February 2013 • Volume 2, Number 1
TENNESSEE INSURANCE LEGAL NEWS EDITORIAL BOARD
John E. Anderson, Sr., Co-Editor
615.620.1735 • janderson@dickinsonwright.com
Autumn L. Gentry, Co-Editor
615.620.1755 • agentry@dickinsonwright.com
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AUTO REPAIR TRADE ASSOCIATION REQUESTS THAT DOJ
INVESTIGATE THE USE OF MOST FAVORED NATION CLAUSES BY
AUTO INSURERS
by James M. Burns, who is a member in Dickinson Wright’s Washington, D.C.
oce, and can be reached at 202.659.6945 or jmburns@dickinsonwright.com
Over the last several years, the use of most favored nation clauses by
health insurers has been the focus of signicant antitrust scrutiny,
with legislation being enacted in several states that prohibits the use
of such clauses in provider contracts and the DOJ Antitrust Division
taking action against the use of such clauses as well. Now, it appears
that the use of such clauses in other insurance contracts may be
beginning to attract attention as well.
Specically, the Automotive Service Association, a trade association
of independent automotive service and repair professionals, recently
sent a letter to the DOJ Antitrust Division urging the Antitrust Division
to examine the use of most favored nation clauses by auto insurers.
The association contends that the use of such clauses by national auto
insurers, particularly when coupled with direct repair arrangements
with other repair shops (typically those in an insurer’s “preferred”
network), impedes the ability of the association’s members to compete
for repair shop business from the insurers’ insureds. The association
further notes that, in its judgment, many of the potential concerns
about the use of MFN clauses raised at the FTC/Antitrust Division’s
MFN clause symposium in September apply in the auto repair industry
as well.
The association therefore urges the Antitrust Division to “continue to
pursue the MFN clause issue,” and requests that the DOJ agree to a
meeting with the association’s leadership to discuss how the use of
most favored nation clauses allegedly impedes competition in the
auto repair industry. Notably, however, most antitrust claims by
independent repair shops challenging the right of an insurer to utilize
a “preferred” network of repair shops, including the recent Harner v.
Allstate case in the Southern District of New York, have failed, with the
courts typically holding that the plainti could not allege antitrust
injury resulting from the insurers’ practices. Whether the Automobile
Service Association will have any better success in advocating its views
to the Antitrust Division, and if so, where it might lead, remains to be
seen. Stay tuned.
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