Auto Dealers Face Deadline to Submit Claims in $129.5M Class Action Settlement

By Joseph Aboyoun, Seth L. Dobbs, Esq. , Grant Baker and Will Salerno

U.S. auto dealers have until Jan. 5, 2025 to submit a claim in the recent $129.5 million class action lawsuit settled by?CDK Global, LLC (CDK) and The Reynolds and Reynolds Company (Reynolds).?The deadline to object to the fee and expense application and/or allocation and distribution plan is Dec. 12, 2024. In the lawsuit, In re Dealer Management Systems Antitrust Litigation,?a group of U.S. automotive dealerships accused CDK and Reynolds of violating federal?and?state antitrust and consumer protection laws. They said CDK and Reynolds?restrained?trade and eliminated?competition within the marketplace by overcharging?Reynolds for dealer management systems (DMS) services and data integration services (DIS).

The court previously approved a $29.5 million class action settlement with Reynolds in 2019 and a $100 million class action settlement with CDK in August 2024.?Under the latest settlement, members of the affected classes can receive a cash payment that corresponds to the number of months a class member (as defined below) paid for the services of CDK or Reynolds, as applicable. Automotive dealership groups that operate out of multiple locations can submit a claim and receive payments for each of their locations. An automotive dealership that used DMS and DIS from both CDK and Reynolds during the relevant period can be a member of both settlement classes. To qualify as a member of either class, an automotive dealership must fall into either of the below categories:

• CDK Class Member — “All persons and entities located in the United States engaged in the business of the retail sale of automobiles?who purchased DMS from CDK and/or Reynolds, or any predecessor, successor, subsidiary, joint venture or affiliate, during the period from September 1, 2013 through August 15, 2024.”
• Reynolds Class Member — “All persons and entities located in the United States engaged in the business of the retail sale of automobiles?who purchased DMSs from CDK and/or Reynolds, or any predecessor, successor, subsidiary, joint venture, or affiliate, during the period from January 1, 2015, through October 23, 2018.”

Further, an otherwise eligible class member must not have opted out of the relevant settlement class(es). If an automotive dealership elected to be excluded from the settlement class(es), then the automotive dealership may not benefit from the respective settlement. By that same token, automotive dealerships who are not Reynolds class members or who excluded themselves from the Reynolds settlement are still eligible to be a CDK class member.

If a class member wishes to receive a portion of the settlement proceeds, the class member must submit a valid claim form by Jan.?9, 2025, through the settlement website: DMS Antitrust Settlement - Home. If an automotive dealership is both a CDK class member and Reynolds class member, only one claim form must be submitted per dealership physical location.?For example, a single dealership group with three separate physical locations, all of which purchased and used DMS during the applicable Reynolds and/or CDK class member periods must submit three separate claim forms, one per location. However, a single dealership group that sells automobiles from multiple original equipment manufacturers (OEMs) at the same physical location must only submit one claim form per physical location. If a valid claim form is not submitted by Jan. 9, 2025, a class member will not receive any portion of the settlement but will be bound by the court’s judgment as to the lawsuit.

Class members should also be cognizant that any settlement funds will not be distributed until the court grants final approval of 1) the CDK settlement, 2) the fee and expense application, 3) allocation and distribution plan of the settlement funds, and 4) any and all objections or appeals must be resolved. The confirmation hearing is currently scheduled for Feb. 25, 2025.?

Further information can be found on the settlement website: DMS Antitrust Settlement - Home. If you believe that your automotive dealership was impacted, please contact, Seth L. Dobbs at?[email protected], Will Salerno at [email protected], Grant C. Baker at [email protected]?or any member of Fox Rothschild's?Automotive Practice Group.

This information is intended to inform firm clients and friends about legal developments, including the decisions of courts and administrative bodies. Nothing in this alert should be construed as legal advice or a legal opinion. Readers should not act upon the information contained in this alert without seeking the advice of legal counsel. Views expressed are those of the author(s) and not necessarily this law firm or its clients. Prior results do not guarantee a similar outcome.