Amended BMV bill requires hearing on attorney fees award

A bill designed to limit the collection of attorney fees in government-related class-action lawsuits is scheduled for a final vote in the Indiana Senate today.

Tucked a little more than halfway through House Bill 1491, a 233-page bill dealing with “various motor vehicle law amendments,” is Section 206, which provides that “a court shall not award attorney’s fees without conducting a hearing.” A hearing, the bill goes on to say, can include the presentation of evidence, testimony of expert witnesses or “any other evidence the court requires to make its determination” on the proper attorney fees award.

HB 1491 was introduced to the General Assembly this year after the Indiana Bureau of Motor Vehicles was sued in two class-action suits for overcharging its customers roughly $30 million for various services.  

Cohen & Malad LLP, the Indianapolis law firm that represented the members of the class against the BMV, was initially awarded $6.3 million in attorney fees, an award that represented roughly 21 percent of a $30 million settlement, according to the Indianapolis Business Journal. Further, the Indianapolis Star has reported that the firm received an additional $9.6 million in fees as part of the second suit last November.

 The original language of HB 1491 held that attorney fees should be calculated based on a “reasonable” rate charged for hours worked in preparation for the action, but critics warned that such a measure could dissuade law firms from accepting government-related class action suits.

The amended form of HB 1491, which only includes the requirement for a hearing on attorney fees, was passed by the Senate on second reading with another amendment not related to attorney fees, but instead related to a summer study committee about a motor vehicle inspection and maintenance program in northern Indiana.  The third reading vote on the fully amended bill is scheduled for Wednesday’s 1:30 p.m. Senate session.