Indiana BMV Pays $62 Million in Second Class Action Over Intentional Driver Overcharges

For more than a decade, Indiana drivers paid more than they owed every time they renewed a registration, obtained a license plate, or applied for an ID card. The Indiana Bureau of Motor Vehicles had been systematically overcharging residents across more than 100 fee categories dating back to 2002, and, according to attorneys, agency officials were aware of the problem and chose not to correct it or issue refunds.

Cohen & Malad filed a class action on behalf of affected Indiana motorists and, in 2013, secured an initial $30 million settlement covering a portion of the overcharges. That litigation, however, revealed that the BMV had not disclosed the full scope of the problem. Attorneys identified well over 100 additional fee mischarges, some of which continued through 2013 despite the agency's awareness of the ongoing investigation.

Managing partner Irwin Levin drove the second round of litigation. After years of additional discovery, he told The Indiana Lawyer that the BMV had known it was overcharging customers at various points and 'intentionally decided not to tell anyone or to refund the money.' The BMV attributed the errors to human error and a complex billing system, but the class pressed forward on the theory that the concealment was deliberate.

In May 2017 the parties reached a preliminary settlement, and the agreement received court approval in Marion Superior Court on July 20, 2017. The BMV agreed to pay $62 million to the class, covering overcharges from 2002 through mid-2014. Drivers overcharged after mid-2006 received automatic account credits toward future BMV transactions; those with claims reaching back to 2002 through mid-2006 submitted online claim forms and received refunds ranging from roughly $1 to $50 depending on how many vehicles and licenses their household held. The court separately awarded Cohen & Malad $7 million in attorney fees for the second case.

Combined with the 2013 recovery, the two settlements returned more than $92 million to Indiana residents and businesses, and the BMV ultimately acknowledged charging drivers more than $115 million in higher-than-allowed taxes and fees over roughly 15 years, covering some 5.5 million class members. The second settlement alone accounted for $28.5 million in refunds for the earlier period and $33.6 million the agency had already begun returning for the 2006 to 2014 period.