Hertz 2007 Annual Report Download - page 171

HERTZ GLOBAL HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Note 10—Litigation and Guarantees
Legal Proceedings
Fuel—Related Class Actions
We are or have been a defendant in four purported class actions—filed in Texas, Oklahoma, New Mexico
and Nevada—in which the plaintiffs have put forth alternate theories to challenge the application of our
Fuel and Service Charge, or ‘‘FSC,’’ on rentals of cars that are returned with less fuel than when rented.
The actions in Texas and Oklahoma remain pending, but the actions in New Mexico and Nevada were
dismissed in 2007.
1. Texas
On March 15, 2004, Jose M. Gomez, individually and on behalf of all other similarly situated
persons, v. The Hertz Corporation was commenced in the 214th Judicial District Court of
Nueces County, Texas. Gomez purports to be a class action filed alternatively on behalf of all
persons who were charged a FSC by us or all Texas residents who were charged a FSC by us.
The petition alleged that the FSC is an unlawful penalty and that, therefore, it is void and
unenforceable. The plaintiff seeks an unspecified amount of compensatory damages, with the
return of all FSC paid or the difference between the FSC and our actual costs, disgorgement of
unearned profits, attorneys’ fees and costs. In response to various motions by us, the plaintiff
filed two amended petitions, which scaled back the putative class from a nationwide class to a
class of all Texas residents who were charged a FSC by us or by our Corpus Christi licensee. A
new cause of action was also added for conversion for which the plaintiff is seeking punitive
damages. After some limited discovery, we filed a motion for summary judgment in December
2004. That motion was denied in January 2005. The parties then engaged in more extensive
discovery. In April 2006, the plaintiff further amended his petition by adding a cause of action for
fraudulent misrepresentation and, at the plaintiff’s request, a hearing on the plaintiff’s motion for
class certification was scheduled for August 2006. In May 2006, the plaintiff filed a fourth
amended petition which deleted the cause of action for conversion and the plaintiff also filed a
first amended motion for class certification in anticipation of the August 2006 hearing on class
certification. After the hearing, the plaintiff filed a fifth amended petition seeking to further refine
the putative class as including all Texas residents who were charged a FSC in Texas after
February 6, 2000. In October 2006, the judge entered a class certification order which certified a
class of all Texas residents who were charged an FSC in Texas after February 6, 2000. We are
appealing the order.
2. Oklahoma
On November 18, 2004, Keith Kochner, individually and on behalf of all similarly situated
persons, v. The Hertz Corporation was commenced in the District Court in and for Tulsa County,
State of Oklahoma. As with the Gomez case, Kochner purports to be a class action, this time on
behalf of Oklahoma residents who rented from us and incurred our FSC. The petition alleged
that the imposition of the FSC is a breach of contract and amounts to an unconscionable
penalty or liquidated damages in violation of Article 2A of the Oklahoma Uniform Commercial
Code. The plaintiff seeks an unspecified amount of compensatory damages, with the return of
all FSC paid or the difference between the FSC and our actual costs, disgorgement of
unearned profits, attorneys’ fees and costs. In March 2005, the trial court granted our motion to
dismiss the action but also granted the plaintiff the right to replead. In April 2005, the plaintiff
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