Appeals Court Tosses $20B Auto Parts Lawsuit
A federal appeals court in Atlanta has dismissed a $20 billion class-action lawsuit that claimed major insurers violated U.S. antitrust law by mandating the use of generic replacement parts to repair damaged cars.
The 11th U.S. Circuit Court of Appeals, in rejecting the plaintiffs arguments in Gilchrist v. State Farm Mutual, found the suit involved the "business of insurance," which is exempt from federal antitrust law under the McCarran-Ferguson Act. Besides finding that it had no jurisdiction, the appeals court ruled that both the insurance industry in general, and the use of non-original equipment manufacturer parts in particular, are regulated by the states.
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