Southeastern Sou utheastern Edition E d i t i on Ed Alabama Florida Georgia Mississippi N. Carolina
S. Carolina Tennessee Virginia West Virginia
36
YEARS
www.autobodynews.com ww ww.autobodynews.com
VOL. 8 ISSUE 10 DECEMBER 2017
Eleventh Circuit Restores Auto Body Shop Antitrust Case
Attorney Who Sued Texas Body Shop Urges Shops to Stand Up to Insurance Companies
On Sept. 7, the Eleventh Circuit Court of Appeals handed a big victory to a class of auto body shops in Quality Auto Painting v. State Farm, et. al, reversing a lower court decision that had dismissed the auto body shops’ complaint for failure to state a claim. In a 2-1 decision, the court held that Middle District of Florida Senior Judge Gregory Presnell had acted too quickly in dismissing the plaintiffs’ complaint, finding that the plaintiffs had “supplied enough allegations” to “raise a reasonable expectation that
Shortly after gaining notoriety within the industry in 2013 for suing State
by Staff, Baker Donelson
discovery will reveal evidence of illegal agreement.” The Eleventh Circuit’s ruling is the first to consider a series of decisions by Judge Presnell that dismissed both Quality Auto and a group of similar cases (approximately 20 in all) that had all been consolidated before him by the Panel for Multidistrict Litigation, over the last two years. In Quality Auto, the auto body shop plaintiffs from Kentucky, Missouri, New Jersey and Virginia alleged that the auto insurers, in their respective states, had agreed not to pay more See Antitrust Case, Page 23
CIC: New Vehicle Technologies Bringing Fresh Challenges for Collision Repairers by John Yoswick
Texas attorney Todd Tracy told shops at SEMA in Las Vegas in November what they can do to avoid a suit like the one he brought against a shop for failure to follow OEM repair procedures
Farm over its mandated use of PartsTrader, Mississippi attorney John Eaves was speaking to shops during SEMA week in Las Vegas, recruiting participants for lawsuits against insurers that he said would revolution-
ize the industry. Four years later almost to the day, Texas attorney Todd Tracy told shops in a packed Las Vegas ballroom during this year’s SEMA that his recent $42 million lawsuit against a dealership body shop—and a subsequent related lawsuit against State Farm—also potentially marks the start of a profound shift for collision repairers. “This is a defining moment in your industry,” Tracy said. “You have a verdict that can change the industry.” Tracy was careful to point out that his goal isn’t to sue body shops for failure to follow OEM repair procedures, the basis of his legal victory against John Eagle Collision Center. Instead, like Eaves, Tracy has insurance companies in his legal crosshairs. See Stand Up, Page 22
Where Do OE Certification Programs Go Now, in a Post-John Eagle World? by Gary Ledoux
Virginia shop owner Barry Dorn said automaker systems that time stamp diagnostic trouble codes make it easier to determine which are related to a claim or repair process See CIC: New Technology, Page 4
Change Service Requested
P.O. BOX 1516, CARLSBAD, CA 92018
New challenges posed for collision repairers by increasingly complex vehicle technology were discussed during several presentations at the Collision Industry Conference (CIC) held in Las Vegas during SEMA week in early November. “I would challenge you, whether you are a repair facility [relying on] the dash light, or if you are an insurer that is still saying, ‘I’m not going to perform a post-scan because the light isn’t on.” There are very valid reasons why that light might not be on,” com-
by John Yoswick
The John Eagle verdict that occurred back in October, and the $42M judgement for the plaintiffs, Matthew and Marcia Seebachan, who were severely injured in an incorrectly repaired Honda Fit was, no doubt, the biggest collision industry story of the year—if not the decade. Subsequently, shops have become acutely aware of the severe liability they open themselves up to when a repair is not performed according to OE procedures. Shops have a huge stake in this game. After all, when you come right down to it, the choice to follow OE procedures and a correct repair, or not, is solely up to the shop – the technician and shop owner or manager. But the OE’s have a big stake too. An OE’s brand is on the line at a cer-
tified shop. When a consumer sees an OE emblem attached to a shop’s office wall or on their website, they assume it is a quality shop and their car, the second largest investment they have, will be repaired correctly and safely. Consumers trust the OE brand – so the OE must be able to trust the shop. Unfortunately, there are so many other forces that drive the industry and may have an over-riding effect, even on those shops that are OE certified. On October 3, 2017, the day after the $42M verdict was rendered, the industry entered the post-John Eagle era. Times have changed. So where do we go from here? How does the industry make sure this doesn’t happen again? What role will the OE’s play? Will OE certification programs adapt and change with this paradigm shift? See Post John Eagle, Page 26
Presorted Standard US Postage PAID San Bernardino, CA Permit #2244