Perez v. State Farm Mutual Automobile Insurance

291 F.R.D. 425, 2013 WL 3187947, 2013 U.S. Dist. LEXIS 88490
CourtDistrict Court, N.D. California
DecidedJune 21, 2013
DocketNo. 06-CV-01962-LHK
StatusPublished
Cited by3 cases

This text of 291 F.R.D. 425 (Perez v. State Farm Mutual Automobile Insurance) is published on Counsel Stack Legal Research, covering District Court, N.D. California primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Perez v. State Farm Mutual Automobile Insurance, 291 F.R.D. 425, 2013 WL 3187947, 2013 U.S. Dist. LEXIS 88490 (N.D. Cal. 2013).

Opinion

ORDER DENYING PLAINTIFFS’ MOTION TO VACATE ORDERS DENYING CLASS CERTIFICATION AND LEAVE TO AMEND; DENYING PLAINTIFFS’ MOTION FOR RELIEF FROM SUMMARY JUDGMENT

LUCY H. KOH, District Judge.

Plaintiffs Sarah Perez, Michelle Laekney, Rachel Stewart, and Rachel Hardyek (collectively, “Plaintiffs”) bring this putative class action against Defendants State Farm Automobile Insurance Company (“State Farm”), Alstate Indemnity Company (‘Allstate”), GEICO General Insurance Company (“GEICO”), Liberty Mutual Fire Insurance Company (“Liberty Mutual”), and Certified Automotive Parts Association (“CAPA”) (collectively, “Defendants”), alleging an anti-competitive conspiracy in violation of Cali-forma’s Cartwright Act, Cal. Bus. & Prof. Code §§ 16720, 16750, and California’s Unfair Competition Law, Cal. Bus. & Prof. Code §§ 17200, el seq. Before the Court are two motions filed by Plaintiffs pursuant to Federal Rules of Civil Procedure 60 and 52: (1) a Motion to Vacate Orders Denying Class Certification and Leave to Amend, and to Set Aide or Amend Findings; and (2) a Motion for Relief from Summary Judgment and to Set Aide or Amend Findings. Pursuant to Civil Local Rule 7-l(b), the Court found these motions appropriate for determination without oral argument. See ECF No. 732. Having considered the parties’ submissions and the relevant law, and for good cause shown, the Court DENIES both Plaintiffs’ Motion to Vacate the Orders Denying Class Certification and Leave to Anend and Plaintiffs’ Motion for Relief from Summary Judgment.

1. BACKGROUND

A. Factual Background1

Defendants sell California automobile insurance policies promising uniformly high quality repair to restore damaged automobiles to their condition before an accident. Fifth Amended Complaint (“5AC”) ¶ 2, ECF No. 566. Plaintiffs are Defendants’ customers; each Plaintiff has paid “premiums for liability, casualty and collision damage automobile insurance” to one of the four Defendants in this ease, and seeks to represent a class on this basis. See 5AC ¶¶ 13-16.

Plaintiffs allege that, rather than providing insurance policy holders with quality repair as promised, Defendants instead “conspire to substitute low-cost repair parts, which are often markedly inferior to the parts originally placed on the automobile by its manufacturer” in order to “create illegal profits.” 5AC ¶ 2. Plaintiffs contend that these parts are not of the same kind and quality as parts originally used to fabricate vehicles by the original equipment manufacturers (“OEM parts”),2 and are not capable of restoring [427]*427vehicles to their pre-loss conditions. See Compl. ¶ 3, ECF No. 1. Consequently, when a customer buys a policy from Defendants, she or he “unknowingly buys into a repair lottery, where there is a very substantial chance the customer may get low quality— even unsafe — repair, not the assured high quality repair sought.” 5AC ¶2. Plaintiffs further allege that Defendants’ “conspiracy has had the effect of raising and maintaining premiums for inferior ‘lottery’ automobile insurance coverages above the competitive levels that would have prevailed for these coverages had full competition prevailed,” 5AC ¶ 12, and “preventing] and excluding] competition among insurance companies based on the quality of repair,” 5AC ¶ 26.

Plaintiffs, on behalf of themselves and California residents who are similarly situated, propose four separate classes for each Defendant, which are defined in the Fifth Amended Complaint as follows:

persons residing in California ... paying premiums to [designated Defendant] for automobile liability, casualty and collision damage insurance at any time between March 14, 2002 and the present where for an insured automobile [Defendant group] uses repair parts other than those provided by the original equipment manufacturer or its authorized parts supplier. The repair parts at issue are parts where the substitution of inferior parts significantly lessens the quality of the automobile’s safety, fit, structural integrity or mechanical functioning than would be experienced over the life of a high-quality OEM repair part ....

5AC ¶¶ 59, 65, 71, 77 (emphasis added). In addition, Plaintiffs define the “Common Class Premium Injury” as follows:

The conspirators’ conduct has the effect of causing members of the four California Classes of policyholders to pay above-competitive premiums for the inferior insurance repair coverages they have actually received. The policy holders are told by the insurance conspirators that they are receiving high quality repair coverages that ostensibly will restore their vehicles to a pre-loss condition akin to the quality provided by the original equipment manufacturer. They pay for such high-quality repair. Instead, they receive substantially inferior repair coverage which would command substantially lower premiums “but for” the conspiracy, and its unlawful deception and anticompetitive conduct, because they face the substantial risk of receiving markedly inferior repair parts.

5AC ¶¶ 83, 84.

B. Procedural History

Plaintiffs initiated this action on March 14, 2006, ECF No. 1, and filed a First Amended Complaint as a matter of right on April 3, 2006, ECF No. 10. On April 10, 2006, this case was reassigned from Magistrate Judge Patricia Trumbull to District Judge James Ware. See ECF No. 18. On May 5, 2006, Defendants filed two Joint Motions to Dismiss Plaintiffs’ First Amended Complaint. See ECF Nos. 49, 54.

Before Judge Ware ruled on Defendants’ motions, Plaintiffs filed a Second Amended Complaint (“SAC”) pursuant to a stipulation which also preserved Defendants’ previously filed Joint Motions to Dismiss. See ECF Nos. 81, 82. Judge Ware thereafter granted Defendants’ Joint Motion to Dismiss the SAC on the ground that Plaintiffs lacked Article III standing, see ECF No. 112, entered judgment in favor of Defendants, and closed the ease, see ECF No. 113. However, on March 17, 2009, the Ninth Circuit Court of Appeals determined that Plaintiffs do have Article III standing to proceed and remanded the case. See Perez v. State Farm Mut. Auto. Ins. Co., 319 Fed.Appx. 615 (9th Cir.2009) (unpublished). The mandate issued on April 8, 2009. See ECF No. 118.

On May 15, 2009, Defendants filed three renewed Motions to Dismiss. See ECF Nos. 127, 130, 132. Defendant Liberty Mutual then filed a Motion for Summary Judgment. See ECF No. 142. On July 17, 2009, Judge Ware granted Defendants’ Renewed Joint Motion to Dismiss the SAC with prejudice and denied as moot the other two motions to dismiss and the summary judgment motion. [428]*428See ECF No. 147. Judge Ware granted Defendants’ Renewed Joint Motion to Dismiss the SAC on the basis that Plaintiffs’ claims were an attack on rates and premiums set by the California Insurance Commissioner and thus were not cognizable antitrust or unfair competition claims. See ECF No. 147. Judge Ware again entered judgment in favor of Defendants and closed the case. See ECF No. 148.

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Cite This Page — Counsel Stack

Bluebook (online)
291 F.R.D. 425, 2013 WL 3187947, 2013 U.S. Dist. LEXIS 88490, Counsel Stack Legal Research, https://law.counselstack.com/opinion/perez-v-state-farm-mutual-automobile-insurance-cand-2013.