US Court Refuses to Revive Antitrust Claims Against Insurers
March 10, 2020—The U.S. Court of Appeals for the Eleventh Circuit, which has jurisdiction over federal cases from Alabama, Florida and Georgia, refused to revive antitrust claims, reported Law 360. The claims related to auto body shops from three states that sued State Farm and other insurers for alleged price-fixing.
State Farm had been singled out as the leader of the alleged conspiracy through its setting of a "market rate" for labor rates in specific geographical areas based on an electronic survey it conducts of shops, according to the report. The shops said the survey is based on faulty methods and that the company manipulates the data.
Insurers named in the long-running litigation include State Farm Mutual Automobile Insurance Co., Allstate Indemnity Co., Farmers Insurance Exchange, Nationwide Mutual Insurance Co. and 21st Century Insurance Co.
The federal appeals court says the factual allegations the shops presented failed to plausibly suggest a prior agreement to fix prices.
Allegations that other insurers said "they will pay no more than State Farm pays for labor" suggested only "price leadership" — following the example of a competitor but not a prior agreement to fix prices.