Avis 2008 Annual Report Download - page 35

assessment to passenger car renters in California. One plaintiff has raised an additional claim against the CTTC and its Executive Director of
alleged violations of California’s Bagley-Keene Open Meeting Act. The plaintiffs are seeking treble damages, injunctive relief and attorneys’
fees and costs. We filed a motion to dismiss the Shames suit, and on April 8, 2008, the U.S. District Court for the Southern District of California
granted the motions to dismiss the putative class action lawsuit, on the ground that plaintiffs failed to state claims for which relief could be
granted. An amended complaint was filed in May 2008 against the Company and six other rental car companies, as well as the CTTC, and
contained claims that the defendants had violated federal antitrust law and California’s Unfair Competition Law and False Advertising Law by
allegedly agreeing to pass on airport concession fees and a state tourism commission assessment to passenger car renters in California. On
July 24, 2008, the U.S. District Court for the Southern District of California granted our motions to dismiss with respect to the state law claims
and denied our motion to dismiss with respect to the federal antitrust claim. The court has dismissed all claims against the CTTC, but the
plaintiffs are appealing the CTTC’s dismissal. We intend to continue to vigorously defend this suit as we believe it is without merit.
In December 2007, two individuals filed separate but virtually identical putative class action lawsuits, captioned Thomas J. Comiskey et al. v.
Avis Budget Group, Inc. et al.,
No. CV07-08118 (C.D. Cal.) and Isabel S. Cohen et al. v. Avis Budget Group, Inc. et al., No. CV07-08164 (C.D.
Cal.), against Avis Budget, 12 other rental car companies, the CTTC and California’s Secretary of Business, Transportation and Housing. These
suits challenge the tourism commission assessment fees imposed on certain renters in California as of January 1, 2007. Both the Comiskey and
Cohen suits allege that California’s tourism assessment program with respect to the rental car industry (i) infringes on renters’ speech and
associational rights in violation of both the U.S. and California Constitutions, (ii) violates the Commerce Clause of the U.S. Constitution,
(iii) violates 42 U.S.C. § 1983 insofar as the assessment program violates the federal Constitution’s Commerce Clause and First and Fourteenth
Amendments, and (iv) violates the Motor Vehicle Revenues section of the California Constitution. On February 5, 2008, the district court
consolidated the Comiskey and Cohen suits, and on March 19, 2008, plaintiffs filed a consolidated amended complaint against Avis Budget, ten
other rental car companies, the CTTC and California’s Secretary of Business, Transportation and Housing. The consolidated amended complaint
contains all the claims from the earlier individual complaints and adds equal-protection claims under the U.S. and California Constitutions. As
was the case with both individual complaints, the consolidated amended complaint seeks declaratory and injunctive relief, a refund of all
California tourism commission assessment fees collected by the rental car defendants, attorneys’ fees and costs, and unspecified damages. The
defendants moved to dismiss the consolidated amended complaint as well as to transfer the action (now known as In re Tourism Assessment Fee
Litigation
) to the Southern District of California. On September 23, 2008, the transfer motion was granted and the action was subsequently
transferred to the Southern District of California. On February 19, 2009, the court granted defendants’ motions to dismiss plaintiffs’ federal law
claims, declined to exercise supplemental jurisdiction over plaintiffs’ state law claims, and dismissed plaintiffs’ amended complaint with
prejudice.
Corporate Litigation
Pursuant to the Separation Agreement, Realogy has assumed 62.5% and Wyndham Worldwide has assumed 37.5% of certain contingent and
other corporate liabilities (and related costs and expenses), including legal matters and related disputes, of the Company or its subsidiaries which
are not primarily related to any of the respective businesses of Realogy, Wyndham Worldwide, Travelport and/or the Company’s vehicle rental
operations, in each case incurred or allegedly incurred on or prior to the date of the separation of Travelport from the Company. Such litigation
includes the Credentials Litigation described below.
CSI Investment et. al. v. Cendant et. al., (Case No. 1:00-CV-01422 (DAB-DFE) (S.D.N.Y.) (“Credentials Litigation”) is an action for breach of
contract and fraud arising out of Cendant’s acquisition of the Credentials business in 1998. The Credentials Litigation commenced in February
2000 and was filed against Cendant and its senior management. The Stock Purchase Agreement provided for the sale of Credentials Services
International to Cendant for a set price of $125 million plus an additional amount which was contingent on Credentials’ future
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