Auto Repair Shop Antitrust Actions May Be Consolidated into Multidistrict Litigation

by Dickinson Wright
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Over the course of the last several months, auto body repair shops in five states (Florida, Mississippi, Indiana, Utah and Tennessee) filed antitrust actions against a collection 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.
With all of the cases having been filed by the same Jackson, Mississippi attorney, it was not particularly surprising that, in late May, plaintiffs filed a motion with the Judicial Panel on Multidistrict Litigation seeking to have the cases consolidated and transferred to the Southern District of Mississippi. In support of the request, the plaintiffs noted that the first filed case (Capitol Body Shop v. State Farm Mutual Automobile Insurance) was filed in Mississippi, that the actions all involve “common questions of fact,” and that transfer would “serve the convenience of the parties and witnesses.” Plaintiffs also noted in their motion that “all of the actions are at the same early stage of litigation.”
In June, the insurers filed oppositions to plaintiffs’ request, contending that “while the general theory of liability alleged in each case is the same, the factual allegations underlying each plaintiff’s claims are highly individualized.” The insurers also noted that plaintiffs’ assertion that the cases are all at the same, early stage of litigation was no longer correct, because, subsequent to plaintiffs’ filing of their motion, the court in the Florida action (A&E Auto Body v. 21st Century Centennial Insurance Co.) dismissed plaintiffs’ claims, albeit with leave to amend, finding that plaintiffs’ complaint lacked the necessary factual detail required for plaintiffs’ claims. Perhaps not surprisingly, the insurers also maintained that if the Judicial Panel does consolidate the cases, they should be transferred to the Middle District of Florida, before the judge presiding in the A&E Auto Body case, because it is the “most procedurally advanced case.”

On June 16, the Judicial Panel set plaintiffs’ motion for oral argument on July 31. In the interim, however, the defendants have filed motions to dismiss the Mississippi case, arguing that the allegations in that complaint, like the allegations in the Florida case, are similarly insufficient as a matter of law. While that motion is unlikely to be decided prior to the Judicial Panel’s ruling on the motion for consolidation and transfer, it could have an impact on the Panel’s decision whether to consolidate the cases, and where. The matter is clearly one to watch going forward.

 

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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