Case 2:12-md-02311-SFC-RSW ECF No. 2120-2, PageID.38503 Filed 03/03/21 Page 1 of 12
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`UNITED STATES DISTRICT COURT
`EASTERN DISTRICT OF MICHIGAN
`SOUTHERN DIVISION
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`AUTOMOTIVE
`RE
`IN
`ANTITRUST LITIGATION
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`PARTS
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`Master File No. 12-md-02311
`Honorable Sean F. Cox
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`THIS DOCUMENT RELATES TO:
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`ALL END-PAYOR ACTIONS
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`DECLARATION OF
`CHANLER LANGHAM 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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`DECLARATION OF CHANLER LANGHAM IN OPPOSITION TO
`FINANCIAL RECOVERY SERVICES, LLC’S MOTION TO COMPEL
`ACCEPTANCE AND PROCESSING OF VEHICLE DATA
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`I, Chanler Langham, hereby declare the following in accordance with the
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`provisions of 28 U.S.C. § 1746:
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`1.
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`I am a partner at the law firm of Susman Godfrey L.L.P., Interim Co-
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`Lead Counsel for the End-Payor Plaintiff Classes. I submit this declaration in
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`support of End-Payor Plaintiffs’ Opposition to Financial Recovery Services, LLC’s
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`Motion to Compel Acceptance and Processing of Vehicle Data.
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`1
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`UNITED STATES DISTRICT COURT
`EASTERN DISTRICT OF MICHIGAN
`SOUTHERN DIVISION
`
`
`
`
`AUTOMOTIVE
`RE
`IN
`ANTITRUST LITIGATION
`
`
`PARTS
`
`:
`:
`:
`:
`
`
`Master File No. 12-md-02311
`Honorable Sean F. Cox
`
`
`
`
`
`
`
`THIS DOCUMENT RELATES TO:
`
`ALL END-PAYOR ACTIONS
`
`
`DECLARATION OF
`CHANLER LANGHAM 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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`:
`
`DECLARATION OF CHANLER LANGHAM IN OPPOSITION TO
`FINANCIAL RECOVERY SERVICES, LLC’S MOTION TO COMPEL
`ACCEPTANCE AND PROCESSING OF VEHICLE DATA
`
`I, Chanler Langham, hereby declare the following in accordance with the
`
`provisions of 28 U.S.C. § 1746:
`
`1.
`
`I am a partner at the law firm of Susman Godfrey L.L.P., Interim Co-
`
`Lead Counsel for the End-Payor Plaintiff Classes. I submit this declaration in
`
`support of End-Payor Plaintiffs’ Opposition to Financial Recovery Services, LLC’s
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`Motion to Compel Acceptance and Processing of Vehicle Data.
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`1
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`Case 2:12-md-02311-SFC-RSW ECF No. 2120-2, PageID.38504 Filed 03/03/21 Page 2 of 12
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`2.
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`The following facts are based on my personal knowledge and
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`knowledge acquired in my role as Co-Lead Class Counsel in this litigation. If called
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`upon as a witness, I could and would testify competently to them.
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`3.
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`I have also reviewed the Declarations of Jefferey N. Leibell and
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`Matthew Huppert filed in Support of Financial Recovery Services, LLC’s
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`Emergency Motion to Compel Acceptance and Processing of Vehicle Data and take
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`issue with their characterization of certain facts.
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`4.
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`EPP Class Counsel’s first contact with Financial Recovery Services,
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`Inc. (“FRS”) was in November 2018. At that time, the district court had already
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`issued an order that automobile insurers lacked antitrust standing to recover
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`payments made to insureds for vehicles declared a total loss. See GEICO Corp. v.
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`Autoliv, Inc., 345 F. Supp. 3d 799, 829-30 (E.D. Mich. 2018). The Round 1 and
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`Round 2 settlements had also already been approved. See Case 2:12-md-02311, Dkt.
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`2101 at p. 1.
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`5.
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`On November 14, 2018, FRS, who is a third-party claims-filing
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`company, reached out to Class Counsel by email contending that it could recover
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`payments made to insured class members for vehicles declared a total loss under a
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`subrogation theory. Id. at p. 2 (citing Dkt. 2060-5). FRS specifically sought a method
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`for submitting document of the insured’s claims. Id. A meet and confer was held
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`between FRS and Class Counsel by telephone on January 24, 2019. Dkt. 2060-2 ¶¶
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`2
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`Case 2:12-md-02311-SFC-RSW ECF No. 2120-2, PageID.38505 Filed 03/03/21 Page 3 of 12
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`5-6. During that call, Class Counsel suggested that FRS file claims and then appeal
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`rejections. Id. (citing Dkt. 2060-2). Class Counsel also noted that it opposed FRS’
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`subrogation theory in part because FRS did not contend that either it or its insurance
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`company clients who wanted to recover on a subrogation theory qualified as Class
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`Members under the approved settlements. FRS explicitly sought permission to file
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`“placeholder” claims for its insurance company clients with the intention of
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`supplementing them with specific vehicle information after the claims-filing
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`deadline. Class Counsel flatly rejected FRS’ request to file these null claims during
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`that discussion. I believe the Declaration of Jefferey N. Leibell filed in support of
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`FRS’s Motion to Intervene, Dkt. 2060-2 ¶¶ 5-6, admits these facts.
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`6.
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`Class Counsel did not hear from FRS again until October 17, 2019. Dkt.
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`2101. At this point in time, FRS sent class counsel a draft letter that FRS claimed it
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`would send to the Court. Dkt. 2060, Ex. E. On November 2, 2019, class counsel
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`responded in writing and unequivocally informed FRS once again that its insurance
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`company clients “have no rights as class members or as subrogees of class
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`members,” and extensively cited authority supporting that position. Dkt. 2060, Ex.
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`F.
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`7.
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`Following this exchange of letters, FRS inquired about a briefing
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`schedule. Dkt. 2060, Ex. G. FRS and class counsel conferred on November 26, 2019,
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`and generally agreed on a briefing schedule regarding the subrogation issue. But
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`3
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`Case 2:12-md-02311-SFC-RSW ECF No. 2120-2, PageID.38506 Filed 03/03/21 Page 4 of 12
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`FRS never sought approval to submit any brief to the Court. FRS did not seek leave
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`to intervene. And FRS did not even attempt to file its brief on the Court’s docket.
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`8.
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`Instead, on December 13, 2019, FRS simply sent a letter to the Court
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`“by Federal Express.” Dkt. 2060, Ex. B. Even then, FRS did not seek intervention,
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`did not seek permission to submit placeholder claims, and did not request permission
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`to identify claimed vehicles or the information substantiating claims based on
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`amounts paid to any insureds after the claim submission deadline. Dkt. 2060, Ex. A.
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`9.
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`I was responsible for preparing a response to FRS’ letter, which EPPs
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`filed on the main docket, and noted that FRS had failed to file its letter on the Court’s
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`docket. Dkt. 2034. FRS sent a reply to the Court on January 30, 2020, again “by
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`Federal express,” but still did not file the letter with the Court and did not move to
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`intervene. Dkt. 2060, Ex. B.
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`10. EPPs did not hear from FRS again until March 9, 2020, when FRS sent
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`the claims administrator a letter stating that FRS would not be able to comply with
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`the then-in-effect claims administration deadline “because identifying, collecting,
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`and marshaling the Total Loss Vehicle data necessary to update each Auto Insurer’s
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`proof of claim will be a considerable undertaking.” Dkt. 2060-10. It then went on to
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`state, not ask, that FRS would “supplement[] each Auto Insurer’s proof of claim”
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`after the claims-filing deadline even though that procedure had previously been
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`rejected by EPPs. Id.
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`4
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`Case 2:12-md-02311-SFC-RSW ECF No. 2120-2, PageID.38507 Filed 03/03/21 Page 5 of 12
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`Class Counsel did not further respond to FRS because Class Counsel did not
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`need to respond. The Plan of Allocation already informed FRS that “All Class
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`Members who fail to complete and submit a valid and timely Claim Form shall be
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`barred from participating in distributions from the Net Settlement Funds (unless
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`otherwise ordered by the Court).” See 2:12-cv-403, Dkt. 301-2. But FRS never
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`moved the Court for relief, EPPs had already made their position on “placeholder”
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`claims clear to FRS, and FRS’ legal questions regarding the validity of subrogation
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`claims could not be answered as part of the claims administration process. FRS never
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`followed up on its letter to the claims administrator and Class Counsel did not hear
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`from FRS until days before the final deadline to submit claims to participate in the
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`EPP Settlements—which had been extended to June 18, 2020.
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`11. On June 15, 2020, FRS’ counsel, Aaron Panner, called Class Counsel
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`asking the following questions: (1) whether EPPs class counsel would oppose a
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`motion to intervene by FRS; (2) whether EPP class counsel would object to FRS
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`submitting so-called “place holder” claims; and (3) whether there was liaison
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`counsel for the Defendants who FRS could contact about the intervention issue. I
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`responded to Mr. Panner that same day and stated that EPPs did oppose FRS’
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`proposed motion to intervene, that EPPs objected to the use of so-called
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`“placeholder” claims, and that EPPs were not aware of any liaison counsel. A true
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`and correct copy of my response to Mr. Panner is attached at Exhibit A.
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`5
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`Case 2:12-md-02311-SFC-RSW ECF No. 2120-2, PageID.38508 Filed 03/03/21 Page 6 of 12
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`12. The claims-filing deadline passed on June 18, 2020. Class Counsel
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`made sure that the claims administrator updated the official claims website that same
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`day to state: “The deadline to file a claim has passed. All claims must have been
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`submitted online or postmarked by June 18, 2020.” See www.autopartsclass.com.
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`13. The same day the claims-filing deadline lapsed, FRS filed a Motion to
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`Intervene for the express purpose of obtaining an order from the Court permitting
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`FRS to submit and recover on claims in this litigation based on subrogation rights as
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`well as to allow “Insurers . . . to complete the documentation of their claims” after
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`the now-passed claims-filing deadline. Dkt. 2060, p. 19. EPPs opposed that motion.
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`Dkt. 2066. On November 11, 2020, EPPs filed a declaration of the claims
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`administrator in opposition to FRS’ Untimely Motion to Intervene. Dkt. 2097. The
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`Court denied FRS’ motion to intervene as untimely. Dkt. 2101.
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`14. FRS appealed the district court’s denial of its Motion to Intervene. Dkt.
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`2105. Shortly after that, FRS filed a motion in the Sixth Circuit Court of Appeals
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`seeking to hold the appeal in abeyance pending the anticipated denial of its so-called
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`“supplemental” subrogation claims—claims FRS has still not submitted.
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`15.
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`I prepared EPPs opposition to that motion, which was denied by the
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`Sixth Circuit.
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`16.
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`In January 2021, EPPs learned that FRS had been sending out
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`solicitations misleadingly
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`telling would-be claimants,
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`including
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`insurance
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`6
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`Case 2:12-md-02311-SFC-RSW ECF No. 2120-2, PageID.38509 Filed 03/03/21 Page 7 of 12
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`companies, that “[l]ate claims are still beign accepted in the Automobile
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`/Automotive Parts Class Action Settlment.” A true and corect copy of that
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`solicitation is attached at Exhibit B. Class Counsel prepared a cease and desist letter
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`that it sent to FRS on January 12, 2021. A true and corerect copy of that letter is
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`attached at Exhibit C.
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`17. Around the same time, FRS’ counsel, Matthew Huppert, reached out to
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`me by email and incorrectly stated that FRS was notified “for the first time on
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`Wednesday, January 6 that ‘any data submitted after the claims deadline will be
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`considered untimely.’” Dkt. 2114-10. I responded and informed Mr. Huppert as
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`follows:
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`Claimants who have previously submitted vehicle data and have some
`deficiency in the information or documentation that was submitted for
`those claims, may submit additional information to correct the
`deficiency. However, claimants who merely registered their name with
`no vehicle information, and did not identify the requisite vehicle
`information by the June 18, 2020 claims deadline have not timely
`submitted a valid claim, and late-filed claims will not be accepted.
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`18.
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` In his declaration, Mr. Huppert incorrectly states that I informed FRS
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`that they could “‘submit additional [vehicle] information’ if they ‘previously
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`submitted vehicle data and have some deficiency in the information or
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`documentation that was submitted.’” Dkt. 2114 ¶ 18. That is not true.
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`19. On January 12, 2021, Jenna Farleigh and I had a call with FRS’ counsel
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`Matthew Huppert and Daniel Severson. Consistent with all of EPPs prior filings and
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`7
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`Case 2:12-md-02311-SFC-RSW ECF No. 2120-2, PageID.38510 Filed 03/03/21 Page 8 of 12
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`messaging, Class Counsel once again stated on that call that so-called “placeholder”
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`claims would not be accepted.’
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`20. Since FRS continues to raise this issue, Class Counsel has performed
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`an in-depth analysis of the claims that FRS filed both before and after the claims-
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`filing deadline. It has discovered the following about the claims submitted by FRS
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`before the deadline:
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` FRS submitted claims for five insurance companies before the June 18, 2020
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`deadline. Those were: AIG, Utica Mutual Insurance Company, Mapfre USA
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`Corporation, Mercury Insurance Services, and Selective Insurance. The
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`claims information submitted for these five insurance companies were for
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`purchases or leases of vehicles made for the company’s own account. Nothing
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`indicates that the claims information submitted for these five insurance
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`companies contains any assertion of subrogation rights.
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` FRS identified the claimant names of 303 additional companies before the
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`June 18, 2020 deadline. For all of these 303 claimants, FRS provided its own
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`Florida-based address on the claim form. With the exception of a handful of
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`companies for which it included a read only .pdf copy of its representation
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`agreement, FRS did not provide any address associated with the company for
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`whom it purported to file the claim. Class Counsel has run an internet search
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`for each of the named companies. Class Counsel was only been able to
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`8
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`Case 2:12-md-02311-SFC-RSW ECF No. 2120-2, PageID.38511 Filed 03/03/21 Page 9 of 12
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`confirm that 13 of these claimants are headquartered in Florida. The vast
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`majority do not even appear to have any location in Florida.
`o Of the 303 additional companies that FRS identified, FRS submitted no
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`information whatsoever identifying any vehicle or part for 58
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`companies. The claims contained no VIN numbers, no purchase data,
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`no make/model information, and no supporting documentation. These
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`claims are facially unsupported submissions and do not qualify as
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`claims complying with the Court’s notice.
`o For the remaining 245 companies, FRS identified only a single vehicle
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`and included only the following information for that single car: make,
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`model, model year, place of purchase, and date of purchase. No VIN
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`numbers were provided for any of these claims. All but three of these
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`claims (242 of them) were universally comprised of one of the
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`following three sets of information, with only slight variations in “Date
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`of Purchase” and “Model Year”:
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`Make
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`Model
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`Mercedes-Benz M-Class
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`Model
`Year
`1996
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`Place of
`Purchase
`Florida
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`Chevrolet
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`Mazda
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`Camaro
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`MPV
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`1995
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`1990
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`Florida
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`Florida
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`9
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`Date of
`Purchase
`1/1/1995
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`1/1/1994
`1/1/1995
`1/1/1990,
`6/1/1990, or
`1/1/1995
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`or
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`Case 2:12-md-02311-SFC-RSW ECF No. 2120-2, PageID.38512 Filed 03/03/21 Page 10 of 12
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`For example, FRS identified a “1996 Mercedes-Benz M-Class” as the
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`single vehicle purchased by 147 different claimants; a “1995 Chevrolet
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`Camaro” as the vehicle purchased by 83 different claimants; and a
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`“1990 Mazda MPV” as the vehicle purchased by 12 different claimants.
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`In addition, at least 22 companies were not even in existence during the
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`year the single vehicle associated with their claim was purchased. These
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`inconsistencies raised red flags suggestive of fraud.
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`21. Regarding vehile information that FRS has submitted after the claims-
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`submission deadline, Class Counsel has discovered the following:
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` FRS has attempted to provide untimely or new vehicle information in the form
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`of twenty-one different “supplements” made on behalf of 21 different
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`claimants. In these so-called supplements, FRS identified (for the very first
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`time) at least 12,204 additional vehicles. Prior to the deadline it had only
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`identified 19 (likely illegitimate) vehicles on behalf of these same 21
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`claimants. Indeed, a review of the “supplement” information indicates that
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`FRS never submitted in vehicle identification numbers (VINs) to support
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`alleged purchases of the vehicles FRS originally identified.
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` FRS has also attempted to file a late “claim addendum” for insurance company
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`WR Berkley. No vehicle or parts purchase data had previously been claimed
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`for that insurance company.
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`10
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`Case 2:12-md-02311-SFC-RSW ECF No. 2120-2, PageID.38513 Filed 03/03/21 Page 11 of 12
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`22. FRS is trying to add new vehicle claims through “placeholders” that it
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`has long known would not be accepted by Class Counsel. FRS’ failure to submit
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`timely claims data is its own fault.
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`23. The claims administration process has been underway since June 18,
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`2020. Receiving late claims and late vehicle information after the claims-submission
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`deadline is problematic and delays distribution of settlement funds.
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`I declare under penalty of perjury, pursuant to 28 U.S.C. § 1746, that the
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`foregoing is true and correct.
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`Executed this 3rd day of March 2021, in Houston, Texas.
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`/s/ Chanler Langham
`Chanler Langham
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`11
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`Case 2:12-md-02311-SFC-RSW ECF No. 2120-2, PageID.38514 Filed 03/03/21 Page 12 of 12
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`CERTIFICATE OF SERVICE
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`I hereby certify that on March 3, 2021, I electronically filed the foregoing document with
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`the Clerk of the Court using the CM/ECF system which will send notification of such filing to all
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`parties of record.
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`/s/ Jenna G. Farleigh
`Jenna G. Farleigh
`SUSMAN GODFREY L.L.P.
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`12
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