Hertz 2007 Annual Report Download - page 172

HERTZ GLOBAL HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
filed an amended class action petition, newly alleging that our FSC violates the Oklahoma
Consumer Protection Act and that we have been unjustly enriched, and again alleging that our
FSC is unconscionable under Article 2A of the Oklahoma Uniform Commercial Code. In May
2005, we filed a motion to dismiss the amended class action petition. In October 2005, the court
granted our motion to dismiss, but allowed the plaintiff to file a second amended complaint and
we then answered the complaint. After the parties engaged in some limited discovery, we filed a
motion for summary judgment in August 2007.
3. New Mexico
On December 13, 2005, Janelle Johnson, individually and on behalf of all other similarly situated
persons v. The Hertz Corporation was filed in the Second Judicial District Court of the County of
Bernalillo, New Mexico. Johnson purported to be a class action on behalf of all New Mexico
residents who rented from us and who were charged a FSC. The complaint alleged that the
FSC is unconscionable as a matter of law under pertinent sections of the New Mexico Uniform
Commercial Code and that, under New Mexico common law, the collection of a FSC does not
constitute valid liquidated damages, but rather is a void penalty. The plaintiff sought an
unspecified amount of compensatory damages, with the return of all FSC paid or the difference
between the FSC and its actual cost. In the alternative, the plaintiff requested that the court
exercise its equitable jurisdiction and order us to cease and desist from our unlawful conduct
and to modify our lease provisions to conform with applicable provisions of New Mexico
statutory and common law. The complaint also sought attorneys’ fees and costs. We removed
the action to the U.S. District Court for the District of New Mexico and, in lieu of an answer, filed a
motion to dismiss. In November 2006, the judge granted our motion to dismiss the liquidated
damages claim and the substantive unconscionability claim but did not grant our motion to
dismiss the procedural unconscionability claim or the claim for equitable relief. Plaintiff then
amended her complaint to replead the unconscionability claim and to add a fraudulent
misrepresentation claim. In December 2006, we filed a motion to dismiss the amended
complaint and, in January 2007, the court dismissed the new fraud claim and reaffirmed the
dismissal of the substantive unconscionability claim. In February 2007, the plaintiff dismissed
the case with prejudice.
4. Nevada
On January 10, 2007, Marlena Guerra, individually and on behalf of all other similarly situated
persons v. The Hertz Corporation was filed in the United States District Court for the District of
Nevada. Guerra purported to be a class action on behalf of all individuals and business entities
who rented vehicle at Las Vegas McCarran International Airport and were charged a FSC. The
complaint alleged that those customers who paid the FSC were fraudulently charged a
surcharge required for fuel in violation of Nevada’s Deceptive Trade Practices Act. The plaintiff
also alleged the FSC violates the Nevada Uniform Commercial Code, or ‘‘UCC,’’ claiming it was
unconscionable and operated as an unlawful liquidated damages provision. Finally, the plaintiff
claimed that we breached our own rental agreement-which the plaintiff claims to have been
modified so as not to violate Nevada law-by charging the FSC, since such charges violate the
UCC and/or the prohibition against fuel surcharges. The plaintiff sought compensatory
damages, including the return of all FSC paid or the difference between the FSC and our actual
costs, plus prejudgment interest, attorneys’ fees and costs. In March 2007, we filed a motion to
dismiss. In July 2007, the court granted our motion to dismiss and ordered the plaintiff’s
complaint dismissed with prejudice.
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