Volume 34, Number 10,  October 1999

USGAuto News

Safelite, LYNX and Insurers Sue Montana
In reaction to legislation that the Montana Independent Glass Dealers Association introduced and helped pass last spring, State Farm Mutual Automobile Insurance Company, Allstate Insurance Company, Progressive Corporation, Safelite, and LYNX Services have brought four different suits against the State of Montana, as well as the state’s Attorney General, the Insurance Commissioner and Department of Commerce.
The suits challenge the Montana law passed this spring that outlaws the waiver of deductibles for glass replacement, third-party billing, inconsistent prices for cash and insurance customers and steering. The plaintiffs charge that this law is unconstitutional by violating commercial free speech and interfering with free trade.
While the plaintiffs have some heavy hitters, the State of Montana is not expected to back down. “We are going to fight this vigorously,” said Gary Spaeth of the state insurance commissioner’s office.
This is welcome news to the state glass association, which put in a lot of effort to get the law passed. “We need this law,” said Truman Strouf, president of the association. We are laboring under a monopoly [Safelite’s alignment with the major insurance providers] and it is breaking everyone’s back,” he said.
Texans Appeal Their Case
More than a year after their case was dismissed from Eastern District Court in Beaumont, TX, the nine Texas glass shops suing Safelite Corporation of Columbus, OH, and Harmon Glass Company of Minneapolis, MN, have filed and made an appeal contracts. The eight shops had charged the network chains, which originally included U.S. Auto Glass Discount Centers Inc. of Chicago and Windshields America Inc. of Bedford, NH, before they merged with Safelite, with violations of the Sherman Antitrust Act and Clayton Act.
The lawsuit, filed in September 1995, sought to recover $10 million in damages for boycott and tortuous interference with contracts.
The eight Texas glass companies are: Stewart Glass & Mirror Inc. of Jasper; Texas Mobil Auto Glass Inc. of San Antonio; A-1 Glass Company of Beaumont; Freddy’s Auto Glass & Mirror Inc. of Waco; Nederland Glass Company Inc. of Nederland; Lone Star Glass Inc. of Houston; Auto Glass Specialists of Irving; Alamo Glass of Port Arthur; and Ray Glass of Richmond.
Dennis Dylewski, counsel for the nine shops, was satisfied with the appeal, though he cautioned that no judgment was passed. “We felt really good about the nature of the questions and the responses we were able to give to the panel,” he said. “However, they don’t give you an indication which way they are going to go, so you have to wait for opinion ...” He said the panel asked the independent shops questions concerning how consumers and independents were hurt by networks.
A successful appeal would mean the plaintiffs will go back to where they began. “If the court decides in our favor, it [the original decision] will be reversed and remanded back to the district court for trial.”   


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