Monday, 25 July 2011 16:16

Class Action Lawsuit Filed Against Insurers Alleging Control of CAPA

In an amended class action complaint filed in July in federal court in California (Perez et al v State Farm et al) against State Farm, Allstate, GEICO and others, the plaintiffs describe the Certified Automotive Parts Association (CAPA) as an insurer-controlled tool designed to help the defendants compete unfairly against insurers using genuinely high-quality parts in repairs.

It alleges the "consumer group" represented on CAPA's board (Advocates for Highway and Auto Safety) is also insurer-funded. It quotes a State Farm executive as having said at a CAPA meeting that if "the parts were high quality, a public relations campaign would not be necessary."

Without saying when this occurred, the lawsuit (originally filed in 2006) says that "CAPA itself decided to lower its standards," and quotes an internal CAPA memo by Karen Fierst (who left CAPA in 1998) saying the change was done in such a way "to avoid calling attention to this detail."

The suit seeks damages for "at least several hundred thousand" members of the class that it says have been harmed by the defendants' unfair competition and restraint of trade.

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