Safelite Group, Inc. v. Jepsen
2014 U.S. App. LEXIS 17110
| 2d Cir. | 2014Background
- Safelite Group and affiliate Safelite Solutions administer auto-glass insurance claims and, via scripted calls, recommend Safelite AutoGlass or other preapproved shops to insureds.
- Connecticut law already prohibited insurers/adjusters from requiring a specific repair shop and required a bold notice that consumers may choose their repair shop. Safelite disclosed its affiliation voluntarily.
- Connecticut enacted PA 13-67, which forbids a glass claims representative from naming, scheduling, or directing an insured to an affiliated glass shop unless the representative also names at least one additional local licensed glass shop (a competitor).
- Legislative history shows the bill was prompted by unaffiliated local dealers; the Insurance Department reported no consumer complaints under the pre-existing law.
- Safelite sued, alleging PA 13-67 violates the First Amendment (commercial speech) and the Commerce Clause; the district court denied a preliminary injunction. The Second Circuit vacated that denial and ordered a preliminary injunction against enforcement of PA 13-67(c)(2).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Appropriate First Amendment test: Zauderer (rational basis for compelled factual disclosures) vs. Central Hudson (intermediate scrutiny for restrictions on commercial speech) | Safelite: PA 13-67 is a disclosure requirement about affiliations and thus governed by Zauderer | Connecticut: law is a mandated disclosure to inform consumers and prevent steering, fitting Zauderer | Court: Zauderer does not apply because the law forces speakers to name a competitor (speech about others), so Central Hudson intermediate scrutiny governs |
| Constitutionality under Central Hudson (is the law false/misleading; substantial interest; direct advancement; not more extensive than necessary) | Safelite: its statements are truthful and non-misleading; PA 13-67 does not materially advance consumer protection and is more extensive than necessary | Connecticut: law protects consumer choice and prevents steering by self-interested adjusters | Court: Safelite’s speech is neither false nor misleading; the State’s asserted interests are dubious on this record and, at best, PA 13-67 advances them only minimally and is more extensive/underinclusive than necessary; statute fails Central Hudson |
Key Cases Cited
- Zauderer v. Office of Disciplinary Counsel of Supreme Court of Ohio, 471 U.S. 626 (1985) (rational-basis review for compelled factual disclosures about speaker’s own services)
- Cent. Hudson Gas & Elec. Corp. v. Pub. Serv. Comm’n, 447 U.S. 557 (1980) (intermediate-scrutiny test for commercial speech restrictions)
- New York State Restaurant Ass’n v. New York City Bd. of Health, 556 F.3d 114 (2d Cir. 2009) (upholding compelled factual menu disclosures under Zauderer)
- Nat’l Elec. Mfrs. Ass’n v. Sorrell, 272 F.3d 104 (2d Cir. 2001) (distinguishing Zauderer disclosures from Central Hudson restrictions)
- Evergreen Ass’n v. City of New York, 740 F.3d 233 (2d Cir. 2014) (compelled municipal messaging violated the First Amendment under heightened scrutiny)