DOJ Wants to End 1963 Auto Repair Consent Decree Between U.S., Insurer Groups’

Date: August 12, 2019
Source: Repairer Driven News

The U.S. Department of Justice last week proposed terminating the 1963 consent decree reached between the government and auto insurance trade groups over collision repair business practices.

Collision repairers, insurers and other interested parties have a deadline of Sept. 2 to provide public comment on the government’s proposal. Comments should be directed to JudgmentTerminationComments@usdoj.gov and in the subject line include the case name (U.S. v. Association of Casualty and Surety Companies, et al) and docket number (63 Civ. 3106).

In April 2018, then-Attorney General Jeff Sessions’s Justice Department announced plans to review the nearly 1,300 “legacy” antitrust judgments enacted without sunset dates and petition to unilaterally some of them. Starting in 1979, the government’s policy has been to include an automatic end date — usually ten years — regarding antitrust judgments.

“Today, we are taking a first step toward freeing American businesses, taxpayers, and consumers from the burden of judgments that no longer protect competition,” DOJ antitrust division Assistant Attorney General Makan Delrahim said in an April 25, 2018, statement. “We will pursue the termination of outdated judgments around the country that presently do little more than clog court dockets, create unnecessary uncertainty for businesses or, in some cases, may actually elicit anticompetitive market conditions.”

On Aug. 2, Attorney General William Barr’s DOJ proposed the Nov. 27, 1963, consent degree for elimination.

We’ve asked the DOJ about its specific rationale for proposing the consent decree for the chopping block.

In 2018, the agency said it “assigned each judgment to a Division attorney, who will examine court papers, internal case files, and publicly available information to determine whether each judgment continues to serve competition.”

The DOJ on March 26 said many of the sunsetless judgments “no longer serve the interests of competition.”

“These include judgments that (1) prohibit already-illegal conduct (e.g., price fixing and market allocation), (2) cover industries in which relevant circumstances have changed, and (3) bind defendants who are no longer operating in the relevant line of commerce,” it continued.

The motion to terminate the consent decree would be filed in the U.S. Southern District of New York, the court which issued the document more than 50 years ago.

Both the U.S. and the insurer defendant trade groups the Association of Casualty and Surety Companies, American Mutual Insurance Alliance and National Association of Mutual Casualty Companies agreed to the judgment entered by Judge Edward McLean.

The Association of Casualty and Surety Companies later was merged into the American Insurance Association, which merged with the Property Casualty Insurers Association of America effective Jan. 1 to create today’s American Property Casualty Insurance Association.

The 1963 agreement held that there had been no “admission by any party with respect to any issue herein.” It was ” binding upon each defendant and upon its officers, directors, agents, servants, employees, committees, successors and assigns, and upon all other persons in active concert or participation with any defendant who shall have received actual notice of this Final Judgment by personal service or otherwise.”

The three trade groups were ordered to end the “Independent Appraisal Plan, sometimes known as the Automotive Damage Appraisal Plan.”

They also were prohibited from enacting “any plan, program or practice” intended to or creating the effect of:

(1) sponsoring, endorsing or otherwise recommending any appraiser of damage to automotive vehicles;

(2) directing, advising or otherwise suggesting that any person or firm do business or refuse to do business with (a) any appraiser of damage to automotive vehicles with respect to the appraisal of such damage, or (b) any independent or dealer franchised automotive repair shop with respect to the repair of damage to automotive vehicles;

(3) exercising any control over the activities of any appraiser of damage to automotive vehicles;

(4) allocating or dividing customers, territories, markets or business among any appraisers of damage to automotive vehicles; or

(5) fixing, establishing, maintaining or otherwise controlling the prices to be paid for the appraisal of damage to automotive vehicles, or to be charged by independent or dealer franchised automotive repair shops for the repair of damage to automotive vehicles or for replacement parts or labor in connection therewith, whether by coercion, boycott or intimidation or by the use of flat rate or parts manuals or otherwise.

The Justice Department itself received permission to review the defendants’ files and interview defendant “officers or employees.”

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