U.S. District Court Finds
Texas Insurer-Owned Repair Shop Law Constitutional
ASA Points to Value of Collision Unity
Washington, D.C., March 10, 2006 — The U.S. District Court, Northern District of Texas, has issued a long-awaited opinion on the Texas insurer-owned shop law. The Automotive Service Association (ASA) had supported the legislation - H.B. 1131 - in the Texas legislature, which put a halt to insurer-owned shops in the state of Texas. Texas state Sen. John Carona had first broached the issue publicly at an International Autobody Congress and Exposition (NACE) press conference in Dallas.
After the legislation became law, Allstate challenged H.B. 1131 in court. In Allstate Insurance Co. and Sterling Collision Centers Inc. v. Greg Abbott, Attorney General; Carol Strayhorn, Comptroller of Public Accounts; the court concluded that "H.B. 1131 does not violate the dormant Commerce Clause and is constitutional, with the exception of the speech restrictions ...," according to Judge Ed Kinkeade.
Bob Redding, ASA Washington, D.C., representative, said: "We are very pleased with the ruling. This new law in Texas demonstrates what collision shop owners can do when they join together with a common message under a single banner. Texas repairers should be very proud and look to how they can continue to improve the collision repair industry. This decision will have ramifications in the collision industry throughout the United States. Many state collision leaders were watching this decision to determine if similar legislation would be introduced in their states."
To review the decision, please go to www.TakingTheHill.com, ASA's legislative Web site.
The Automotive Service Association is the largest not-for-profit trade association of its kind dedicated to and governed by independent automotive service and repair professionals. ASA serves an international membership base that includes numerous affiliate, state and chapter groups from both the mechanical and collision repair segments of the automotive service industry. ASA's headquarters is in Bedford, Texas.
ASA advances professionalism and excellence in the automotive repair industry through education, representation and member services. For additional information about ASA, including past news releases, go to www.asashop.org, or visit ASA's legislative Web site at www.TakingTheHill.com.
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