Hertz 2010 Annual Report Download - page 149

HERTZ GLOBAL HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Plaintiffs’ claims against the rental car defendants have been dismissed, except for the federal
antitrust claim. In June 2010, the United States Court of Appeals for the Ninth Circuit affirmed
the dismissal of the plaintiffs’ antitrust case against the CTTC as a state agency immune from
antitrust complaint because the California Legislature foresaw the alleged price-fixing
conspiracy that was the subject of the complaint. The plaintiffs subsequently filed a petition with
the Ninth Circuit seeking a rehearing and that petition was granted. In November 2010, the
Ninth Circuit withdrew its June opinion and instead held that state action immunity was
improperly invoked. The Ninth Circuit reinstated the plaintiffs’ antitrust claims and the case has
now been remanded to the district court for further proceedings.
We were also a defendant in a consolidated action captioned ‘‘In re Tourism Assessment Fee
Litigation’’ in the United States District Court for the Southern District of California. Originally
filed as two separate actions in December of 2007, the consolidated action purported to be a
class action brought on behalf of all persons and entities that paid an assessment since the
inception of the Passenger Car Rental Industry Tourism Assessment Program in California on
January 1, 2007. The other defendants included various of our competitors, including Avis
Budget Group, Inc., Vanguard Car Rental USA, Inc., Dollar Thrifty Automotive Group, Inc.,
Advantage Rent-A-Car, Inc., Avalon Global Group, Enterprise Rent-A-Car Company, Fox Rent A
Car, Inc., Beverly Hills Rent-A-Car, Inc., Rent4Less, Inc., Autorent Car Rental, Inc., Pacific
Rent-A-Car, Inc., ABC Rent-A-Car, Inc., as well as the California Travel and Tourism
Commission, and Dale E. Bonner. The complaint sought injunctive and declaratory relief, that
all assessments collected and to be collected be held in trust, unspecified monetary damages,
interest, attorneys’ fees and costs. In August 2010, the United States Court of Appeals for the
Ninth Circuit affirmed the district court’s dismissal of plaintiffs’ claims against all defendants.
The deadline for plaintiffs to seek review of the Ninth Circuit’s opinion has passed.
5. Public Liability and Property Damage
We are currently a defendant in numerous actions and have received numerous claims on
which actions have not yet been commenced for public liability and property damage arising
from the operation of motor vehicles and equipment rented from us. The obligation for public
liability and property damage on self-insured U.S. and international vehicles and equipment, as
stated on our balance sheet, represents an estimate for both reported accident claims not yet
paid and claims incurred but not yet reported. The related liabilities are recorded on a
non-discounted basis. Reserve requirements are based on actuarial evaluations of historical
accident claim experience and trends, as well as future projections of ultimate losses,
expenses, premiums and administrative costs. At December 31, 2010 and December 31, 2009
our liability recorded for public liability and property damage matters was $278.7 million and
$277.8 million, respectively. We believe that our analysis was based on the most relevant
information available, combined with reasonable assumptions, and that we may prudently rely
on this information to determine the estimated liability. We note the liability is subject to
significant uncertainties. The adequacy of the liability reserve is regularly monitored based on
evolving accident claim history and insurance related state legislation changes. If our estimates
change or if actual results differ from these assumptions, the amount of the recorded liability is
adjusted to reflect these results.
We intend to assert that we have meritorious defenses in the foregoing matters and we intend to defend
ourselves vigorously.
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