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It started with an offer to help a former law professor. More than eight years of collegial “help” later, Clint Watkins has wrapped up the case of a lifetime. This February, Watkins, a solo practitioner in Brentwood, Tennessee, settled a suit on behalf of a class of African Americans and Hispanics over the credit policies of General Motors Acceptance Corporation (GMAC). The changes that GMAC, the financing arm of General Motors, agreed to in the settlement are intended to discourage discriminatory practices among dealers and will save consumers about $60 million a year. (This is only the second settlement of its kind; Nissan Motors Acceptance Corporation settled a similar suit in February 2003.) Watkins, a 46-year-old who ordinarily handles a mix of employment and estates work, had gotten a call from David Tarpley, his former consumer law professor at Vanderbilt University Law School, in late 1996. Tarpley told Watkins that his former secretary, Addie Coleman (the lead plaintiff in the suit), had recently paid unusually high financing charges when buying a car. Tarpley asked Watkins to investigate further. In February 1997 Watkins wrote a letter to GMAC and to the General Motors dealer where Coleman had purchased her car. He inquired about how the financing rate was set and whether the dealer had any incentive to raise the rate. After sending a second letter, Watkins received a written response from a lawyer at GMAC saying that the matter involved the dealer and that all GMAC did was purchase the contract from the dealer. Not understanding the automobile loan process, Watkins spoke with people in the industry, such as former car salespeople, until he had enough information to outline his case. “It was clear that there was a method in place where the dealer had an incentive to raise the rate,” Watkins says. As the case ballooned, Watkins brought in two more local lawyers, Michael Terry and Wyman Gilmore. In 1998 they filed a consumer protection suit in state court in Nashville on an unfair or deceptive act or practice claim. (The suit was later transferred to federal district court in Nashville.) Shortly after filing the suit, Watkins discovered a number of cases that the U.S. Department of Justice had filed against mortgage companies, alleging that minorities had paid more for credit than whites. The department had brought these cases under the Equal Credit Opportunity Act (ECOA). After reading about the mortgage industry cases, Watkins started looking at the GMAC case differently and amended the complaint to focus on an ECOA claim. During discovery, Watkins and his cocounsel obtained key information. They started by subpoenaing driver’s licenses from states that identify race and then matched that information against transaction data from loan records (which GMAC was required to turn over) to compare credit rating and race in more than a million transactions. The models derived showed that all else being equal, African Americans paid higher interest rates on car loans than whites. While GMAC refutes the findings, Watkins feels the numbers precipitated the settlement. Watkins hasn’t seen a penny for his eight years of work. And over time the GMAC case crowded out paying matters. “[The GMAC case] was an absolutely huge, huge risk,” Watkins says. While not yet certain what share of the up to $9 million in attorneys’ fees he’ll get, Watkins will certainly get decent back pay. (Knowing that automobile financing is now a little fairer isn’t bad either.) So consider lending a hand the next time an old teacher calls.

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