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Guest columnist wants to know: who is Quin Hillyer and why is he on the editorial Staff of the Advocate newspapers?

May 12, 2014 by tomaswell

©May 12, 2014

Stephen Winham

 

When The Advocate first started running Quin Hillyer’s columns, I assumed they were syndicated. I figured it was okay to run his pieces occasionally so we could be exposed to the far right agenda without having to actually access far right sources. I was dismayed when I realized he is billed as a member of the Advocate editorial staff and writes these columns specifically for its readers in Baton Rouge and New Orleans.

I thought the Advocate’s editorial staff and syndicated columnists already presented a fairly good philosophical balance including conservatives, liberals and moderates. I viewed it as slightly skewed toward conservatism, but that was okay. With the addition of Hillyer, the paper’s editorial posture took a hard right turn.

Among other things, I wondered if his inclusion was intended as a direct counterpoint to James Gill. In that regard, it is interesting that The Advocate has recently published 2 readers’ letters criticizing the presence of James Gill on the editorial staff.   NONE critical of Quin Hillyer have seen the letters page. Surely, at least two people have submitted printable letters critical of Hillyer. Heck, I sent in two. And I know more than a few other people who find Mr. Hillyer’s columns offensive.

Hillyer’s May 11, 2014, column is emblematic of why I object to his presence as a regular columnist. It fans the flames of hostility toward our President while unabashedly cheerleading for the policies of our Governor. Expressions of opinion are one thing. Hate-mongering, coupled with views so distorted as to bridge on prevarication, are something else. Columns like his are better suited to blogs like The Hayride and other venues that make no effort to be balanced in any way.

James Gill was born in the United Kingdom, is a graduate of Liverpool University and wrote for the Times-Picayune in New Orleans before joining The Advocate editorial staff in May 2013. He is currently one of 10 finalists for the Molly National Journalism Prize, established by The Texas Observer to recognize works that focus on civil liberties and social justice. The winner will be announced June 3. The prize is named after the late Molly Ivins whose columns once graced The Advocate’s editorial pages. Gill’s columns are noted for lampooning politicians and often take a humorous turn, as was the case with Molly Ivins’ syndicated columns.   Few would consider Gill’s columns mean-spirited or his views extremist, no matter how liberal they are.

Quin Hillyer is a graduate of Georgetown University (A.B. in government and theology, 1987) and a recipient of the Carmage Walls Commentary Award from the Southern Newspaper Publishers Association and the Green Eyeshade Award for commentary from the Society of Professional Journalists (formerly Sigma Delta Chi). He was born and raised in New Orleans, but now lives in Mobile, Alabama.

He worked for the Times-Picayune before joining Bob Livingston’s gubernatorial campaign staff in 1987. As Chair of the Louisiana Young Republicans in the late 80s and early 90s, he was a member of the bipartisan Louisiana Coalition Against Racism and Nazism, a ten member group actively involved in bringing forth facts to repudiate the legitimacy of David Duke’s claims to have abandoned his white supremacy agenda. He was briefly managing editor of New Orleans Gambit magazine before joining Congressman Livingston’s staff in 1991 and becoming his press secretary in 1995.

Hillyer returned to private sector journalism in 1997, working for the Arkansas Democrat-Gazette, theMobile Register, The American Spectator(with whom he is still affiliated), The Washington Examiner, The Washington Times and the National Review (with whom is still affiliated) and writing for others. He ran for and finished 4th in the November 2013 Republican primary election for the United States House of Representatives from Alabama’s 1st congressional district.

While his background has significant depth and is consistent with conservative views, extremism would not seem its logical product. One would expect commentary more along the lines of William F. Buckley, Jr. than Rush Limbaugh, but reading his columns is often like listening to Limbaugh. Fiery political evangelism is as good a description as any.

As far as the columns he has written for publication in the Advocate newspapers so far, most share a singular theme. Ten of his columns are archived at The Advocate website. Review them and you will find that seven seem to have little purpose other than promotion of Governor Jindal’s policies and future aspirations, including one completely unambiguous in its intent titled, “Jindal shows clear national appeal” (March 29, 2014).

In his very first Advocate column (March 21, 2014), he managed to attack the rest of the Advocate editorial staff and the President while promoting Governor Jindal. That one is titled, “Gov. Jindal was justified in jamming President Obama”. His most recent column, mentioned above, and his April 26 columns are refrains of this theme. His April 8 column supports the governor’s use of coastal wetlands funding to “bridge the gap” in the budget. His April 19 and May 3 columns support the governor’s position that the lawsuit by the Southeast Louisiana Flood Protection Authority is illegitimate.

A cynic might believe Mr. Hillyer was brought on board to promote Governor Jindal’s campaign for President rather than to just provide a strong conservative voice for The Advocate. If that is true, shouldn’t the publisher clearly state his support for the Governor and his political aspirations? Rolfe McCollister (Greater Baton Rouge Business Report publisher) is certainly not unbiased, but he is also not coy about his support for the governor’s political future. If the Advocate is to become the voice of Bobby Jindal, let’s at least be honest about it.

Posted in Guest Columnist | 14 Comments »

Jindal critical of Washington in speeches while the 44% of state budget in federal funds ranks second highest in nation

May 11, 2014 by tomaswell

When Louisiana’s favorite Koch-head Bobby Jindal rejected the Medicaid expansion provided under the Affordable Care Act (ACA), aka Obamacare, he trotted Kathy Kliebert, his third secretary of the Department of Health and Hospitals (DHH) before the legislature to proclaim that the state would have to pay $1.7 billion over a decade for the expansion.

The nonpartisan Legislative Fiscal Officer, however, cut that 10-year estimate by half: $886 million, pointing out that in the first three years, the expansion would actually reduce state spending.

Never mind that his refusal to accept the $16 billion in new Medicaid money would provide health care for nearly a quarter-million Louisiana residents currently without medical coverage.

Never mind that his decision meant that Louisiana residents, like those in the other 20 or so state that rejected the Medicaid expansion, would be paying for its implementation in other states.

Never mind that the $280 million Medicaid expansion would cost the state in 2022 pales in comparison to the $2.2 billion the state is projected to spend on incentive payments to attract private business to the state—some of which would produce no new jobs or at best, low-paying jobs.

Never mind also the $80.6 million Broadband Technology Opportunities Program (BTOP) federal grant to provide high speed broadband internet to rural areas of Louisiana—also rejected by Jindal in lockstep compliance with the wishes of the Koch brothers-run American Legislative Exchange Council (ALEC) agenda.

And never mind the fact that despite Jindal’s disdain for accepting federal funds (remember how he, like Queen Gertrude in Hamlet, protested too much about accepting stimulus funds from the 2009 American Recovery and Reinvestment Act and then helicoptered to all those Protestant churches in North Louisiana to hand out the checks?), Louisiana still ranks as the fourth most dependent on the federal government.

That’s correct; Louisiana is still co-dependent on the federal teat and if Jindal, despite all his anti-government puffery, dared slicing and dicing other federal largesse from an already stressed state budget, he may well have open insurrection on his hands.

Apparently the only area where he can safely reject federal funding to satisfy the far right—especially his benefactors the Koch Brothers, Charles and Bill—is in areas where only the poor and disenfranchised—those unable to fight back—are impacted.

Wall Street Cheat Sheet, an online news service with 11 million monthly readers, notes that despite the ratcheted-up rhetoric between red and blue states, it is the red states (Republican) that are more likely to receive help from the federal government—a fact that helps them keep local tax bills lower and unimaginative politicians like Jindal in power.

In computing its rankings of states’ dependency on federal government, the Cheat Sheet report took three factors into account:

  • Return on taxes paid to the federal government. This statistic reflects how many dollars in federal funding state taxpayers receive for every dollar in federal income taxes paid.
  • Federal funding as a percentage of state revenue. This metric tells what percentage of a state’s annual revenue is provided by the federal government. Without federal dollars, states would have to look elsewhere for revenue, most likely via tax increases, or cut services. The steady influx of federal funds allows executives like Jindal to eschew tax increases while at the same time publicly scorn federal money.
  • Number of federal employees per capita. This illustrates the federal government’s role as a nationwide employer and reveals the percentage of a state’s workforce that owes its livelihood to Washington.

Red states are known for imposing lower taxes than blue states, but it appears they are able to do so because they are more dependent on federal funding, the report says.

The only states more dependent than Louisiana on Washington are (in order) Alabama, New Mexico and Mississippi.

Louisiana’s return on taxpayer investment, for example, if $3.35, meaning the state receives $3.35 for every dollar it sends to Washington. That’s the fourth-highest return in the nation, behind South Carolina ($7.87), North Dakota ($5.31) and Florida ($4.57). That compares to Delaware’s 50 cents return for every dollar paid to Washington and the 56 cents of Illinois and Minnesota.

The 6.76 of its citizens employed by the federal government ranked 14th lowest in the nation.

But that positive was more than offset by the negative metric showing that 44.26 percent of Louisiana’s state budget is funded by federal dollars, second highest only to Mississippi’s 45.84 percent.

That’s correct: the anti-federal government, anti-Washington, more-is-less governor, who preaches the mantra of less government is the best government, serves as chief executive of the state that ranks second in the nation in its voracious appetite for federal dollars.

A quick examination of the bigger line items in the state’s current General Fund and Capital Outlay budgets (which will expire on June 30) is quite revealing—something a little north of $11 billion:

FEDERAL FUNDS

General Appropriations (HB1: FY2013-2014)

Agency:

  • Governor’s office of Coastal Activities: $1,163,604;
  • (DOA) Community Development Block Grant: $1,481,607,780;
  • Coastal Protection & Restoration Authority: $64,470,311;
  • Gov. Off. Homeland Security & Emergency Preparedness ; $1,275,010,482;
  • Department of Military Affairs: $36,558,254;
  • LA. Commission on Law Enforcement and the Administration of Criminal Justice: $21,430,530;
  • Office of Elderly Affairs: $22,318,669;
  • Louisiana War Veterans Home: $6,837,674;
  • State Veterans Cemetery: $769,767;
  • Northeast Louisiana War Veterans Home: $6,632,146;
  • Southwest Louisiana War Veterans Home: $6,725,639;
  • Northwest Louisiana War Veterans Home: $7,015,855;
  • Southeast Louisiana War Veterans Home: $6,301,319;
  • Criminal Law and Medicaid Fraud: $5,989,344;
  • Gaming: $1,375,911;
  • Lt. Governor: $5,509,255;
  • Agriculture & Forestry: $7,716,818, $4,181,260;
  • Office of Business Development (Business Incentives Program): $4,739,367;
  • State Library: $3,099,513;
  • State Parks: $1,371,487;
  • Cultural Development: $2,059,575;
  • DOTD (Aviation): $26,761,411;
  • Pardons & Parole: $1,480,697;
  • Office of State Police: $10,252,081;
  • Office of Motor Vehicles: $1,090,750;
  • Highway Safety Commission; $34,585,088;
  • Office of Juvenile Justice: $891,796;
  • Developmental Disabilities Council: $1,355,052;
  • Medical Vendor Administration (Medicaid/Medicare): $228,242,058;
  • Medical Vendor Administration (Medicare): $4,794,910,040, $185,066,345;
  • Other Medicaid, Medicare funds: $185,066,345;
  • Office of Public Health: $237,866,451;
  • Office of Behavioral Health: $36,185,361;
  • Disaster Crisis Counseling Services: $2,320,529;
  • Office for Citizens with Developmental Disabilities: $6,376,792;
  • Community and Family Services: $598,538,224;
  • Department of Natural Resources: $27,233,004;
  • Office of Conservation: $1,752,796;
  • Office of Coastal Management: $86,206,980;
  • Office of Charitable Gaming: $883,007;
  • DEQ: $4,913,837;
  • Office of Environmental Compliance: $10,094,810;
  • Office of Environmental Services: $4,572,895;
  • Office of Management and Finance: $3,207,858;
  • Department of Wildlife and Fisheries: $2,781,838;
  • Office of Wildlife: $17,526,411;
  • Office of Fisheries: $50,914,428;
  • Office of Workers Compensation Administration: $165,174,992;
  • Board of Regents: $13,363,873;
  • Louisiana Universities Marine Consortium: $4,034,667;
  • Office of Student Financial Assistance: $67,637,166;
  • Louisiana State University Board of Supervisors: $29,713,934;
  • Huey P. Long Hospital: $945,558;
  • Lallie Kemp Regional Medical Center: $4,800,336;
  • W.O. Moss Regional Medical Center: $7,937,503;
  • Washington-St. Tammany Regional Medical Center: $5,481,167;
  • Southern University Board of Supervisors: $3,654,209;
  • Department of Education: $53,743,617, $1,062,669,284, $4,163,877;

Executive Department:

  • Louisiana Youth for Excellence: $877,185;
  • Juvenile Legal Representation: $328,573;
  • Education Programs: $18,972,982;
  • Medical Vendor Administration: $87,191,390;
  • Payments to Private Providers/Services for Medicaid Eligible Children: $844,368,786;
  • DHH: $148,223,040;
  • Office of Children and Family Services: $426,096,064;
  • Louisiana Workforce Commission: $17,465,074;
  • LSU System: $1,572,622;
  • Department of Education: $1,120,576,778;
  • Community Development Block Grant: $1,828,666,994;
  • Coastal Protection and Restoration: $6,400,000;
  • GOHSEP: $1,275,239,610;
  • Education: $19,072,519;
  • Military Affairs: $17,184,491;
  • Commission on Law Enforcement/administration Criminal Justice: $25,083,035;
  • Governor’s Office of Elderly Affairs: $812,222;
  • Title III, V, VII and NSIP: $21,571,923

Capital Outlay (HB2):

  • Department of Military Affairs: $7,389,000;
  • Department of Veterans Affairs: $6,849,462;
  • DOTD: $30,000,000;
  • Wildlife and Fisheries: $1,660,000;
  • St. Helena Court House: $2,680,000;

Posted in Budget, Governor's Office, Legislature, Legislators, Revenue, Taxes | 4 Comments »

Jindal, aka the Petulant Paranoid, teagues yet another state official for (gasp!) having opinion, possession of integrity

May 8, 2014 by tomaswell

Bobby Jindal the Petulant Paranoid has teagued yet another high-ranking state official, LouisianaVoice has learned.

This time the victim is said to have been only a few months from retirement.

The governor who publicly advocates openness, accountability and transparency everywhere in the U.S. except Louisiana, has shown on repeated occasions that he cannot stomach any difference of opinion among state employees at any level, classified or unclassified—or even from legislators.

His paranoia rose (or sank, depending upon one’s preferred descriptive verb) to a new level on Thursday, however, when he fired Gary Crockett, former administrator at Huey P. Long Medical Center in Pineville just two days after the House Health and Welfare Committee voted 10-8 to close the facility.

Crockett last year tried to keep administration-ordered layoffs at the hospital to a minimum but was forced to make deep cuts in personnel.

The irony of Jindal’s ongoing purge, aka dissident cleansing is that Crockett had already left his $144,650-a-year position at Huey P. Long because of his differences with the administration. He took a position at another state medical facility where he thought—incorrectly, it turns out—he could ride out the rest of his career..

Word out of the State Capitol is that Jindal felt that Crockett may have been providing information to legislators opposed to the closure of the hospital as part of Jindal’s flawed state hospital privatization plan that less than a week ago was shot down by the Centers for Medicare and Medicaid Services because of the creative but prohibited method of financing the privatization plans.

The federal action threw the state budget into chaos literally only days before the budget was to go to the House for debate on Thursday (today, May 8) because of a $400 million hole it blew in the state spending document.

Without going into specific names, suffice it to say that heads roll whenever a discouraging word is heard in Jindal’s presence and now the latest is what is becoming a very long line of teagueites, so named in honor of former Office of Group Benefits Director Tommy Teague, fired on April 15, 2011, and his wife Melody, fired about six months earlier as a grants reviewer but later reinstated.

One recent Teagueite, a friend of Crockett who must remain nameless, said of Jindal’s latest action, “There’s no other way to say it except to say the man is evil.”

Attempts by LouisianaVoice to reach Crockett Thursday for comment were unsuccessful.

 

 

Posted in Contract, Contracts, DHH, Governor's Office, Health Care, Legislature, Legislators, Privatization, Teague | 14 Comments »

Insurers’ auto repair tactics only part of problem; Jindal old firm McKinsey Co. coached Katrina on claims delays, denials

May 8, 2014 by tomaswell

The brewing legal battle between Louisiana automobile body shops, represented by the Louisiana Collision Industry Association (LaCIA), and a couple of dozen insurance companies has far reaching implications that go much further than just the current dispute between the LaCIA and the insurance companies, according to information obtained by LouisianaVoice.

Efforts by the automobile insurance companies, led by industry giants State Farm, Allstate, Progressive and GEICO, date back to the 1990s and continued through Hurricanes Katrina and Sandy and now the companies have moved into what one LouisianaVoice reader calls managed care for the auto repair business by the insurance industry.

Along the way, the insurance companies received invaluable assistance and coaching from McKinsey and Co., the company for whom Gov. Jindal worked for several months in his only private sector gig before entering public service. The advice provided by McKinsey came at a steep price but in the end, it helped the insurance companies to reap record profits, even in the wake of Katrina, one of the worst hurricanes in terms of dollar cost to ever strike the U.S. mainland—at the expense of thousands of homeowners in New Orleans, New York and New Jersey and the Mississippi coast.

Between 1992 through 1997, Allstate executives and their consultants from McKinsey met at the Allstate’s Northbrook, Ill., campus, to develop a complete overhaul of Allstate’s claims system. What emerged was the now infamous policy of “from good hands to boxing gloves” method of dealing with policy holders/claimants who refused the company’s initial settlement offers, which typically were far below replacement costs.

In 2003, the largest wildfire in California history destroyed 2,232 homes, including Julie Tunnel’s $300,000 home. Her insurance adjuster, from State Farm, offered her $184,000 as a cost of rebuilding. http://www.bloomberg.com/apps/news?pid=nw&pname=mm_0907_story1.html

That “deny, delay, defend” strategy was revealed in its stark nakedness when it was learned that McKinsey was coaching Allstate and State Farm on methods to delay and/or deny claims of homeowners in the New Orleans and north shore areas and along the Mississippi Gulf Coast who suffered devastating property losses during Hurricane Katrina. One of those victimized by the less-than-good-faith-dealings was none other than then U.S. Sen. Trent Lott of Mississippi.

It was in the wake of $4.2 billion in claims stemming from 1989’s Hurricane Hugo which battered the Carolinas that Allstate first sought the services of McKinsey and State Farm quickly followed suit. McKinsey subsequently generated 13,000 pages of documents, including PowerPoint slides in developing the strategy for higher profits which would quickly give the two giants the distinction of ranking among the worst insurance companies in America. Those rankings placed Allstate at the top of the worst list and State Farm fourth. http://www.justice.org/cps/rde/justice/hs.xsl/2323.htm

With Allstate’s CEO proclaiming that the company’s mission was “to earn a return for our shareholders” (as opposed say, to such a radical philosophy as customer service, good faith settlements and claimant satisfaction), Good Hands adjusters worked under strict guidelines to protect the bottom line or risk losing their jobs. http://stlouis.legalexaminer.com/automobile-accidents/allstate-you-are-not-in-good-hands/

So by virtue of its adjusters’ adoption of the fundamental mantra of “Allstate gains—others must lose,” the company reaped $4.6 billion in profits in 2007, even as it was still denying, delaying and defending against record property loss claims from Katrina just two years before and Hurricanes Gustav and Ike in 2006. http://www.huffingtonpost.com/2011/12/13/insurance-claim-delays-industry-profits-allstate-mckinsey-company_n_1139102.html

Almost unperceptively to all but auto repair shops and their customers, the insurance companies also embarked upon a similar ploy to increase profits in the area of auto insurance while at the same time forcing auto body shops into accepting considerably lower profits or to use less desirable after-market, or generic, parts.

New Jersey auto repair shops have sharply criticized State Farm’s cozy relationship with a company called Parts Trader, an online procurement program out of Illinois. Spokesmen for auto repair associations in both New Jersey and Mississippi claim the forced implementation of the Parts Trader program is in direct violation of a 1963 Consent Decree and is State Farm’s way “to get back into the aftermarket parts business and not have their handprint on it.”

“The profit we make on our parts goes to offset the insufficient labor rate,” said Jeff McDowell, president of the New Jersey chapter of the Alliance of Automotive Service Providers. “Materials go up, and we don’t get an increase.” http://onlinedigeditions.com/article/Partstrader+In+New+Jersey%3F++Not+Without+A+Fight!+/1519060/0/article.html

In October of 1999, CBS News reported that an Illinois judge awarded $730 million to State Farm policyholders whose vehicles were repaired with after-market parts. It was the second such decision within a week. Just days before, a jury awarded $456 million in another case involving knockoff replacement parts. http://www.cbsnews.com/news/state-farm-loses-big-in-court/

Immediately following the two adverse decisions, State Farm announced it would temporarily suspend the use of the after-market parts in favor of parts made by auto manufacturers—the moral equivalent of a politician’s apologizing for his inexcusable behavior only after being caught in an extra-marital affair.

The generic parts have come under criticism from auto body shops as being cheap, flimsy, imitation parts that don’t fit and which have poor finishes, don’t hold paint, have little, if any, corrosion protection and which lack structural integrity.

But in the interest of their own bottom line, the insurance companies were perfectly willing to foist these parts upon their unsuspecting policyholders who simply grit their teeth and write the checks whenever premiums increase.

But with the filing of lawsuits last August in Mississippi http://partschecklive.files.wordpress.com/2013/10/partstrader-ms.pdf and in Florida here and Indiana here earlier this year by auto repair shops—and the expected filing in Louisiana—the repair shops are teaming up to present a united front against yet another profit-driven tactic by the insurance companies: forcing shops to either reduce their hourly labor charges or risk having business directed to other shops by the insurers.

The Society of Collision Repair Specialists (SCRS) issued a strong statement in opposition to the practice of the insurers last September in which it said the organization “takes exception to business mandates that property and casualty insurers impose upon collision repair businesses. http://www.fenderbender.com/FenderBender/September-2013/SCRS-Releases-Statement-About-State-Farm-PartsTrader-Lawsuit/

Apparently the insurance companies have no problem with the concept that auto repair shops should be prohibited from making a fair profit—especially if benefits their own shareholders.

Complaints to the Louisiana Department of Insurance, meanwhile, have fallen upon deaf ears, according to several shop owners.

Small wonder. As might be expected, Insurance Commissioner Jim Donelon derives the bulk of his campaign contributions from the companies his office regulates. Who else, after all, would be motivated to contribute to the campaign to elect an insurance commissioner?

But even Gov. Bobby Jindal has benefitted from the generosity of the insurance industry to the tune of $119,000 since his initial run for governor in 2003. Of that amount, at least $15,000 came from three companies named as defendants in the Florida and Indiana lawsuits: $5,000 each from State Farm, Allstate, and Zurich American.

Donelon, who would be expected to fair even better from the insurance industry, did. He received $30,000 from defendants in the Indiana and Florida lawsuits—Liberty Mutual ($5,000), Progressive ($6,500), Allstate ($2,500), GEICO ($11,000), State Farm ($2,500), Security National ($1,500), and Travelers ($1,000).

Overall, Donelon has received more than $675,000 from insurance companies just since 2006, the year he took office.

Attorney General investigator Randy Ishee has been looking into the practice, called program agreements, whereby the insurance companies are demanding that repair shops enter into agreements to lower their hourly rates or be faced with blackballing by the insurers. One representative for the repair shops said a State Farm representative became belligerent while making his demands.

Alysia Hanks, executive director of the Louisiana Collision Industry Association (LaCIA), said Ishee’s probe has developed so much information that he found it necessary to recruit a second investigator to assist him.

LouisianaVoice was told that Ishee had communicated in writing with the Department of Insurance on at least two occasions concerning the program agreements but when a public records request for those communications was made of the Insurance Department, we were told the department was in possession of no such documents.

Posted in Attorney General, Ethics, Governor's Office, Lawsuits | 3 Comments »

Unlike a good neighbor, State Farm may be undermining choice of auto repair shops; same for the good hands folks

May 7, 2014 by tomaswell

Unlike a good neighbor, State Farm Insurance may be trying to undermine policyholders’ choices of who they want to perform their auto repairs.

And those Good Hands may not be so good, either.

Louisiana Attorney General Buddy Caldwell apparently is preparing to join other states, namely Indiana and Florida, in filing an antitrust lawsuit against State Farm and possibly other insurance companies for their attempts to artificially control and depress automotive damage repair labor rates by repair shops, according to information obtained by LouisianaVoice.

Caldwell’s office has been bombarded with complaints from automotive body shops that State Farm and other companies have attempted to get shops to sign “program agreements” with the insurance companies that would adversely impact profit margins of the repair shops. Those who refuse to sign the program agreements are removed from the insurance companies’ preferred lists, the complaints say, in effect, driving business away from those shops.

Attorneys in Florida and Indiana claim in their lawsuits that the insurance companies, particularly State Farm, have engaged in “an ongoing pattern and practice of coercion and of implied threats” to force lower hourly rates. “Failure to comply results in the insurance companies either “steering” customers away from the plaintiff’s businesses or, failing that, refusing to pay for certain repair procedures and/or charges.

By forcing the program agreements upon the shops, which count on insurance customers for 70 to 95 percent of their business, the shops’ profits are adversely affected but the shops have little choice but to comply.

While State Farm has been identified as the moving force behind the program agreements, other insurers follow State Farm’s lead, the Florida lawsuit claims, “The remaining defendants intentionally and by agreement and/or conscious parallel behavior, specifically advised the plaintiffs they will pay no more than State Farm pays for labor,” the lawsuit says, adding that the insurance companies have conducted no surveys of their own to determine market rates.

The Florida suit also claims that the insurance companies imply that the non-cooperating body shops perform inferior work. “When a repair shop is deemed noncompliant to the direct repair agreement, the insurer will tell its clients ‘a particular chosen shop is not on the preferred provider list,’ advising that quality issues have arisen with that particular ship, that complaints have been received about the shop from other consumers, that the shop charges more than any other shop in the area and these additional costs will have to be paid by the consumers, that repairs at the disfavored shop will take much longer than at other, preferred shops and the consumer will be responsible for rental car fees beyond a certain date, and that the defendant cannot guarantee the work of that shop as it can at other shops,” the Florida petition says.

Trying to control auto repair prices is one thing but doing it by spreading innuendo and outright falsehoods about the reputations of auto body shops and the quality of their work borders on outright libel.

The Florida lawsuit was filed by 20 auto repair shops on Feb. 24 in that state’s Middle District Federal Court in Orlando and names more than 40 companies as defendants. A&E Auto Body, Inc., is the lead plaintiff in the Florida action.

Fourteen Indiana repair shops, led by lead plaintiff the Indiana Autobody Association, followed Florida in filing suit on April 2 in the Southern District of U.S. District Court in Indianapolis and named as defendants 29 insurance companies but also allege similar issues with third-party administrators (TPAs) which handle glass claims for insurers.

“…The concessions demanded by insurers in exchange for remaining on the direct repair program were not balanced by the purported benefits,” the Indiana petition says. “The defendants, particularly State Farm, have utilized these agreements to exert control over the shops in a variety of manners, and well beyond the constraints imposed by an ordinary business agreement.”

The Indiana plaintiffs claim that failure or refusal by a shop “results in either removal from the DRP (direct repair program) agreements, combined with improper ‘steering’ of customers away from the plaintiff’s business, or simply punishment to decrease the number of customers utilizing the plaintiff’s services.”

The suit ways if a repair shop persists in efforts to raise labor rates, “State Farm takes one or more ‘corrective measures.’

“It (State Farm) will go into the individual shop’s survey responses and unilaterally and wrongfully alter the labor rate listed without the knowledge or consent of the shop and use this lowered rate to justify its determination of the ‘market rate.’ It will threaten to remove the shop from the direct repair program to coerce compliance,” the petition said, adding that State Farm will actually remove a shop from the DRP.

Both the Florida and Indiana lawsuits are seeking compensatory damages and Florida is asking the court to order that insurers cease the practice of steering. In Indiana, plaintiffs are seeking compensatory, punitive and treble damages.

Caldwell and Randy Ishee, an investigator for the attorney general’s office, will attend the next meeting of the Louisiana Collision Industry Association (LaCIA), scheduled for May 22 at the Hilton Garden Inn in Monroe at 6:30 p.m.

LaCIA Executive Director Alysia Hanks said the association has been in contact with Ishee, who she said “has knowledge of what our industry is going through. “He isn’t happy with what he has come across so far and last week in informed me that, due to the huge amount of information he is gathering, (the attorney general’s office) has brought in another investigator for our cases.”

Posted in Attorney General, Lawsuits | Tagged | 5 Comments »

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