IGA Responds to Safelite Motion to Dismiss Suit

The Independent Glass Association (IGA) has responded to the Safelite motion to dismiss the case against the Columbus, Ohio-based third party administrator in the U.S. District Court of Minnesota with a Plaintiffs' Memorandum in Opposition to Defendants' Motion to Dismiss. (See glassBYTEs™ May 5, 2005 for news item on the Safelite motion.)

Marc Anderson, IGA executive director, has filed a response to Safelite's motion to dismiss the law suit filed by the IGA.

The IGA response memorandum alleges that, "Using the unique access to glass repair customers that Safelite has as the auto insurers' third party administrator, and despite State "right to choose" laws designed to thwart Safelite's obvious conflict of interest, Safelite uses novel but illegal means to "steer" customers away from their choice of glass shop and toward one of Safelite's proprietary glass shops. Safelite's illegal steering typically occurs before either the insurance customer or Safelite's competitors realize what has happened.

Through its two-fisted control of the market, Safelite has been able to force upon its independent competitors various rules and regulations, the financial and administrative benefits of which inure only Safelite. Moreover, with the power of the Network, Safelite has such dominance of the market that no independent glass shop, acting alone, can mount any sustainable challenge to Safetlite's nefarious practices."

The memorandum then goes through the history of what happened to one of the plaintiff's when he got a crack in his windshield and wanted an independent glass company to do the work. Details of the alleged steering by Safelite CSRs are provided.

The memorandum then rebuts the points made by Safelite in its motion to dismiss in an Argument: The Procedural Issues section. This includes a discussion of IGA's right and standing to bring this action, the ability of the insurance adjustor who is a plaintiff in the suit to remain anonymous, that all three sections of the company (Safelite Solutions Inc., Safelite Fulfillment and Safelite Group Inc.) are proper defendants in the suit, and that including insurance companies in the suit is unnecessary.

The memorandum concludes: "In its motion to dismiss, Safelite incorrectly focuses on its relationship with its insurance company clients and bases its arguments on fundamental mischaracterizations of the Complaint and the relief sought therein. Safelite's motion to dismiss and to join additional parties [the insurance companies] should accordingly be denied."

The memorandum points out that the plaintiffs do not seek to prevail on any of their claims at this time. It states, "They seek only to preserve the right to make them….For the most part the Plaintiffs ask the Court only to pass on the legality of some of Safelite's most controversial business practices…."

With the IGA action, the next step in the process will be for the judge to rule on the Safelite motion to dismiss. The expectation is that this will take place within 60 days.

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