LexisNexis pays $9.8M to Florida over car crash report fees
The company allegedly underreported the number of car crash reports it sold while serving as a vendor to avoid paying state fees.
A whistleblower investigation that revealed a legal and business research service pocketed millions in fees meant for the Florida Department of Highway Safety and Motor Vehicles has resulted in a $9.8 million settlement with the state, Attorney General Ashley Moody announced on Sept. 17.
The agreement settles claims that LexisNexis Coplogic Solutions Inc. systematically underreported the number of car crash reports it sold while serving as a state vendor to avoid paying the statutorily required $10 fee that it collected for every report sold.
The Department of Highway Safety and Motor Vehicles terminated that contract in 2019 after Broward whistleblower Christopher Hood came forward with the allegations under the Florida False Claims Act. Hood had worked as a supervisor for LexisNexis’s crash report department since 2014, his complaint said.
The case revolved around LexisNexis’s site buycrash.com, which allows people to buy car crash reports for a small fee. And it’s a lucrative industry in Florida due to the state’s size, the complaint noted.
LexisNexis denied the allegations. Its attorney Ashley Taylor of Troutman Pepper Hamilton Sanders in Virginia, said his client was always open about the fees it took and had simply interpreted the contract’s terms differently than the state.
“Despite the Attorney General’s unfortunate press release, this case was, at its core, a business dispute about the meaning of a contract term,” Taylor said. “The parties worked cooperatively together for over a year to find a business solution that resulted in this settlement. I am pleased the parties were able to resolve their differences and can now return to the business of providing valuable services to law enforcement agencies and the public.”
LexisNexis’s communications director Regina Haas shared that sentiment.
“Although we disagreed with the interpretation of contract language by the state, ultimately, we decided that rather than litigate, we would settle our disagreement in a way that benefited our law enforcement partners,” Haas said. “We want to emphasize that this was not a case about fraud, and the settlement agreement includes no admission of wrongdoing or liability on the part of LexisNexis Coplogic Solutions or any other LexisNexis entity.”
’100% profit to us’
But investigators discovered that an internal LexisNexis PowerPoint presentation “bragged” that “it is 100% profit to us” whenever it didn’t forward repeat sales fees to the state, according to a press release from Moody.
The state will receive $7.7 million under the settlement agreement, while the remaining $1.8 million is the whistleblower’s share. The settlement also includes $300,000 in attorney fees.
Illinois, Massachusetts, New Jersey, New York, Tennessee, and the city of Baltimore have also filed similar lawsuits against the company, which resulted in a $5.8 million settlement in 2019. But Moody said Florida is the only state to have intervened in the whistleblower action.
The alleged scheme was a betrayal, in Moody’s view.
“The state of Florida trusted this private company to help Floridians access crash reports to assist them with insurance claims and other important matters that can arise following an automobile accident,” Moody said in a press release Thursday. “But instead of passing the agency fee along to the FLHSMV, millions of dollars were pocketed as corporate profits. My office will continue to hold responsible companies that seek to abuse the public’s trust in order to bolster their profits.” Hood’s attorney Ryon McCabe of McCabe Rabin in West Palm Beach, said his client was happy to bring the claims and grateful for Moody’s investigation.
“Mr. Hood was proud to bring the case and very pleased with the result,” McCabe said. “He wanted to bring the case because of his long-term relationships with law enforcement.”
FLHSMV Executive Director Terry Rhodes said he was thankful Moody held LexisNexis accountable for its alleged deceit.
“As soon as we became aware of this fraud, we immediately began an internal review and started assisting the Office of the Attorney General in their investigation,” Rhodes said. “Prior to these revelations, the department had initiated the process to end our contract with LexisNexis and ultimately did so in June of 2019.”
Related: