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Monday, 11 March 2019 16:46

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

Written by Greg Land, PropertyCasualty360.com

Index

 

Neither was there support for claims that State Farm kept its rating decision a secret, he said.

 

“Quite the opposite,” Anderson wrote, “the complaints reveal that State Farm must necessarily tell the rate to every repair shop in a given geographic area.”

 

Similarly, he said, there is no indication that the insurers are making identical demands of the repair shops.

 

“The body shops argue that the insurance companies have engaged in uniform tactics in that they require the Body Shops: to repair faulty parts rather than install replacement parts; to install used or recycled parts; and to offer discounts and concessions,” the opinion said.

 

“All of these purported ‘highly uniform’ tactics are easily explained by the most common of corporate stimuli: a desire to increase profits,” the opinion said.

 

None of the plaintiffs’ “plus factors” sufficed to “tip the scale from equipoise toward conspiracy sufficiently to prevent dismissal of this count,” Anderson wrote.

 

Boycott Allegations Insufficient

 

“The boycott allegations in this case are even weaker than the allegations of price-fixing,” the opinion said. “Neither the ‘steering’ allegations nor the ‘boycott’ section of the complaint allege even in conclusory fashion that there was an agreement to do so.”

 

“For the same reasons that it forecloses the body shops’ price-fixing claim, Twombly forecloses the body shops’ group boycott claims,” it said, which “allege only parallel conduct which is insufficient to create an inference of prior agreement or conspiracy.”

 

The complaints also included state law claims for unjust enrichment, quantum meruit and tortious interference, only the last of which narrowly survived the judges’ scrutiny.

 

Even that claim, Anderson noted, may be knocked out of district court on remand if Presnell declines to exercise jurisdiction.

 

In dissent, Wilson wrote that the majority’s reading of Twombly was too narrow for dismissal of the suits at the pleading stage.

 

“Antitrust laws are often under-enforced against anticompetitive exercises of buyer market power,” Wilson wrote. “And yet, under the majority’s interpretation of the Twombly standard, never has it been harder for an antitrust plaintiff to proceed to discovery.”

 

Allowed to proceed, wrote Wilson, discovery “might uncover, for example, that the insurers agreed at industry meetings to use the same market rate, same reimbursement formulas, and same standards of quality … And it might not.”


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