Antitrust Law Daily Wrap Up, STATE UNFAIR TRADE PRACTICES—DNev: Class Certified in Action Against Hertz for Unbundling Fees, (Mar 26, 2013)

By Jody Coultas, J.D.

A class of consumers that rented cars from Hertz was granted certification of Nevada Deceptive Trade Practices Act claims against the company by the federal district court in Reno (Sobel v. Hertz Corp., March 21, 2013, Hicks, L.).

A class of consumers that rented cars at the Reno and Las Vegas international airports alleged that Hertz “unbundled” surcharges from the base rental rate. Rental car companies are required to pay a percentage of their gross revenues to the airports as concession fees. The companies then pass along the fees to their customers as surcharges labeled “concession recovery fees.” Hertz did not include the additional airport “concession recovery fee” in the base rental price, but rather itemized the fee separately in the rental agreement.

Hertz argued that the class should not be certified because the class members could not meet the Federal Rule of Civil Procedure 23(a) requirements of typicality and adequacy of representation.

A representative’s claims are “typical” of the class if claims arose from the same event that gives rise to the claims of the other class members, and the named plaintiffs’ claims are based on the same legal theories as the other class members’ claims. Hertz argued that the named plaintiffs were not misled by its rate-charging practice. Because the claims are based on the charging of the unbundled fees, the claims do not depend on reliance. The named plaintiffs’ claims were reasonably coextensive with those of the unnamed class members, according to the court.

The named representatives adequately represented the class, according to the court. Both named plaintiffs had business relationships with class counsel in the past, and Hertz argued that this created a conflict between their interest and the interest of other class members. Courts have held that class representatives are not adequate representatives if they have a personal relationship with class counsel. Here, the relationships were professional rather than personal.

Common issues of law and fact predominated, according to the court. The common questions of fact included whether the class members were charged the unbundled fees. Despite Hertz’s argument that the claims required individual inquiries into whether class members relied on Hertz’s representations, the issue of reliance was not relevant.

The case is No. 3:06-CV-00545-LRH-RAM.

Attorneys: Arthur Stock (Berger & Montague, P.C.) for Janet Sobel. Anna McLean (Sheppard Mullin Richter & Hampton LLP) for Hertz Corp.

Company: Hertz Corp.

Cases: StateUnfairTradePractices NevadaNews