The ruling came in a lawsuit brought by Safelite against Minnesota Department of Commerce Chairman Michael Rothman.
“In Minnesota, insureds have the right to select whatever shop they wish to perform auto-glass repair or replacement work,” Minnesota District Judge Susan Nelson wrote in court documents. “However, insurers are only required to pay the selected shop a ‘competitive price that is fair and reasonable within the local industry at large[,]’ for the work performed. If a shop and an insurer disagree on the fair price, the issue is subject to arbitration. This system creates the potential for shops to pursue insureds for the difference between what the shop charges and the insurer pays—a practice known as “balance billing.”
The Department of Commerce argued that Safelite’s use of the phrase “may be” was misleading and deceptive and that Safelite “ … consistently attempted to persuade the insured into using a [Safelite or Network shop] by representing that the insured risked being balance billed for amounts the [non-Network] shop might charge beyond those deemed reasonable by Safelite[.]”
Nelson pointed out in her ruling that “there is no evidence the DOC ever received any complaint from a consumer/insured regarding Safelite’s claims administration practices.”
However, she also noted that “ … there is evidence in the record that on at least two occasions, non-Network shops balance billed an insured and attempted to collect on that bill.”
With regards to Safelite’s reminders to customers that they “may” be balance-billed by using a non-network glass company, Nelson further noted that “ … although Safelite is not prohibited from recommending a vendor to an insured, before doing so, it must ‘offer [the] insured the opportunity to choose the vendor.’ Furthermore, if Safelite does recommend a vendor, it must also give this advisory: ‘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.’ Second, Safelite is prohibited from ‘engaging in any act or practice of intimidation, coercion, threat, incentive, or inducement for or against an insured to use a particular company or location to provide the motor vehicle glass repair or replacement services or products.’”
Safelite argued that its scripted reminders to customers fall within these requirements.
Nelson agreed, stating that although Safelite’s “may be balance billed” statements are “potentially misleading,” they are not “inherently misleading” and thus protected as free speech.
“The DOC’s prohibition on Safelite’s use of ‘may be balance billed’ statements violates the First Amendment and thus the Consent Order is unenforceable,” Nelson wrote.