Hertz 2010 Annual Report Download - page 62

ITEM 3. LEGAL PROCEEDINGS (Continued)
3. Telephone Consumer Protection Act
On May 3, 2007, Fun Services of Kansas City, Inc., individually and as the representative of a
class of similarly-situated persons, v. Hertz Equipment Rental Corporation was commenced in
the District Court of Wyandotte County, Kansas. The case was subsequently transferred to the
District Court of Johnson County, Kansas. The Fun Services matter purports to be a class action
on behalf of all persons in Kansas and throughout the United States who on or after four years
prior to the filing of the action were sent facsimile messages of advertising materials relating to
the availability of property, goods or services by HERC and who did not provide express
permission for sending such faxes. The plaintiffs seek an unspecified amount of compensatory
damages, attorney’s fees and costs. In August 2009, the court issued an order that stayed all
activity in this litigation pending a decision by the Kansas Supreme Court in Critchfield Physical
Therapy, Inc. v. Taranto Group, Inc., another Telephone Consumer Protection Act case. The
Kansas Supreme Court heard oral argument in the Critchfield case in January of 2010 and has
not yet rendered a decision in that case.
4. California Tourism Assessments
We are currently a defendant in a proceeding that purports to be a class action brought by
Michael Shames and Gary Gramkow against The Hertz Corporation, Dollar Thrifty Automotive
Group, Inc., Avis Budget Group, Inc., Vanguard Car Rental USA, Inc., Enterprise Rent-A-Car
Company, Fox Rent A Car, Inc., Coast Leasing Corp., The California Travel and Tourism
Commission, and Caroline Beteta.
Originally filed in November of 2007, the action is pending in the United States District Court for
the Southern District of California, and plaintiffs claim to represent a class of individuals or
entities that purchased rental car services from a defendant at airports located in California after
January 1, 2007. Plaintiffs allege that the defendants agreed to charge consumers a 2.5%
tourism assessment and not to compete with respect to this assessment, while
misrepresenting that this assessment is owed by consumers, rather than the rental car
defendants, to the California Travel and Tourism Commission, or the ‘‘CTTC.’’ Plaintiffs also
allege that defendants agreed to pass through to consumers a fee known as the Airport
Concession Fee, which fee had previously been required to be included in the rental car
defendants’ individual base rates, without reducing their base rates. Based on these
allegations, the amended complaint seeks treble damages, disgorgement, injunctive relief,
interest, attorneys’ fees and costs. Plaintiffs dropped their claims against Caroline Beteta.
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
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