Feb. 9, 2000
Consumer Groups Ask Illinois Supreme Court
to Expedite Automobile Crash Parts Case
Illinois Ruling Will Create Monopoly,
Lead to Higher Auto Insurance Rates, Groups Say
WASHINGTON, D.C. — An Illinois state trial court ruling that threatens to create a monopoly in automobile crash parts — and lead to dramatically higher part prices and auto insurance rates — should be overturned, two Washington, D.C.-based consumer groups have told the Illinois Supreme Court.
Public Citizen and the Center for Auto Safety filed a “friend of the court” brief in the case on Tuesday, asking the Illinois Supreme Court to accept the case on an expedited basis because of the irreparable harm to consumers if it languishes in court during the appellate process. The groups want the Illinois Supreme Court to bypass the appellate court and handle the case immediately.
“This ruling, if not overturned, will severely harm automobile owners throughout the country,” said Joan Claybrook, Public Citizen s president. “Repairing a car after a crash will become prohibitively expensive, and insurance rates will skyrocket. The Illinois Supreme Court should intervene and intervene now.”
Crash parts, such as exterior sheet metal and plastic parts like fenders, hoods and grills, are used to repair autos damaged in crashes. State Farm and a number of other insurance companies use certified generic parts because they cost significantly less than auto company parts, called “original equipment manufacturer” (OEM) parts, and are equally reliable, the groups brief states. The generic parts are certified by the Certified Automotive Parts Association (CAPA), which conducts a rigorous testing program and inspects manufacturing plants. Because these CAPA parts cost less, they help contain auto insurance rates. Further, their existence helps keep down the cost of auto company (OEM) parts; without such competition, those parts would cost much more, the filing says.
“The ruling gives the OEM part manufacturers something they have been trying to get for years from federal and state courts, and from federal and state legislatures, and that is a monopoly,” said Eleanor J. Lewis, senior staff attorney for the Center for Auto Safety. “As a result, consumers will pay handsomely if this case is not reversed.”
In October, an Illinois jury in a class action suit found that State Farm Insurance Co. had breached its contract with policyholders by using generic CAPA parts in damaged cars, rather than auto company (OEM) parts. The court ordered State Farm to pay $1.2 billion.
State Farm is appealing the judgment. Meanwhile, State Farm and other insurers have stopped using generic CAPA parts, the filing says. If this situation continues, insurance rates will not only climb, but some generic parts manufacturers will be driven out of business, leaving manufacturers with a monopoly on crash parts, the brief says.
Further, the ruling effectively nullifies state laws, such as those in Hawaii and Massachusetts, which both have laws favoring the use of generic parts, the brief says.