Thursday, 30 September 2004 17:00

Allstate tries to overturn Texas law regulating tied shops

Nearly one year after Allstate filed suit against the state of Texas to overturn H.B. 1131, the 2003 Texas law that regulates insurer ownership of collision repair businesses, testimony began in Allstate vs. Abbott. The trial began on September 20 in the courtroom of Judge Ed Kinkeade, U.S. District Court, Northern District of Texas Dallas Division. 

H.B. 1131 prohibits insurance companies from opening or buying more body shops and regulates the marketing practices of those that were already open when the bill took effect in 2002 such as Allstate's Sterling Collision Centers.

Allstate Insurance Company and Sterling Collision Center claim that HB 1131 "stops dead in its tracks a promising, market-based mechanism for improving customer satisfaction, providing efficient, cost effective services and eliminating incentives for waste and fraud in auto repair estimates and actual repair work. (See ABN, October 2003).

Both Plaintiff and Defendant were given 15 hours to present their cases. Testimony was heard from all but one witness before court was adjourned until October 19, when the final defense witness, Dr. House, an economist for the defense, will be heard and closing arguments presented.

Among those testifying was Texas State Senator John J. Carona, noted for holding a press conference during NACE 2002 to promote introduction of the bill that eventually became H.B. 1131.

Several repairers testified including Alan Walne, owner of five Herb's Body Shop locations in the Dallas area, Victor Vandergriff, vice president of V.T. Inc and Automotive Investment Group, and Charles "Larry" Stafford, AAM, owner of RiverCity Collision in Austin, Texas.

With the trial ongoing, principals in the case declined to make statements to Autobody News for fear of creating any ancillary issues to the one at hand. Once the trial has ended and transcripts have been released, several parties have agreed to discuss the proceedings.