Hertz 2010 Annual Report Download - page 61

ITEM 3. LEGAL PROCEEDINGS
From time to time we are a party to various legal proceedings. Other than with respect to the aggregate
claims for public liability and property damage pending against us, management does not believe that
any of the matters resolved, or pending against us, during 2010 are material to us and our subsidiaries
taken as a whole. While we have accrued a liability with respect to claims for public liability and property
damage of $278.7 million at December 31, 2010, management does not believe any of the other pending
matters described below are material. We have summarized below, for purposes of providing
background, various legal proceedings to which we were and/or are a party during 2010 or the period
after December 31, 2010 but before the filing of this Annual Report. In addition to the following, various
other legal actions, claims and governmental inquiries and proceedings are pending or may be
instituted or asserted in the future against us and our subsidiaries.
1. Hertz Equipment Rental Corporation, or ‘‘HERC,’’ Loss Damage Waiver
On August 15, 2006, Davis Landscape, Ltd., individually and on behalf of all others similarly
situated, filed a complaint against HERC in the United States District Court for the District of
New Jersey. In November 2006, the complaint was amended to add another plaintiff, Miguel V.
Pro, and more claims. The Davis Landscape matter purports to be a nationwide class action on
behalf of all persons and business entities who rented equipment from HERC and who paid a
Loss Damage Waiver, or ‘‘LDW,’’ or an Environmental Recovery Fee, or ‘‘ERF.’’ The plaintiffs
seek a declaratory judgment and injunction prohibiting HERC from engaging in acts with
respect to the LDW and ERF charges that violate the New Jersey Consumer Fraud Act and
claim that the charges violate the Uniform Commercial Code. The plaintiffs also seek an
unspecified amount of compensatory damages with the return of all LDW and ERF charges
paid, attorneys’ fees and costs as well as other damages. The court has granted class
certification, denied our motion for summary judgment and the case is in the discovery stages.
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 for the time being 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 wherein Hertz and Enterprise, without
admitting wrongdoing and in order to avoid further litigation, agreed to provide rental
certificates to proposed class members who register for same and to pay attorneys’ fees to the
plaintiffs’ attorneys. In November 2010, the court certified settlement classes for purposes of
implementing the proposed settlement and preliminarily approved the proposed settlement.
Notification of the proposed settlement was mailed or e-mailed in February of 2011 and a final
approval hearing on the settlement is scheduled for May of 2011.
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