Thursday, 07 May 2015 17:00

Minnesota Supreme Court Denies Safelite’s Petition for Review

The Minnesota Supreme Court has denied Safelite Group and Safelite Solutions petition for further review of an Appellate Court decision that upholds the settlement agreement between the Minnesota Department of Commerce, Insurance Division and Auto Club Group.

The settlement requires Auto Club Group to “cease and desist from using Safelite Solutions, or any other subsidiary of Safelite Group Inc., as its administrator of automotive glass claims in Minnesota,” according to the settlement agreement.

“It is hereby ordered that the petition of Safelite Group and Safelite Solutions LLC for further review be denied,” according to Lorie Gildea, chief justice of the Minnesota Supreme Court.

In their request for review, Safelite attorneys alleged the court of appeals “plainly erred by dismissing the appeal for lack of jurisdiction.”

The attorneys further contend, “Here, in issuing the cease and desist order, the commissioner necessarily concluded that the statute authorizes him to order licensed insurance companies in Minnesota to terminate valid, enforceable and entirely legal contracts with third-party administrators who are not required to be licensed by the department. In issuing the order, the commissioner necessarily concluded that the statute authorizes him to blacklist third-party administrators, despite the fact that they are not required to be licensed, and authorizes the commissioner to, essentially, de-bar certain legitimate companies from ever doing business in Minnesota.

“The commissioner’s cease and desist order, to the extent that it affects petitioners and harms their contract rights in Minnesota, is a quasi-judicial decision that must be subject to judicial review. If not, the commissioner would be free to use cease and desist orders of this type to expand his authority to encompass third-party administrators and other parties who, by law, are not required to be licensed by the department. The cease and desist order exceeds the commissioner’s statutory authority, and raises serious due process concerns. The court of appeals erred by dismissing the writ, thereby immunizing the commissioner’s action from judicial review in this case and in future cases,” attorney write in the petition.

Attorneys for the Minnesota Department of Commerce Commissioner had asked the State Supreme Court to deny a review.

“The Court of Appeals correctly determined that Safelite was not entitled to petition for certiorari because the underlying administrative consent order is not a ‘quasi-judicial proceeding.’ Quasi-judicial proceedings are reviewable by writ of certiorari but legislative or administrative actions are not,” attorneys write.

In preparation for such a decision at the state level, Safelite has already filed a complaint in U.S. District Court.

It has asked the U.S. District Court, District of Minnesota, to issue a temporary injunction, enjoin and declare invalid enforcement of a Minnesota statute which excludes “Safelite from doing business in Minnesota without the opportunity for a hearing.”

“Because some businesses feel disadvantaged by the insurer’s right to refer, some states and state agencies have—as Minnesota has done here—sought to restrict the speech of insurance companies and claims processors. Every court to consider these efforts has concluded that such speech restrictions are unconstitutional,” Safelite attorneys write in the court documents.

Meanwhile, attorneys representing the Commissioner of the Minnesota Department of Commerce, call Safelite’s U.S. District Court complaint “misleading.”

“With their motion for a preliminary injunction, plaintiffs Safelite Group Inc. and Safelite Solutions LLC allege they have been improperly targeted by the Minnesota Department of Commerce for engaging in commercial speech that is protected by the First Amendment. Plaintiffs’ motion fails to address a host of issues, both with their non-speech related conduct and with the deceptive and misleading nature of the commercial speech they claim is protected,” according to court documents.

Attorneys contend AAA, “offered to terminate its relationship with Safelite Solutions as its claim handler as an inducement to lower the penalties the Commerce Department might otherwise impose” during settlement negotiations.

The U.S. District Court judge has not issued any decisions at press time.


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