State Farm Lawsuit Will Come Back to Louisiana

There’s been a recent development in a battle that made the transition from repair shops to the legal system in August of 2014. Roughly a year ago, Louisiana Attorney General Buddy Caldwell filed a lawsuit against State Farm. In that suit, Caldwell claimed that State Farm had violated the Louisiana Unfair Trade Practices Act. The suit alleged that State Farm was utilizing a number of practices that violate a 1963 consent decree from then U.S. Attorney General Robert Kennedy that sought to prevent insurance companies from colluding with appraisers and repair shops to sacrifice quality repairs for the cheapest parts available.

In December of 2014, according to repair driven news, a federal panel added the suit to a group of lawsuits from more than a dozen states being heard by the middle district of Florida to avoid the burden of repetition on the legal system and parties. Wednesday, August 19^th, Caldwell’s office announced that the State Farm lawsuit will come back to Louisiana. Attorney General Buddy Caldwell said he is pleased that case will be heard, “where it belongs.”

In the press release, Caldwell said the ruling was a “victory for Louisiana consumers.” Here is what the press release had to say, in its entirety:

In a victory for Louisiana consumers, a federal judge has ruled that Attorney General James D. “Buddy” Caldwell’s lawsuit against State Farm Auto Insurance will be heard in Louisiana state court, where it was originally filed one year ago, Attorney General Caldwell announced today.

The suit, filed in Louisiana’s 19th Judicial District Court, alleges State Farm violated Louisiana’s Unfair Trade Practices Act and Monopolies Law by using scare tactics to steer Louisiana consumers to State Farm’s preferred repair shops and forcing shops to perform vehicle repairs cheaply and quickly, rather than in accordance with consumer safety and vehicle manufacturer performance standards.

Through a procedural mechanism available, State Farm had the case removed to federal court and then transferred to multi-district litigation pending in Florida. Attorney General Caldwell filed motions in December 2014 to have the case transferred back to state court in Louisiana, where it was originally, properly filed. U.S. District Court Judge Gregory A. Presnell granted Caldwell’s motion, and ordered that the case be heard in Louisiana.

“We are pleased that the Court ruled in our favor and will be sending the case back to Louisiana, where it belongs” Attorney General Caldwell said. “State Farm has violated Louisiana laws by engaging in a pattern of unfair and fraudulent business practices aimed at controlling the auto repair industry and forcing unsafe repairs on vehicles without the knowledge or consent of Louisiana consumers. We look forward to moving this case forward for the benefit and safety of our citizens.”

Caldwell says the suit aims to change the culture of unsafe business practices led by State Farm in the auto insurance and repair industry. State Farm currently holds the largest share of auto insurance policies in Louisiana.

In 2012, State Farm wrote one third of all auto insurance policies in the state, totaling over $1 billion in premiums.

We will continue to follow this case as it makes its way through Louisiana’s courts.