On December 12, the Judicial Panel on Multidistrict
Litigation issued an order transferring State
of Louisiana v. State Farm Fire and Casualty Insurance to the Middle
District of Florida, making the case the latest addition to the multidistrict litigation
entitled In re Auto Body Shop Antitrust
Litigation. With the addition of the Louisiana case, the MDL proceeding now
includes actions initially filed in Florida, Indiana, Mississippi, Tennessee,
Utah, Alabama, Michigan, California, Washington, Illinois, Virginia, New
Jersey, Oregon and Missouri.
The Louisiana case, like each of the previously transferred
actions, centers upon a claim that more than thirty five auto insurers
conspired to suppress reimbursement rates to repair shops for collision
repairs. The first case, A&E Auto
Body v. 21st Century Centennial Insurance, et. al, was filed in
the Middle District of Florida in February of 2014, and it was to that court,
and the Judge before whom that case was originally pending (Judge Gregory
Presnell), that all of the subsequently-filed cases have been sent by the MDL
Panel.
The Louisiana case, however, was somewhat unique – or at
least different from – the other previously transferred cases in several
respects. First, the Louisiana case was originally filed in state court, and
subsequently transferred to federal court – improperly, in the view of the
State. However, the Panel was not concerned by this, noting that jurisdictional
issues do not present an impediment to transfer, because the plaintiff can
present its arguments about why a case might properly be remanded to the
transferee judge. See In re Prudential
Insurance Sales Practices Litigation, 170bF.Supp.2d 1346 (J.P.M.L. 2001).
In addition, Louisiana’s contention that its case, which it characterized as an
“enforcement action,” was materially different in character than the private
party actions currently before the transferee court, and thus the Louisiana
case should not be transferred for this reason, was also rejected by the Panel.
Calling Louisiana’s contention “unconvincing,” the Panel states that it “often
has transferred state enforcement actions to MDLs that involved cases brought
by private litigants.” See, e.g., In re
Countryside Fin. Corp. Mortgage Marketing and Sales Practices Litigation,
582 F.Supp.2d (J.P.M.L. 2008).
With the addition of the newly-transferred actions, In re Auto Body Shop Antitrust Litigation
begins the new year with even greater significance. Judge Presnell has granted
the newly-added parties until January to appear in the MDL proceeding, and will
likely begin issuing rulings in the matter shortly thereafter. Given the issues
in the cases and the large number of insurers now involved in the proceeding,
the matter is unquestionably “one to watch” for 2015. Stay tuned.