Kansas-based Shamrock Roofing, a heavyweight residential and commercial roofing contractor firm that operates across the Midwest and Southwest, asserts that state regulators are infringing on the company’s First Amendment rights.
A lawsuit filed in the U.S. District Court for the Southern District of Iowa challenges the state’s prohibition against contractors providing public adjusting services, claiming that the rule infringes on constitutional rights and negatively impacts consumers.
“We can’t talk about process or policy or any of that,” Garen Armstrong, owner of Shamrock Roofing, told CBS News, which first reported on the story locally. “They want to muzzle us so that insurers don’t pay the fair claim what they’re supposed to pay.”
The second-generation roofer, whose father founded the firm nearly a half-century ago and assumed the reigns at Shamrock in 2016, said the restrictions directly impact homeowners needing guidance after a disaster.
“Instead of helping the insured, the Iowans, get taken care of and made whole again, they want to muzzle you,” Armstong said. “We’re in eight states and 12 locations; we stay in the Midwest … We’re just a mom-and-pop business, and we take care of our customers.”
Regulators at the Iowa Insurance Division have issued countless cease-and-desist orders and warning letters to roofing companies like Shamrock, stating that they are violating the state’s public adjuster law.
Armstrong asserts that a contractor's role for homeowners is to provide damage assessments and explain the insurance process accurately, and regulatory enforcement of the state’s rule prohibiting those discussions hampers contractors from aiding clients.
An insurance law expert at the University of Iowa explained that Iowa law prohibits contractors from acting as contractors and public adjusters on the same project to avoid conflicts of interest.
“Public adjusters have a fiduciary duty or responsibility to you,” Martin Grace, the insurance law expert, said. “They're representing you, just like a lawyer would or another personal representative would … Having [the hired contractor] in the process sort of makes the repairman's interests paramount.”
Grace added that the law was conceived to prevent scenarios in which contractors might benefit financially by inflating claims or arguing with insurance companies over compensation.
“If the contractor gets in a fight with the insurance company over the repair costs that guy can walk away,” he added. “The homeowner is still stuck with a hole in the roof or a missing window.”
Armstrong’s lawsuit challenges the constitutionality of Iowa’s regulations, leaning into the First Amendment context.
“I want a federal judge to understand is this, this, this is a freedom of speech and a violation of the 14th amendment,” he said, citing the vagueness of how the law was written, effectively preventing contractors like Shamrock Roofing from complying and do their jobs effectively.
Grace conceded that the law may be too vaguely worded, which could bode well for Shamrock’s case.
“[Armstrong] couldn’t get a clear definition of what it was he could or couldn’t do,” Grace said. “Normally, when that happens, you have a situation where the courts might strike it down for vagueness.”
Grace believes the state’s intent in drafting the law is to regulate behavior rather than restrict legitimate speech.
“Actually inserting yourself into that relationship between the homeowner and the insurance company, that probably is the behavior that they want to regulate rather than the speech,” he said.
Armstrong said that despite the clash with state regulators, the company remains committed to providing its Iowa customers with the best service and further expanding Shamrock’s footprint there.
