Bacon v. Avis Budget Grp., Inc.

Decision Date07 December 2018
Docket NumberCiv. No. 16-5939 (KM) (JBC)
Citation357 F.Supp.3d 401
Parties Abigail BACON, et al., Plaintiffs, v. AVIS BUDGET GROUP, INC., and Payless Car Rental, Inc., Defendants.
CourtU.S. District Court — District of New Jersey

Bruce Heller Nagel, Greg Michael Kohn, Nagel Rice, LLP, Roseland, NJ, David J. Disabato, Lisa R. Bouckenooghe, The Wolf Law Firm LLC, North Brunswick, NJ, for Plaintiffs.

Kellie A. Lavery, Laura Kateri Conroy, Siobhan Anne Nolan, Reed Smith LLP, Princeton, NJ, for Defendants.

MEMORANDUM OPINION

KEVIN MCNULTY, U.S.D.J.

The plaintiffs1 have filed a putative class action against car rental companies Avis Budget Group, Inc. ("Avis") and an Avis subsidiary, Payless Auto Rental, Inc. ("Payless"). The Complaint alleges that the defendant rent-a-car companies routinely charged customers' credit and debit cards for ancillary products and services that the customers had not authorized, or even had declined. The plaintiffs, car rental customers who allegedly incurred such unauthorized charges, assert claims for damages under New Jersey, Florida, and Nevada consumer protection and unfair trade practices statutes, for unjust enrichment, and for conversion. They also seek injunctive relief. (See Compl., passim .)2 Plaintiffs propose to certify a nationwide class action comprising five subclasses.

Now before the Court are two motions for summary judgment. The first is brought by defendants jointly. (DE 81). Defendants' motion seeks an order compelling the plaintiffs to arbitrate their claims on an individual basis. The plaintiffs oppose that motion and cross-move for summary judgment that the claims not be arbitrated, but proceed in this Court. (DE 93).

The defendants' motion for summary judgment is denied outright to the extent it rests on the agreements signed in person by the plaintiffs when they rented their cars in the United States, and the plaintiffs' corresponding cross motion is granted to the same extent. Section II.D.1 & 2, infra .

The defendants' motion and the plaintiffs' cross motion are both denied to the extent that they rest on the agreement signed in person by the plaintiff who rented her car in Costa Rica, because factual issues remain. Section II.D.3, infra .

To the extent the motions rest on the terms of service on booking websites, I find that the record is not sufficiently developed. After appropriate discovery, the issue may be resolved on summary judgment or tried. Section II.E, infra .

I. SUMMARY
A. Procedural History

The plaintiffs filed their Complaint on September 26, 2016. Defendants initially moved to dismiss the Complaint and compel arbitration. (DE 16, 17). Because the defendants' motions to dismiss presented issues of fact, I denied those motions as offered and ordered limited discovery on the issue of arbitrability. (See MTD Opinion). In that Opinion, I described how discovery was necessary to develop the record on the question of whether the parties agreed to arbitrate so that the motion to compel could be decided on a summary judgment standard pursuant to the framework outlined in Guidotti v. Legal Helpers Debt Resolution, L.L.C. , 716 F.3d 764 (3d Cir. 2013). (See MTD Opinion at 6-8).

Once discovery on the question of arbitrability was completed, the defendants filed the present motion for summary judgment to compel arbitration. Plaintiffs cross-moved for summary judgment on the same issue.

B. The U.S. Plaintiffs' Rental Agreements and Rental Jackets

Six of the seven plaintiffs (the "U.S. Plaintiffs") rented cars in the United States—specifically, New Jersey, Nevada, or Florida. (DSMF ¶¶ 113, 123, 131, 146, 159, 168).3 The seventh plaintiff, Arcadia Lee, rented a car in Costa Rica.4

The U.S. Plaintiffs signed identical one-page rental agreements (the "U.S. Agreement") to rent Payless cars. (PSMF ¶¶ 5-7).5 Each U.S. Agreement is essentially a receipt. It itemizes charges and fees, lists basic identification information about the customer and the rented vehicle, and states pickup and drop-off details.

Each U.S. Plaintiffs signature appears immediately below the final paragraph of the U.S. Agreement. That final paragraph states, in part, as follows: "I agree the charges listed above are estimates and that I have reviewed&agreed to all notices&terms here and in the rental jacket." (DSMF ¶¶ 8, 108; PRDSMF ¶¶ 8, 108) (spacing sic in original). The U.S. Agreements do not specifically define what a "rental jacket" is, and the phrase is not capitalized or otherwise emphasized. (DSMF ¶ 8; PRDSMF ¶ 8; DRPR ¶ 8).

The defendants attach copies of what they identify as the rental jackets that correspond to the U.S. Agreements (the "Rental Jackets"). (DSMF ¶ 109).6 These Rental Jackets, pre-printed documents about the size of standard sheet of paper (8.5"xl 1"), contain certain terms and conditions. (DSMF ¶ 9; PRDSMF ¶ 9). Folded into thirds, they are eventually used to enclose the U.S. Agreements, as described more fully below. (Id. ; DSMF ¶ 15; PRDSMF ¶ 15; DRPR ¶ 15).

Payless rental sales associates are instructed to give a rental jacket to the customer after the customer signs the rental agreement. (DSMF ¶¶ 14, 36; PRDSMF ¶ 14; DRPR ¶ 14). They are also instructed to give a rental jacket to any customer who requests one. (DSMF ¶¶ 16, 36). However, rental sales associates are not trained to alert customers to the existence of the rental jacket or to any additional terms while the customer is reviewing the U.S. Agreement. (PRDSMF ¶ 36; DRPR ¶ 36).

After the customer signs the U.S. Agreement, the rental sales associate takes the signed agreement, folds the customer copy, inserts it into a Rental Jacket, and hands the customer the Rental Jacket with the copy of the signed U.S. Agreement inside. (DSMF ¶¶ 14, 15; PRDSMF ¶¶ 14, 15; DRPR ¶¶ 14, 15). Thus the customer routinely receives the Rental Jacket only after signing the U.S. Agreement, unless the customer has specifically asked to see the Rental Jacket at some earlier time. (DSMF ¶¶ 32, 36).

That is essentially what occurred when each of the U.S. Plaintiffs rented a car. (DSMF ¶¶ 113, 119, 121, 123, 125, 127-29, 131, 138, 140-41, 146, 151-52, 154-55, 163, 165-66, 168, 180, 182, 185). The U.S. Plaintiffs did not ask to see the Rental Jacket; the rental sales associates did not mention anything about the Rental Jacket as the U.S. Plaintiffs were reviewing their Agreements; the U.S. Plaintiffs signed their Agreements; and then the rental sales associates folded the U.S. Agreements inside the Rental Jackets and handed them back to each U.S. Plaintiff. (Id. ). It is undisputed that the U.S. Plaintiffs received the Rental Jackets at the rental counter only after they signed their Rental Agreements. (PSMF ¶¶ 1, 2; DRPSMF ¶¶ 1, 2).7 None of the U.S. Plaintiffs, it seems, actually read the Rental Jacket when they received it.

The Rental Jacket, so called, is not actually titled as such; the actual title at the top of the page is "Rental Terms and Conditions." (DSMF ¶ 10; PRDSMF ¶ 10; DRPR ¶ 10). The Rental Jacket includes 31 paragraphs of terms and conditions in small but legible print. The word "jacket" is not found as a header anywhere in the document; it does appear in the text of the second numbered paragraph, which refers to the "Rental Document Jacket." (DE 81-11). The terms and conditions, as well as the layouts, are substantially the same across all six Rental Jackets provided to the U.S. Plaintiffs. Each includes the same arbitration provision, which states, in relevant part:

28. Arbitration.
....
Dispute Resolution: Except as otherwise provided below, in the event of a dispute that cannot be resolved informally through the pre-dispute resolution procedure, all disputes between you and Payless arising out of, relating to or in connection with your rental of a vehicle from Payless and these rental terms and conditions shall be exclusively settled through binding arbitration through the American Arbitration Association ("AAA") pursuant to the AAA's then-current rules for commercial arbitration. There is no judge or jury in arbitration. Arbitration procedures are simpler and more limited than rules applicable in court and review by a court is limited. YOU AND PAYLESS AGREE THAT ANY SUCH ARBITRATION SHALL BE CONDUCTED ON AN INDIVIDUAL BASIS AND NOT IN A CLASS, CONSOLIDATED OR REPRESENTATIVE ACTION. Notwithstanding any provision in these terms to the contrary, if the class-action waiver in the prior sentence is deemed invalid or unenforceable, however, neither you nor we are entitled to arbitration.... This arbitration agreement is subject to the Federal Arbitration Act.... Disputes and claims that are within the scope of a small claims court's authority, as well as disputes to or loss of a vehicle related to your Payless rental, are exempt from the foregoing dispute resolution provisions.

(DSMF ¶¶ 11-13, 21; PRDSMF ¶¶ 11-13, 21; DRPR ¶¶ 11-13).

The defendants keep the Rental Jackets at the rental counter, typically near the computer terminal or printer. (DSMF ¶¶ 35, 41; PRDSMF ¶¶ 35, 41; DRPR ¶¶ 35, 41). The parties provided photos of the rental counters where the U.S. Plaintiffs rented their cars in Tampa, FL and Las Vegas, NV to illustrate the physical layout.8

At the Las Vegas location, the Rental Jackets are located on a desk behind the counter where the rental associate stands. The desk on which they sit is lower than the counter, so the view of a customer who is standing more than a few feet away is obstructed. Even for a customer standing directly at the counter, only the bottom portion of the Rental Jacket page would be visible. The Rental Jackets are facing in the direction of the rental sales associate (i.e. , the text is upside-down from the customer's point of view).

The photos of the Tampa location are similar, except that the Rental Jackets are somewhat less obstructed by the counter ledge, and the bottom of the rental jacket is therefore more visible.

C. Lee's Costa Rica Agreement

Arcadia Lee rented a car in Costa Rica from Payless's licensee, Las...

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