U.S. District Court Judge Janet Bond Arterton heard oral arguments in Safelite vs. Jepsen on Monday from Safelite’s Attorney Jay Lefkowitz of Kirkland & Ellis and the State of Connecticut’s Assistant Attorney General Joseph Chambers. At issue is the law requiring third-party administrators (TPA) who own their own glass shops to provide a name of a non-affiliated glass repair shop in the same area to consumers. The law is scheduled to go into effect on January 1. Safelite contends it is the only entity covered by the law.
The case is based on whether the State of Connecticut can under the First Amendment compel Safelite to as Safelite says, “recommend its competitors.” A key issue is the legislative intent of the law. Judge Arterton stated that both sides cherry-picked from the legislative intent. According to Safelite, the statute was allegedly adopted to “advantage local businesses in competition with larger interstate businesses—specifically Safelite.” According to the state of Connecticut, the legislative intent was the promotion of “Consumer Choice and the Prevention of Steering.”
A key issue is whether the case is similar in key points to Allstate Insurance vs. Abbott, which struck down part of a Texas law forbidding Allstate from recommending only its own Auto Body repair shops without recommending several other shops. Safelite claims that the cases are identical and Connecticut argued that they were not because Safelite only has to provide one other name, and not recommend the other shop.
The State of Connecticut maintains that the law is necessary to demonstrate to consumers that they have an actual choice. Attorney Chambers likened the current situation to where you tell someone that they can have any fruit they want but offering them only a piece of fruit from a bag of apples versus the law as offering them fruit from two bags, one containing apples and one containing oranges. Under the second scenario, the consumer better understands that they actually have a choice.
The hearing yesterday afternoon ran just under two hours. Safelite had five attorneys present, the state of Connecticut had one.
Sometime before the law goes into effect on January 1, Judge Arterton will decide whether to grant a temporary injunction to delay the law from going into effect. If she issues an injunction, there would be a trial to determine whether that injunction should be made permanent. Whether she grants that injunction depends on whether the Plaintiff (Safelite) is likely to win at trial and whether it will be irreparably harmed by having the law go into effect. If she does not grant the temporary injunction, Safelite has said it will immediately appeal to the appellate court (Second Circuit). If the temporary injunction is not granted and the appellate court does not intervene, the case could still move forward to trial.
This case is a great example of Nelson Mandela’s quote, “Where you stand depends on where you sit.” Is this law an effort by the State of Connecticut to stop Safelite (and other who might do the same thing) from taking unfair advantage of its position working with insurance companies (as a third-party administrator) to guide consumers to Safelite, or is this an unconstitutional compulsion by the State of Connecticut to unfairly force Safelite to recommend its competitors and give an advantage to local businesses. Stay tuned. glassBYTEs.com™ will have coverage when Judge Arterton’s decision is released.
Editor’s note: Contributing to this story was Stuart Zimmerman. He is a former attorney/advisor for the U.S. Department of Justice. He currently works as an Information Technology Consultant, and said that listening to the oral argument reminded him of what he liked—and didn’t like—about the practice of law.
To view a copy of Safelite’s complaint, click here.
To view a copy of Safelite’s request for an injunction, click here.
To view Connecticut’s response, click here.