BATON ROUGE — Nothing has happened for more
than a year, but Louisiana’s lawsuit against insurance carrier State Farm is still alive.
The case documents are sitting in an East
Baton Rouge Parish court. The lawsuit has an interesting history.
The suit has to do with State Farm's alleged insurance claims practices pushing repairs to predetermined shops which then engage in cost-cutting actions, like using old or damaged parts to repair cars.
The original lawsuit came in 2014 and was filed by Republican former Attorney General Buddy Caldwell. It was subsequently
dismissed by district judge Donald Johnson in December 2015.
Despite the dismissal, Caldwell received 30
days to refile and revise the case, and that’s what he did in January 2016.
But Caldwell was not going to be
around to prosecute the case. He was defeated in the November 2015
election by fellow Republican Jeff Landry in the attorney general race.
The last action on the case came on March 17,
2016, and nothing much has been reported on since.
According to a press release, Landry said the
court should not dismiss the case. He was asked if he would proceed with the
case against the insurance carrier.
Press secretary Ruth Wisher said in a
statement, “All cases and contracts begun in the previous administration are
under review to ensure the Department of Justice upholds the rule of law,
adheres to the Constitution, and protects the rights of our state and its
The original case received some notoriety and was
featured on CNN and highlighted by newsman Anderson Cooper.
most companies, State Farm does not comment on pending litigation. The
insurance carrier’s response, though, is four pages longer in the revised
lawsuit than it was when the original suit was filed.
Caldwell’s revised lawsuit revealed that it
will be attacking State Farm for being a business that is allegedly affecting
another industry and consumers in the state improperly.
Caldwell said in the revised complaint, “This
is not an action related to the defendants’ participation in the insurance
market. Rather, this is an action related to the defendants’ unlawful
manipulation of the auto body collision repair industry and their attempt to
control that influence that industry to the detriment of Louisiana citizens.”
In its 2015 rebuttal, State Farm lawyers
wrote, “… (T)his case is about insurance claims practices, and the fact that
auto body shops are also involved does not remove it from the insurance
And in its request to squash the revised
lawsuit in February of last year, the carrier’s lawyers wrote, “The alleged
conduct falls squarely within acts and practices ‘in the business of insurance’
as defined by … the Louisiana Insurance Code, and is subject to the
jurisdiction of the Insurance commissioner.’’
The revised suit said, “This is not an action
related to the defendants’ participation in the insurance market. Rather, this
is an action related to the defendants’ unlawful manipulation of the auto body
collision repair industry and their attempt to control … that
industry to the detriment of Louisiana citizens.”
And in that revised suit, the state insurance
commissioner’s office said it does not have any jurisdiction when it comes to
insurer relationships with body shops.
office of the commissioner of insurance has repeatedly maintained that the
Insurance Code … provides no basis for the insurance commissioner to exercise
jurisdiction over the relationships with auto body repair facilities and
the unfair or deceptive acts and practices that stem from those relationships,”
So what’s next?
It’s up to the district court, but no date has