Valli v. Avis Budget Rental Car Grp.

• Docket Number: Civil Action 14-6072 (JBC)
• Decision Date: 30 September 2024
• Citation: Valli v. Avis Budget Rental Car Grp., Civil Action 14-6072 (JBC) (D. N.J. Sep 30, 2024)
• Parties: DAWN VALLI, et al., individually and on behalf of others similarly situated, Plaintiffs, v. AVIS BUDGET RENTAL CAR GROUP, LLC, et al., Defendants.
• Court: U.S. District Court — District of New Jersey

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DAWN VALLI, et al., individually and on behalf of others similarly situated, Plaintiffs, v. AVIS BUDGET RENTAL CAR GROUP, LLC, et al., Defendants.

Civil Action No. 14-6072 (JBC)

United States District Court, D. New Jersey

September 30, 2024

OPINION

JAMES B. CLARK, III UNITED STATES MAGISTRATE JUDGE

THIS MATTER comes before the Court on two motions: (i) a motion by DefendantsAvis Budget Group, Inc., Avis Budget Car Rental, LLC, Avis Rent a Car System, LLC, and Budget Rent A Car System, Inc.(collectively “Defendants” or “ABG”) seeking to compel arbitration [see Dkt. No 246]; and (ii) a motion by PlaintiffsDawn Valli and Anton S. Dubinsky(collectively “Plaintiffs”) seeking partial summary judgment [see Dkt. No 241].Both motions are opposed.SeeDkt. Nos. 249, 251.The Court has reviewed the parties' submissions in support of and in opposition to the motions and decides the motions without oral argument pursuant to Fed.R.Civ.P. 78(b) and L. Civ. R. 78.1(b).For the reasons set forth below, Defendants' motion to compel arbitration[Dkt. No. 246] is DENIED, and Plaintiffs' motion for partial summary judgment[Dkt. No 241] is DENIED.

I.BACKGROUND

Procedural History

On September 30, 2014, PlaintiffDawn Valli(“Valli”) filed a class action complaint against DefendantsAvis Budget Rental Car Group, LLC and ATS Processing Services, LLC(“ATS”)^[1] regarding their alleged “misrepresentations and omissions concerning charging [car rental customers] for alleged traffic infractions and an administrative fee without consent, without disclosure, and without the opportunity to contest the allegation.”Dkt. No. 231at 2.Avis Budget Rental Car Group and ATS each filed motions to dismiss on December 8, 2014.SeeDkt. Nos. 17, 19.

On January 22, 2015, Valli filed a First Amended Class Action Complaint against Avis Budget Group, Inc., Avis Rent A Car System, LLC, and ATS alleging: (1) violations of the New Jersey Consumer Fraud Act (“NJCFA”);(2) breach of the implied covenant of good faith and fair dealing; (3) unjust enrichment; and (4) unconscionability under the laws of New Jersey.SeeDkt. No. 23.

On March 9, 2015, Defendants filed motions to dismiss[seeDkt. Nos. 26, 27], which were administratively terminated on April 12, 2016 pending completion of jurisdictional discovery.SeeDkt. No. 42.On August 18, 2016, the ABG Defendants filed another motion to dismiss.SeeDkt. No. 49.These motions were filed pursuant to Fed.R.Civ.P. 12(b)(6) for failure to state a claim.In arguing for dismissal, Defendants did not mention in any of the moving briefs that Plaintiffs' claims were subject to arbitration.On May 10, 2017, the Court denied the ABG Defendants' motion to dismiss in its entirety, finding among other things, that the Rental Agreements-i.e., the contracts Defendants enter into with their car rental customers-neglected to state that “Plaintiff would not have the opportunity to contest any such fines, and that [ABG] would pay the fine prior to any adjudication of the underlying violation.”Dkt. No. 65at 10.The Court noted that “[t]hese facts may constitute an affirmative act of misrepresentation,” which precluded dismissal.Id.

After the Court denied Defendants' motion to dismiss, discovery commenced with the entry of the Pretrial Scheduling Order on May 15, 2017.SeeDkt. No. 67.Since then, discovery has been extended several times^[2] and the parties raised several discovery disputes.^[3] However, discovery is not fully complete, and since October 30, 2023, discovery has been stayed pending further order of the Court.Dkt. No. 234.On May 25, 2017, Defendants filed their Answer to the First Amended Complaint and raised arbitration as a potential affirmative defense.Dkt. No. 68at p. 18-19, ¶¶ 33, 37, 38, Affirmative Defenses.

In response to Defendants' contention that Plaintiff only had standing for discovery related to the Avis brand because Valli was an Avis renter, and pursuant to the parties' stipulation, on June 26, 2018, Plaintiff filed a Second Amended Class Action Complaint adding Anton S. Dubinsky(“Dubinsky”), a Budget brand renter, as a plaintiff and adding defendantsAvis Budget Car Rental, LLC and Budget Rent a Car System, Inc., wholly-owned subsidiaries of Avis Budget Group, as defendants.SeeDkt. No. 95.Generally, the allegations related to Dubinsky's car rental in the Second Amended Class Action Complaint closely tracked the First Amended Complaint.Id.On September 25, 2018, Defendants filed their Amended Answer to the Second Amended Complaint and again mentioned arbitration as a possible affirmative defense.SeeDkt. No. 108at p. 24, ¶¶ 45, 49, 50, Affirmative Defenses.

On July 1, 2019, Plaintiffs filed their motion for class certification.SeeDkt. No. 146.The motion was administratively terminated and reinstated multiple times over the course of the next three years in large part due to the parties engaging in both Court-ordered and private mediation.SeeDkt. Nos. 175, 180, 193, 198, 206.Thereafter, on February 28, 2023, Judge Cecchi signed and entered a consent order executed by the parties consenting to the jurisdiction of the Undersigned pursuant to 28 U.S.C. § 636andFederal Rule of Civil Procedure 73.SeeDkt. No. 218.On March 28, 2023, the Court reinstated Plaintiffs' motion for class certification.SeeDkt. No. 221.

On October 10, 2023, the Court issued a decision on Plaintiffs' class certification motion denying Plaintiffs' proposed nationwide class and granting the motion as to a Preferred Members

Subclass created at the Court's discretion pursuant to Rule 23(c)(4)(B).SeeDkt. No. 231.More specifically, the Court determined the Class Period to be September 30, 2008 through the Present and defined the Preferred Members Subclass as:

All Avis Preferred and Budget Fastbreak members with a United States address who rented an Avis or Budget brand vehicle during the Class Period and whose rented vehicle was the subject of an alleged parking, traffic, toll or other violation, where: (1) the ticket issuing authority sent notice of the ticket directly to ABG; (2) ABG or its agent paid the fine and/or court costs associated with the alleged violation; and (3) ABG charged the vehicle renter for such fine, penalty and court costs, and/or an associated administrative fee.

Dkt. No. 232.Additionally, the Court ordered that Valli be designated as the representative of the Preferred Members Subclass.Id.As part of its decision on the class certification motion, the Court also held that Defendants had waived their right to arbitration by having litigated the case against Plaintiffs for years under the Third Circuit's reasoning in White v. Samsung Electronics Am., Inc., 61 F.4th 334(3d Cir.2023).Dkt. No. 231 at p. 23.

On October 24, 2023, Defendants filed a Petition for Permission to Appeal UnderRule 23(f) to the United States Court of Appeals for the Third Circuit.SeeDkt. No. 246-1 at 8(citingValli v. Avis, et al., App.No. 23-8047, at Doc. 1).Defendants requested, among other things, that the Third Circuit review the impact of an arbitration clause on class certification.Id.On October 30, 2023, following a telephone status conference held with the parties, the Court entered a stay of proceedings and directed Plaintiffs to file a letter regarding their request to file a motion for partial summary judgment under the NJCFA, with Defendants filing a reply shortly after.Dkt. No. 234.On November 17, 2023, the Third Circuit denied Defendants' Petition in its entirety. Dkt.No. 2371.

Thereafter, on December 14, 2023, the Court granted Plaintiffs leave to file their motion for partial summary judgment and concurrently permitted Defendants to file their motion regarding arbitrability.Dkt. No. 239.The motions were filed on February 2, 2024.SeeDkt. Nos. 240, 241, 242, 243, 244.On February 7, 2024, Defendants filed an amended motion to compel arbitration.Dkt. No. 246.

Statement of Facts

Valli a Florida resident and Avis Preferred member, rented an Avis brand car from Defendants' Maryland facility at Baltimore-Washington International Airport on June 11, 2014, and was ticketed by an automatic traffic enforcement device which captured the rental vehicle going 52 mph in a 35-mph zone in Washington, DC on that same day (the “Infraction”).Dkt. Nos. 244 at ¶¶ 3,7;251-3 at ¶¶ 3,7.The D.C. Metropolitan Police Department issued a “Notice of Infraction” to PV Holding Corp., a subsidiary of Defendants, as the owner of the vehicle.Dkt. No. 251at p. 2.The Notice of Infraction stated: “[y]our vehicle was photographed violating District of Columbia traffic regulations on the date and time listed below.Under District law, the registered owner of a vehicle is liable for payment of the fine for violations recorded using an automated traffic enforcement system.”Dkt. No. 251-3 at ¶ 7(citingDkt. No. 243-1 Ex. G).The Notice of Infraction also specified how to contest the ticket, such as when and where to appear for a hearing and/or how to direct a mail adjudication request.Id.

On July 3, 2014, Avis sent Valli a “Vehicle Violation Notice” with a copy of the Infraction and notified Valli that, per the rental contract, it had paid the fine and that Valli owed the $150 fine plus a $30 administrative fee.Dkt. Nos. 244 at ¶¶ 12, 13;251-3 at ¶¶ 12,13.Although the deadline to contest the ticket was August 17, 2014, Avis indicated in its July 3, 2014 notice that it had already paid the $150 fine.Id.at ¶ 10.After Valli did not pay the fee or fine through another payment arrangement, Avis charged the credit card on file.Id.at ¶ 13.^[4]

The parties dispute which agreement governed the rental and Defendants ability to pay and charge for the tickets.Plaintiffs assert that the...