Sixth Circuit to review class certification in State Farm vehicle value suit

The Sixth Circuit Court of Appeals agreed Thursday to reconsider class certification granted to plaintiffs suing State Farm over the values it assigns to totaled vehicles.

The decision vacated a three-judge panel decision on Oct. 9, 2025 to uphold class certification in the case of Clippinger v State Farm Auto Insurance Co. In its place, the appeals court will conduct an en banc review – a proceeding before all active judges in the circuit – on March 18.

Most other courts – including the Third, Fourth, Seventh, and Ninth Circuits – have recently ruled in favor of State Farm and other insurers like Progressive in rejecting class certification in vehicle total loss lawsuits.

Lawsuits filed in many states

State Farm is a defendant in several lawsuits in multiple states over how it calculates totaled vehicle loss assessments.

The Clippinger lawsuit makes a similar argument to lawsuits filed in Alaska, Illinois, Kentucky, Mississippi, North Carolina, and West Virginia, each arguing that the insurer’s automated pricing models produce artificially low payouts.

Jessica Clippinger was in a May 2019 accident that destroyed her 2017 Dodge minivan, court documents say. Under her policy, State Farm was required to pay the "actual cash value" of the vehicle.

Using a software product called Autosource -- provided by the company Audatex -- State Farm valued Clippinger’s van at $14,490, excluding taxes and fees. Clippinger, who now goes by Jessica Pyron, rejected the methodology behind that figure, sparking a lawsuit that had represented a certified class of 90,000 Tennessee drivers.

Until the Sixth Circuit vacated the class certification.

At the heart of the dispute is how State Farm and Audatex calculate a car's worth. According to court filings, the process involves Audatex searching a database for comparable vehicles sold or advertised within 120 days of the accident.

While Tennessee state regulations provide guidance on calculating these values, State Farm’s policies dictate that if a customer and the company cannot agree on a price, the dispute must move to a formal appraisal process.

Under that system, each side hires an appraiser, and those two select a third "umpire" to break any tie. The final signed agreement between any two of the three appraisers becomes binding. However, the cost of this process falls largely on the policyholder, who must pay for their own appraiser and half the cost of the third party.

Flawed system alleged

Clippinger’s suit alleges that the underlying methodology used to reach the initial offers is flawed, leading to systemic underpayments for totaled vehicles across the state. State Farm has defended its use of the Audatex system as being in line with policy language and state law.

The State Farm calculation further incorporated a "Typical Negotiation Adjustment," or TNA. The insurer applies this discount to the advertised prices of comparable cars, arguing that most dealership customers negotiate lower prices than what is listed on the sticker.

Clippinger’s suit alleges the practice is bogus and ignores the reality of the modern used-car market, where online shopping often results in vehicles selling for exactly their advertised price. By applying the TNA, Clippinger argues, State Farm artificially reduces the "actual cash value" it owes to policyholders.

The financial gap between the insurer's math and independent valuations can be significant. In Clippinger’s case, State Farm initially valued her totaled 2017 Dodge minivan at $14,490. After a court-ordered appraisal process, the van was valued at $18,476, court documents say.

State Farm eventually paid Clippinger the difference, then moved to have the case dismissed, arguing the payment resolved the dispute.

However, a district court denied that motion, ruling that Clippinger’s breach-of-contract claims survive. The court noted that State Farm’s methodology allegedly leaves Tennessee drivers with an unfair choice: accept an undervalued payout or spend their own money to trigger an expensive, formal appraisal process.

Clippinger is seeking to recover appraisal costs as damages, arguing they were a direct result of the insurer's initial breach of contract.

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InsuranceNewsNet Senior Editor John Hilton has covered business and other beats in more than 20 years of daily journalism. John may be reached at [email protected]. Follow him on Twitter @INNJohnH.