No. 5-99-0830 IN THE APPELLATE COURT OF ... - Appellate.net

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OEM parts. R. 11133; PX 4974. All of these savings were “passed directly and completely to policyholders in the form of lower rates and premiums.” R. 11047-48. State Farm policyholders saved as much as $1 billion more during that period because the use of non- OEM parts by State Farm and other insurers created competitive pressures on car companies to reduce OEM prices, thereby further reducing repair costs. R. 11148. The non-OEM replacement parts at issue in this case (referred to as “crash” parts because they typically are replaced due to damage in a crash rather than mechanical failure) are sheet metal and plastic parts that hang on the outer shell of the car. Most of these parts are cosmetic — essentially the “skin” of the car. R. 8297, 9775. The circuit court defined non-OEM crash parts as: (1) fenders, (2) hoods, (3) doors, (4) deck lids, (5) luggage lid panels, (6) quarter panels, (7) rear outer panels, (8) front end panels, (9) header panels, (10) filler panels, (11) door shells, (12) pickup truck beds, box sides and tailgates, (13) radiator grill support panels, (14) grills, (15) head lamp mounting panels, brackets, housing, lenses and doors, (16) tail lamp mounting panels, brackets, housing, and lenses, (17) outer body moldings, (18) door body side moldings, (19) front wheel open moldings, (20) side moldings, (21) front and rear fascias, (22) outer panels, mounting brackets, supports and surrounds, (23) bumpers, excluding chrome bumpers, (24) bumper covers, face bars, and (25) bumper brackets and supports. A. 57-59. These 25 categories include approximately 33,000 distinct types of parts made by scores of different manufacturers for different makes and models of vehicles during the 10½-year class period. R. 11342-46. 2. Contract Language. This case involves a number of different policy forms containing varying language. Some of the policies provided that State Farm would “pay to repair or replace the property or part with like kind and quality.” See, e.g., PX 1200-1 at tab 29 p. 16. Most policies required State Farm to pay for the restoration of the insured vehicle -4-
to its “pre-loss condition.” DX 1244 at 16. Most of the policies also expressly provided that State Farm could meet that obligation by specifying non-OEM repair parts: We will include in the estimate parts sufficient to restore a vehicle to its pre-loss condition. You agree with us that such parts may include either parts furnished by the vehicle’s manufacturer or parts from other sources including non-original equipment manufacturers. Id. (emphasis added). Melding the “pre-loss condition” and “like kind and quality” language from different policies, the circuit court instructed the jury at the start and close of the case that “the State Farm policies and insurance contracts allow State Farm to specify [non-OEM parts] . . . so long as the crash parts are of like kind and quality which restore the damaged vehicle to its pre-loss condition.” R. 4426; A. 59-60. The court defined “pre-loss condition” as the “condition of the vehicle immediately before the time it is damaged.” A. 60. The court did not mention policies purchased by class members in five states that did not use either the “pre-loss condition” or the “like kind and quality” language, PX 1200-1 at tabs 23, 53-56, and barred State Farm from introducing any “evidence regarding differences in State Farm’s contractual obligations towards members of the class.” C. 28970; see also C. 28980. 3. Varying State Regulations. Like other insurance practices, the specification of non-OEM parts is not regulated on a uniform, national level. Instead, it is regulated by each state’s department of insurance under laws and regulations that vary from state to state. <strong>No</strong> state bars specification of non-OEM parts, and most expressly permit it subject to regulation. Thirty states regulate insurers’ disclosures regarding non-OEM parts, usually requiring -5-
Page 1 and 2: No. 5-99-0830 IN THE APPELLATE COUR
Page 3 and 4: Charles Hester Enters. v. Illinois
Page 5 and 6: In re Fibreboard Corp., 893 F.2d 70
Page 7 and 8: State v. Piedmont Funding Corp., 38
Page 9 and 10: Hansberry v. Lee, 311 U.S. 32 (1940
Page 11 and 12: 1. Plaintiffs’ Body Shop Witnesse
Page 13 and 14: People v. Clayton, 302 Ill.App.3d 2
Page 15 and 16: VPHI, Inc. v. National Educ. Traini
Page 17 and 18: Okada v. MGIC Indem. Corp., 823 F.2
Page 19 and 20: Zekman v. Direct Am. Marketers, Inc
Page 21 and 22: Malooley v. Alice, 251 Ill.App.3d 5
Page 23 and 24: NATURE OF THE CASE This is an appea
Page 25: STATUTES INVOLVED Relevant portions
Page 29 and 30: OEM parts. 5/ At least two states
Page 31 and 32: paid the difference in cost out of
Page 33 and 34: epair estimate specified only OEM p
Page 35 and 36: potential class members whose names
Page 37 and 38: member’s vehicle other than those
Page 39 and 40: William Anderton, who had previousl
Page 41 and 42: categorically inferior and, in fact
Page 43 and 44: specified on their repair estimates
Page 45 and 46: Second, plaintiffs sought “instal
Page 47 and 48: parts] are inferior.” R. 12539 (
Page 49 and 50: had an adequate remedy at law if St
Page 51 and 52: loss condition. Instead of requirin
Page 53 and 54: ARGUMENT I. Class Certification Vio
Page 55 and 56: members.” Slimack v. Country Life
Page 57 and 58: of evidence State Farm would be ent
Page 59 and 60: that are incongruous with the effic
Page 61 and 62: fenders to its pre-loss condition.
Page 63 and 64: a result of Allstate’s specificat
Page 65 and 66: insurance regulators and consumer a
Page 67 and 68: have been the overwhelming predomin
Page 69 and 70: some class members and the issue of
Page 71 and 72: not sooner, that plaintiffs could n
Page 73 and 74: explained above, class members who
Page 75 and 76: Even if the court had been right in
Page 77 and 78:
value” of “parts at the time of
Page 79 and 80:
page 7, supra. All of these statute
Page 81 and 82:
(7th Cir. 1995) (decertifying class
Page 83 and 84:
As the circuit court itself recogni
Page 85 and 86:
the same shortcut, arguing — just
Page 87 and 88:
epresentatives who appeared at tria
Page 89 and 90:
— was injured by the alleged dece
Page 91 and 92:
Litig., 182 F.R.D. at 225. Basic fa
Page 93 and 94:
Meineke’s continued financial via
Page 95 and 96:
this decision, plaintiffs were excu
Page 97 and 98:
corresponding OEM part. R. 7169. In
Page 99 and 100:
Mathur’s testimony was particular
Page 101 and 102:
end of the day, Mathur conceded tha
Page 103 and 104:
Zimny, 256 Ill.App.3d 386, 390-91 (
Page 105 and 106:
the jury was focused on the wrong i
Page 107 and 108:
to its pre-loss condition.” R. 12
Page 109 and 110:
quality of non-OEM parts. See Baltu
Page 111 and 112:
which is not surprising because the
Page 113 and 114:
In this case, plaintiffs’ experts
Page 115 and 116:
Bender could not swear that the non
Page 117 and 118:
OEM part construction “had some d
Page 119 and 120:
theory, even non-OEM parts that are
Page 121 and 122:
of his training or expertise”). P
Page 123 and 124:
eflected a policy of “discriminat
Page 125 and 126:
“speak up for justice.” R. 1301
Page 127 and 128:
12984-85. The perversion of ostensi
Page 129 and 130:
Polywheels company makes both the O
Page 131 and 132:
parts — was simply a made-for-lit
Page 133 and 134:
In contrast, each of the 47 other s
Page 135 and 136:
occurred outside Illinois. 51/ In t
Page 137 and 138:
laws of the State where the policy
Page 139 and 140:
This Court should follow the weight
Page 141 and 142:
other states, Illinois cannot apply
Page 143 and 144:
state’s law when it is not within
Page 145 and 146:
headquartered in Michigan); Endo, 1
Page 147 and 148:
for this Court to alter that author
Page 149 and 150:
y using parts of like kind and qual
Page 151 and 152:
plaintiffs’ failure to identify a
Page 153 and 154:
percentage of the class (New York a
Page 155 and 156:
committing fraud: if all non-OEM pa
Page 157 and 158:
specification damages they had soug
Page 159 and 160:
A. It Is Unconstitutional To Punish
Page 161 and 162:
that will subject him to punishment
Page 163 and 164:
fact benefitted from access to non-
Page 165 and 166:
deterrence and therefore must be va
Page 167 and 168:
517 U.S. at 576. This case is not i
Page 169 and 170:
either higher premiums or the incre
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