claims. In total, these untimely claims identified additional vehicles for
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`twenty-one claimants—19 of which had originally identified a single vehicle before
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`the June 18, 2020 claims-filing deadline and 2 of which originally failed to provide
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`any vehicle information at all.
`
`45. All untimely “supplements” provided brand new vehicle claims. They
`
`are untimely and do not qualify as claims complying with the Court’s notice.
`
`46. But, even if the “supplemental information” submitted to date by FRS
`
`were considered, it remains the case that of the 245 claimants for which FRS
`
`
`
`16
`
`

`

`Case 2:12-md-02311-SFC-RSW ECF No. 2120-1, PageID.38495 Filed 03/03/21 Page 17 of 24
`
`submitted a single vehicle “placeholder” claim,4 FRS never even attempted to
`
`“supplement” claims for 226 of those claimants. And FRS also never attempted to
`
`“supplement” claim forms filed on behalf of 56 of the 58 claimants that were
`
`originally filed “empty” without any vehicle information whatsoever. For these
`
`alleged claimants, FRS has not provided an iota of vehicle information, either before
`
`or after the claims-filing deadline.
`
`47.
`
`To the degree FRS claims that its timely filing of “placeholder” claims
`
`for specific companies excuses it from complying with the June 18, 2020 deadline
`
`set by the Court, that is incorrect. The Court’s orders and the class notices did not
`
`authorize the making of placeholder claims. And I have never personally worked on
`
`a class action case where placeholder claims were permitted.
`
`Prejudice to Administration Process and Actual Class Members
`
`48. Allowance of late claims has never been authorized and would be
`
`prejudicial to class members. This is especially true of subrogation claims, which
`
`have never been contemplated in the settlements or the Plan of Allocation.
`
`49.
`
` Specifically, to allow the submission of subrogation claims now –
`
`much less at some indefinite time in the future—would substantially delay and
`
`prejudice the claims administration process. The additional expense of administering
`
`
`4 The five timely claims for insurance companies for which vehicle purchase data
`was provided before the June 18, 2020 deadline are not included in this count.
`
`
`
`17
`
`

`

`Case 2:12-md-02311-SFC-RSW ECF No. 2120-1, PageID.38496 Filed 03/03/21 Page 18 of 24
`
`and processing subrogation claims would also reduce the recoveries to be paid to
`
`qualifying class member claimants, because the additional administration costs
`
`would have to be paid out of the settlement funds.
`
`50. Validation of subrogation claims by an insurance company would at
`
`least require satisfactory proof of the following:
`
` the identification of each vehicle owned by an insured class member,
`including the year, make, and model of the vehicle, the VIN number,
`the identity and name of the purchaser, the time and place where the
`purchase occurred, the residence or principal place of business of the
`purchaser at the time of purchase, and the date when the vehicle was
`declared a total loss;
`
` the existence of a policy of insurance between the insurance company
`and the class member covering each vehicle in question, including
`proof that the insurance policy provided for subrogation in the event
`that a vehicle was declared a total loss;
`
` proof that the vehicle that was insured at the time of the loss was
`purchased or leased as a new vehicle by the insured, and had not been
`acquired by the insured as a used vehicle;
`
` proof that a qualifying vehicle was in an accident and declared a total
`loss;
`
` proof that the insurance carrier made a payment to a class member for
`the vehicle that was declared a total loss;
`
` documentation showing the purchase price paid by an insured class
`member, or agreed-value of the vehicle at the time of lease;
`
` documentation showing the value of the vehicle at the time of the loss;
`
` documentation of the payments made to a class member by the
`insurance company;
`
`
`
`18
`
`

`

`Case 2:12-md-02311-SFC-RSW ECF No. 2120-1, PageID.38497 Filed 03/03/21 Page 19 of 24
`
` documentation of any payments the insurance company obtained from
`a third-party or tortfeasor regarding the collision or accident that caused
`the total loss, because any such payments would reduce the amount of
`any subrogation claim.
`
`51.
`
`FRS has provided no estimate as to how long it would take to submit
`
`information necessary to support subrogation claims, or how long it would take to
`
`submit the additional information required to process subrogation claims or other
`
`claims. FRS has stated that the process of gathering and submitting data regarding
`
`the many thousands of specific vehicles that underlie their subrogation claims would
`
`be “an enormous task” for FRS that is “substantial and time consuming.” See, e.g.,
`
`No. 2:12-md-02311, ECF Nos. 2060 [Page ID: 37719], 2060-5.
`
`52.
`
`Further, if subrogation claims were allowed, such claims and the
`
`information necessary to support such claims would necessarily be provided months
`
`after the claims submission deadline has passed. The same is true for placeholder
`
`claims. In addition, Epiq would still need to compare any additional claims
`
`information submitted by FRS to the claims already submitted by class members to
`
`avoid duplicate claims and ensure that subrogation claims are only applied to class
`
`members that (a) submitted valid claims, (b) were insured by one of the insurance
`
`companies identified by FRS, (c) received a payment from one of those insurance
`
`companies for a qualifying vehicle that was declared a total loss, and (d) have not
`
`reduced or eliminated any subrogation claim.
`
`
`
`19
`
`

`

`Case 2:12-md-02311-SFC-RSW ECF No. 2120-1, PageID.38498 Filed 03/03/21 Page 20 of 24
`
`53.
`
`This additional claims administration process would likely require the
`
`Court to approve additional procedures for Epiq to apply in (1) evaluating whether
`
`any subrogation claim would be eligible for any payment under the terms of the
`
`settlements, and (2) creating a proportionate sharing calculation for the potential split
`
`of the settlement payment between the class member insured who purchased a
`
`qualifying new vehicle at the full purchase price, and the insurance company that
`
`made a total loss payment for the “actual cash value” of the vehicle, adjusted for
`
`depreciation, physical deterioration, and obsolescence. Because the pro rata
`
`distribution of settlement funds assumes that each class member has purchased a
`
`qualifying new vehicle at the purchase price charged for the qualifying new vehicle,
`
`and an insurance company would have only paid the actual cash value of a used
`
`vehicle at the time of loss (adjusted for depreciation and deterioration), an insurance
`
`company seeking to recover as a subrogee would have no claim based on the
`
`purchase price a class member insured paid for a qualifying new vehicle.
`
`54. Due to significant differences in a claims administration process for
`
`subrogation claims, Epiq would need to contact class members whose claims were
`
`potentially affected by a subrogation claim and obtain additional information about
`
`their vehicles, including vehicle identif

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