Gary Conns Collision Center, Inc. v. State Farm Mutual Automobile Insurance Company

Court of Appeals for the Eleventh Circuit·Decided March 6, 2020·No. 16-13601·Published

Opinion

[PUBLISH]

IN THE UNITED STATES COURT OF APPEALS

FOR THE ELEVENTH CIRCUIT

No. 16-13596

D.C. Docket Nos. 6:14-md-02557-GAP-TBS, 6:14-cv-06000-GAP-TBS

AUTOMOTIVE ALIGNMENT & BODY SERVICE, INC., d.b.a. Pitalo Auto Paint & Body, ALEXANDER BODY SHOP, LLC, et al.,

Plaintiffs-Appellants,

versus

STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, STATE FARM FIRE & CASUALTY COMPANY, et al.,

Defendants-Appellees.

No. 16-13601

D.C. Docket Nos. 6:14-md-02557-GAP-TBS, 6:14-cv-06001-GAP-TBS

GARY CONNS COLLISION CENTER, INC., CROSS PAINT & BODY SHOP, INC., et al.,

Plaintiffs-Appellants,

versus

STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, STATE FARM FIRE & CASUALTY COMPANY, et al.,

Defendants-Appellees.

No. 16-15467

D.C. Docket Nos. 6:14-md-02557-GAP-TBS, 6:14-cv-06003-GAP-TBS

ALPINE STRAIGHTENING SYSTEMS, d.b.a. Alpine Body Shop, A.F. COLLISION REPAIR, INC., et al.,

Plaintiffs-Appellants,

versus

STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, MID-CENTURY INSURANCE COMPANY, et al.,

Defendants-Appellees.

Appeals from the United States District Court for the Middle District of Florida

(March 6, 2020)

Before WILLIAM PRYOR, MARTIN, and KATSAS, * Circuit Judges. WILLIAM PRYOR, Circuit Judge:

*

Honorable Gregory G. Katsas, United States Circuit Judge for the District of Columbia Circuit, sitting by designation.

These consolidated appeals require us to decide two jurisdictional questions before reaching the merits: whether the district court had jurisdiction to adjudicate amended complaints filed after its earlier orders of dismissal became final judgments, and whether we have jurisdiction to review an order that the appellants failed to designate in their notice of appeal. Three groups of automotive body shops in Mississippi, Indiana, and Utah filed complaints against the major automobile insurance companies. They asserted claims for relief under the Sherman Act, 15 U.S.C. § 1, and state law based on the insurance companies’ alleged anticompetitive practices. The district court dismissed their first amended complaints with leave to amend within a specified time. The Mississippi body shops timely amended their complaint, but the Indiana and Utah body shops missed the deadline and filed untimely second amended complaints. Under our precedent, the orders dismissing the first amended complaints in the Indiana and Utah actions became final judgments when the deadline to amend expired. The district court never set aside those final judgments, so it was without jurisdiction to permit the amendments and to adjudicate the second amended complaints. We must vacate the orders that purported to do so.

Although the Mississippi body shops timely amended their complaint, they failed to designate the interlocutory order dismissing their antitrust claims in their notice of appeal. But we conclude that we may review the order because the shops

designated the final judgment into which the interlocutory order merged. On the merits, we affirm the dismissal of the Mississippi body shops’ antitrust claims and the denial of their motion to reconsider the dismissal of those claims. We also affirm the dismissal of all but two of their claims under state law. Because two body shops have adequately alleged claims of tortious interference, we vacate the dismissal of those claims and remand for further proceedings.

I. BACKGROUND

These appeals arise from three lawsuits filed in Mississippi, Indiana, and Utah by body shops that repair vehicles for individuals insured by the major automobile insurance companies. The Judicial Panel on Multidistrict Litigation transferred the actions to the Middle District of Florida for pretrial proceedings. We recently decided en banc five similar appeals arising from the same multidistrict litigation. See Quality Auto Painting Ctr. of Roselle, Inc. v. State Farm Indem. Co., 917 F.3d 1249 (11th Cir. 2019) (en banc).

Here, as in Quality Auto, the body shops allege that the insurance companies have conspired to depress the prices they pay for repairs the body shops perform for their insureds. The leader of this alleged conspiracy is State Farm, which sets a “market rate” for labor in a geographic area using an electronic survey of shops in the area and refuses to pay more for labor than the survey-determined market rate. But the “survey” State Farm conducts is allegedly more sham than survey. State

Farm allegedly uses faulty methods and outright manipulation of data to generate “market rates” that are well below the real market rates for labor in a geographic area. Still, State Farm advises the shops that it will pay no more for labor than the “market rate” determined by its survey. And the other insurance companies also advise the body shops that they will pay no more for labor than the “market rate” determined by State Farm.

The body shops also allege that the insurance companies use other unsavory business practices to reduce the prices they pay for repairs. For example, the insurance companies allegedly refuse to pay for necessary repairs and procedures, and they allegedly require the body shops to use subpar “aftermarket” parts instead of new parts. They also allegedly “steer” their insureds away from noncompliant body shops and toward body shops that comply with their pricing demands and other requirements. If an insured plans to use a noncompliant body shop for repairs, the insurance company allegedly will tell its insured that the body shop has had quality issues, charges more than other shops, takes longer than other shops, or performs work that the insurance company cannot guarantee. Some body shops have lost prospective customers because of the insurance companies’ alleged steering. The body shops also allege that the insurance companies collectively agree to steer customers away from noncompliant body shops.

Based on these allegations, the body shops assert claims of horizontal price-

fixing and group boycott in violation of the Sherman Act, 15 U.S.C. § 1, and claims of quantum meruit and tortious interference under state law. The Mississippi body shops also bring a claim under a state statute that prohibits insurers from requiring their insureds to use a particular body shop for repairs. See Miss. Code Ann. § 83-11-501.

The district court dismissed the first amended complaints in all three actions for failure to state a claim, Fed. R. Civ. P. 12(b)(6). But the orders of dismissal were without prejudice to the body shops’ right to amend their complaints within a specified time. The day before their deadline expired, the Mississippi body shops moved for an extension of time to amend their complaint. They filed their second amended complaint two days later, and the district court accepted the complaint as timely. But the Indiana and Utah body shops missed the deadline to amend their complaints. They instead filed untimely second amended complaints without ever moving for an extension of time.

The insurance companies in the Indiana and Utah actions moved to strike the untimely second amended complaints and close the cases. They argued that the first orders of dismissal became final judgments when the time to amend expired without the body shops either filing an amended complaint or moving for an extension of time. Relying on our decision in Hertz Corporation v. Alamo Rent-A- Car, Incorporated, 16 F.3d 1126 (11th Cir. 1994), the insurance companies argued

that the district court lost its prejudgment powers to extend the time to amend when the first orders of dismissal became final.

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