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State Farm & PartsTrader Meet with Industry As Program Rolls Out in the Southwest by John Yoswick
Shop and vendor concern and unhappiness about State Farm’s mandated use of PartsTrader was evident at a packed Automotive Service Association (ASA) of Arizona meeting in Phoenix in August, the same week the program was being rolled out in that David Priest market. We feel you’re using your size and intruding into our business through the
shops with PartsTrader,” David Priest, parts director for Brown & Brown Chevrolet in Mesa, AZ, told State Farm’s George Avery at the meeting. “You’re asking me to pay a fee for a program that will probably decrease OEM part usage. How do you perceive that PartsTrader for an OEM dealer is an effective tool?” Dale Sailer Dale Sailer of PartsTrader, who also spoke at the See PartsTrader Rollout, Page 16
A Matrix of Parts Procurement Features Won’t Help Shops If They Have No Choice on Usage
See No Choice on Usage, Page 37
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The Collision Industry Conference (CIC) Parts & Materials Committee came to the CIC meeting in Boston in July looking for input from the assemblage for a survey it plans to conduct about electronic parts procurement systems. What it heard was an impassioned request to look at another aspect of the issue. The committee is working to produce a matrix that would help shops or other users of the systems understand the capabilities and features each system offers. At the Boston meeting, the committee shared the
questions about the systems that it plans to ask the providers, and asked CIC participants at the meeting whether the questions would Randy Stabler provide information about the systems that would be helpful. But as the committee was completing its presentation, California shop owner Randy Stabler drew applause when he told the committee that understanding the differences be-
Change Service Requested
by John Yoswick
VOL. 2 ISSUE 1 SEPTEMBER 2013
Avery v State Farm is Back in the News, as a RICO Case making the Judge the Issue A sitting Illinois Supreme Court justice, Lloyd A. Karmeier, may have been compelled to testify under oath about allegations that he voted in 2005 to overturn a $1 billion verdict against State Farm because the company secretly funded a multi-million dollar campaign to help him get elected to the state supreme court. The 2004 Illinois Supreme Court race was the most expensive campaign for a single judicial office in U.S. history. Lawyers whose plan to depose Illinois Supreme Court Justice Lloyd Karmeier became public now say they will do it later or maybe not at all. On Aug. 14, they told U.S. District Judge David Herndon that they would not rush into it if he lifts a temporary stay on discovery in their fraud and racketeering suit against State Farm.
In 1998 in the Avery v. State Farm case, the original plaintiffs won the largest verdict ever against State Farm for requiring the use of “imitation” crash parts in its auto repairs. After years of appeals, the verdict was reversed. On May 29, 2012, three plaintiffs from Avery v. State Farm filed a new class action lawsuit, claiming that the insurance company acted as the hub of an enterprise designed to defraud millions of policyholders out of a $1 billion judgment. Mark Hale, Todd Shadle and Carly Vickers Morse, all of whom live out-of-state and were class members to the unsuccessful 1997 class action suit against State Farm, brought their complaint in May in the U.S. District See Avery v State Farm Judge, Page 12
See Correction to July 2013 Article on Felder’s Collision Parts v General Motors et al. . . . . . . . . . . . . . . . . . . . . . . . .p. 3
Federal Court Refuses to Stop Auto Parts Antitrust Class Action in Michigan In one of the world’s largest antitrust price-fixing actions, a group of auto parts manufacturers continues to face claims of bid rigging and price fixing in a multidistrict litigation (“MDL”) following a Michigan federal judge’s refusal to dismiss federal antitrust claims. Direct and indirect purchasers in the putative class action of In re Automotive Parts Antitrust Litigation accuse the manufacturers of conspiring to fix the prices of wire harness systems in automobiles. The allegations track a U.S. Department of Justice (“DOJ”) investigation into the auto industry, which has already resulted in guilty pleas involving the manipulation of wire harness pricing during secret meetings. Judge Marianne Battani of the U.S. District Court of the Eastern District of Michigan dismissed indirect purchasers’ antitrust claims brought
under the state laws of Massachusetts, Missouri, and Illinois, among others. The court, however, declined to dismiss direct purchasers’ federal antitrust claims accusing defendants of creating a global conspiracy to control pricing and manipulate bidding. In an independent order, separate from the order dismissing the state claims, the court concluded that the federal antitrust allegations could survive because the direct purchasers had sufficiently informed defendants of the substance of the claims, and that the allegations provide “a reasonable expectation that discovery may reveal further evidence of an illegal agreement.” The class action complaint was sound, the court concluded, because it sufficiently identifies the products involved and the methods of communication utilized by conspiring competitors during the seSee Antitrust Price-Fixing, Page 4
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