`
`UNITED STATES DISTRICT COURT
`EASTERN DISTRICT OF MICHIGAN
`SOUTHERN DIVISION
`Master File No. 12-md-02311
`IN RE: AUTOMOTIVE PARTS
`
`ANTITRUST LITIGATION
`
`
`Hon. Sean F. Cox
`
`Mag. Judge R. Steven Whalen
`
`
`THIS DOCUMENT RELATES TO:
`
`ALL END PAYOR ACTIONS
`
`
`
`
`
`FINANCIAL RECOVERY SERVICES, LLC’S
`MOTION FOR RECONSIDERATION OF
`THE COURT’S APRIL 28 OPINION AND ORDER
`
`PLEASE TAKE NOTICE that, upon the accompanying memorandum,
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`Financial Recovery Services, LLC d/b/a Financial Recovery Strategies (“FRS”), by
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`its undersigned attorneys, will move this Court, before the Honorable Sean F. Cox,
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`at the United States District Court for the Eastern District of Michigan, at a time
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`and place set by the Court, for an Order reconsidering the Court’s April 28, 2021
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`Opinion and Order denying FRS’s Emergency Motion To Compel Acceptance and
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`Processing of Vehicle Data (ECF No. 2134) and for such other and further relief as
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`the Court deems just and proper. Counsel for FRS sought concurrence in this
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`motion from the parties to the End Payor Actions. Counsel for End Payor
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`Plaintiffs stated that they oppose the motion, and counsel for End Payor
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`Defendants stated that they take no position on the motion.
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`WHEREFORE, FRS requests that the Court grant the following relief:
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`
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`
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`Case 2:12-md-02311-SFC-RSW ECF No. 2137, PageID.39185 Filed 05/07/21 Page 2 of 19
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`A. Reconsider the Court’s April 28, 2021 Opinion and Order denying
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`FRS’s Emergency Motion To Compel Acceptance and Processing of Vehicle Data;
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`B. Upon reconsideration, enter an order compelling Class Counsel and
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`the Claims Administrator to (1) permit FRS and the Insurers a reasonable
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`opportunity to submit vehicle data in support of their timely filed claim forms, and
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`(2) deem that data timely for the purpose of evaluating FRS and Insurers’
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`eligibility to recover under the End Payor Settlements; and
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`C. Grant such further relief as the Court determines to be appropriate.
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`ii
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`Case 2:12-md-02311-SFC-RSW ECF No. 2137, PageID.39186 Filed 05/07/21 Page 3 of 19
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`Dated: May 7, 2021
`
`Respectfully submitted,
`
`
`
`
`
`
`
`/s/ Laura S. Faussié
`Jonathan T. Walton, Jr. (P32969)
`Laura S. Faussié (P48933)
`FRASER TREBILCOCK
` DAVIS & DUNLAP, P.C.
`One Woodward Avenue, Suite 1550
`Detroit, MI 48226
`(313) 237-7300
`jwalton@fraserlawfirm.com
`lfaussie@fraserlawfirm.com
`
`Aaron M. Panner
`Matthew R. Huppert
`Daniel S. Severson
`KELLOGG, HANSEN, TODD,
` FIGEL & FREDERICK, P.L.L.C.
`1615 M Street, N.W., Suite 400
`Washington, D.C. 20036
`(202) 326-7900
`apanner@kellogghansen.com
`mhuppert@kellogghansen.com
`dseverson@kellogghansen.com
`
`Counsel for Financial Recovery
`Services, LLC
`
`iii
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`
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`Case 2:12-md-02311-SFC-RSW ECF No. 2137, PageID.39187 Filed 05/07/21 Page 4 of 19
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`UNITED STATES DISTRICT COURT
`EASTERN DISTRICT OF MICHIGAN
`SOUTHERN DIVISION
`Master File No. 12-md-02311
`IN RE: AUTOMOTIVE PARTS
`
`ANTITRUST LITIGATION
`
`
`Hon. Sean F. Cox
`
`Mag. Judge R. Steven Whalen
`
`
`THIS DOCUMENT RELATES TO:
`
`
`ALL END PAYOR ACTIONS
`
`BRIEF IN SUPPORT OF FINANCIAL RECOVERY SERVICES, LLC’S
`MOTION FOR RECONSIDERATION OF
`THE COURT’S APRIL 28 OPINION AND ORDER
`
`
`
`
`iv
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`
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`Case 2:12-md-02311-SFC-RSW ECF No. 2137, PageID.39188 Filed 05/07/21 Page 5 of 19
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`TABLE OF CONTENTS
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`Page
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`TABLE OF AUTHORITIES .................................................................................... vi
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`ISSUES PRESENTED ............................................................................................ vii
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`CONTROLLING OR MOST APPROPRIATE AUTHORITIES ......................... viii
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`LEGAL STANDARD ................................................................................................ 2
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`ARGUMENT ............................................................................................................. 3
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`I.
`
`II.
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`Under Rule 23, Non-Parties with Class-Member Interests May,
`Without Intervening, Seek Appropriate Relief in a Class
`Proceeding ....................................................................................................... 3
`
`FRS’s Motion To Compel Is Independent from FRS’s Prior
`Motion To Intervene and from FRS’s Pending Appeal .................................. 6
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`CONCLUSION .......................................................................................................... 9
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`
`
`
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`v
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`Case 2:12-md-02311-SFC-RSW ECF No. 2137, PageID.39189 Filed 05/07/21 Page 6 of 19
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`TABLE OF AUTHORITIES
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`Page
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`CASES
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`Faber v. Ciox Health, LLC, 944 F.3d 593 (6th Cir. 2019) ........................................ 5
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`Fine Paper Antitrust Litig., In re, 695 F.2d 494 (3d Cir. 1982) ................................ 5
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`Knowles v. Butz, 358 F. Supp. 228 (N.D. Cal. 1973) ................................................ 4
`
`Mich. Dep’t of Treasury v. Michalec, 181 F. Supp. 2d 731
`(E.D. Mich. 2002) ........................................................................................ 2, 3
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`Moulton v. U.S. Steel Corp., 581 F.3d 344 (6th Cir. 2009) ....................................... 5
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`Phillips Petroleum Co. v. Shutts, 472 U.S. 797 (1985) ............................................. 4
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`
`
`RULES
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`Fed. R. Civ. P.:
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`Rule 23 ................................................................................................. 1, 3, 5, 6
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`Rule 23(c) ........................................................................................................ 4
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`Rule 23(c)(2)(B)(iv) ..................................................................................... 3, 5
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`Rule 23(d)(1) ................................................................................................... 3
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`Rule 24 ............................................................................................................. 1
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`E.D. Mich. L.R. 7.1(h)(3) .......................................................................................... 3
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`
`
`OTHER MATERIALS
`
`Newberg on Class Actions (5th ed.) ....................................................................... 4, 6
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`vi
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`
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`Case 2:12-md-02311-SFC-RSW ECF No. 2137, PageID.39190 Filed 05/07/21 Page 7 of 19
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`ISSUE PRESENTED
`
`Should the Court reconsider its April 28, 2021 Opinion and Order and require
`Class Counsel and the Claims Administrator to accept and process as timely
`vehicle data that a class member submits in support of timely filed claim forms?
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`FRS says “Yes.”
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`
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`
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`vii
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`Case 2:12-md-02311-SFC-RSW ECF No. 2137, PageID.39191 Filed 05/07/21 Page 8 of 19
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`CONTROLLING OR MOST APPROPRIATE AUTHORITIES
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`Federal Rule of Civil Procedure 23
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`Moulton v. U.S. Steel Corp., 581 F.3d 344 (6th Cir. 2009)
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`
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`viii
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`
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`Case 2:12-md-02311-SFC-RSW ECF No. 2137, PageID.39192 Filed 05/07/21 Page 9 of 19
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`Financial Recovery Services, LLC d/b/a Financial Recovery Strategies
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`(“FRS”) moves for reconsideration of the Court’s April 28, 2021 Opinion and
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`Order denying FRS’s motion to compel processing of vehicle data, ECF No. 2134
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`(the “April 28 Order”). The April 28 Order is based on the incorrect premise that
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`the Court lacks authority to decide the merits of FRS’s motion because (1) FRS is a
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`non-party and/or (2) FRS’s motion to compel is related to or seeks reconsideration
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`of FRS’s prior motion to intervene. Id. at 1-2, PageID.39177-39178. Because
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`those apparent bases for the Court’s decision are incorrect and outcome-
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`determinative, the Court should reconsider its decision. FRS also requests oral
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`argument, which FRS respectfully submits would assist the Court in clarifying
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`these issues.
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`First, FRS’s status as a non-party does not affect its right to seek the relief
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`requested in its motion to compel, and, therefore, this Court erred in citing FRS’s
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`status as a “non-party” as a basis to deny FRS relief. FRS is an assignee and
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`representative of absent class members’ interests in this proceeding; the Claims
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`Administrator’s refusal to process vehicle data is prejudicing those interests.
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`Accordingly, FRS is entitled under Rule 23, without intervening under Rule 24, to
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`appear in this proceeding to seek protection of its and its clients’ class-member
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`interests; FRS’s status as a “non-party” is not a proper basis for denying FRS’s
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`motion or declining to consider its merits. More broadly, the Court cannot and
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`Case 2:12-md-02311-SFC-RSW ECF No. 2137, PageID.39193 Filed 05/07/21 Page 10 of 19
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`should not bar the courthouse doors to absent class members in this proceeding
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`merely because they are “non-parties.”
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`Second, this Court has authority to decide FRS’s motion to compel because
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`that motion does not relate to or depend upon FRS’s prior motion to intervene
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`(ECF No. 2060) or upon FRS’s pending appeal of the Court’s denial of
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`intervention (ECF No. 2101). The motion to compel deals with the procedural
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`rights of claimants to have their vehicle data processed; that issue is independent
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`of, and broader than, the topic of FRS’s motion to intervene—namely, the legal
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`rights of subrogated auto insurers. The Claims Administrator’s unauthorized
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`refusal to process vehicle data harms the rights of non-party claimants that, in
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`support of timely filed claims, have submitted or will submit vehicle data after the
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`claim-filing deadline; this includes claimants that are not insurers, do not seek
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`recovery as subrogees, and have not sought intervention. The prejudice caused by
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`not processing this vehicle data will remain regardless of whether FRS may
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`intervene. Accordingly, FRS’s motion to compel requires independent
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`consideration, and FRS’s pending appeal does not deprive this Court of authority
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`to rule on that motion.
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`LEGAL STANDARD
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`The Court will grant a motion for reconsideration if the moving party shows
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`“a palpable defect which results in a different disposition of the motion.” Mich.
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`2
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`
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`Case 2:12-md-02311-SFC-RSW ECF No. 2137, PageID.39194 Filed 05/07/21 Page 11 of 19
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`Dep’t of Treasury v. Michalec, 181 F. Supp. 2d 731, 736 (E.D. Mich. 2002); see
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`E.D. Mich. L.R. 7.1(h)(3). “A ‘palpable defect’ is a defect which is obvious, clear,
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`unmistakable, manifest, or plain.” Michalec, 181 F. Supp. 2d at 734.
`
`ARGUMENT
`
`The Court should reconsider its April 28 Order because it has two “palpable
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`defect[s],” and correcting either defect would “result[] in a different disposition” of
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`FRS’s motion. Michalec, 181 F. Supp. 2d at 733.
`
`I.
`
`Under Rule 23, Non-Parties with Class-Member Interests May, Without
`Intervening, Seek Appropriate Relief in a Class Proceeding
`Because Rule 23 entitles putative class members like FRS (or any other class
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`member seeking recovery from the End-Payor Settlements) to seek protection of
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`their rights in a class proceeding, without intervening, the April 28 Order erred in
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`holding that the Court lacked “authority” to grant relief to “a non-party.” ECF No.
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`2134 at 2, PageID.39178. Specifically, Rule 23 entitles class members to “enter an
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`appearance through an attorney if the member so desires,” Fed. R. Civ. P.
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`23(c)(2)(B)(iv), and it grants the Court authority to “issue orders that,” among
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`other things, “determine the course of proceedings” or “protect class members” by
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`allowing them an “opportunity to . . . intervene . . . or to otherwise come into the
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`action,” Fed. R. Civ. P. 23(d)(1) (emphasis added). These provisions give the
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`Court ample “authority . . . to grant” FRS’s motion, even though “FRS remains a
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`non-party,” pending appeal. ECF No. 2134 at 1-2, PageID.39177-39178. A
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`3
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`Case 2:12-md-02311-SFC-RSW ECF No. 2137, PageID.39195 Filed 05/07/21 Page 12 of 19
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`putative class member need not “go[] the full length of becoming a party through
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`intervention” to ascertain or seek protection of its rights as a class member.
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`3 Newberg on Class Actions § 9:37 (5th ed.) (“Newberg”); accord Knowles v. Butz,
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`358 F. Supp. 228, 230 (N.D. Cal. 1973) (“There is, therefore, no need for these
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`new class members to formally intervene.”). Likewise, the Due Process Clause
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`requires that “absent class plaintiffs” receive, among other things, “an opportunity
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`to be heard and participate in the litigation.” Phillips Petroleum Co. v. Shutts, 472
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`U.S. 797, 811-12 (1985); see also 6 Newberg § 18:44 (discussing the “constellation
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`of participatory protections” for absent class members).
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`In support of the motion to compel, FRS cited Rule 23(c) in furtherance of
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`the argument that, because absent class members also may “participate in
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`proceedings before the Court” and “pursu[e] relief,” “without intervening,” it is
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`“wrong” that “only parties to this action can file motions.” ECF No. 2126 at 8 n.4,
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`PageID.39107. Therefore, the April 28 Order’s statement that “[FRS] cites no
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`authority for the court to grant such a ‘motion to compel acceptance’ from a non-
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`party” is incorrect. ECF No. 2134 at 2, PageID.39178.
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`Because FRS has the rights of a class-member claimant by assignment and
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`also represents the interests of other class-member claimants, it may, without
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`intervening, request relief from the Court. Indeed, “purported members of the
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`class” need not formally intervene in the class proceeding to “request . . . that the
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`4
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`Case 2:12-md-02311-SFC-RSW ECF No. 2137, PageID.39196 Filed 05/07/21 Page 13 of 19
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`court interpret the class order so as to include [them] and on that basis direct the
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`payment of [their] claims.” In re Fine Paper Antitrust Litig., 695 F.2d 494, 499
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`(3d Cir. 1982). In that circumstance, a putative class member need only “present
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`[a] motion for resolution by the court,” id., which is what FRS did here. Moreover,
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`the Sixth Circuit has construed Rule 23’s “appearance” provision to contemplate
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`meaningful participation by absent class members and their counsel, including
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`being listed on the docket, having their filings accepted by the court, and having
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`the opportunity to be heard at proceedings that affect class members. See Moulton
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`v. U.S. Steel Corp., 581 F.3d 344, 353 (6th Cir. 2009); see also Faber v. Ciox
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`Health, LLC, 944 F.3d 593, 604 (6th Cir. 2019) (an “appearance” under Rule
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`23(c)(2)(B)(iv) is made “to obtain favorable outcomes—not for its own sake”).
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`The basis for the Court’s April 28 Order also is incorrect because, taken to
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`its logical extreme, it would prevent non-party class members—that is, all class
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`members other than the named plaintiffs—from participating and protecting their
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`rights at later stages of the claims administration process. Non-party class
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`members that submit proofs of claim have a right to object to recommendations
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`that a claims administrator makes to a court about which claims to compensate,
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`and to challenge the court’s decision to accept or reject those recommendations.
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`See Fed. R. Civ. P. 23(c)(2)(B)(iv). Yet, the Court’s holding that it has no
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`“authority” to grant relief to “non-party” claimants suggests that such claimants
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`5
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`Case 2:12-md-02311-SFC-RSW ECF No. 2137, PageID.39197 Filed 05/07/21 Page 14 of 19
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`may be denied the opportunity to challenge the recommended disposition of their
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`claims, or the distribution of settlement funds, unless they spend the time and
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`money formally to intervene—a cost that will be “not worth the[] effort” for the
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`garden-variety class member who has relatively “little at stake.” 3 Newberg
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`§ 9:30. That result would violate Rule 23, which is designed to protect class
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`members. Moreover, courts would need to adjudicate individually motions to
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`intervene by every class member who has enough at stake to justify the costs of
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`seeking intervention, adding burden and delay to every class settlement
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`administration. Accordingly, the Court should reconsider its holding regarding
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`“non-party” claimants.
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`II.
`
`FRS’s Motion To Compel Is Independent from FRS’s Prior Motion To
`Intervene and from FRS’s Pending Appeal
`Insofar as the April 28 Order concludes that the Court lacks authority to
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`decide FRS’s motion to compel because that motion is related to (or seeks
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`reconsideration of) FRS’s prior motion to intervene, see ECF No. 2134 at 1-2,
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`PageID.39177-39178, that ruling misconstrues the nature of FRS’s motion to
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`compel. The motion to compel raises issues about processing class members’
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`claim information and thus is independent of FRS’s motion to intervene, which
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`was filed to obtain a ruling regarding Insurers’ subrogation rights. FRS’s motion
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`to compel neither seeks to make FRS a party nor depends upon FRS being a party.
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`Rather, it asks the Court to enforce the Claims Administrator’s obligation to
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`6
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`Case 2:12-md-02311-SFC-RSW ECF No. 2137, PageID.39198 Filed 05/07/21 Page 15 of 19
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`claimants, who purport to be absent class members, not parties to the End Payor
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`Actions.
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`Under the Court-approved Plan of Allocation, the Claims Administrator
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`must “use the information [claimants] provide in [their] Claim Form[s] . . . to
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`determine whether [the claimant’s] Vehicle[s] contain[] one or more of the
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`Automotive Parts.” 12-cv-403, ECF No. 301-2, PageID.11014. The Claims
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`Administrator owes that obligation to all claimants—it does not depend on whether
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`the Claims Administrator believes the Court ultimately will approve a given claim,
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`or whether the claimant has intervened. Yet, as FRS’s motion to compel showed,
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`the Claims Administrator has declined to fulfill its data-processing obligation for
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`claimants who have supplemented timely filed claim forms with additional vehicle
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`information. See ECF No. 2114 at 7-10, PageID.38318-21. FRS and its clients, as
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`claimants, are just as entitled as all other claimants to have their vehicle
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`information processed.1
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`Moreover, whether or not FRS intervenes, the Claims Administrator’s
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`refusal to process vehicle information will harm FRS and all similarly situated
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`claimants. Not processing a claimant’s vehicle information harms that claimant by
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`functionally nullifying its claim; there can be no basis to pay a claim until the
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`1 Attached hereto as Exhibit 2 is the Declaration of Daniel W. Shoag, Ph.D.,
`which provides additional information about FRS’s imminent submission of
`vehicle information for the Insurers’ Total Loss Vehicles.
`
`7
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`
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`Case 2:12-md-02311-SFC-RSW ECF No. 2137, PageID.39199 Filed 05/07/21 Page 16 of 19
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`Claims Administrator “determine[s] whether [the claimant’s] Vehicle[s] contain[]
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`one or more of the Automotive Parts,” 12-cv-403, ECF No. 301-2,
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`PageID.11014—that is, determines whether the claimant’s vehicles are eligible to
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`recover from the End Payor Settlements. The Claims Administrator’s abdication
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`of its responsibilities has imposed this harm on FRS and its Insurer clients not only
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`with regard to claims that are based on subrogation, but also claims based on the
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`purchase of fleet vehicles—that is, claims that have nothing to do with
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`subrogation. Moreover, the Claims Administrator’s actions threaten to harm
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`several of FRS’s non-insurer clients, see Decl. of Robin M. Niemiec ¶¶ 2-3 (May
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`5, 2021) (attached as Exhibit 1), as well as dozens of non-insurer claimants that
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`FRS does not represent, see id. ¶ 4; ECF No. 2125-1 at 1-3, PageID.38551-38553.
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`Neither making FRS a party nor deciding that the Insurers have subrogation rights
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`would address or remedy these harms.
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`Additionally, if the Court does not require the Claims Administrator to
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`process claimants’ vehicle data now—when ample time to do so remains in the
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`claims administration process—the Claims Administrator and Class Counsel may
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`very well rely on such inaction to recommend at the end of the claims
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`administration process that this Court deny claimants compensation. The Claims
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`Administrator, without any authority provided by the Plan of Allocation or
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`otherwise, is declining to process vehicle information from claimants it believes
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`8
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`Case 2:12-md-02311-SFC-RSW ECF No. 2137, PageID.39200 Filed 05/07/21 Page 17 of 19
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`should not recover, even though they timely submitted claim forms and are entitled
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`to recover. By refusing to process these claimants’ vehicle information, the Claims
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`Administrator is unlawfully attempting to short-circuit the claims administration
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`process in a manner designed to preclude any evaluation of the merits of these
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`claims. Accordingly, deferring this issue to the end of the claims administration
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`process risks irreparable prejudice to eligible claimants. The Court should ensure
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`that vehicle information is processed now to protect claimants’ rights to recover.
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`CONCLUSION
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`
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`The Court should reconsider its April 28 Order and grant FRS’s motion to
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`compel. The Court should also permit oral argument to address the issues raised
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`by FRS’s motion to compel and the present motion for reconsideration.
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`9
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`Case 2:12-md-02311-SFC-RSW ECF No. 2137, PageID.39201 Filed 05/07/21 Page 18 of 19
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`Dated: May 7, 2021
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`
`
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`
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`
`
` Respectfully submitted,
`
` /s/ Laura S. Faussié
`Laura S. Faussié (P48933)
`Jonathan T. Walton, Jr. (P32969)
`FRASER TREBILCOCK
` DAVIS & DUNLAP, P.C.
`One Woodward Avenue, Suite 1550
`Detroit, MI 48226
`(313) 237-7300
`lfaussie@fraserlawfirm.com
`jwalton@fraserlawfirm.com
`
`Aaron M. Panner
`Matthew R. Huppert
`Daniel S. Severson
`KELLOGG, HANSEN, TODD,
` FIGEL & FREDERICK, P.L.L.C.
`1615 M Street, N.W., Suite 400
`Washington, D.C. 20036
`(202) 326-7900
`apanner@kellogghansen.com
`mhuppert@kellogghansen.com
`dseverson@kellogghansen.com
`
`Counsel for Financial Recovery
`Services, LLC
`
`10
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`Case 2:12-md-02311-SFC-RSW ECF No. 2137, PageID.39202 Filed 05/07/21 Page 19 of 19
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`CERTIFICATE OF SERVICE
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`
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`I hereby certify that, on May 7, 2021, I electronically filed the foregoing
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`document with the Clerk of the Court using the ECF system, which will send
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`notification of such filing to counsel of record.
`
`
`
` /s/ Laura S. Faussié
`Laura S. Faussié
`
`
`
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`
`