Antitrust Law Daily Wrap Up, ANTITRUST—M.D. Fla.: Auto insurers' parallel behavior does not support repair shops' claims, (Sep 24, 2015)

By Jeffrey May, J.D.

A group of Florida automobile repair shops have failed in their third attempt to state price fixing and boycott claims against 39 insurers who write private passenger automobile coverage. Although their roughly 90-page Second Amended Complaint was "much wordier" than earlier pleadings, it still did "not come remotely close to satisfying the minimum pleading requirements," according to the federal district court in Orlando (A&E Auto Body, Inc. v. 21st Century Centennial Ins. Co., September 23, 2015, Pressnell, G.).

Price fixing. In their first count, the plaintiffs alleged that the insurers conspired to depress automobile damages repair costs to the detriment of the complaining repair shops. To support their claims of a buyer cartel, the plaintiffs alleged that the insurers engaged in parallel conduct. They contended that all of the insurers paid the same rates, refused to pay for the same list of procedures, and required cheaper and lower-quality parts to do repairs.

The plaintiffs did not, however, adequately allege the "plus factors" that permit an inference of agreement from this admissible circumstantial evidence. Their allegations did not compel a conclusion that only the existence of a conspiracy could explain the defendants’ actions. The court noted that paying as little as possible for repairs was clearly in the self-interest of automobile insurers.

Moreover, the court rejected the defendants’ other purported "plus factors." These included assertions that the defendants held over 90 percent of Florida's private passenger insurance market, desired to make a profit, participated in insurance-related organizations that provided the defendants with "numerous opportunities to conspire," and paid the same labor rates for repairs that were not an accurate reflection of the rates prevailing in the market.

Boycotts. The plaintiffs also contended that when they tried to raise their hourly rates or otherwise balked at the insurers' efforts to exert control the collision repair industry they were subject to being boycotted by the defendants. The defendants purportedly steered their insureds away from non-cooperating shops by disseminating false statements about the quality, timeliness, and/or price of the work done by these shops. However, the alleged incidents of steering involved only a single defendant discouraging one of its insureds from dealing with a single plaintiff. The allegations did not suggest that the defendants engaged in a concerted refusal to deal. There also was no connection between the incidents of steering and the alleged price fixing.

Because amendment would be futile, the antitrust claims were dismissed with prejudice. Tortious interference with business relations and quantum meruit claims under Florida law also were dismissed with prejudice.

This is Case 6:14-cv-00310-GAP-TBS.

Attorneys: Alan Brent Geohagan (A. Brent Geohagan, PA) and Allison P. Fry (John Arthur Eaves, Attorneys at Law) for A & E Auto Body, Inc., American Paint & Body, Inc., Auto & Coach Works of Central FL Inc. d/b/a Hi Tech Auto & R.V. Parts and Repair, Auto Body Concepts, Inc. and Collision Concepts of Delray, LLC. Hal K. Litchford (Baker, Donelson, Bearman, Caldwell & Berkowitz, PC) for 21st Century Centennial Insurance Co. and Bristol West Insurance Co. Andrew Abramovich (Boyd & Jenerette, PA) and Hal K. Litchford (Baker, Donelson, Bearman, Caldwell & Berkowitz, PC) for Acceptance Indemnity Insurance Co. Bonnie Lau (Dentons US LLP), Hal K. Litchford (Baker, Donelson, Bearman, Caldwell & Berkowitz, PC), and Lori J. Caldwell (Rumberger, Kirk & Caldwell, PA) for Allstate Fire and Casualty Insurance Co. and Allstate Insurance Co.

Companies: A & E Auto Body, Inc.; American Paint & Body, Inc.; Auto & Coach Works of Central FL Inc. d/b/a Hi Tech Auto & R.V. Parts and Repair; Auto Body Concepts, Inc.; Collision Concepts of Delray, LLC; 21st Century Centennial Insurance Co.; Acceptance Indemnity Insurance Co.; Allstate Fire and Casualty Insurance Co.; Allstate Insurance Co.; Bristol West Insurance Co.

Cases: Antitrust FloridaNews