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Court Rules Against Body Shops in State Farm Antitrust Lawsuit

The Eleventh Circuit Court of Appeals in Atlanta has scrapped five combined lawsuits filed by body shops accusing State Farm and several other insurers of conspiring to punish shops that didn’t cooperate with its alleged scheme to fix prices and use substandard replacement parts.

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The Eleventh Circuit Court of Appeals in Atlanta has scrapped five combined lawsuits filed by auto body repair shops accusing State Farm and several other insurers of conspiring to punish shops that didn’t cooperate with its alleged scheme to fix prices and use substandard replacement parts, according to an article by Property Casualty 360.

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Eight of nine judges agreed that the repair shops’ complaints didn’t rise to the level of price-fixing and group-boycotting under the Sherman Antitrust Act, agreeing with a trial judge who dismissed the actions in 2016, according to the article.

The most recent ruling dismissed the federal causes of action and two of three state claims, leaving alive only a claim for tortious interference.

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These cases were part of a series of nearly two dozen lawsuits across the country that began in 2014 and accused insurers including State Farm, Allstate, Progressive, Geico, Nationwide, USAA, Liberty Mutual and Hartford and others of conspiring to drive down the prices they pay for repairs by agreeing among themselves on a preset “market rate,” enforcing compliance by steering their policyholders to businesses that agree to their terms and boycotting those that refuse, according to the article.

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This decision involves five complaints combined as Quality Auto Painting Center of Roselle Inc. et al. v. State Farm Indemnity Co. et al. The actions were dismissed by Judge Gregory Presnell in 2016 for failure to state a claim, according to the article.

The judges’ main issues with the case were whether the complaints could support claims of illegal price-fixing and whether they could support claims of illegal boycotting by the insurers, according to the article.

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To read the full article, click here.

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