Safelite Group and Safelite Solutions complaint in U.S. District Court, District of Minnesota, over a Minnesota statute is “misleading,” according to attorneys representing the Commissioner of the Minnesota Department of Commerce. Safelite Group has sued the commissioner and asked the court for a preliminary injunction and to enjoin and declare invalid enforcement of a Minnesota statute which excludes “Safelite from doing business in Minnesota without the opportunity for a hearing.”
Safelite is referring to a settlement agreement between the Minnesota Department of Commerce, Insurance Division, and Auto Club Group that provides for the Auto Club Group to pay a civil penalty of $150,000 and “cease and desist from using Safelite Solutions, or any other subsidiary of Safelite Group Inc. as its administrator of automobile glass claims in Minnesota,” according to the settlement agreement.
“With their motion for a preliminary injunction, plaintiffs Safelite Group Inc. and Safelite Solutions LLC allege they have been improperly targeted by the Minnesota Department of Commerce for engaging in commercial speech that is protected by the First Amendment. Plaintiffs’ motion fails to address a host of issues, both with their non-speech related conduct and with the deceptive and misleading nature of the commercial speech they claim is protected,” according to court documents.
“Plaintiffs fail to address Safelite Solutions’ unlicensed and improper adjusting of insurance claims. State law requires that parties who negotiate on behalf of an insurer to settle an insurance claim must register with the department as insurance adjusters, obtain training and education, and follow required standards on the adjustment of claims. Safelite Solutions has repeatedly violated these laws while working for the Auto Club Group (AAA) and other insurers, both by adjusting claims without a license and by adjusting claims in a manner that falls short of the required standards,” attorneys representing the commerce commissioner allege in court documents.
Attorneys contend AAA, “offered to terminate its relationship with Safelite Solutions as its claim handler as an inducement to lower the penalties the Commerce Department might otherwise impose” during settlement negotiations.
Meanwhile, Safelite’s attorneys argue, “Safelite has been afforded no opportunity to become a party to any proceedings involving the consent orders. Safelite petitioned the Minnesota Court of Appeals for a writ of certiorari to review the consent order, but the court determined the order was unreviewable because it does not qualify as a ‘quasi-judicial decision’ and because Safelite was not a party to the order. A petition to the Minnesota Supreme Court is pending, but Safelite remains a non-party with no right to review.”
Asking for a preliminary injunction, Safelite’s attorneys contend that, “Because some businesses feel disadvantaged by the insurer’s right to refer, some states and state agencies have—as Minnesota has done here—sought to restrict the speech of insurance companies and claims processors. Every court to consider these efforts has concluded that such speech restrictions are unconstitutional.”
The judge has not issued any decisions at press time.
Whether or not automotive glass claims third-party administrators need to have licensed claims adjusters on staff has been the subject of much debate in the past few years. Read what AGRR™ magazine discovered in our article titled “Are they Claims Adjusters?” in the May/June 2014 edition by clicking here.
To view the Commissioner of the Minnesota Department of Commerce’s response in U.S. District Court, click here.
To view Safelite’s petition for a preliminary injunction, click here.