News

Court Dismisses Racketeering Lawsuit From Body Shops

Order Reprints

Dec. 31, 2019—A federal appellate court threw out a racketeering lawsuit brought by a group of 126 auto body collision repair shops, per a report from the Insurance Journal. 

The body shops brought the lawsuit against seven of the largest U.S. insurers.

The 11th Circuit Court of Appeals in Atlanta agreed with the district court that the repair shops failed to state a valid claim that the insurers had conspired to commit a fraud by demanding that they accept lower rates for their work in order to participate in their repair networks.

The court said in order to pursue a claim under the Racketeering Influenced and Corrupt Organizations Act (RICO), the repair shops would have to show that they there were the victim of a fraud or extortion. The fraud alleged in the complaint, however, consisted of nothing more than “vague allusions” to misrepresentations made by the insurers.

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