Ansell, Grimm & Aaron, P.C. recently commenced two actions on behalf of auto-body shop clients who suffer allegedly unlawful conduct at the hands of multiple insurance carriers. Our clients’ story — and that of other, similarly situated plaintiffs — were featured on Anderson Cooper 360 on February 10, 2015 on CNN (click link to view article).
The Complaints allege that the Defendants engage in an ongoing, concerted and intentional course of conduct — with State Farm acting as the spearhead — to improperly and illegally control and depress automobile damage repair costs to the detriment of Plaintiffs and the general public, and to the substantial profit of Defendants.
By example, Defendants exert control over body shops by entering into program agreements generically known as direct repair program agreements (“DRPs”). DRPs were presented to body shops as a mutually beneficial opportunity — in exchange for providing certain concessions of price, priority and similar matters, the individual Defendants would list a body shop as a preferred provider. However, the concessions demanded by the individual Defendants in exchange for remaining in a DRP were not balanced by the purported benefits. Rather, the Defendants, particularly State Farm, allegedly utilized these agreements to exert control over the auto body repair industry in general including those shops, like Plaintiffs, which are not part of a DRP. In sum, Defendants sought to dictate the price for parts, labor and material untethered to market realities.
The Complaints further allege that Defendants engage in an ongoing pattern and practice of coercion and implied threats to the pecuniary health of the Plaintiffs’ businesses in order to force compliance with unreasonable and onerous concessions. Failure to comply results in removal from the DRP combined with improper “steering” of customers away from the Plaintiffs’ businesses.
Defendants’ alleged misconduct means that repairs are made by the cheapest bidder, using the cheapest parts, and the cheapest labor — and then placing those unsafe vehicles on the road. We anticipate these remarkable facts being brought to light tonight night on CNN.
The nationwide impact of Defendants’ alleged misconduct resulted in the commencement of litigation in multiple jurisdictions. As a result, the various actions were consolidated as A&E Auto Body, Inc. et al. v. 21st Century Centennial Insurance Company, et al., bearing Docket number 6-14-mdl-2257 (GAP)(TBS) in the United States District Court for the Middle District of Florida.
For additional information, please contact Joshua S. Bauchner at (973) 247-9000.