Latest Aftermarket Developments
March 2007 was the year when a Missourian county court gave $17 million to 315,000 state residents> This was in a class-action suit against American Family Mutual Insurance Company involving aftermarket auto parts. The lawsuit declared that the insurer used inferior aftermarket parts, among other charges related to mending damaged vehicles. The insurer, which does not employ aftermarket parts on vehicles that are less than three model years old or to replace safety-related parts such as air bags, intends to seek an appeal on the verdict.
In December 2006, a United States International Trade Commission administrative law judge gave out a preliminary ruling that, if followed, could put a stop to imports of certain aftermarket parts that the Ford Motor Company claims infringe on its patents. Though some patents were not infringed, the judge found some that were. The ruling will be taken up by the International Trade Commission, which must give its decision before the date March 5, 2007.
Ford filed a design patent infringement complaint in December 2005 against Keystone Automotive Industries as well as other suppliers of aftermarket automotive parts. Supporters of the use of aftermarket parts fear that if this case gets the nod, although few parts will be affected, success could lead other automobile manufacturers to use similar strategies to ultimately reduce and eliminate non-OEM part suppliers from the automitive market.
In a triumph for consumers all over, the U.S. Supreme Court refused to hear an appeal from the plaintiffs in State Farm v. Avery in March 2006, with the class action lawsuit targeting the use of aftermarket parts. The Illinois Supreme Court had overturned lower court rulings, learning that the utilization of an aftermarket part did no, in any way, breach State Farm’s contract with its policyholders. Thus, the class action was proved to be had been wrongly certified.
The lawsuit had charged State Farm with violating the contracts it had with its policyholders when it specified the use of non-original equipment (non-OEM) parts in the repair of vehicles that were damaged in crashes. The suit covered the entire United States, with the exception of two states: Arkansas and Tennessee. In addition, there were some State Farm policyholders in Illinois and California as well that were subsumed under this law, depending on the date of their crashes. The loss of the appeal made it easier for insurers to start using generic auto repair parts after that. Several insurers had reverted to using the generally more expensive OEM parts, in the wake of the lower court rulings. The use of aftermarket parts that demonstrate the same if not exactly that of a higher quality than those seen in OEMs were given credit for keeping down the cost of car repairs.
The Illinois Supreme Court ruled that the claims in the case–in the court’s ruling on the validity of the class action certification—which sprang from repairs using many different parts from a great many vendors following accidents in 48 jurisdictions, each with its own brand of insurance laws as well as regulations, were much too different to be dealt effectively with as a class action.