AUTOMOBILE DEALERSHIPS

Has your Dealership Joined the Class Action Lawsuit?

Tood Merriam CPA

Todd E. Merriam Manager CPA

2 July 2020

Note: O’Connor & Drew, PC is not a law firm. Please consultant your attorney for any legal advice.

Currently, there are several class-action lawsuits that dealerships can join. Over the years we have had several of our clients join these class action lawsuits. While the amount of compensation that is received can vary based on factors such as the number of vehicles sold or the amount of money spent with a vendor, the end result is a cash
payment.

The following is a listing of current class-action lawsuits that relate to dealerships:

Automotive Parts – Fourth and Final
Round of Settlements

This settlement is for dealerships that sold new vehicles between January 1, 1990 and August 12, 2019. There have been three rounds of settlements that have passed. Currently, claims are being submitted for the fourth round of settlements. This lawsuit
claims that automotive parts manufacturers conspired to fix, maintain, and artificially raise the price of new vehicle component parts. Due to higher costs of component parts, dealerships suffered as they paid more for new vehicles from manufacturers and were unable to pass these costs to customers. This case has been settled and dealers need to submit claims to be compensated.  Compensation depends on the type of vehicle sold. Vehicles that contain more parts from the parts manufacturers that were part of the settlement will receive higher compensation per vehicle sold. In order to participate in this funding round, dealers can submit claim directly to the claims administrator or utilizing a third-party service to submit a claim on your behalf. We have seen some large payments to dealerships regarding this lawsuit, therefore it is worth looking into if you have not submitted a claim. More information can be found at autodealersettlement.com.

Dealership Management Systems – Lawsuit Currently Pending

This lawsuit relates to dealerships that utilize Reynolds & Reynolds or CDK Dealership Management Systems (DMS) since September 2013. While DMS fees have always been a large expense to dealerships, this lawsuit alleges there is a conspiracy between Reynolds & Reynolds and CDK to charge higher prices to dealerships. Currently, this case is still in litigation and no settlement has been awarded. Upon settlement, a claims process will occur. For further information, see dealershipclassdmssettlement.com.

Visa/Mastercard – Lawsuit Currently Pending

Any business that accepted Visa or Mastercard-branded debit or credit cards after January 1, 2004 is eligible. When a business accepts a credit card, they pay an interchange fee of approximately 1-2% of the cost of the transaction to the credit card company. The current lawsuit claims that both Visa and Mastercard violated antitrust laws and caused merchants to pay excessive fees.  The Court has granted final approval for a $5.54 million settlement. On January 3, 2020, an appeal was filed.  It is unknown how long the appeal will take. If the appeal is successfully defended, a claims process will occur. For further information, see the court- approved website paymentcardsettlement.com.

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