Tuesday, 29 July 2014 00:00

Allstate Argues for Multidistrict Consolidation in Antitrust and RICO Cases Filed in Five States, Supports Illinois or Florida Venues, Opposes Mississippi or Louisiana Venues

Over several months, auto body repair shops in five states (Florida, Mississippi, Indiana, Utah and Tennessee) have filed antitrust actions against a multitude of auto insurers, alleging that the insurers’ direct repair programs violate the antitrust laws. In each case, the plaintiffs alleged that the manner in which the insurers set reimbursement rates for covered repairs artificially depressed the compensation plaintiffs received for their services, and that the insurers also steered insureds away from plaintiffs’ businesses to those shops that are participants in the insurers’ direct repair programs.

The five Antitrust Actions were all filed in the first four months of 2014 and include the following:

 

1) Capitol Body Shop, Inc., et al. v. State Farm Mut. Auto. Ins. Co., et al., No. 3:14CV12, United States District Court for the Southern District of Mississippi, Northern Division-Jackson (pending before the Honorable Carlton Reeves; complaint filed in January, 2014 and amended complaint filed on March 4, 2014) (“Mississippi Action”);

2) A&E Auto Body, Inc., et al. v. 21 Century Centennial Ins. Co., et al., No. 6:14-CV-00310, United States District Court for the Middle District of Florida, Orlando Division (pending before Judge Presnell; complaint filed on February 24, 2014) (“Florida Action”);

3) Indiana Auto Body Ass’n, Inc., et al. v. State Farm Mut. Automobile Ins. Co., et al., No.1:14-CV-507, United States District Court for the Southern District of Indiana, Indianapolis Division (pending before the Honorable Tanya W. Pratt; complaint filed on April 2, 2014) (“Indiana Action”);

4) Alpine Straightening Systems, Inc., d/b/a Alpine Body Shop, et al. v. State Farm Mut. Auto.Ins. Co., et al., No. 2:14-CV-261, United States District Court for the District of Utah, Central Division (pending before the Honorable David Nuffer; complaint filed on April 10, 2014) (“Utah Action”); and

5) Brewer Body Shop, LLC, et al. v. State Farm Mut. Auto. Ins. Co., et al., No. 2:14-CV-02286, United States District Court for the District of Tennessee, Western District (pending before the Honorable Sheryl H. Lipman; complaint filed on April 22, 2014) (“Tennessee Action”).

The plaintiffs have since filed a motion to consolidate the five Federal lawsuits filed by multi-state repair facilities against insurance companies domiciled in other states. The request to the Judicial Panel on Multidistrict Litigation (JPML) asks to have the five suits moved to the U.S. District Court for the Southern District of Mississippi for consolidated pretrial proceedings.

A sixth suit, the RICO class action filed by  Crawford’s Auto Center, Inc. has been proposed for consolidation but Crawford’s opposes that.

On June 12, attorneys for Allstate (the Allstate Defendants) requested that the Panel centralize for coordinated pretrial proceedings the six Pending Actions to the Northern District of Illinois (Eastern Division) to be managed by the Honorable Robert M. Dow, Jr., or, in the alternative, to the Middle District of Florida (Orlando Division) to be managed by the Honorable Gregory A. Presnell.

Allstate’s arguments include the availability of regular and frequent airline connections, the location of their attorneys, and the comparably lack of connections into Mississippi and Louisiana.

They also cite the convenience for plaintiff’s attorney (who represents all the plaintiffs) John Eaves, Jr. who is based in Jackson, MS, as not being a valid reason to transfer the actions there.

The Allstate Defendants have each been sued in some or all of six actions alleging that they wrongfully refused to compensate plaintiff auto body shops in full for collision repair work performed on insured automobiles, and engaged in various conspiracies to artificially suppress the cost of collision repair services and attendant labor rates and materials costs. Five of the six cases (collectively, the “Antitrust Actions”) were filed by the (Movant) Plaintiffs’ counsel and allege violations of federal antitrust laws, as well as a potpourri of state law business tort claims, all on behalf of individual body shop plaintiffs, and are the subject of the Motion.

The Allstate defendants also support the inclusion of the RICO case as a “tag-along” complaint, saying “That forum should be before Judge Dow in the Northern District of Illinois, where the RICO Class Action is pending. Unlike the Antitrust Actions, the RICO Class Action asserts claims on behalf of putative nationwide classes, and seeks the broadest relief on behalf of the largest number of potential claimants.”

In this respect they agree with the RICO plaintiffs.

On June 10, 2014, the Allstate Defendants notified this Panel of a potential tag-along action, Crawford’s Auto Ctr., Inc. v. State Farm Mut. Auto. Ins. Co., et al. (the “RICO Class Action”), filed by other counsel and not mentioned in the Motion. The RICO Class Action alleges essentially the same conduct as the Antitrust Actions, but seeks relief for a number of nationwide classes under RICO.

For more on the RICO action see related story this page.

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