Hertz 2012 Annual Report Download - page 68

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 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.
We have accrued our best estimate of the ultimate cost, which is not material to our financial
condition.
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
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