an iga viewpoint
IGA Legal Fund
by Sue Johnson
Q What is the legal fund?
A. The IGA’s proposed litigation campaign is an invitation to the industry to get organized, to pool resources and focus those resources at the heart of the problem. We understand we have created hope and expectations, and we take that very seriously. The board has wrestled with this decision for two years, has met with prominent and experienced law firms, which handle huge class action cases against the insurance industry and other formable opponents. We have examined the practices, the evidence and a variety of laws. We have asked all the questions about costs, consequences and risk to the industry, our members and the IGA. We have gotten second and third opinions on the critical questions. We have done our homework. We are confident in our decision. We expect to win. If we raise the money, this campaign will change how the auto glass market functions.
Q. What is the legal strategy?
A. We cannot give full details at this time because to do so would undermine the strategy. We are using the phrase “litigation campaign” for a reason. We have published our intention to use the Lanham Act to go after illegal steering, but our strategy may include other claims, which we feel are just as good.
Q. What will be the first step?
A. The most effective way that insurers or networks steer is by telling consumers that they may have to pay out of pocket if they choose your shop. If you are a network shop or if you do not have a business practice of seeking reimbursements from your customers, this warning to consumers about possible additional charges may be legally actionable as a deceptive trade practice.
That is why the IGA is creating “The List.”
Starting now, the IGA is building a list of member shops whose policy is to not charge customers the difference between a reimbursement and an invoice. We will then present “The List” to Safelite and other TPAs, informing the company that warnings about consumers having to pay out of pocket would be legally false and misleading and may lead to legal consequences.
Q. Hasn’t this all been done before and failed?
A: There was an anti-trust lawsuit filed in Texas and there was a fund-raising effort to bring about a RICO claim. The anti-trust suit was thrown out and the RICO fundraising fell short of its goal and was abandoned with no suit filed. This time it’s different because 1) these legal claims are different, and, 2) there is no risk to contributing. Past failures happened for specific reasons and should not undermine this effort.
There was also the case of Glass Service Company of St. Paul, Minn., which sued State Farm insurance for tortuous interference in 1992. Glass Service claimed State Farm was steering customers and short paying. At the time State Farm surveyed shops and created a preferred list that was sent to agents. Glass Service did not make the list. In that case, the court found that the statements that were made by State Farm were true and therefore were protected. That is not presently the case with respect to some networks. When a network tells a customer that he may have to pay out of pocket expenses if he chooses your shop, is that a true statement? If your shop does not bill customers for the difference between an invoice and a reimbursement should a network be able to imply that you do, or is that false and misleading? This lawsuit will allow a federal judge to decide if such statements are a violation of the law. Many legal experts believe it is.
Q. Is there any risk to those who make a contribution to the fund?
A. No. You can be sued for other behavior in your business, but you cannot be sued for contributing money to the IGA Legal Fund. Donating money to support a lawsuit, for any cause, is free speech. Remember, 90 percent of any funds you contribute to the Legal Fund will be returned to you if major litigation against a network or insurance company is not initiated.
Q. Is this all that the IGA is doing now?
A. No, this is a focus, but IGA remains the active member-service oriented association it always has been. We expect to introduce a few new services this year, and have just announced the dates of our annual convention, February 24-26, 2005 at the Rosen Plaza Hotel in Orlando.
Q. How do I obtain more information?
A. Contact the IGA at 32 10th Avenue South, Suite 210, Hopkins, MN 55343.
© Copyright Key Communications Inc. All rights reserved. No reproduction of any type without expressed written permission.