Attorneys for Safelite have formerly filed a Motion to Dismiss the case against the third party administrator brought by the Independent Glass Association (IGA) and others in the U.S. District Court of Minnesota.
Among the arguments for dismissal, Safelite states that the plaintiffs (IGA et. al.) "seek to invoke Minnesota's Consumer Fraud Act to regulate alleged conduct that, according to controlling Minnesota authority, is outside that statute's scope;" that by pleading that if successful, the plaintiffs would raise the average automobile glass repair bill for consumers by approximately $200, they "have thus pleaded away their ability to show the public benefit required to bring claims under Minnesota's 'private attorney general' statute;" that those "plaintiffs who plead that their dealings with defendants have no connection to Minnesota give [the] Court no grounds for applying Minnesota statutes to regulate those dealings" and that "the plaintiff who pleads her claims anonymously has failed to invoke this Court's jurisdiction."
In the body of the motion, Safelite argues that that the claims against Safelite Fulfillment should be dismissed because the plaintiffs plead only "that Safelite Fulfillment 'is engaged in the business of providing automobile glass repair and replacement products' [and] 'do not plead that Safelite Fulfillment operates a call center, speaks to insurance company customers, processes insurance claims, pays auto glass invoices or has collected paper invoice processing fees.'" Two other branches of Safelite are named in the lawsuit (Safelite Solutions Inc. and Safelite Group Inc.).
Safelite further contests the conversion claims brought by three of the other plaintiffs, the unnamed insurance adjuster and two consumers, pointing out that none of the three pay-or even claim to pay-the paper invoice service fee to Safelite. The motion to dismiss specifically notes that "to the contrary, they plead that only "Glass Shops" are subject to the threat of that fee. The non-Glass-Shop plaintiffs- i.e., everyone except IGA-have therefore failed to state a conversion claim."
Safelite also argues against the claims of consumer fraud and false advertising by the IGA and the unnamed insurance adjuster, noting that "courts applying Minnesota law therefore limit the claims allowed under the [Consumer Fraud Act] to those brought by consumers" and as the "IGA and the unnamed adjuster do not plead that they are consumers of any products or services offered by the defendant," Safelite motions for those claims to be dismissed as well.
Similarly, because two consumers are named as plaintiffs in the case and are considered parties to the claims brought against the network, Safelite motions that any claims for competitive injury brought by consumers be dismissed as well, given that the consumers do not compete for jobs against Safelite or any company represented by Safelite.
Safelite also takes on the IGA's use of associational standing to make the claims filed in the initial complaint. The network argues that the IGA is an incorporated trade association and must pass a three-part test established by the Supreme Court in order to "have standing to redress its members' injuries." The three factors that the IGA must posses are: members that must "otherwise have standing to sue in their own right;" that the "interests the organization seeks to protect must be 'germane to the organization's purpose;'" and that "neither the claim asserted nor the relieve requested [may] require the participation of individual members in the lawsuit." It is on the final aspect that Safelite argues the IGA does not qualify to file suit. The company points out that a considerable amount of the allegations it is facing revolve around alleged false statements to consumers regarding the guarantee of work performed by non-network shops, competent labor, quality standards and/or paying the difference between the invoiced amount and the actual pay-out. Safelite then points out that IGA "pleads, however, that these alleged statements are false only as to some of the IGA's members. IGA pleads that "many," but not all, 'IGA member glass shops guarantee and warranty both their component material and their labor to the same or better extent than that of Safelite Network shops employ only trained, experienced and specially certified glass installation technicians use high quality glass, adhesive and component materials equal to or better than Safelite and its Network [that] 'the vast majority', but not all, 'do not bill or collect from Insured Customers for any glass repair or replacement costs that the customer's insurance company or Safelite, as its third party administrator, fails to pay. Thus, the truth or falsity of the defendants' alleged statements must be resolved on a glass shop-by-glass shop basis." Safelite further argues this point, noting that "because individual participation by IGA's members is necessary for IGA to prevail on its Lanham Act, false advertising, fraud, CFA and deceptive trade practices claims, the Court should therefore dismiss those claims for lack of standing."
Regarding the claims against Safelite for consumer fraud, the company counters that "Minnesota courts hold that a company providing services under contract with, and for the benefit of, a third-party does not thereby provide services so that third-party's customers so as to give rise to a CFA claim." The CFA applies to the sale of merchandise, and though the definition of merchandise includes "services" rendered to consumers, the Safelite legal team points to previous cases such as Rossbach v. FBS Mortgage Corp. in which the Minnesota Court of Appeals held that "a mortgage loan servicer is not subject to claims by mortgagors under the Consumer Fraud Act because the servicer does not participate in the 'sale of any merchandise' as required." The argument is that "the only services the defendants (Safelite et. al.) rendered were contractual services to the insurance companies who have hired defendants as third party administrators."
As to the claims for unlicensed insurance adjusting, Safelite argues for the dismissal of these claims, noting that "Minnesota statues requiring insurance adjuster to be licensed do not provide a private right of action," and that "the Minnesota legislature determined that violations of the insurance adjuster licensing statutes would be punishable only by a 'fine imposed by the commissioner' of commerce." Safelite further points out that "under Minnesota law, '[a] statute does not give rise to a civil cause of action unless the statute expressly or implicitly creates a cause of action," and thus no such claim exists under Minnesota law.
Safelite challenges the plaintiffs' claim benefits the public, pointing out that "any benefit that might result would not inure to the general public but only to a relatively small group of businesses the largest segment of the public that would potentially be affected by this lawsuit are automobile owners who may one day need auto glass repair or replacement."
Safelite further argues that "the primary 'benefit' from this lawsuit would be the commercial benefit to IGA member auto glass shops that want to charge higher prices to consumers and their insurance companies," something against which Safelite is fighting, further stating that if the suit were successful it would eliminate a public benefit by raising prices.
Safelite also takes on the IGA conversion claim, made on behalf of IGA member glass shops, for the "paper invoice service fee." Safelite points to the definition of conversion, "an act of willful interference with personal property, done without lawful justification by which any person entitled thereto is deprived of use and possession." Safelite argues that the "IGA pleads that its members knowingly and voluntarily agreed to pay the "paper invoice service fee" that they could have avoided. A person who knowingly and voluntarily pays a fee has no legal right to recover it." Part of the argument here is that "no insurance company specifies in which form Glass Shops or their insured customers are required to submit the Glass Shop Invoice to Safelite; that choice is left to the Glass Shop or the customer," and electronic invoices are free.
Safelite also takes on the constitutionality of any claim made by one of the named consumers who lives in Nebraska making claims against the company that, according to the initial complaint, does business in Ohio (with headquarters in Delaware). The two named consumers "purport to assert claims under these Minnesota statutes on behalf of "all other Insured Customers" nationwide." Safelite points to different Minnesota statutes requiring the business in question be done in the state or by people who work in the state, as well as to the state Constitution that does not allow claims on behalf of non-Minnesota residents under Minnesota statutes.
According to the motion, Safelite is seeking the claims of common law fraud to be dismissed, citing failure of the plaintiffs to plead that "they reasonably relied on defendants' allegedly false statements and suffered actual damaged resulting from that reliance." Safelite argues that "nowhere in the complaint does IGA plead that it or its members were given any allegedly false information by any of the defendants, much less that they relied on that information and suffered a proximately resulting harm." The motion also points to the unnamed insurance adjuster and the lack of language in the initial complaint alleging any false statements to her on which she could have relied or been harmed. The two named consumers who say they were falsely told by Safelite that the shop they had chosen might have them pay the difference if the insurance company doesn't pay the full amount "do not plead that they relied on the allegedly false statement; do not plead that they changed their Glass Shop selection because of this statement nor do they plead they were injured."
Finally, Safelite argues that it is necessary for the insurance companies with which the two named consumer plaintiffs are insured as well as all insurance companies that contract with Safelite to be part of the adjudication to qualify it as a just adjudication.
No reproduction, in print, electronic or any form without the expressed written permission of
Key Communications Inc. 540-720-5584.