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Letter to the Editor
This article originally appeared in the August 2000 Issue of INSIGHT
Braving the Storm
CAPA and the aftermath of the State Farm verdict
by Marc Duvin
It would be difficult to blame a man whose business was all but gutted by a stunning jury verdict for making a quick exit out the back door. What’s dead is dead, right?
But that’s not the way Certified Automotive Parts Association executive director, Jack Gillis, sees it.
"Under no circumstances are we packing up our bags and leaving town," says Gillis. "To the contrary, I definitely see this period as an opportunity in disguise. As a result of that verdict in a little Illinois courtroom, our story is now being told. "And all things considered, we think it’s a good story."
The most recent installment of CAPA’s story, for better or worse, takes one to that little Illinois courtroom, and to a jury that delivered a giant verdict.
In short, the Illinois jury held that State Farm’s use of non-OEM aftermarket parts constitutes a breach of its contract with the policy holder to return damaged cars back to pre-accident condition. The damages for failing to do so - $1.186 billion.
While CAPA’s not on tap for the cash, that privilege belonging to State Farm, CAPA’s business of setting standards for the non-OEM aftermarket will likely bare the full brunt of the verdict’s aftermath. What’s the sense in setting standards for a market that’s dead?
But Gillis doesn’t see it that way.
"Look, ultimately I think we’ll see that what happened in that verdict was just an aberration, and that justice will win out.
"Either way, though, the marketplace is crying out for competition. That’s a fact," Gillis says. "And if you’re going to have competition, then you’ve got to have someone out there to make sure that the competitive parts are quality.
"That’s what CAPA brings to the table."
Today, less than a year removed from the State Farm verdict, Gillis and CAPA are forging ahead, not only with selling the seals that provide much-needed revenue, but with the business of trying to bring quality and reliability to the non-OEM aftermarket.
And there is evidence to suggest that their efforts are succeeding.
"I’ve seen significant change, positive change in the months since the verdict," says Lou DiLisio, a shop consultant with clients throughout the nation and 25 years of experience in the industry. "Not only with CAPA, but with the aftermarket industry in general. Whether the verdict was the catalyst for that change, I don’t know, but I like what I’ve been seeing in the industry lately."
DiLisio referred, for instance, to a recent series of meetings that took place among distributors and collision repairers on the grounds of Entela, CAPA’s independent validator of its certified parts, headquartered in Grand Rapids, Michigan.
"It’s that kind of dialogue that ultimately is going to lead the betterment of the industry," Dilisio says. "As a result, I’d say there’s a renewed hope among a lot of people in the industry, myself included.
"In the end, though, it’s up to the CAPAs and the Entelas of the world to do the right thing. Talk is good, but the proof is in the pudding."
It is a challenge from which Gillis does not shy away.
Despite projected 2000 seal sales that are roughly 2.5 million off the more than 3.5 million pace set in 1998, Gillis sees this entire period as just a natural part of their evolution.
"It wasn’t long ago that there were was no aftermarket part industry at all," Gillis says. "Sure, this has been a difficult period for the industry, but I’ve got to believe that in the big picture this is going to be but a blip in CAPA’s evolution."
"Capa’s going to be around for a while."
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