(BUSINESSWIRE)--Dec.8,1997-State Farm auto policyholders Tammy Snider and Michael Ave have won a class action procedural victory for millions of drivers insured by State Farm Mutual Insurance company of Bloomington, Ill., ("State Farm"), whose damaged vehicles were repaired by defendant State Farm under estimates calculated by using the price of cheaper, imitation, non-facto -authorized and/or non-original equipment manufacturers' parts (non-OEM parts). Snider and Ave are class representatives in a class action lawsuit, Snider, et al. v. State Farm Mutual Auto Ins. Co., which was filed in Illinois -- where State Farm is headquartered -- in the Circuit Court of Williamson County, Ill., before the Honorable John Speroni. On Dec. 5, 1997, the Court issued an order certifying a plaintiff class, thereby allowing millions of State Farm insureds to have their claims adjudicated in a single case.

The plaintiff class includes all individuals and entities whose vehicles State Farm paid to repair, and upon which State Farm specified parts not approved or manufactured by the original manufacturer of the vehicle. Excluded from the class are Tennessee and Arkansas policyholders; Illinois policyholders whose State Farm policies were issued/executed prior to April 16, 1994; and California policyholders whose State Farm policies were issued/executed prior to Sept. 26, 1996. The Court's Dec. 5 order notes that State Farm is the largest auto insurer in the United States, with over 34 million auto policies in effect nationwide. State Farm paid approximately 5.1 million separate collision and comprehensive claims in 1996. In 1993, at least approximately 49.4% of State Farm's repair estimates nationwide included non-OEM parts.

Plaintiffs' class action complaint alleges that State Farm's uniform nationwide policy of specifying the use of imitation parts whenever these parts cost less than parts from the vehicles' manufacturer violates State Farm's contract to restore its policyholders' vehicles to their pre-loss condition, and violates the Illinois Consumer Fraud and Deceptive Business Practices Act (the "CFA"), 815 ILCS Section 505/1, et seq. because the non-OEM parts are inferior. State Farm denies any wrongdoing.

The repair estimates involved in the class include what State Farm referred to as "quality replacement parts." The use of such parts on a State Farm repair estimate is indicated when the terms "QUL REPL PAR" and "QRP CAPA" appear in place of manufacturer's parts number on the repair estimate. Plaintiffs in the class action contend that parts not approved by the vehicle's manufacturer are inferior in performance and safety because of inferior design, manufacture and quality control.

In certifying the class action under Illinois state law, Judge Speroni did not make any rulings on the merits. The decision stressed the uniformity of State Farm's parts practices and noted that "millions of people are affected by State Farm's current claims settlement practices." Judge Speroni noted testimony presented at the class certification hearing that "if the policyholder does not want non-OEM parts placed on their car, they must convince a body shop to absorb the price difference, or pay for the difference in price themselves." The court held that whether State Farm's replacement part policies violated the CFA or State Farm's contractual obligations to its policyholders is the central issue in the litigation, to be addressed at the trial phase of the litigation.

The Illinois trial court is expected to set a trial date shortly after a status conference scheduled for the end of the month.

For further information, please contact Plaintiff Class Counsel:

G. Patrick Murphy, Attorney at Law
104 West Calvert
P.O. Box 907
Marion, IL 62959

Don Barrett, Barrett Law Offices
P.O. Box 987
Lexington, MI 39095

Morris A. Ratner, Lieff, Cabraser, Heimann & Bernstein, LLP
275 Batte St.,30th Floor
San Francisco, CA 94111-3339.

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