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Thursday, 18 June 2015 00:00

U.S. District Judge in FL Recommends Dismissing Complaints Without Prejudice in Multi-District Lawsuit

In the Multi-District Lawsuit involving more than 500 collision repair shops across the country, U.S. Magistrate Judge Thomas Smith recommended in June that the antirust complaints filed against the nation’s top insurers be dismissed without prejudice. Eaves Law Firm, the lead attorneys for the Plantiffs, is able to file amended complaints by June 30.

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Autobody News spoke to Allison Fry at Eaves Law Firm, based in Jackson, MS, to find out how this development will affect the case.

Fry, the litigation director and designated plaintiffs’ liaison counsel, said that in certain instances a district court judge, the trial court judge in the federal system, is permitted to send certain motions to the magistrate judge for what is essentially a “first look.” After reviewing the motion, the judge will prepare a legal opinion on whether or not the motions have merit and whether they should be granted or denied.

U.S. District Judge Gregory Presnell asked Magistrate Judge Smith to prepare what is known as a “Report and Recommendations.”

Fry explained that the report and recommendations are not orders. Presnell will have the option to accept the recommendations in whole or in part or completely reject it. 

“In this instance, Magistrate Judge Smith did issue a number of reports and recommendations on the cases that have been gathered in the MDL,” she explained.

In his report, Magistrate Judge Smith wrote, “After due consideration, I respectfully recommend that the motions be granted in part and denied in part, that the complaints in the Pending Cases be dismissed, that the dismissals be without prejudice and with leave to amend except as otherwise stated in this report and recommendations, and that Plaintiffs be afforded 21 days’ leave to file amended complaints.”

The recommendations are two-tiered and include the federal Sherman Anti-trust claims for price fixing and boycotting as well as the state law causes of action—tortious interference and unjust enrichment—which are unique to each individual state. She said that state law is mainly consistent on these types of claims, but it does vary in regards to the evidence you need to bring forward to succeed.

In regards to the claim of quasi estoppel, the judge recommended dismissing it with prejudice, which means it cannot be refiled.

“The court has taken the position that quasi estoppel while it is a legal doctrine is not a cause of action in and of itself,” said Fry. “However, it does not preclude us from using this evidence.”

According to the court report, “Defendants argue that the Court should dismiss all of the complaints because Plaintiffs engaged in impermissible group pleading by making collective allegations against ‘Defendants.’ In response, Plaintiffs argue that group pleading is perfectly acceptable, and that when they refer to ‘Defendants’ collectively, they are only alleging that all Defendants engaged in the same conduct.”

In each of the cases, the defendants have filed motions to dismiss, the plaintiffs have filed a consolidated response, and the defendants have filed replies.

Originally filed in 2014, the Multi District Lawsuit in Florida now involves 18 cases already filed by Eaves Law Firm. Fry said they anticipate filing approximately 17 more after the court has made a final determination regarding the factual detail it requires of a case.

“The reports and recommendations that Judge Smith entered were not a surprise to us,” said Fry. “They are extremely consistent with the prior recommendations that were made to Judge Presnell in the six originally filed cases.” These include FL, IN, LA, MS, TN and UT.

She said the court’s work with the report and recommendations was very thoughtful. “I actually find them rather encouraging because it gives us an idea of the path the court wants us to follow,” she said.

Eaves Law Firm has until June 30 to enter an objection to any part of the report and recommendation and Fry said they plan to file several on specific points. They entered a number of objections to the previous report and recommendations as well.

Fry said that shops should not lose heart about the case. “It is actually moving toward positive ends. There is pretty good movement here and we’re very optimistic.”

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