Collision repair shops from throughout the country have objected to a Florida judge’s recommendation that many of the cases alleging antitrust violations by insurers be dismissed without prejudice. Collision repair shops from 12 Federal District Courts had alleged “steering and price fixing” by dozens of insurers. The cases are consolidated before a Florida U.S. District Court judge.
Given all of the states and allegations involved, the presiding U.S. District Court judge asked a U.S. magistrate judge to help review and research the cases and offer recommendations.
“The report and recommendations improperly create and add elements to multiple state law causes of action which do not exist in the respective states, omit relevant facts set forth in the respective complaints as justification for recommendations to dismiss, as well as fail to take in account relevant and applicable law. For these reasons, the plaintiffs object,” according to the court documents.
“The plaintiffs are free to set their own prices so as to compete with each other,” attorneys for the plaintiffs write in court documents. “They are not required to accept the defendants’ own determination of what their prices should be, nor are they required to negotiate, bargain or discount those prices.
“Respectfully, the court appears to be creating a new element into the various states’ laws of unjust enrichment by ruling the plaintiffs must plead facts sufficient to justify their ‘failure’ to bargain with defendants. The court cites no authority from any affected jurisdiction that plaintiffs are under any obligation whatsoever, much less a legal duty, to negotiate or bargain with anyone over their respective prices,” according to the court documents.
A&E Auto Body Inc. v. 21st Century Centennial Insurance Co. appears to have sparked the court battle. In it, a group of Florida collision repair shops filed a complaint against State Farm and dozens of other insurers, alleging the insurers use their direct repair programs to illegally control and depress rates and they say if the shops don’t comply, customers are steered away.
On the heels of this court filing, other similar cases cropped up in Arizona, Michigan, Alabama, California, Illinois, New Jersey, Oregon, Washington, Pennsylvania and additional states. On December 3, 2014, the United States Judicial Panel on Multidistrict Litigation (JPML) transferred these cases to the U.S. District Court for the Middle District of Florida, Orlando division.
The presiding judge has not yet issued a decision.
To read the collision repair shops objection, click here.
To read the magistrate’s recommendations, click here.