A U.S. District judge in Florida has dismissed much of the antitrust lawsuit filed by group of Florida collision repair shops against State Farm and dozens of other insurers without prejudice, meaning attorneys for the repair shops can file an amended complaint. The shops allege the insurers use their direct repair programs to “illegally control and depress” repair rates and if the shops don’t comply, customers are steered away. The judge says more evidence is needed to support the allegations.
“In Count VI, the plaintiffs assert that the defendants have conspired to impose maximum price limits upon the plaintiffs’ products and services in violation of the Sherman Act,” the judge writes. “[S]tating a claim under the Sherman Act requires ‘a complaint with enough factual matter (taken as true) to suggest that an agreement was made.’… The plaintiffs’ allegations in this case fall far short of meeting that standard.
“To start with, aside from conclusory allegations that it exists, the plaintiffs offer no details at all in the amended complaint about the alleged [price fixing] agreement, such as how the defendants entered into it or when. Though not fatal to their Sherman Act claims, this bears noting,” according to the court documents.
“[T]he fact that a number of the defendants have indicated an unwillingness to pay more than State Farm has to pay does not, itself, raise Sherman Act concerns. In the words of the Supreme Court, ‘lawful parallel conduct fails to bespeak unlawful agreement,’” the judge writes.
As for the collision repair shops’ allegations that the insurers have “engaged in … boycott and boycotting activity through their repeated actions of steering customers away from the plaintiffs through allegations and intimations of poor quality work …,” the judge writes that the plaintiffs do not identify a time period when this alleged boycotting activity occurred.
“Group boycotts, or concerted refusals to deal, clearly run afoul of Section 1 of the Sherman Act … However, the amended complaint does not set forth ‘a concerted refusal to deal.’ The plaintiffs’ allege (in conclusory fashion) that the defendants ‘steer customers away’ by badmouthing shops that seek to charge higher prices. But there is no allegation that any defendant refused to allow any of its insureds to obtain a repair from such a shop, or refused to pay for repairs at such a shop,” according to the court documents.
The judge writes that the plaintiffs “offer even less ‘evidence’ of an agreement to boycott than they did of an agreement to fix prices.”
The judge gave plaintiffs’ attorneys until February 10, 2015 to file an amended complaint.
To read the full decision by the judge, click here.