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Thursday, 31 January 2008 17:00

Allstate Pursues Supreme Court Certification To Review HB 1131

Allstate Insurance Company has filed an appeal to the U.S. Supreme Court regarding the Texas statute prohibiting insurance companies from owning collision repair shops. Just as children go from parent to parent to get the answer they want, Allstate has refused to accept lower court decisions, and, in a last ditch effort to own repair shops in Texas (under the Sterling banner), has asked the Supreme Court to review the previous decisions. 

The appeal comes after the U.S. Court of Appeals, 5th Circuit, New Orleans, affirmed the District Court ruling in the case of Allstate Insurance Co., et al., Appellants-Appellees vs. Greg Abbott, Etc., et al., vs. Automotive Service Association, et al on August 1, 2007.

Allstate’s request for certiorari addresses two questions:

•Whether state law discrimination against an inherently interstate means of doing business ... violates [this] Court’s precedents and conflicts with the contrary interpretations of other circuits.


•Whether the mere articulation of a purportedly legitimate state interest obviates the need for heightened scrutiny of legislation arising from an admittedly local economic protectionist motive under this Court’s precedents and conflicts with the contrary interpretations of other circuits.


ASA responds
The Automotive Service Association (ASA), along with Consumer Choice in Autobody Repair (CCAR) responded to the brief as an Intervenor, making the following points:

•The McCarran-Ferguson Act removes this case from scrutiny under the Dormant Commerce clause.

•The Fifth Circuit applied the court’s settled precedent to determine that HB 1131 does not discriminate against interstate commerce. The Fifth Circuit analyzed whether HB 1131 had a discriminatory purpose using the correct legal standard and concluded it did not Furthermore, the Court never adopted the discriminatory effects analysis that petitioners claim the Fifth Circuit should apply.

•There are no circuit splits implicated by this case that warrant review.

Shortly after ASA filed its response, Allstate addressed the Intervenor’s brief, saying:

•The McCarran-Ferguson Act argument is an irrelevant diversion.

•The Fifth Circuit’s disregard of Exxon’s “Business Shifting” test creates a circuit split.

•Opposition highlights the need to clarify when firms are “similarly situation.”

•ASA’s opposition underscores the need to clarify whether this Court’s “Mixed Motives” test or the Fifth Circuit’s “Primary Purpose” test controls.

•The Intervenors’ opposition confirms the need for this Court’s guidance in establishing discriminatory purpose.

And so the waiting game continues.


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