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Aftermarket Parts Antitrust Action Against Insurers to Proceed After Five Year Delay
In April this year Judge James Ware of the U.S. District Court for the Northern District of California denied the summary judgment motions of several car insurers in a class action alleging they created a sham organization to eliminate competition in the market for repair parts. The plaintiffs in Perez et al. v. State Farm Mutual Automobile Insurance Co. et al. are California automobile insurance policyholders who allege that defendant car insurers set up the Certified Automotive Parts Association to provide inferior replacement parts in violation of California’s Cartwright Act and Unfair Competi-
tion Law. The plaintiffs also allege that the insurers unlawfully conspired to stifle competition in the auto repair market by agreeing to offer exclusively policies that provide inferior repair parts and to exclude other insurance companies. The original complaint was filed in 2006, and a third amended complaint was filed in November 2010. Defendants argued that the amended complaint should be dismissed because the plaintiffs did not meet the Twombly standard to establish a conspiracy. Judge Ware disagreed and held that the facts, if taken as true,
In a bid to capture more business from customers who shop online, Allstate Corp. has agreed to buy two popular online insurance sellers—Esurance and the associated site, Answer Financial. Allstate will pay a total price of about $1 billion– $700 million plus the tangible book value of the two firms acquired at close. Esurance is the third-largest provider of online auto insurance quotes through its website and a 24/7 call center. It sells in 30 states. Over the past five years, Esurance has more than doubled policies in force and grown premiums on average 20 percent per year, according to the com-
pany, which advertises heavily. It also sells other personal lines coverages. Answer Financial provides auto insurance quote comparisons from 20 brand-name auto insurance companies to buyers in all 50 states. The carriers it represents include Esurance, Travelers, Progressive, Safeco, Met Life Auto & Home, Unitrin and The Hartford. In July, it reported having 324,000 policies in force. Alltstate is buying the firms from White Mountains Insurance Group, Ltd., a Bermuda-domiciled financial services holding company with interests in property/casualty insurance and
See AfterMarket Antitrust, Page 12
Allstate Will Buy Esurance and Answer Financial
See Allstate Buys Esurance, Page 57
VOL. 29 ISSUE 6 JUNE 2011
Aftermarket Chrome Compromising Wheel Leads to $2.75M Judgment in California On October 11, 2006, at 6:00 a.m., Martin Nagel was driving his new 2006 Nissan 350Z northbound on the 405 freeway in Los Angeles just as LAPD motorcycle officer Steven Johnson was approaching him in the opposite lanes. At approximately 65 mph, the left front wheel of Nagel’s car fractured, separated from his vehicle, flew over the center divider and struck Johnson’s motorcycle. Johnson was knocked from his bike and slid approximately 150 feet. He suffered a number of injuries to his knees, hips, arms and back as well as dislocation of two fingers, a broken finger, a right shoulder injury and an in-
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tervertebral disc injury. Nagel had purchased his vehicle from Antelope Valley Nissan. The court established that Antelope Valley Nissan had applied after-market factory chrome to OEM wheels even though they should have known that this application could change the metallurgical properties of the wheels, including their hardness and tensile strength. Fourteen years prior to the accident (1992), Nissan North America had issued a technical service bulletin stating that dealers should not sell OEM wheels with aftermarket chrome, but Antelope Valley Nissan had done so. See AM Chrome Page 25
Shop and Product SHOWCASE
REGIONAL STORIES in this issue...
Local Repairers, Vendors Finish San Diego Marine’s Mustang . .p. 4 Suspect Wanted in Killing of Repair Shop Owner . . . . . . . . . . . . .p. 6 BMW North America Files to Dismiss Jobber Suit . . . . . . . . . . . . .p. 9 Farmers Insurance Shop of Year Hosts Extrication Training . . . .p. 14 Calif. May Consider Statewide Crash Tax Ban . . . . . . . . . . . . . . .p. 16 Nevada Low Cost Insurance Bill Moves to Senate . . . . . . . . . . . .p. 18 Women’s Industry Conference Held in San Diego . . . . . . . . . . . .p. 48
COLUMNS in this issue...
Amaradio — The Good Old Days . . . . . . . . . . . . . . . . . . . . . . . . . .p. 20
Espersen — The Value of Service Repair Information . . . . . . . . .p. 22
Franklin — Focusing Marketing Efforts . . . . . . . . . . . . . . . . . . . . .p. 26
Weaver — Shift Happens: The Story of Three Transmissions . . .p. 29
Insurance Insider — Allstate Deserves Credit for DRPs . . . . . . .p. 36
Schroeder — The Body Shop Garage Opens in Woodward, OK .p. 38
Yoswick — Repairing a Quarter Panel, Bumper, and Molding . . .p. 50
Evans — Repairing a Quarter Panel, Bumper, and Molding . . . .p. 52
Chess — Getting OSHA-Compliant Part 2 . . . . . . . . . . . . . . . . . . .p. 54
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