Aftermarket auto parts lawsuits struck down
Aftermarket parts have been cemented as just as good as original replacement parts, and often cheaper, by three state courts.
Insurance companies were victorious when class action lawsuits accusing the insurers of improperly authorizing the use of non-original manufacturer parts to repair vehicles were struck down.
Three separate class-action lawsuits in Ohio, Washington and Florida were overturned or dismissed. In each of the lawsuits, policyholders accused insurance companies of violating the terms of their policies by authorizing the use of aftermarket parts, rather than parts from the original equipment manufacturer (OEM).
The courts ruled the policyholders failed to meet the requirements for class-action status under state laws. The courts also ruled there were other methods available for the policyholders to resolve their disputes with their insurance companies.
“All three cases signal important victories for insurance companies and consumers in a continuing legal battle regarding the use of aftermarket crash parts,” said Robert Hurns, counsel of the National Association of Independent Insurers (NAII). “Aftermarket parts are just as safe and significantly less expensive than parts made by a car’s original manufacturer. Using aftermarket parts is an effective way to minimize costs and keep insurance rates low.”
The Florida case
A judge in Dade County, Florida ruled against the plaintiffs in a lawsuit filed against the United Automobile Insurance Company. The plaintiffs claim United violated the terms of its auto insurance policies, by authorizing the use of aftermarket parts for repairs. The lawsuit contended aftermarket parts are inferior to OEM parts. The court ruled class-action certification is only appropriate if non-OEM parts can never be of “like, kind, and quality” to OEM parts. The judge also said it “is of the belief that such proposition cannot be proven given that this country’s free market economy relies heavily on the ability to manufacture and sell non-original or imitation items, such as generic drugs.”
The Ohio case
The Ohio Court of Appeals upheld the denial of nationwide class certification in a non-OEM parts lawsuit filed by policyholders against Progressive Insurance. The appellate court stated each policyholder’s allegations must be reviewed on its own merits to determine whether OEM or non-OEM parts were actually used in the repair, and whether the repairs were sufficient in returning the vehicle to its “pre-loss condition.”
The appellate court rejected the plaintiff’s allegation that non-OEM parts are inherently not of “like, kind and quality.” In addition, specific language in Progressive policies authorized the use of non-OEM parts to restore vehicles to pre-loss condition.
“The Ohio case as a class-action suit would be unmanageable as the suit involved different facts for each participant,” Hurns said. “The case failed the basic requirement under Ohio law to quality as class-action status since a high-degree of commonality does not exist among the class members.”
The Washington case
Plaintiffs suing USAA Casualty Insurance for using aftermarket automobile parts in repairing damaged automobiles were also denied class-action status. The Washington-state Court of Appeals denied the plaintiffs’ argument that USAA’s use of non-OEM parts was a breach of contract and a violation of Washington’s trade-practices law.
Aftermarket parts save money
The Insurance Information Institute (III) claims there is often little or no difference between aftermarket and OEM parts, except for the price. III points out a certification process assures the quality of aftermarket parts. The Certified Automotive Parts Association (CAPA) was established in 1987 through the efforts of the Auto Body Parts Association (ABPA), which was anxious to improve the quality of and the public’s confidence in aftermarket parts. Although CAPA receives a great deal of funding from the insurance industry, collision repair experts provide advice and have seats on the CAPA Board of Directors.
The CAPA Certification Program is a multi-step program. It includes a detailed review and inspection of a participant’s factory and manufacturing processes, followed by an analysis conducted by an independent testing laboratory.
III claims certified aftermarket parts are subject to random inspection by CAPA to ensure quality standards continue to be met. III recommends if you are concerned about the use of aftermarket parts, ask the repair shop if the parts are OEM or CAPA certified. If the repair shop uses CAPA parts, the III recommends asking to see the certification.