Antitrust Law Daily Wrap Up, STATE UNFAIR TRADE PRACTICES—2d Cir.: Zipcar steers clear of consumers’ deceptive acts claims, (Nov 4, 2014)

By Greg Hammond, J.D.

U.S. based car rental company, Zipcar, Inc. successfully evaded consumers’ claims that the company engaged in deceptive acts or practices by representing to consumers that they are liable for vehicle damage. In affirming the lower court’s order of dismissal, the U.S. Court of Appeals in New York City determined that there is no private cause of action under New York General Business Law (GBL) Section 396-z (Sigall v. Zipcar, Inc., October 31, 2014, Per Curiam).

Consumers Michael and Jessica Sigall filed a class action suit against Zipcar and its subsidiary, Zipcar New York, Inc., alleging—in part—that that the defendants engaged in deceptive acts and practices in violation of GBL Section 349 by: (1) representing to consumers that they are liable for vehicle damage even though GBL Section 396-z provides that they are not liable for such damages; (2) by representing to credit card issuers that charges related to such damages were authorized; and (3) by selling waivers to waive such damage charges even though the charges are not valid.

Despite the consumers’ arguments to the contrary, the appellate court determined that the GBL claims were properly dismissed. Specifically, it noted that GBL Section 396-z does not provide a private right of action, and each of the consumers’ claims relies solely on the fact that Zipcar allegedly violated that section. In addition, the court found that the consumers’ Section 349 claim was barred, because they merely repackaged the Section 396-z claim, and they failed to allege any fact that, if found to be true, would demonstrate a free standing Section 349 violation. The lower court’s order of dismissal was therefore affirmed.

The case number is 14-899-cv.

Attorneys: Lawrence Katz, Daniel A. Edelman, and Cathleen M. Combs (Edelman, Combs, Latturner & Goodwin, LLC) for Plaintiffs-Appellants. Dennis R. LaFiura, Paul J. Halasz, and Elizabeth J. Sher (Day Pitney LLP) for Zipcar, Inc. and Zipcar New York, Inc.

Companies: Zipcar, Inc.; Zipcar New York, Inc.

Cases: StateUnfairTradePractices ConnecticutNews NewYorkNews VermontNews