Safelite has asked the U.S. District Court of Connecticut for a preliminary injunction against enforcement of a law that it claims will “unconstitutionally” force the company to recommend auto glass repair and replacement work to its competitors. The law was recently signed off by the governor and is set to take effect January 1.
In addition to asking for a preliminary injunction, Safelite has also filed a complaint against George Jepsen, Connecticut Attorney General and Thomas Leonardi, Commissioner of the Connecticut Insurance Department, and is asking for a permanent injunction against enforcement.
The company is asking the court to “enjoin and declare invalid the portions of a recently enacted Connecticut statute unconstitutionally prohibiting Safelite from engaging in truthful commercial speech and compelling Safelite to make potentially false and misleading statements about other glass shops.”
The company claims the statute, House Bill 5072, “An Act Concerning Automotive Glass Work” [Public Act 13-67] is an infringement of Safelite’s first amendment rights because it “requires Safelite to promote other glass repair shops as a part of any statements it may make about itself,” according to court documents.
Safelite argues, “Those provisions advance no legitimate-let alone substantial state interest, as any state law that seeks to regulate speech must. Rather the legislative history of PA 13-67 makes clear that the real purpose of these provisions and their effect is constitutionally impermissible economic protection of local Connecticut glass repair shops from the interstate competition of Safelite.”
The company goes on to claim, “Any state interest in consumer choice is already fully served by existing Connecticut anti-steering, consumer protection and antitrust laws. Notably, the legislative history is devoid of a single consumer complaint about a lack of consumer choice in glass repair.”
In the court documents, Safelite attorneys claim, “Upon receipt of each telephone call [from an insurance customer making a glass claim] a pre-recorded announcement is played disclosing to the policyholder the relationship between Safelite Solutions [which is a company division that serves as a third-party administrator handling auto glass claims for insurance companies] and Safelite AutoGlass [which is a company division that handles the auto glass repair and replacement work]. In addition, Safelite informs policyholders of the features and benefits available under their policy and their right to choose any repair shop to perform the service. At no time does Safelite Solutions or any of its insurance provider clients require the policyholder to have the work performed at a particular shop, and always honors the policyholders’ preference.
“But if the policyholder does not express a preference, the customer service representative will recommend a glass repair shop in accordance with the insurance provider’s glass program. Many, though not all, of Safelite’s insurance provider clients have chosen Safelite AutoGlass as one of its preferred glass repair shops,” according to the court documents. “In that case, the scripts may include a recommendation to Safelite AutoGlass if one is conveniently located or offers mobile repair service that can perform the work wherever the vehicle is located.”
In response to Safelite’s request for an injunction, state lobbyist Jim Amann, who worked on the bill on behalf of auto glass retailers, says, “Let the courts fight it out. We are very comfortable the act will pass constitutional muster.”
Jaclyn Falkowski, a spokesperson for the Connecticut Attorney General, says, “We are reviewing the complaint and will respond at the appropriate time in court. As the matter is pending, we would decline further comment at this time.”
Also speaking out, Tom Feeney, Safelite Group president and CEO, says, “Public Act 13-67 is targeted specifically at companies like Safelite that have both TPA and retail business operations. We established our business model more than 20 years ago to meet the changing needs of the insurance clients we serve and to improve the service we provided to their policyholders, the consumer. And that’s just what we did. Consumers have enjoyed the benefits of the efficiencies we offer in the form of reduced costs and enhanced service.
“As a direct result of the free market competition that networks promote, consumers are paying far less for vehicle glass services and receiving a much higher level of customer service now than they were twenty years ago,” he adds. “It is our right, as well as our clients’ rights under the First Amendment guaranteeing commercial free speech to use our model to educate insureds about their options and recommend glass shops as we feel are in their best interest, thereby improving their claims experience.”
At press time, officials representing the Commissioner of the Connecticut Insurance Department had not yet responded.
PA-13-67, which the governor approved in early June, “requires initial communications between a glass claims representative or a third-party claims administrator of an insurance company doing business in Connecticut and the company’s insured about automotive glass works or products to inform the insured about his or her right to choose where to have the work done.”
Additionally, “The bill bars insurance companies or their representatives from steering an insured to a licensed glass shop owned by the company, claims administrator or their parent company, unless they provide the insured with the name of at least one other shop in the area where the glass work is to be performed,” according to a summary of the bill from the Connecticut government website.
The bill further “requires that a glass claims representative for an insurance company or its third-party claims administrator, in the initial contact with an insured about automotive glass repair services or glass products, tell the insured something substantially similar to: ‘You have the right to choose a licensed glass shop where the damage to your motor vehicle will be repaired. If you have a preference, please let us know.'”