Trial Lawyers Versus Insurers: This Time It's Car Parts

Trial lawyers and insurance companies have had their political battles through the years: Prop. 64. Disability access lawsuits. Competing candidates in primary elections.

But this year’s legislative proxy fight between the two titans developed over a decidedly less high-brow issue: car parts.

AB 1200 would allow insurance companies to offer “truthful and nondeceptive information” about specific auto body shops to customers looking to get their dinged up cars fixed. The bill’s author, Assemblywoman Mary Hayashi, D-Hayward, says she’s just trying to give consumers more information. AB 1200 opponents, however, see the legislation as the insurance industry’s attempt to restore steering, the banned practice of guiding customers to an insurer’s preferred repair shop.

Who won the battle over AB 1200, after the jump.

After months of debate, AB 1200 finally passed out of the Legislature Wednesday night, but only after heavy lobbying persuaded a handful of Democratic legislators to change their votes to “aye.”

“I see the bill as an attempt by the insurance companies to create as big a loophole as they can so they can control the costs of repairing vehicles covered by their insurance plans,” said Edie Mermelstein, a Huntington Beach lawyer and expert on car repair legalities.

Contracts between insurers and body shops often limit payments for labor and parts, sometimes resulting in an inferior repair job, Mermelstein said.

“That’s really what it’s all about -- it’s price fixing,” she said.

In an Aug. 19 editorial in the San Francisco Chronicle, Hayashi accused insurance industry critics of spreading “disinformation” about her bill.

“These include trial lawyers who sometimes file questionable or frivolous lawsuits related to auto body shop repair,” Hayashi wrote.

On Aug. 24, AB 1200 failed by two votes in the state Senate. Less than two weeks later the bill reappeared in the Senate. This time it passed with a bare majority of 21 votes after two senators switched from “not voting” to “aye.” The bill faced a similar roadblock in the Assembly, forcing Hayashi to keep the roll open until two Democrats switched their votes at the last minute.

The bill now heads to the governor’s desk where it is expected to be signed into law.

-- Cheryl Miller

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