A New Orleans woman's lawsuit challenging the amount of money she had to pay the state to reinstate her driver's license after her auto insurance lapsed can move forward, a judge in Baton Rouge ruled Monday.
Shawn Noell Holliday is seeking to have the suit she filed last October certified as a class action on behalf of the hundreds of thousands of ถถา๕h motorists who, like her, received collection letters in October 2015 imposing fines for their lapsed insurance coverage.
A month after Louisianโs Office of Motor Vehicles sent out 1.2 million pre-collection notic…
The state is seeking an estimated $444 million from those motorists. Critics have labeled the effort a money grab by the cash-strapped state. Some of the alleged insurance violations date back to 1986. Some drivers said they were being improperly accused of expired insurance on vehicles they've sold or on vehicles now registered in other states where they've moved.ย
Holliday's class certification motion is pending before state District Judge Janice Clark.
Clark decided Monday that Holliday's suit, which the judge said needs some amending to add specificity, can proceed -- despite objections from the state's attorneys who argued the woman lost her right to sue because she did not respond to three letters sent to her by the state.
One of her attorneys told Clark she did not receive the first letter sent to her by the Office of Motor Vehicles.
Holliday's lapse in auto insurance coverage occurred prior to June 30, 2014, and lasted between 30 and 90 days, according to her suit.
At that time, state law provided for a reinstatement fee of $50 for a lapse in auto insurance coverage up to 30 days, $150 for a lapse between 30 and 90 days, and $250 for a lapse of 90 days or more.
As of July 1, 2014, those fees increased to $125 for a lapse of coverage up to 30 days, $275 for a lapse between 31 and 90 days, and $525 for a lapse of 91 days or more.
Holliday was expecting to have to pay $187.50, or $150 for a pre-July 2014 lapse of 30 to 90 days plus a 25 percent administrative fee, her suit says. But instead, she had to pay $656.25, or $525 plus a $131.25 administrative fee.
Holliday claims the reinstatement fine she was forced to pay amounted to a $468.75 overpayment, which she describes in her suit as improper and illegal.
Louisianโs Office of Motor Vehicles has raked in $22.5 million of the projected $444 millio…
Michael Adams, one of OMV's attorneys, argued Monday that Holliday's delinquent debt is final because she did not request an administrative hearing that was mentioned in the first letter sent to her. The woman failed to timely object to the fines, he said.
"Whatever happened to the access to the court ... for all persons," Clark said during the hearing.
"She lost the right to bring this matter forward," Adams replied. "She didn't do anything."
Matthew Sherman, an attorney for the state Department of Revenue and the Office of Debt Recovery, pointed out that the first letter sent to Holliday said she could request an administrative hearing within 10 days of the date of the letter.
Maria Stephenson, one of Holliday's attorneys, said the letters are not certified or sent by registered mail.
"If that's not a violation of due process, I don't know what is," she argued.
Since the ถถา๕h Office of Motor Vehicles sent more than a million letters Oct. 13 asking…
Adams said state law doesn't say the letters have to be sent via certified mail.
"There were so many opportunities and ways for her to resolve this and she failed to do so," Adams told the judge.
Stephenson said after the hearing that the state, through either negligence or technology, has overcharged many ถถา๕h motorists.
"It could be a lot of money for a lot of people," she said.
Attorneys for the defendants declined comment afterward.