Safelite Group and Safelite Solutions have filed a motion for summary judgment in their lawsuit against the Commissioner of the Minnesota Department of Commerce. They ask that the U.S. District Court for Minnesota enjoin and declare invalid enforcement of a state statute which excludes the company “from doing business without the opportunity for a hearing.”
In the lawsuit filed in April 2015, Safelite referred 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 consent order.
The Minnesota Department of Commerce, Insurance Division, reviewed 125 automotive glass and accident claim files, which led to its decision, according to the settlement agreement.
Safelite’s attorneys contend that Commissioner Michael Rothman seeks to restrict Safelite’s protected commercial speech. Discovery has made it “clear” that the state’s Department of Commerce cannot justify its restrictions on Safelite’s commercial speech, the attorneys say in court documents.
They contend that the Department of Commerce has interpreted a local statute as prohibiting the company from “advising that insureds may be balance billed by non-preferred glass vendors” for charges not covered by the insurer. Safelite’s attorneys argue this statement is true.
According to Safelite, the Department of Commerce also requires the company to tell policyholders that “Minnesota law gives you the right to go to any glass vendor you choose, and prohibits me from pressuring you to choose a particular vendor.” The company’s attorneys contend this statement serves no purpose because policyholders are already informed of their rights in the script when they call in with glass damage.
In support of the motion for summary judgment, Safelite attorneys point to what they learned in discovery. The Minnesota Department of Commerce’s Assistant Commissioner for the Enforcement Division said during a deposition that “under Minnesota law if an insurance company doesn’t pay a shop in full for a job that shop has the right to try to seek the balance from the customer.”
“Accordingly, Safelite’s warning that policyholders ‘may’ be balance billed by non-network shops is truthful,” according to court documents.
Safelite’s attorneys also contend the script informs policyholders of their right to choose a shop.
Under discovery, Safelite’s attorneys say that Department of Commerce officials could show no evidence that consumers have been misled.
“The Department of Commerce’s witnesses could not point to a single instance in which a consumer reported being misled or deceived by what Safelite says,” according to court documents.
The attorneys note that the Department of Commerce opened investigations into certain Safelite insurance clients, including Auto Club Group, based on its incorrect interpretation of the state statute. The company was not notified of the investigation or involved in the settlement negotiations.
In response to the original lawsuit, attorneys for the Minnesota Commissioner said: “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.”
A hearing on this matter is set for August 5, 2016 at the Warren E. Burger Federal Building and United States Courthouse in St. Paul, Minn.
The judge has not issued any new decisions. Attorneys for the Minnesota Department of Commerce have not yet responded to the motion for summary judgment.
To view Safelite’s motion for summary judgment, click here.
To view Safelite’s memorandum in support of its motion for summary judgment, click here.