Erie To Appeal Crash-Parts Class Action

The lawsuit was initiated by Pennsylvania resident Brenda L. Foultz in February 2000 on behalf of herself and other similarly situated insureds.

Ms. Foultz claimed in her complaint that aftermarket replacement parts used by her auto insurer were not of the same quality as original equipment manufacturer parts.

This, said the complaint, violated the insurance policy which obliged Erie Insurance, based in Erie, Pa., to repair damaged auto parts with parts of "like quality and kind."

"I think there is a lot of myth about these parts," countered Erie Insurance's attorney, Jeffrey A. Less, of the Philadelphia law firm Bazelon, Less & Feldman.

"We disagree with the plaintiffs that there is anything wrong with the parts that have been used as the basis of any Erie Insurance estimates," he said.

Erie Insurance does not install, buy or sell parts –it merely prepares repair estimates, Mr. Less stressed.

He added that his client believes that the types of aftermarket parts its adjusters and appraisers are permitted to use are of like kind and quality to their OEM counterparts.

The lead attorney for the plaintiffs, Joseph F. Roda, of the Lancaster, Pa., law firm, Roda & Nast, said that Ms. Foultz's case was the type for which class certification was intended.

He said that, practically speaking, Ms. Foultz's claim –like those of the other members of the class –was individually "too small" to proceed in its own right.

Because these claims typically range only from three figures to the low four figures, they provide no incentive to attorneys to take on such cases against insurers, Mr. Roda noted.

Fortunately, a class action is appropriate when there is a common complaint affecting many people which can be efficiently decided in one proceeding rather than many and which is the only practical way to obtain relief, he said.

Judge Herron's order describes the class of plaintiffs as anyone in the United States insured under auto policies issued by Erie Insurance who made a claim no earlier than Feb. 2, 1994, for car repairs under the policy and whose car received non-OEM replacement parts.

Erie Insurance operates in 12 states that are all east of the Mississippi River.

Mr. Roda said that Erie Insurance has estimated that 100,000 to 500,000 automobile drivers could fall within the class definition.

The case is similar to one brought against State Farm that was filed in Illinois and won by the class of plaintiffs, Mr. Roda pointed out. The State Farm v. Avery case resulted in a $1 billion judgment against the insurer. It is now on appeal to the Illinois Supreme Court.

Mr. Roda said the next legal steps include notifying the class with a court-approved notice, which the attorneys are currently preparing, completing pretrial discovery and investigation and, if the case does not settle, proceeding to trial.

But Mr. Less believes the trial court "made several errors in law in certifying the class."

Therefore, he said he will likely seek an interlocutory appeal of the class certification order. This involves requesting permission to appeal from the Pennsylvania Superior Court. That first-level appellate court has the discretion to accept or reject an appeal in an ongoing case, he explained.

"Certification decisions are not final right up to the time of trial," Mr. Less noted.

This means that even if the Superior Court chooses not to allow the interlocutory appeal, Erie Insurance expects to file motions in the trial court to decertify the class of plaintiffs.

But even if the matter goes to trial, Mr. Less expressed confidence that Erie Insurance will prevail.