Class Lessons: Learning from Class Actions

On June 25, 2014, a New Jersey federal court approved a settlement of more than $11 million plus attorneys’ fees and costs to settle class actions involving toll and administrative fees charged to renters who used electronic toll payment systems. (Doherty and Simonsen v. Hertz Corp., et al.)

Since rental companies (RACs) have long been targets of class actions, what lessons can we learn from Doherty and other cases?

A class action is a lawsuit filed by a representative on behalf of a group (“class”) of parties with similar claims. Depending upon the claim, class size can range from 20 to hundreds of thousands.

Liability can be multiplied by the class size, and the defendants may be responsible for the plaintiffs’ attorneys’ fees and other costs.

Two categories, strict compliance and consumer protection, are instructive.

Strict Compliance Cases

Strict compliance cases are based on a range of federal and state laws, such as privacy, civil rights/anti-discrimination and state vehicle rental laws, which impose liability even if the defendant is unaware of the law or its requirements. Recent examples include:

Website accessibility: A number of class actions allege the denial of website access to the visually impaired. These cases typically allege that visually impaired persons are denied full access to a website if the site does not allow access via keyboards and software that vocalizes the website information.

Claims are made under federal Americans with Disabilities Act (ADA) and various state acts, and some also identify website standards published under the Web Content Accessibility Guidelines 2.0.

Text messaging: The Federal Telephone Consumer Protection Act (TCPA) protects U.S. consumers from unsolicited text messages. A potential claim arises when a business receives a customer’s cell phone number for texting important information.

Potential exposure arises when a business then uses that cell number to text a solicitation or advertisement. That practice potentially violates the TCPA, as well as various state statutes and regulations, and has given rise to numerous class action claims.

With strict compliance cases, remember that ignorance of the law is no excuse. Pay attention to legal developments in “hot” areas like state rental law, privacy and the ADA through newsletters such as Auto Rental News Reporter and additional resources from your advisers and industry groups.

Follow high-profile cases in other industries (such as cases related to the Target data security breach in late 2013). They may provide guidance on complying with laws affecting all businesses.

Review your marketing materials for compliance.

CONTINUED:  Class Lessons: Learning from Class Actions
« Previous  |  1  2  |  Next »

Comment On This Story

Name:  
Email:  
Comment: (Max. 10000 characters)  
Please leave blank:
* Please note that every comment is moderated.

Newsletter: Sign up to receive latest news, articles, and much more.

Read the latest

Auto Focus Blog: A blog covering fleets, auto rental and the business of cars

Autonomous Vehicles and the Changing Role of the Fleet Manager

With fewer drivers and substantially longer fleet lifecycles, fleet managers will pivot to new job functions.

2017: Fleet Mix Will Be Paramount

Car rental companies are migrating to vehicle segments with better residual values, though not without bumps in the road.

Auto Rental Summit: Five Trend Lines

Taking in the seminars, discussions, and networking at the 2016 Auto Rental Summit, trend lines emerged around shifts in model mix, data protection issues, increasing labor costs, workforce engagement, and new platforms to rent cars.

Job Finder: Access Top Talent. Fill Key Positions.