COURT GRANTS ALLSTATE REQUEST:

Allstate Insurance Company announced that the United States Federal District Court for the Northern District of Texas has granted Allstate and Sterling Autobody Centers’ request for a preliminary injunction against enforcement of several provisions of Texas House Bill 1131, saying the restrictions violate Allstate’s and Sterling’s First Amendment rights to free speech. According to Allstate, the Court’s decision clears the way for the insurer and Sterling to resume joint marketing of their relationship, and allows Allstate to resume recommending Sterling as an option to Allstate customers and claimants in Texas. HB 1131 became Texas law on Sept. 1, 2003. It prohibits further expansion of insurance company owned auto body repair facilities in Texas and restricts the ability of these companies to speak to Texas customers and claimants. Neither Texas Attorney General Greg Abbott or Texas Comptroller of Public Accounts nor the intervenors named in the lawsuit, appealed the decision. Allstate’s bulletin concerning the case indicated that in his opinion U.S. District Court Judge Ed Kinkeade said, “A ban on Plaintiff’s [Allstate’s and Sterling’s] speech promoting Sterling inhibits the dissemination of information that may benefit consumers.” The judge also noted that Allstate makes it clear to consumers that they may always take their cars to any shop they choose. Allstate and Sterling filed a legal challenge to HB 1131 on Aug. 29, 2003. The case alleges HB 1131 is unconstitutional because it violates both Allstate’s and Sterling’s First Amendment right of free speech and the Commerce Clause by unduly interfering with interstate commerce. Allstate and Sterling’s constitutional challenge to this legislation will be heard at trial, currently scheduled for September 2004. Sterling Autobody Centers is a non-insurance subsidiary of the Allstate Corporation.

Topics Texas