Guerra v. Hertz Corp.

Decision Date25 July 2007
Docket NumberNo. 2:07-CV-00023-PMP-GWF.,2:07-CV-00023-PMP-GWF.
Citation504 F.Supp.2d 1014
PartiesMarlena GUERRA, Plaintiff, v. HERTZ CORPORATION, Defendant.
CourtU.S. District Court — District of Nevada

Austin Tighe, Feazell & Tighe LLP, Austin, TX, Richard L. Kellner, Kabateck Brown Kellner, LLP, Los Angeles, CA, for Plaintiff.

Anna McLean, Peter S. Hecker, Heller Ehrman, LLP, San Francisco, CA, Denise Barton, Morris Pickering & Peterson, Las Vegas, NV, for Defendant.

ORDER

PRO, District Judge.

Presently before the Court is Defendant The Hertz Corporation's Motion to Dismiss Plaintiff's Complaint (Doc. # 4), filed on March 16, 2007. Plaintiff filed an Opposition (Doc. # 16) on April 23, 2007. Defendant filed a Reply (Doc. # 18) on May 7, 2007.

I. BACKGROUND

In October 2006, Plaintiff leased a car from Defendant at its McCarran Airport location in Las Vegas, Nevada. (Compl. [Doc. # 1] at 4.) Plaintiff and Defendant entered into a standard form car rental agreement. (Id.) The car rental agreement contains the following terms regarding fueling the car:

8. REFUELING OPTIONS

Most Hertz rentals come with a full tank of gas, but that is not always the case. There are three refueling options:

(1) IF YOU DO NOT PURCHASE FUEL FROM HERTZ AT THE BEGINNING OF YOUR RENTAL AND YOU RETURN THE CAR WITH AT LEAST AS MUCH FUEL AS WAS IN IT WHEN YOU RECEIVED IT, You will not pay Hertz a charge for fuel.

(2) IF YOU DO NOT PURCHASE FUEL FROM HERTZ AT THE BEGINNING OF YOUR RENTAL AND YOU RETURN THE CAR WITH LESS FUEL THAN WAS IN IT WHEN YOU RECEIVED IT, Hertz will charge You a Fuel and Service Charge at the applicable per-mile or per-gallon rate specified on the Rental Record.

. . .

(3) IF YOU CHOOSE TO PURCHASE FUEL FROM HERTZ AT THE BEGINNING OF YOUR RENAL BY SELECTING THE FUEL PURCHASE OPTION, You will be charged as shown on the Rental Record for that purchase. IF YOU CHOOSE THIS OPTION, YOU WILL NOT INCUR AN ADDITIONAL FUEL AND SERVICE CHARGE, BUT YOU WILL NOT RECEIVE ANY CREDIT FOR FUEL LEFT IN THE TANK AT THE TIME OF RETURN....

... THE PER GALLON COST OF THE FUEL PURCHASE OPTION WILL ALWAYS BE LOWER THAN THE FUEL AND SERVICE CHARGE. BUT IF YOU ELECT THE FUEL PURCHASE OPTION YOU WILL NOT RECEIVE CREDIT FOR FUEL LEFT IN THE TANK AT THE TIME OF RETURN. THE COST OF REFUELING THE CAR YOURSELF AT A LOCAL SERVICE STATION WILL GENERALLY BE LOWER THAN THE FUEL AND SERVICE CHARGE OR THE FUEL PURCHASE OPTION. HOWEVER, THE FUEL AND SERVICE CHARGE AND THE FUEL PURCHASE OPTION ALLOW FOR THE CONVENIENCE OF NOT HAVING TO STOP AND REFUEL THE CAR PRIOR TO RETURN.

(Compl., Ex. A.)

Plaintiff declined to purchase fuel from Defendant at the beginning of the rental under the pre-paid fuel option and returned the vehicle without refueling at a local gas station. (Id. at 5.) As a result, Defendant charged Plaintiff the Fuel and Service Charge. (Id., Ex. A.)

Plaintiff filed a class action in this Court alleging the Fuel and Service Charge is a surcharge for fuel and is therefore void under Nevada law. Plaintiff identifies the purported class as "All individuals and business entities who rented a vehicle from Hertz at its McCarran Airport facility in Las Vegas, Nevada and were charged a, Fuel Service Charge on or after January 9, 2002," excluding Nevada state judiciary members, Defendant's employees, and their immediate families. (Id. at 6.) Plaintiff asserts jurisdiction exists in this Court pursuant to 28 U.S.C. 1332(d), alleging the amount in controversy exceeds $5,000,000 and at least one member of the putative class is a citizen of a different state than Defendant. (Id. at 3.) Defendant moves to dismiss Plaintiff's Complaint for failure to state a claim upon which relief may be granted.

II. JURISDICTION

A federal district court is obligated to ensure it has jurisdiction over an action, and once it determines it lacks jurisdiction, it has no further power to act. Steel Co. v Citizens for a Better Env't, 523 U.S. 83, 94, 118 S.Ct. 1003, 140 L.Ed.2d 210 (1998) ("Without jurisdiction the court cannot proceed at all in any cause. Jurisdiction is power to declare the law, and when it ceases to exist, the only function remaining to the court is that of announcing the fact and dismissing the cause.") (quotation omitted). Consequently, the Court must ensure it has jurisdiction before it rules on Defendant's motion to dismiss.

Pursuant to 28 U.S.C. § 1332(d)(2)(A), this Court has original jurisdiction over a class action in which any class member is a citizen of a state different from any defendant, and in which "the matter in controversy exceeds the sum or value of $5,000,000, exclusive of interest and costs." The Court generally determines the amount in controversy from the face of the pleadings, and the amount the plaintiff claims controls so long as the plaintiff makes the claim in good faith. Crum v. Circus Circus Enters., 231 F.3d 1129, 1131 (9th Cir.2000). "To justify dismissal, it must appear to a legal certainty that the claim is really for less than the jurisdictional amount." Id. (quotations omitted).

The Complaint alleges Plaintiff is a citizen of Texas and Defendant is a citizen of Delaware and New Jersey. (Compl. at 3.) Accordingly, the diversity of citizenship requirement is satisfied. The Complaint alleges damages in excess of $5,000,000 for a class of all individuals and businesses who rented a vehicle from Defendant at McCarran Airport in Las Vegas, Nevada and who paid a Fuel and Service Charge since January 2002. (Id. at 3, 6.) The Complaint alleges the Fuel and Service Charge is a "profit center" for Defendant. (Id. at 9.) Defendant has not contended that Plaintiff's damages claim of over $5,000,000 is not in good faith, and Defendant would be in a position to know whether Fuel and Service Charges at the McCarran Airport facility over the past five years have exceeded $5,000,000. The Court cannot say to a legal certainty that Plaintiff's class claims do not exceed $5,000,000. The Court therefore will exercise jurisdiction over this matter.

III. MOTION TO DISMISS

Defendant moves to dismiss Plaintiff's claims, arguing Plaintiff fails to state a claim for deceptive trade practices or breach of contract because Nevada law authorizes the Fuel and Service Charge. Additionally, Defendant moves to dismiss Plaintiff's claim under the Nevada Uniform Commercial Code ("Nevada UCC") regarding leases because Plaintiff cannot assert an affirmative cause of action based on the defenses of unconscionability or penalty. Finally, Defendant argues that even if Plaintiff could bring a claim under the Nevada UCC, the Fuel and Service Charge is not a penalty and it is not unconscionable because it is an optional method of performance under the rental agreement.

Plaintiff responds that while Nevada law permits Defendant to charge for refueling, Nevada law prohibits a surcharge on fuel. Plaintiff argues that because Defendant charges over two times its cost to refuel, the Fuel and Service Charge is an impermissible surcharge. Plaintiff contends that because the surcharge is void under Nevada law, Defendant committed a deceptive trade practice and breached the rental agreement by charging Plaintiff for refueling. Plaintiff also argues Nevada would recognize affirmative causes of action for a penalty and unconscionability. Finally, Plaintiff contends the Fuel and Service Charge is an unconscionable penalty, not a refueling option.

A. Deceptive Trade Practices/Breach of Contract

Count one of the Complaint alleges the Fuel and Service Charge violates Nevada consumer protection laws because Nevada law specifically prohibits Defendant from charging a surcharge for fuel. Count three of the Complaint alleges that pursuant to the rental agreement, if any of the contract's terms violate the law of the state in which the car is rented, that provision is modified to conform with the state's law. According to the Complaint, because the Fuel and Service Charge is contrary to Nevada law, the rental agreement is modified to delete that provision. The Complaint thus alleges Defendant breached the rental agreement by charging the Fuel and Service Charge.

Pursuant to Nevada Revised Statute § 482.3158(1):

The short-term lessor of a passenger car may impose an additional charge:

. . .

(b) For any item or a service provided if the short-term lessee could have avoided incurring the charge by choosing not to obtain or utilize the optional item or service.

. . .

(e) For refueling the car at the conclusion of the lease if the lessee did not return the car with as much fuel as was in the fuel tank at the beginning of the lease.

However, a short-term lessor "shall not charge a short-term lessee, as a condition of leasing a passenger car, an additional fee for ... [a]ny surcharges required for fuel." Nev.Rev.Stat. § 482.3158(2)(a).

Nevada has not addressed the issues in this case or construed § 482.3158. Where a state has not addressed a particular issue, a federal court must use its best judgment to predict how the highest state court would resolve it "using intermediate appellate court decisions, decisions from other jurisdictions, statutes, treatises, and restatements as guidance." Strother v. S. Cal. Permanente Med. Group, 79 F.3d 859, 865 (9th Cir.1996) (quotation omitted); Med. Lab. Mgmt. Consultants v. Am. Broad. Cos., Inc., 306 F.3d 806, 812 (9th Cir.2002). In making that prediction, federal courts look to existing state law without predicting potential changes in that law. Orkin v. Taylor, 487 F.3d 734, 741 (9th Cir.2007). Although federal courts should not predict changes in a state's law, they "are not precluded from affording relief simply because neither the state Supreme Court nor the state legislature has enunciated a clear rule governing a particular type of controversy." Air-Sea Forwarders, Inc. v. Air Asia Co., Ltd., 880 F.2d 176, 186 (9th Cir.1989) (quotation omitted). The Court looks to Nevada rules of statutory construction to determine the...

To continue reading

Request your trial
21 cases
  • Keddrell v. Berryhill
    • United States
    • U.S. District Court — District of Nevada
    • May 6, 2019
    ...jurisdiction over an action, and once it determines it lacks jurisdiction, it has no further power to act." Guerra v. Hertz Corp., 504 F. Supp. 2d 1014, 1017-18 (D. Nev. 2007) (citing Steel Co. v. Citizens for a Better Env't, 523 U.S. 83, 94 (1998) ("Without jurisdiction the court cannot pr......
  • Katayama v. Horita
    • United States
    • U.S. District Court — District of Nevada
    • February 20, 2019
    ...jurisdiction over an action, and once it determines it lacks jurisdiction, it has no further power to act." Guerra v. Hertz Corp., 504 F. Supp. 2d 1014, 1017-18 (D. Nev. 2007) (citing Steel Co. v. Citizens for Better Env't, 523 U.S. 83, 94 (1998) ("Without jurisdiction the court cannot proc......
  • Inoue v. Enforcement
    • United States
    • U.S. District Court — District of Nevada
    • January 17, 2018
    ...jurisdiction over an action, and once it determines it lacks jurisdiction, it has no further power to act." Guerra v. Hertz Corp., 504 F. Supp. 2d 1014, 1017-18 (D. Nev. 2007) (citing Steel Co. v. Citizens for a Better Env't, 523 U.S. 83, 94 (1998)). A court is "presumed to lack jurisdictio......
  • Walters v. Pella Corp.
    • United States
    • U.S. District Court — District of South Carolina
    • May 19, 2015
    ...or misleading language, or was so complicated that it failed to inform a reasonable person of the contract's consequences. 504 F. Supp. 2d 1014, 1021 (D. Nev. 2007). The Walters have likewise not alleged such faults in the limited warranty. However, the Nevada Supreme Court has also recogni......
  • Request a trial to view additional results
2 books & journal articles
  • Chapter § 3.04 RENTAL CARS
    • United States
    • Full Court Press Travel Law
    • Invalid date
    ...to re-fill the tank"; motion to dismiss granted with leave to file amended complaint). Ninth Circuit: Guerra v. Hertz Corp., 504 F. Supp. 2d 1014 (D. Nev. 2007) ("Plaintiff filed a class action in this Court alleging the Fuel and Service Charge is a surcharge for fuel and therefore void und......
  • Chapter § 6.01 THE IMPACT OF CLASS ACTIONS
    • United States
    • Full Court Press Travel Law
    • Invalid date
    ...provisions governing refueling of rental vehicles. . . . [M]otion to dismiss granted"). Ninth Circuit: Guerrav. Hertz Corp., 504 F. Supp. 2d 1014 (D. Nev. 2007).[78] See, e.g., Speyer v. Avis Rent-A-Car System, Inc., 415 F. Supp. 2d 1090 (S.D. Cal. 2005) ("Since 1997, Defendants have charge......

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT