Monday, 11 March 2019 16:46

Court Junks Body Shops' Antitrust Claims Against State Farm, Other Carriers

Written by Greg Land, PropertyCasualty360.com



The Eleventh Circuit Court of Appeals in Atlanta has scrapped five combined lawsuits filed by auto body repair shops accusing State Farm Insurance and several other insurers of conspiring to punish shops that didn’t cooperate with its alleged scheme to fix prices and use sub-standard replacement parts.


No Price-Fixing


Eight of the nine judge en banc panel agreed that the repair shops’ complaints didn’t rise to the level of price-fixing and group-boycotting under the Sherman Antitrust Act, agreeing with a trial judge who dismissed the actions in 2016.


The case has divided courts. In 2017, a three-judge panel for the U.S. Court of Appeals for the Eleventh Circuit had split the other way, with Judge Charles Wilson and a visiting judge sitting by appointment saying complaints should move forward, while a third, Senior Judge R. Lanier Anderson, dissented.


The majority opinion made March 4 was written by Anderson with the concurrence of Chief Judge Ed Carnes and Judges Gerald Tjoflat, Adalberto Jordan, Kevin Newson, William Pryor, Beverly Martin and Elizabeth Branch.


The dissenting opinion was crafted by Judge Charles Wilson, who had written the earlier opinion favoring the body shops.


The most recent ruling dismissed the federal causes of action and two of three state claims, leaving alive only a claim for tortious interference.


Cases Began in 2014

As detailed in the opinions and other filings, the cases began in 2014, when the first of nearly two-dozen lawsuits was filed around the country accusing State Farm and insurers including Allstate, Progressive, GEICO, Nationwide, USAA, Liberty Mutual, Hartford and others of conspiring to drive down the prices they pay for repairs by agreeing among themselves on a preset “market rate,” enforcing compliance by steering their policyholders to businesses that agree to their terms and boycotting those that refuse.


The complaints were combined in multidistrict litigation in the U.S. District Court for the Middle District of Florida, where some were dismissed with prejudice and others remain pending.


The March 4 decision involves five complaints combined as Quality Auto Painting Center of Roselle Inc. et al. v. State Farm Indemnity Co. et al. The actions were dismissed by Judge Gregory Presnell in 2016 for failure to state a claim.

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