Wednesday, November 25, 2009

Price Fixing Claims Against Title Insurers Dismissed

This posting was written by Darius Sturmer, Editor of CCH Trade Regulation Reporter.

Groups of title insurance companies did not engage in a price fixing conspiracy in violation of federal or California antitrust law through their participation in rate-setting organizations in several states, the federal district court in San Francisco has decided in an unpublished opinion.

The companies' alleged conduct and motive to conspire, in light of the characteristics of the title insurance market, were insufficient to state a claim of illegal price fixing, under the pleading standard established by the U.S. Supreme Court in Bell Atlantic Corp. v. Twombly (2007-1 Trade Cases ¶75,709).

Participation in the same trade associations was not sufficient to establish a conspiracy. Likewise, assertions about when the organizations held meetings, and about which of the defendants' representatives attended those meetings, contained no information that could be construed as invitations to conspire or responsive actions by the defendants, the court explained.

Claims of "plus factors"—such as high market concentration, stability of the defendants' prices despite a decline in costs, and the homogeneity of title insurance policies—did not support the complaining consumers' argument that conspiracy could be inferred from the parallel behavior. An equally plausible inference was that the defendants merely engaged in conscious parallelism.

The decision is In re California Title Insurance Antitrust Litigation, 2009-2 Trade Cases ¶76,803.

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