WASHINGTON–The Supreme Court declined to review a Texas law that bars Allstate from buying any more auto repair facilities in the state.
Yesterday, without comment, the High Court rejected Allstate's challenge to a state law that bars the insurer from buying additional auto repair facilities and also restricts the company from participating in the running of 15 repair shops it owns in the state.
The law was enacted in 2003 after Allstate purchased Sterling Collision Centers in 2001, a move that gave the insurers nationwide entry into the automobile repair business.
In its request that the Supreme Court review the case, Allstate argued that the Texas law violates restrictions the Constitution places on state regulation of interstate commerce.
The state passed the law to protect smaller in-state collision repair companies from insurance industry competition.
"Texas in particular has legislatively shuttered its borders against interstate competition," Allstate said in its appeal. "This time, Texas targeted an intrinsically interstate initiative developed to improve the automobile accident repair business."
A U.S District Court in Texas rejected Allstate's challenge, however. The 5th U.S. Circuit Court of Appeals in New Orleans followed, saying the law was "based not on domicile but on business form" and didn't violate the Constitution.
In response to court's action Michael Siemienas, an Allstate spokesman said, "While we are disappointed that the Supreme Court declined to hear Allstate's challenge to Texas House bill 1131, we are continuing to provide exceptional service at the more than 60 Sterling shops countrywide, including the 15 we currently operate in Texas. Allstate supports customer choice in choosing a repair facility and we believe Sterling should be an option available to customers across the country."
(This story was updated at 11:18 a.m.)
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