Hertz 2012 Annual Report Download - page 172

HERTZ GLOBAL HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
2. Concession Fee Recoveries
On October 13, 2006, Janet Sobel, Daniel Dugan, PhD. and Lydia Lee, individually and on
behalf of all others similarly situated v. The Hertz Corporation and Enterprise Rent-A-Car
Company, or ‘‘Enterprise,’’ was filed in the United States District Court for the District of Nevada.
The plaintiffs agreed to not pursue claims against Enterprise initially and the case only
proceeded against Hertz. The Sobel case purports to be a nationwide class action on behalf of
all persons who rented cars from Hertz at airports in Nevada and were separately charged
airport concession recovery fees by Hertz as part of their rental charges. The plaintiffs seek an
unspecified amount of compensatory damages, restitution of any charges found to be
improper and an injunction prohibiting Hertz from quoting or charging those airport fees that
are alleged not to be allowed by Nevada law. The complaint also seeks attorneys’ fees and
costs. Relevant documents were produced, depositions were taken and pre-trial motions were
filed. After the court rendered a mixed ruling on the parties’ cross-motions for summary
judgment and after the Lydia Lee case was refiled against Enterprise, the parties engaged in
mediation which resulted in a proposed settlement. Although the court tentatively approved the
settlement in November 2010, the court denied the plaintiffs’ motion for final approval of the
proposed settlement in May 2011. Since that time, the plaintiffs filed a motion for class
certification-which we opposed-and discovery has commenced again. A separate action is
proceeding against Enterprise, National and Alamo. In May 2012, all briefing was completed on
the two outstanding issues—unjust enrichment and damages. The briefing included expert
reports as submitted by both sides. In October 2012, the court held a hearing on the plaintiffs’
motion for class certification. The court has since entered a stay order and the parties will again
be engaging in mediation.
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 issued its decision in September 2011. Thereafter, the District Court of
Johnson County lifted the stay in the Fun Services case and issued a scheduling order that
addresses class certification discovery. In February 2012, HERC filed a Notice of Removal with
the U.S. District Court for the District of Kansas seeking to remove the case to federal court
based on federal question jurisdiction. In March 2012, the federal magistrate entered an order
requiring the parties to engage in mediation and report back to her regarding their progress by
June 2012. In June 2012, a mediation was held and as a result of the mediation, the parties
reached an agreement in principle to settle this class action. A settlement that addresses
compensation to class members, class counsel fees and the claims process was finalized by
the parties’ counsel in January 2013. The court issued an order preliminarily approving the
settlement in January 2013 and the final approval hearing is currently scheduled for April 2013.
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