Monday, 04 April 2016 22:12

Alleged ‘Price Fixing’ by State Farm and Progressive Prompt Filings in MDL

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For updated information on this case, click here.

In light of new evidence in the multi-district lawsuit, on March 2 Eaves Law Firm filed a motion to reconsider the dismissal of the Mississippi antitrust complaint by Judge Gregory Presnell.

Allison Fry of Eaves Law Firm pointed out that at the time the amended complaint was filed a year ago, they did not have access to the information they do now. This includes two statements, one from a State Farm representative and one from a Progressive representative where Fry said they admit to price fixing.

“We have direct admissions of price fixing and other illegal acts,” said Fry, the litigation director and designated plaintiffs’ liaison counsel at Eaves Law Firm.

On February 22 of this year, the trial court issued an order dismissing the plaintiffs’ claims for price fixing and boycotting under the Sherman Antitrust Act with prejudice, which means they cannot be refiled.

Fry explained there are very limited grounds in which a court can reconsider an order. These include (1) an intervening change in controlling law; (2) the availability of new evidence; and (3) the need to correct clear error or manifest injustice.

Therefore, the new information acquired by the Jackson, MS firm is grounds for reconsidering the case, she said. “Specifically, Plaintiffs obtained a statement from a Progressive employee who stated unequivocally that body shops have no say in the setting of their own labor rates, that the insurance companies ‘get together at big meetings’ to set body shop labor rates, and that the insurance companies uniformly apply the labor rates agreed upon at these meetings,” according to court documents. “This representative even identified when the next such meeting was going to occur.”

In addition, a State Farm representative provided the following statement in court documents: “State Farm intentionally suppresses and fixes body shop labor rates, and that State Farm’s labor rate survey is a sham to justify its intentional fixing of labor rates.”

The anti-trust lawsuit was first filed in Mississippi by 20 auto repair shops in February 2014 against 39 insurance companies. Eaves Law Firm subsequently filed more than 20 others. The lawsuits were eventually consolidated for pretrial purposes and the law firm now represents 500 shops across the country.

In the lawsuits that have been filed, the plaintiffs allege that the defendants, “engaged in an ongoing, concerted and combined intentional course of action and conduct to improperly and illegally control and depress automobile damage repair costs to the detriment of the plaintiffs and the substantial profit of the Defendants.”

The plaintiffs also claim that the defendants engaged in price fixing, compulsory use of substandard parts and boycotting shops that refuse to comply.

Eaves Law Firm plans to file the same motion to reconsider in IN, MS, TN and Utah, citing the new evidence obtained.

Meanwhile, the court is going through the claims on a rolling basis. “What is unusual about the current crop of orders is that the court has made a separation,” said Fry. “Other than the very first order two years ago, the court has handed over to the magistrate [Judge Thomas Smith] the duty to prepare a report and recommendation for all of the claims, state and federal.” 

Magistrate Smith has prepared the report and recommendation on the state law claims and District Judge Gregory Presnell entered an order on the federal claims, which fry said is a break from their previous habit.

The next step is to wait for the court to rule on the motion to reconsider, which Fry said can happen at anytime because there isn’t a specific deadline set. “If he does agree to reconsider and reverse itself on dismissal, then we will move forward with ordinary practices of litigation,” she said. “If he does not, we will appeal it to the 11th circuit.”

In March of this year, Eaves Law Firm filed an objection to the magistrate’s report and recommendations in both Mississippi and Indiana. Fry pointed out that In the MS case, the court did not dismiss four of the tortious interference claims. “At this moment they are alive,” she said. “Unfortunately there is no final answer on that at this moment because of the very unusual nature where they separated the claims, federal vs state.” Tortious interference occurs when a person intentionally damages the plaintiff’s contractual or other business relationship.

Although the report and recommendations issued by the magistrate judge stated that there are sufficient facts to move forward, Judge Presnell will still make the final ruling.

Eaves Law Firm plans to file an amended complaint in the states that the judge hasn’t dismissed yet, in order to include the new evidence.
Fry wants shops to know that “…there is still a great deal of life to go here. We will be pursuing each and every avenue that is required, whether that is an appeal or additional motion to reconsider.”

State Farm provided the following statement to Autobody News magazine:

“Our court filings speak for themselves; we believe that the allegations made by the plaintiff are without merit. We will ask the court to deny the motion for reconsideration. We have nothing further to add at this time.”