Sobel v. The Hertz Corp., 03:06-cv-00545-LRH-RAM.

• Citation: 698 F.Supp.2d 1218
• Decision Date: 17 March 2010
• Docket Number: No. 03:06-cv-00545-LRH-RAM.,03:06-cv-00545-LRH-RAM.
• Parties: Janet SOBEL and Daniel Dugan, Ph.D., individually and on behalf of all others similarly situated, Plaintiffs,v.The HERTZ CORPORATION, a Delaware corporation, Defendant.
• Court: U.S. District Court — District of Nevada

698 F.Supp.2d 1218

Janet SOBEL and Daniel Dugan, Ph.D., individually and on behalf of all others similarly situated, Plaintiffs,
v.
The HERTZ CORPORATION, a Delaware corporation, Defendant.

No. 03:06-cv-00545-LRH-RAM.

United States District Court,
D. Nevada.

March 17, 2010.

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COPYRIGHT MATERIAL OMITTED

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Arthur Stock, Susan S. Thomas, Berger & Montague, P.C., Philadelphia, PA, David B. Zlotnick, Krause Kalfayan, San Diego, CA, G. David Robertson, Richard D. Williamson, Robertson & Benevento, Reno, NV, for Plaintiffs.

Anna McLean, Peter S. Hecker, Sheppard Mullin Richter & Hampton LLP, San Francisco, CA, Dan C. Bowen, Bowen Hall Ohlson & Osborne, Reno, NV, William E. Peterson, Morris Peterson, Reno, NV, for Defendant. ORDER LARRY R. HICKS, District Judge.

Before the court is Plaintiffs Janet Sobel and Daniel Dugan, Ph.D.'s (collectively “Plaintiffs”) Motion for Summary Judgment (# 78 ¹). The Hertz Corporation (“Hertz”) has filed an opposition (# 93) to which Plaintiffs replied (# 100). Also before the court is Hertz's Motion for Summary Judgment (# 81). Plaintiffs have filed an opposition (# 89) to which Hertz replied (# 103). Hertz has also filed a Motion to Strike (# 97). Plaintiffs have filed an opposition (# 99) to which Hertz replied (# 105).²

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I. Facts and Procedural History

This is a class action filed on behalf of persons who have rented cars from Hertz at airports in the State of Nevada. Hertz, a national rental car company that transacts business in Nevada, is a Delaware corporation with its principal place of business in New Jersey.

The material facts of this case are largely undisputed. To operate at airport locations, rental car companies agree by contract to pay concession fees to the airports. At the Reno-Tahoe International Airport in Reno and the McCarran International Airport in Las Vegas, Hertz contracted to pay a percentage of its gross revenues to the airports as concession fees. Hertz recovers these fees from its customers as surcharges that it labels “concession recovery fees.” The amounts of these surcharges are determined by Hertz, and the fees represent nothing more than an attempted recoupment of one of Hertz's ordinary operating expenses.³ Since the mid-to-late 1990s, Hertz has “unbundled” the surcharges from its base rental rate. In other words, the base rental rate quoted to customers does not include the separate airport “concession recovery fee” that Hertz charges customers.

Plaintiffs reserved rental cars from Hertz over the telephone. At the time of the reservations, Hertz representatives quoted Plaintiffs an approximate total, which included taxes, fees, and surcharges. Upon obtaining their cars, Plaintiffs each signed a “Rental Record” that separately disclosed the airport concession recovery fee and provided an approximate total price. Plaintiffs paid their rental charges in full without protest.

Plaintiffs allege Hertz's conduct violated section 482.31575 of the Nevada Revised Statutes and the Nevada Deceptive Trade Practices Act. In addition, Plaintiffs allege a claim for unjust enrichment.⁴

II. Legal Standard

Summary judgment is appropriate only when “the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(c). In assessing a motion for summary judgment, the evidence, together with all inferences that can reasonably be drawn therefrom, must be read in the light most favorable to the party opposing the motion. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986); County of Tuolumne v. Sonora Cmty. Hosp., 236 F.3d 1148, 1154 (9th Cir.2001).

The moving party bears the burden of informing the court of the basis for its motion, along with evidence showing the absence of any genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). On those issues for which it bears the burden of proof, the moving party must make a showing that is “sufficient for

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the court to hold that no reasonable trier of fact could find other than for the moving party.” Calderone v. United States, 799 F.2d 254, 259 (6th Cir.1986) see also Idema v. Dreamworks, Inc., 162 F.Supp.2d 1129, 1141 (C.D.Cal.2001).

To successfully rebut a motion for summary judgment, the non-moving party must point to facts supported by the record that demonstrate a genuine issue of material fact. Reese v. Jefferson Sch. Dist. No. 14J, 208 F.3d 736 (9th Cir.2000). A “material fact” is a fact “that might affect the outcome of the suit under the governing law.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). Where reasonable minds could differ on the material facts at issue, summary judgment is not appropriate. See v. Durang, 711 F.2d 141, 143 (9th Cir.1983). A dispute regarding a material fact is considered genuine “if the evidence is such that a reasonable jury could return a verdict for the nonmoving party.” Liberty Lobby, 477 U.S. at 248, 106 S.Ct. 2505. The mere existence of a scintilla of evidence in support of the plaintiff's position will be insufficient to establish a genuine dispute; there must be evidence on which the jury could reasonably find for the plaintiff. See id. at 252, 106 S.Ct. 2505.

Where, as here, parties file cross-motions for summary judgment on the same claims before the court, the court must consider each party's motion separately and on its own merits. Fair Hous. Council of Riverside County, Inc. v. Riverside Two, 249 F.3d 1132, 1136 (9th Cir.2001) (citations omitted). “[T]he court must consider the appropriate evidentiary material identified and submitted in support of both motions, and oppositions to both motions, before ruling on each of them.” Id. at 1134.

III. Hertz's Motion for Summary Judgment

In the complaint, Plaintiffs assert the following claims for relief: (1) a violation of Nevada Revised Statutes section 482.31575; (2) false and deceptive trade practices in violation of the Nevada Deceptive Trade Practices Act, Nev.Rev.Stat. §§ 598.005-598.992; and (3) unjust enrichment. Hertz seeks summary judgment on each of these claims.

A. Voluntary Payment Doctrine

Hertz first argues the voluntary payment doctrine bars all of Plaintiffs' claims. Hertz contends, “Plaintiffs' claims are barred in their entirety ... [because] Sobel and Dugan paid their rental charges with full knowledge of the fee they now claim is improper.” (Hertz's Mot. Summ. J. (# 81) 23.)

In Randall v. County of Lyon, the Nevada Supreme Court recognized the voluntary payment doctrine and stated, “The rule is well settled that money voluntarily paid, with full knowledge of all the facts, although no obligation to make such payment existed, cannot be recovered back.” 20 Nev. 35, 14 P. 583, 584 (1887). Since that decision, however, the Nevada Supreme Court has not addressed the application of the doctrine. Accordingly, the court must use its best judgment to predict how the Nevada Supreme Court would apply the doctrine using “intermediate appellate court decisions, decisions from other jurisdictions, statutes, treatises, and restatements as guidance.” See Strother v. S. Cal. Permanente Med. Group, 79 F.3d 859, 865 (9th Cir.1996) (citation omitted).

In arguing that the voluntary payment doctrine is a viable affirmative defense in this case, Hertz relies primarily on

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Huch v. Charter Communications, Inc., No. ED89926, 2008 WL 1721868, 2008 Mo.App. LEXIS 531 (Mo.Ct.App. April 15, 2008) (“ Huch I ”). There, the Missouri Court of Appeals held that the voluntary payment doctrine barred the plaintiffs from recovering under the Missouri Merchandising Practices Act amounts billed by and paid to the defendant telephone company for television channel guides the plaintiffs did not request. In relevant part, the court found that (1) the doctrine applied to claims seeking to recover allegedly illegal fees or surcharges and (2) the consumer-based public policy behind the Merchandising Practices Act did not bar the doctrine's application.

Since the parties submitted their briefs, however, the Missouri Supreme Court has issued a superceding opinion. See Huch v. Charter Communications, Inc., 290 S.W.3d 721 (Mo.2009) (“ Huch II ”). In reversing the decision of the court of appeals, the court in Huch II first stated that because the fundamental purpose of the Merchandising Practices Act is to protect consumers, “certain legal principles are not available to defeat claims authorized by the act.” Id. at 725 (citation omitted). The court found this includes the voluntary payment doctrine, which is a “principle based on waiver and consent that is not always available when its application would be contrary to public policy....” Id. at 727. Accordingly, the court held, “In light of the legislative purpose of the [M]erchandising [P]ractices [A]ct, the voluntary payment doctrine is not available as a defense to a violation of the act.” Id.

There appears to be a split in authority concerning whether the voluntary payment doctrine is a permissible defense where its application would be contrary to public policy. Several courts have issued rulings consistent with Huch II. See Indoor Billboard/Wash. Inc. v. Integra Telecom of Wash., Inc., 162 Wash.2d 59, 170 P.3d 10, 24 (2007) (“[T]he voluntary payment doctrine is inappropriate as an affirmative defense in the [Consumer Protection Act] context, as a matter of law, because we construe the [Act] liberally in favor of plaintiffs.”); Eisel v. Midwest BankCentre, 230 S.W.3d 335, 339-40 (Mo.2007) (because voluntary payment doctrine is based on waiver and consent, defendant could not assert defense to claim that it engaged in the unauthorized practice of law in...