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Appeals Court Upholds Texas' Right to Ban Insurance Company-Owned Collision Repair Shops

August 09, 2007

NEW ORLEANS --- Upholding a decision from a U.S. District Court in Dallas, a U.S. Court of Appeals has ruled that states can legally ban insurance company ownership of collision repair facilities. The appeal was brought by Allstate Insurance Co., which argued that a Texas state law prohibiting insurance company ownership of collision repair facilities violated the commerce clause of the U.S. Constitution and Allstate's First Amendment rights to free speech, reported CollisionWeek. The U.S. Court of Appeals, 5th Circuit, in New Orleans, agreed with Allstate on a few of the free-speech points, but decided that the law should stand with only a few modifications to address those concerns. The decision upholds the Texas law's premise that insurance company ownership of a collision repair facility creates a conflict of interest. The case was Allstate Insurance Co. vs. Greg Abbott.
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