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Sunday, May 11, 2014

Ind. Courts - "Indiana auto-body shops accuse insurers of collusion"

From a very long story today in the Indianapolis Star, reported by Jeff Swiatek, a few quotes:

Body shops in at least six states, including Indiana, have banded together to sue the nation's top auto insurers, including State Farm, Geico and Progressive. They accuse insurers of antitrust violations, collusion by making deals with preferred auto-body shops to tamp down prices, and interfering with body shops' business by dictating how they do repairs. There are also allegations that shops are being forced to use substandard repair parts.

Body shops are seeking damages from the suits that could amount to billions of dollars.

Mississippi trial lawyer John Eaves Jr., known for launching high-profile lawsuits, such as one against the operator of the grounded Italian cruise ship Costa Concordia, is the driving force behind the body-shop lawsuits. He hopes to work with local counsel to file similar claims in as many as 40 states within a year. * * *

State Farm, the Bloomington, Ill.-based insurance giant, is the main target of the lawsuits, said Eaves, the Mississippi trial lawyer, because of its market dominance and creation of an influential survey of body shop wage rates used to justify how much it pays to cover labor costs on a repair.

The Indiana lawsuit alleges State Farm "manipulates the results" of the wage survey to show rates as lower than they really are, while refusing to detail how the survey is done.

"The shops are simply required to blindly accept State Farm's pronouncements" on what prevailing body shop wages are around the state, the Indiana lawsuit says. * * *

The only Indiana-based plaintiff in the Indiana lawsuit is Indiana Farmers Mutual Insurance, whose legal counsel, Sam Ellingwood, said he thinks the company shouldn't have been listed as a defendant and was confused with its much-larger in-state competitor Indiana Farm Bureau, which is not named as a defendant. Ellingwood said Indiana Farmers will ask to be dropped from the suit.

Eaves said he thinks the numerous lawsuits he and co-counsel are filing could eventually be consolidated in one court. He said he expects to present testimony from "whistle-blowers" who worked for insurance companies and will give evidence of collusion among companies in their business tactics.

Posted by Marcia Oddi on May 11, 2014 05:11 PM
Posted to Indiana Courts