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State Farm Auto Insurance Lawsuit to be Heard in Louisiana

The suit, filed in Louisiana’s 19th Judicial District Court, alleges State Farm violated Louisiana’s Unfair Trade Practices Act and Monopolies Law.

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The Office of Louisiana Attorney General James D. “Buddy” Caldwell  announced that a federal judge has ruled Caldwell’s lawsuit against State Farm Auto Insurance will be heard in Louisiana state court, where it was originally filed one year ago. Caldwell called the decision a “victory for Louisiana consumers.”

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The suit, filed in Louisiana’s 19th Judicial District Court, alleges State Farm violated Louisiana’s Unfair Trade Practices Act and Monopolies Law by using scare tactics to steer Louisiana consumers to State Farm’s preferred repair shops and forcing shops to perform vehicle repairs cheaply and quickly, rather than in accordance with consumer safety and vehicle manufacturer performance standards.

Through a procedural mechanism available, State Farm had the case removed to federal court and then transferred to multi-district litigation pending in Florida. Caldwell filed motions in December 2014 to have the case transferred back to state court in Louisiana, where it was originally, properly filed. U.S. District Court Judge Gregory A. Presnell granted Caldwell’s motion, and ordered that the case be heard in Louisiana.

“We are pleased that the Court ruled in our favor and will be sending the case back to Louisiana, where it belongs,” Caldwell said. “State Farm has violated Louisiana laws by engaging in a pattern of unfair and fraudulent business practices aimed at controlling the auto repair industry and forcing unsafe repairs on vehicles without the knowledge or consent of Louisiana consumers. We look forward to moving this case forward for the benefit and safety of our citizens.”

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Caldwell says the suit aims to change the culture of unsafe business practices led by State Farm in the auto insurance and repair industry. State Farm currently holds the largest share of auto insurance policies in Louisiana. In 2012, State Farm wrote one third of all auto insurance policies in the state, totaling over $1 billion in premiums.

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