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.