The case documents are sitting in an East Baton Rouge Parish court. The lawsuit has an interesting history.
The suit has to do with State Farm's alleged insurance claims practices pushing repairs to predetermined shops which then engage in cost-cutting actions, like using old or damaged parts to repair cars.
The original lawsuit came in 2014 and was filed by Republican former Attorney General Buddy Caldwell. It was subsequently dismissed by district judge Donald Johnson in December 2015.
Despite the dismissal, Caldwell received 30 days to refile and revise the case, and that’s what he did in January 2016.
But Caldwell was not going to be around to prosecute the case. He was defeated in the November 2015 election by fellow Republican Jeff Landry in the attorney general race.
The last action on the case came on March 17, 2016, and nothing much has been reported on since.
According to a press release, Landry said the court should not dismiss the case. He was asked if he would proceed with the case against the insurance carrier.
Press secretary Ruth Wisher said in a statement, “All cases and contracts begun in the previous administration are under review to ensure the Department of Justice upholds the rule of law, adheres to the Constitution, and protects the rights of our state and its citizens.”
The original case received some notoriety and was featured on CNN and highlighted by newsman Anderson Cooper.
Like most companies, State Farm does not comment on pending litigation. The insurance carrier’s response, though, is four pages longer in the revised lawsuit than it was when the original suit was filed.
Caldwell’s revised lawsuit revealed that it will be attacking State Farm for being a business that is allegedly affecting another industry and consumers in the state improperly.
Caldwell said in the revised complaint, “This is not an action related to the defendants’ participation in the insurance market. Rather, this is an action related to the defendants’ unlawful manipulation of the auto body collision repair industry and their attempt to control that influence that industry to the detriment of Louisiana citizens.”
In its 2015 rebuttal, State Farm lawyers wrote, “…(T)his case is about insurance claims practices, and the fact that auto body shops are also involved does not remove it from the insurance commissioner’s jurisdiction.”
And in its request to squash the revised lawsuit in February of last year, the carrier’s lawyers wrote, "The alleged conduct falls squarely within acts and practices ‘in the business of insurance’ as defined by … the Louisiana Insurance Code, and is subject to the jurisdiction of the Insurance commissioner."
The revised suit said, "This is not an action related to the defendants’ participation in the insurance market. Rather, this is an action related to the defendants’ unlawful manipulation of the auto body collision repair industry and their attempt to control … that industry to the detriment of Louisiana citizens."
And in that revised suit, the state insurance commissioner’s office said it does not have any jurisdiction when it comes to insurer relationships with body shops.
“The office of the commissioner of insurance has repeatedly maintained that the Insurance Code ... provides no basis for the insurance commissioner to exercise jurisdiction over the relationships with auto body repair facilities and the unfair or deceptive acts and practices that stem from those relationships,” Caldwell wrote.
So what’s next?
It’s up to the district court, but no date has been set.
We would like to thank Louisiana Record for reprint permission.