Florida Repair Shops File Antitrust Lawsuit Against State Farm, Other Insurers

A group of Florida collision repair shops have banded together to file an antitrust lawsuit against State Farm and dozens of other insurers, alleging the insurers use their direct repair programs to “illegally control and depress” repair rates and if the shops don’t comply, customers are steered away. This case has potential implications for the AGRR industry, as independent automotive glass repair shops allege similar issues with third-party administrators (TPAs), which handle automotive glass claims for insurers.

“Over the course of several years, the defendants have engaged in an ongoing, concerted and intentional course of action and conduct with State Farm acting as the spearhead to improperly and illegally control and depress automobile damage repair costs to the detriment of the plaintiffs and the substantial profit of the defendants,” write attorneys for A&E Auto Body Inc., the lead repair shop listed as plaintiff in the lawsuit filed in the U.S. Middle District of Florida Court, Orlando Division.

“Defendants, particularly State Farm, have engaged in an ongoing pattern and practice of coercion and implied threats to the pecuniary health of the individual plaintiff business in order to force compliance with unreasonable and onerous concessions,” the attorneys claim. “Failure to comply results in removal from the [direct repair agreement] programs, combined with improper ‘steering’ of customers away from the plaintiffs’ businesses, simply punishment to decrease the number of customers utilizing the plaintiffs’ services, and/or increasing ongoing and improper refusals to pay for certain repair procedures and/or charges without valid or reasonable justification.”

Insurance customers account for between 70 to 95 percent of business for each shop, attorneys claim.

Discussing labor rates, the attorneys allege that if a shop tries to raise its rate, State Farm representatives will inform the shop that it is the only one in the area to have made the change and that the higher rate does not conform to the “market rate” agreed to. The shop is informed that raising its rates is a violation of the direct repair program agreement.

The other insurers listed as defendants in the lawsuit follow State Farm’s lead, the attorneys claim.

“The remaining defendants intentionally and by agreement and/or conscious parallel behavior, specifically advised the plaintiffs they will pay no more than State Farm pays for labor. These defendants have not conducted any ‘surveys’ of their own in which the plaintiffs have participated to determine market rates,” the repair shop attorneys’ allege.

When a repair shop is deemed noncompliant to the direct repair agreement, the insurer will tell its clients “a particular chosen shop is not on the preferred provider list, advising that quality issues have arisen with that particular shop, that complaints have been received about that particular shop from other consumers, that the shop charges more than any other shop in the area and these additional costs will have to be paid by the consumers, that repairs at the disfavored shop will take much longer than at other, preferred shops and the consumer will be responsible for rental car fees beyond a certain date, and that the defendant cannot guarantee the work of that shop as it can at other shops.”

The repair shops are seeking a trial by jury and have asked for compensatory damages for all non-payment and underpayment of work, compensation for lost revenue through “artificial suppression of labor rates,” damages to compensate for lost business opportunities, as well as treble damages and “reasonable” attorneys fees and costs for violations of the Sherman Act. The plaintiffs are also seeking the court to put a plan into effect that will force the insurers to stop steering.

Attorneys for the insurers have not responded to the repair shops’ claims at press time.

To read a copy of the lawsuit, click here.

This article is from glassBYTEs™, the free e-newsletter that covers the latest auto glass industry news. Click HERE to sign up—there is no charge. Interested in a deeper dive? Free subscriptions to Auto Glass Repair and Replacement (AGRR) magazine in print or digital format are available. Subscribe at no charge HERE.

This entry was posted in glassBYTEs Original Story and tagged , , , , , , , , , . Bookmark the permalink.

8 Responses to Florida Repair Shops File Antitrust Lawsuit Against State Farm, Other Insurers

  1. Bob says:

    A Connecticut law pointed directly at Safelite and a now a juicy anti-trust suit in Florida by the collision repair folks that has thier name all over it on the back side. Don’t tell me things are changing. It’s taken me 10 years to get my head just half way around the dichotomy which is this industry’s SOP. When I tell people that my company has to subject our customers to our direct competitor’s steering, bad-mouthing, hostile agents every single day to get “authorization” to do our jobs they just laugh. It’s so ridiculous and implausible, few believe that its really true. They can’t get their head around it. That’s because there’s nothing for the average person to compare it to. Anyway, it’s a long way from Connecticut and Florida to where I live and earn a living. Wish we could hurry things up a bit so I can see an industry that’s been very good to me get a nice break before I hang it up for good. As a historically fragmented industry, right now seems to be a very opportune time for some serious cohesiveness to push the CT/FL ripple into a national wave. Hope there’s the will and horsepower to make it so. In His name, all things are possible!

  2. Pingback: State Farm Denies Allegations in Florida Repair Shops’ Antitrust Lawsuit | glassBYTEs.com

  3. Pingback: Indiana Repair Shops File Antitrust Lawsuit Against State Farm, Other Insurers | glassBYTEs.com

  4. Pingback: Ohio House Representatives Introduce Bill to Eliminate Preferred Repair Shop Network | glassBYTEs.com

  5. Pingback: Pennsylvania Repair Center Files RICO Class Action Against Multiple Insurers | glassBYTEs.com

  6. randall hubbard says:

    We would gladly join the suit and labor rates should be the same across the nation ,this is America

  7. Pingback: Repair Shops Ask the Judicial Panel for Multidistrict Litigation to Consolidate Lawsuits Against Insurers | glassBYTEs.com

  8. Pingback: Judge Dismisses Florida Repair Shops’ Antitrust Lawsuit Against Insurers | glassBYTEs.com

Leave a Reply

Your email address will not be published. Required fields are marked *