Opinion ID: 201445
Heading Depth: 3
Heading Rank: 2

Heading: Business of Insurance — The JUA's Prohibition on the Use of OEM parts.

Text: 40 The plaintiffs' allegations about the JUA's repair practices are as follows: 41 55.C.(a) The monopoly has allowed the [JUA] to freely dictate the practices relating to the adjustment of claims allowing said [JUA] to establish unreasonable depreciation percentages for the replacement of new parts to be replaced; repairing vehicles with old parts obtained from [j]unkers; creating a complicated and unfair system of diagrams for the determination of fault to the detriment of the affected member[s] of the class. This monopoly and absence of competition has resulted in the diminution of the quality of service as the insureds have became [sic] captives of the [JUA] without any possibility of escaping. 42 Although the terms of the standard insurance policy of the compulsory insurance program do not specify practices on repair parts, we understand the allegations to mean that the JUA subjects consumers to certain depreciation practices and to a non-OEM parts requirement. It is not clear how this is carried out: conceivably the requirements are imposed directly on the policyholders or perhaps the JUA refers consumers to garages which adhere to these practices. The precise mechanism makes no difference. 43 This claim is essentially a contract dispute between the policyholder and the JUA; the claim is about the business of insurance. 8 See Gilchrist v. State Farm Mut. Auto. Ins. Co., 390 F.3d 1327, 1332-34 (11th Cir.2004). 44 More significantly, no serious antitrust claim is presented. The plaintiffs argue that the JUA is using its monopoly to increase its profits through using cheap parts without charging cheaper prices. But a monopolist is entitled to exploit a monopoly in order to maximize its profits. See III Areeda and Hovenkamp, Antitrust Law, ¶ 720a (2d ed.2000). Monopoly pricing and monopoly profits are neither `exclusionary' acts nor `abuses' of monopoly power under § 2 [of the Sherman Act]. Id. at 254. A monopolist is free to exploit whatever market power it may possess when that exploitation takes the form of charging uncompetitive prices. Kartell v. Blue Shield of Mass., Inc., 749 F.2d 922, 927 (1st Cir.1984) (holding it was lawful for health insurer to require participating physicians to refrain from billing insurer's subscribers extra charges even assuming that health insurer had market power in the buying market); see also Berkey Photo, Inc. v. Eastman Kodak Co., 603 F.2d 263, 297 (2d Cir.1979) ([M]ore than monopoly power is necessary to make the charging of a noncompetitive price unlawful.). 45