IGA Files Major Steering Lawsuit

[Delta Kits]

From GlassBYTEs

The March to Court: The IGA Files Its Landmark Lawsuit in Federal Court

by Debra Levy

It may have been a little later than planned, but the Independent Glass Association (IGA) made good its promise to file a lawsuit designed to settle the legalities of steering in the auto glass industry.

"We need a court to take a look at steering," said then-incoming executive director Marc Anderson at the association's annual convention last April in Columbus.

"Steering is the biggest single issue destroying our profitability," he had said at the time. "We don't believe the practices being used now are legal, and we want the courts to give us their opinion."

At the direction of the IGA board of directors, Anderson had promised a suit would be filed by the end of the year. He missed the target by just a few weeks.

Attorney Tom Goodman and Rick RosarIGA bills itself as the country's only association dedicated to meeting the needs of independent glass shops with 100 locations or less. The association has its roots in the auto glass business, but began outreach last year to expand its membership to include and serve the architectural glass industry. The Minneapolis-based association currently represents more than 1,600 locations in the country involved with auto glass installation.

The association has filed its lawsuit today with the U.S. District Court in Minnesota against the Safelite Group, Inc. of Delaware and a number of its related companies. In addition to the IGA itself, the suit is being brought by three other plaintiffs; two are insurance adjustors in Nebraska and Minnesota. All are identified with pseudonyms to "preclude any attempt or tendency for professional retaliation by the defendants or any of their insurance clients."

Alleged Illegal Activity
The suit includes a number of unexpected strategies. First, the fact that IGA itself is a plaintiff is a surprise to many. IGA was expected to facilitate the lawsuit, but not be a party to it. Secondly, recitation of both alleged Lanham Act violations and illegal claims adjusting took some by surprise. Finally, the fact that no damages were requested was a shock to others.
"This case has never been about damages," says Anderson. "We want illegal steering to stop once and for all. We want their practices to change, so the playing field is level. Give independents a fair shot at competition and they'll win, but it has to be fair," he told the group at its 2004 meeting.

The group's annual convention, scheduled this year for February 24-26 in Orlando, Fla., will also include an update on the lawsuit.

The suit details four major areas of alleged illegal activities by Safelite:
1. Illegal steering by the Safelite Call Centers;
2. A systematic policy of short payments to independents;
3. An illegal $15 invoice service fee that was deducted from non-affiliated shops for a few months before Safelite "suspended" the practice; and
4. Unlicensed insurance adjusting.

Steering
The complaint details ways in which IGA believes Safelite engages in unlawful steering. It says that, if an insured requests that its auto glass work be done by an unaffiliated shop, representatives at Safelite's call centers will say one or more of the following:

*
if the insured customer has the work performed by a glass shop that is not affiliated with the Safelite Network, then the products and services may not or will not be guaranteed or warranteed - at least not as well as if performed by the Safelite Network.
*
if the insured customer has the work performed by a glass shop that is not affiliated with the Safelite Network, then the laborers or installers of the glass may not or will not be trained, qualified, certified or otherwise competent to perform the work.
*
if the insured customer has the work performed by a glass shop that is not affiliated with the Safelite Network, then the glass, adhesives and other products and materials used in the repair or replacement may not or will not meet industry, safety or quality standards or be equal in quality to the Safelite Network.
*
if the insured customer has the work performed by a glass shop that is not affiliated with the Safelite Network, then the customer may have to or will have to pay an amount out of pocket directly to the glass shop over and above that (as determined by Safelite) payable by his or her insurance glass coverage and deductible, if any, pursuant to the glass claim, in contrast to using the Safelite Network which never requires such additional amount.
*
if the insured customer has the work performed by a glass shop that is not affiliated with the Safelite Network, then the glass shop the customer has selected "is not authorized," "is not approved," "is not part of the network," "is not recommended," or "is not known," thereby implying that the insured customer's insurance company is limiting their choice of glass shop to only those "authorized, approved, or recommended" by the insurance company.
*
if the insured customer has the work performed by a glass shop that is not affiliated with the Safelite Network, then the customer's policy might be cancelled or his or her premium costs for the insurance might increase."

[Delta Kits]

Still with me? Here's the rest:

[quote]
The 22-page suit further alleges:
"In October of 2004 and November of 2004, the IGA wrote to Safelite to notify Safelite that its business practice and script contained false and misleading information, especially concerning at least the list of IGA member glass shops contained on a list included with the letter. The IGA demanded that Safelite thereafter accurately reflect the true practice of the glass shops on the list and cease leading insured customers to believe that they may be billed for Safelite short pays of the glass shop's invoice when that was not true, in fact. (A copy of the letter was attached.)

"Despite having been put on notice that it was disseminating false and misleading information or misleading insured customers with respect to the glass shops on the list, Safelite nevertheless has refused to modify its script and it currently continues to make said misrepresentations to call center customers."

Short Payments
IGA alleges that "

[Jeremiahswindshieldrepair]

I hope safelite (intentionally in lower case out of disrespect) fries!

[chips1144]

Hahahahahahaaaaaaaaaaa

[Almost-New WSR]

Finally some good news. Yeah!

I love the fact that they are going for the jugular and putting the 'damages' to the side. Talk about Credibility.

GO IGA!!!!

[mafsu]

While it's nice to see another lawsuit against this network, remember that Diamond has had an ongoing lawsuit for years against the same network. On another note be careful who you align yourself with. Thisis the same IGA that has gone out of it's way the past few years to try and destroy all credibility that windshield repair has.

[mafsu]

I have read two different stories now where the IGA will be willing to settle out of court. I tried to give them some slack, but if they do then this lawsuit smells of a stunt to me. I'm sure their membership has grown as almost all independent glass shops feel slighted by safelite. If they are offered money by
safelite will they redistribrute it amongst their members? Don't count on it.