The Supreme Court of Oregon has reversed a Court of Appeals ruling that granted a $26.3 million summary judgment to plaintiffs in a case that alleged Farmers Insurance Co. broke anti-steering laws in the state. 

Steven Bellshaw, the plaintiff in a class action suit, purchased motor vehicle insurance from Farmers in 2011, court records says. According to the plaintiff, Farmers included a notice that failed to meet all requirements of Oregon statute ORS 746.280. 

The code requires insurance companies to inform consumers of their right to choose their own repair facility prior to providing a recommendation. 

According to the statute, the language should be similar to the following: 

“Oregon law prohibits us from requiring you to get repairs to your vehicle at a particular motor vehicle repair shop. You have the right to select the motor vehicle repair shop of your choice.” 

The language is required to be approved by the Department of Consumer and Business Services (DCBS) director. 

According to the Supreme Court opinion, the notice that Farmers Insurance provided in 2011 was the same language used by the insurer since 1993. The notice did not address changes made in the law in 2007 that required the company to inform consumers of their right to choose. The opinion notes the DCBS director did not issue new guidance to insurers following the 2007 change. 

Farmers argued that it had satisfied the law because it used language approved by the director, according to court records. 

A trial court agreed with the plaintiff in the case and established a statutory penalty of $100 for each insured in the plaintiff class for a total of $26,319,200. The decision was upheld by the Oregon Court of Appeals. 

The Supreme Court opinion dissents from the two courts, stating that it disagrees because Farmers received approval from the DCBS director. 

“ORS 746.290(2) regulates and penalizes insurance companies who fail to accurately inform Oregonians of their repair rights,” the opinion says. “It is a consumer protection statute that regulates the insurance industry. That is its purpose. It came into existence because insurance companies, not the director, were being less than fully accurate with Oregon consumers.” 

Yet, legislators found that the code still left consumers vulnerable to the insurance companies. 

“Clearly, the regulator and regulated community had not sufficiently protected the public, requiring the legislature to impose the requirement that ‘the provisions of ORS 746.280’ be provided to the insurance-buying public ‘in clear and conspicuous language approved by the director,’” the opinion says.

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