W02-WEST:5ELS1\403381932.1 MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT
OF MOTION FOR FINAL APPROVAL OF SETTLEMENT
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WILLIAM PETERSON (Bar No. 1528)
MORRIS PETERSON
6100 Neil Road, Suite 555
Reno, NV 89511
Telephone: 775.829.6000
Facsimile: 775.829.6001
PETER S. HECKER (Admitted Pro Hac Vice)
ANNA S. McLEAN (Admitted Pro Hac Vice)
SHEPPARD, MULLIN, RICHTER & HAMPTON LLP
A Limited Liability Partnership
Including Professional Corporations
Four Embarcadero Center, 17th Floor
San Francisco, California 94111-4109
Telephone: 415.434.9100
Facsimile: 415.434.3947
Attorneys for Defendant
THE HERTZ CORPORATION
UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEVADA
JANET SOBEL, DANIEL DUGAN, Ph.D.,
LYDIA LEE, and MARK SINGER, individually
and on behalf of all others similarly situated,
Plaintiffs,
v.
THE HERTZ CORPORATION, a Delaware
corporation, et al.,
Defendants.
Civil Action No. 3:06-CV-00545-LRH-RAM
DEFENDANT THE HERTZ
CORPORATION'S MEMORANDUM OF
POINTS AND AUTHORITIES IN
SUPPORT OF FINAL APPROVAL OF
SETTLEMENT
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TABLE OF CONTENTS
Page
I. INTRODUCTION ......................................................................................................................... 1
II. BACKGROUND .......................................................................................................................... 1
A. Summary of Plaintiffs' Claims .................................................................................. 1
B. The Settlement and Preliminary Approval of the Settlement Agreement................. 2
III. DISCUSSION ............................................................................................................................. 3
A. Notice Complied With the Preliminary Approval Order and Was Legally
Sufficient ................................................................................................................... 3
B. The Settlement Terms Are Fair, Reasonable and Adequate ..................................... 3
1. The Settlement Is Fair and Adequate In Light of the Substantive
Problems with Plaintiffs' Remaining Claims ................................................ 3
a. NRS Section 482.31585 Requires Proof of Causation and
Actual Damage.................................................................................. 4
b. To Establish Unjust Enrichment, Plaintiffs Would Have To
Show That Defendant "Unjustly" Retained A Benefit ...................... 5
c. Plaintiffs Could Not Have Shown the Necessary Elements of
Their Claims...................................................................................... 6
2. The Settlement Terms Are Generous ............................................................ 6
IV. CONCLUSION........................................................................................................................... 7
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I. INTRODUCTION
Defendant The Hertz Corporation ("Hertz") submits this memorandum in support of final
approval of the settlement agreed to by the parties in this action (the "Settlement"). Hertz has
provided the required notice set forth in the Court's Order Granting Preliminary Approval of the
Settlement Agreement and Approval of the Form of Notice by emailing notices to 425,933
identifiable settlement class members, and Hertz and Advantage have mailed notice to an
additional 791,961 identifiable settlement class members.1 In addition to certain factors set forth
in plaintiffs' moving papers, Hertz submits the Settlement is fair, reasonable and adequate for the
reasons set forth below. Hertz therefore joins in plaintiffs' request that the Court grant final
approval of the Settlement in all respects, so that the settlement relief may be distributed and the
litigation concluded.
II. BACKGROUND
A. Summary of Plaintiffs' Claims
Hertz is a national rental car company ("RAC"). This case concerns the practice—used by
all national RACs and approved by Nevada airport authorities for many years—of charging
customers an "Airport Concession Recovery Fee" ("ACRF") to "recover" fees imposed by the
airports on RACs for the privilege of doing business there, and separately listing such charge on
customer bills. Specifically, plaintiffs allege that Hertz improperly itemized the ACRF in an
"unbundled" manner, whereby the charge appeared on their bills separate from the "base rental
rate," purportedly in violation of NRS section 482.31575 ("section 482.31575"). Plaintiffs also
allege that Hertz was unjustly enriched by plaintiffs' rentals, and that the "unbundling" practice
constituted an unfair business practice in violation of the Nevada Deceptive Trade Practices Act
(the "NDTPA"). On cross-motions for summary judgment, this Court granted Hertz's motion
1 Simply Wheelz LLC—a wholly owned subsidiary of Hertz—acquired the assets of
Advantage Rent A Car out of bankruptcy in April 2009. In July 2009, Simply Wheelz
LLC d/b/a Advantage Rent A Car opened a rental location at Reno-Tahoe International
Airport using rental documents modeled after those used by Hertz. For that reason,
Advantage customers who rented at that airport from July 1, 2009 to September 30, 2009
are included within the settlement class, have been afforded full notice, and will be
afforded full benefits under the Settlement.
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regarding plaintiffs' NDTPA claim, granted plaintiffs' motion as to the section 482.31575 claim,
and denied both parties' motions on the unjust enrichment claim.
In granting Hertz's motion on plaintiffs' NDTPA claim, the Court stated that "courts
addressing the issue of whether itemizing a concession recovery fee as a separate charge not
included in the daily rental rate is unfair or deceptive have consistently held that the practice is not
unfair or deceptive where the fee is disclosed at the time of the rental." (Dkt. 111, p. 17:15-17.)
In this case, "when Plaintiffs made their reservations, Hertz quoted Plaintiffs the full price of their
rentals. By informing Plaintiffs that the price included all taxes, fees, and surcharges, Hertz
notified Plaintiffs that the total rental price included additional charges on top of the base rate."
Id. at p. 18:9-12. Thus, the Court found, "in light of Hertz's full disclosure of the total price at the
time of the reservations, the court finds that Hertz's practice was not deceptive within the meaning
of the NDTPA." Id. at p. 18:13-15 (emphasis added).
B. The Settlement and Preliminary Approval of the Settlement Agreement
As discovery on the damages phase of the litigation began, the parties, as well as
Enterprise Leasing Company-West, LLC and Vanguard Car Rental USA, LLC—Enterprise had
been subject to a separate but nearly identical suit brought by plaintiffs' counsel—agreed to attend
mediation at JAMS before the Honorable Judge Ronald Sabraw (Ret.). Judge Sabraw held a
lengthy mediation session on June 4, 2010, and the parties continued informal discussions
separately and through Judge Sabraw for the remainder of the month.
In July 2010, after much negotiation, the parties agreed upon settlement terms. They
subsequently negotiated a Settlement Agreement, and moved for preliminary approval of the
Settlement Agreement. This Court held a hearing on preliminary approval on November 9, 2010.
On November 23, 2010, the Court granted preliminary approval of the Settlement Agreement, and
it found that the notice requirements set forth in the Settlement Agreement complied with due
process. It issued an Order Granting Preliminary Approval of the Settlement Agreement and
Approval of the Form of Notice, as well as an Order Conditionally Certifying a Settlement Class.
(See Dkt. 135, 136.) All parties now move for final approval of the Settlement.
//
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III. DISCUSSION
A. Notice Complied With the Preliminary Approval Order and Was Legally Sufficient
As the Court recognized in its Order Granting Preliminary Approval of Settlement and
Approval of the Form of Notice, the notice provisions of the Settlement comply with all
constitutional requirements. (Dkt. 136; see 5 Moore's Federal Practice, § 23.162 (Matthew Bender
3d ed.) (courts have broad discretion in determining adequacy of form and manner of notice)).
Hertz was ordered to, and has now provided, notice of the Settlement to approximately 1,217,894
settlement class members directly by e-mail or standard mail. (Declaration of Jeffrey Gyomber
Regarding Notice to Settlement Class Members, ¶¶ 5, 6, Dkt. 182.) Hertz also provided notice by
standard mail to settlement class members for whom the original e-mail notice "bounced back."
Additionally, a public website has been created to host all pertinent settlement-related documents,
and to permit registration for settlement benefits as well as electronic changes of address and opt-
outs. Hertz has provided notice of the Settlement to the appropriate state and federal officials
pursuant to the Class Action Fairness Act, 28 U.S.C. section 1715. (See Proof of Service of
Notice of Proposed Class Settlement, Dkt. 125-2.) The requirements of due process endorsed by
this Court have plainly been met.
B. The Settlement Terms Are Fair, Reasonable and Adequate
Just as the notice to settlement class members was fair and adequate, so too are the terms
of the Settlement itself. In considering the fairness, reasonableness, and adequacy of a settlement,
this Court should consider a number of factors, including the strength of the plaintiff’s case, the
risks of ongoing litigation, and the benefits offered to settlement class members. See Staton v.
Boeing Co., 327 F.3d 938, 959 (9th Cir. 2003) (quoting Molski v. Gleich, 318 F.3d 937, 953 (9th
Cir. 2003)). Here, these factors, along with certain additional factors cited in plaintiffs' papers,
militate in favor of this Court granting final approval.
1. The Settlement Is Fair and Adequate In Light of the Substantive Problems
with Plaintiffs' Remaining Claims
After summary judgment, numerous problems remained with plaintiffs' case. As set forth
below, plaintiffs would have to establish the elements of causation, actual injury and damages, and
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"unjust" enrichment to prevail in the damages phase of this litigation.2 Their inability to do so,
along with the difficulties they would have faced with respect to class certification in the litigation
context, all support final approval of the Settlement here.
a. NRS Section 482.31585 Requires Proof of Causation and Actual
Damage
NRS section 482.31585 ("section 482.31585") provides only certain remedies for
violations of section 482.31575. It states: "[a] short-term lessee may bring an action against a
short-term lessor for the recovery of damages and appropriate equitable relief for any violation of
NRS 482.3151 to 482.3159, inclusive." NRS § 482.31585 (emphasis added). Thus, in order to
recover under section 482.31585, plaintiffs must have experienced actual injury and damages.
The plain language of section 482.31585 supports this reading. First, the statute lacks a
"statutory damages" provision, while numerous other Nevada statutes provide for such a monetary
remedy in the absence of actual damage. See NRS § 484.6068 (violation of vehicle odometer
disclosure requirements merits three times amount of actual damages sustained or $2,500,
whichever is greater); NRS § 118A.390(1) (landlord guilty of retaliatory eviction must pay actual
damages, or amount not greater than $1,000, or both); NRS § 369.560 (wholesaler entitled to
award of $1,000 for each violation and also may recover damages sustained by him for violation
of statute).
Next, use of the word "damages" in the statute invokes the common definition of the word.
Arnesano v. State, 113 Nev. 815, 821 (1997) ("damages" indicates, by plain meaning,
"'compensation . . . recovered . . . by any person who has suffered loss, detriment, or injury . . .
through the unlawful act or omission, or negligence of another'") (citation omitted). Moreover,
"damages" means "money claimed by, or ordered to be paid to, a person as compensation for loss
or injury." Black’s Law Dictionary, p. 416 (9th ed. 2009); see also 22 Am. Jur. 2d, Damages § 1
2 As this Court recognized, plaintiffs' request for injunctive relief is moot due to the Nevada
Legislature's 2009 amendment to section 482.31575, which expressly approved the pass-
through and separate disclosure of ACRFs. (Order on Motions for Summary Judgment, p.
9:17 n. 9, Dkt. 111.)
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("damages" generally connotes payment in money for plaintiff’s loss caused by defendant’s breach
of duty). Accordingly, plaintiffs would have to prove actual damages and injury.
Proof of causation is also required. Again, "damages" means payment in money "for a
plaintiff’s loss caused by a defendant’s breach of a duty." 22 Am. Jur. 2d, Damages § 1 (emphasis
added).3 Thus, by allowing for the recovery of "damages," section 482.31585 would require
plaintiffs to show actual injury and damages caused by Hertz’s alleged illegal conduct. This, in
turn, requires proof of reliance. See Picus v. Wal-Mart Stores, Inc., 256 F.R.D. 651, 657-58 (D.
Nev. 2009).
b. To Establish Unjust Enrichment, Plaintiffs Would Have To Show That
Defendant "Unjustly" Retained A Benefit
Like plaintiffs' statutory claim, their claim for unjust enrichment requires proof of certain
elements prior to recovery. The essential elements of unjust enrichment are "a benefit conferred
on the defendant by the plaintiff, appreciation by the defendant of such benefit, and acceptance
and retention by the defendant of such benefit under circumstances such that it would be
inequitable for him to retain the benefit without payment of the value thereof." Unionamerica
Mtg. v. McDonald, 97 Nev. 210, 212 (1981) (emphasis added); Topaz Mut. Co. v. Marsh, 108
Nev. 845, 856 (1992) (same). A plaintiff's recovery is strictly limited to restitution of the benefit
found to be unjustly conveyed to another. See Haromy v. Sawyer, 98 Nev. 544 (1982) (awarding
restitution upon finding of unjust enrichment); Martinez v. State, 120 Nev. 200, 202-203 (2004)
("Restitution is 'compensation for benefits derived from a wrong done to another,' or
'compensation or reparation for the loss caused to another.'") (citation omitted) (emphasis added).
Plaintiffs thus would have to prove an "unjust" benefit conferred on Hertz.
//
3 See also Windham at Carmel Mt. Ranch Ass'n v. Superior Ct., 109 Cal.App.4th 1162, 1175
(2003) ("'damages refers to monetary compensation for detriment caused by a breach of an
obligation'") (emphasis added); Picus v. Wal-Mart Stores, Inc., 256 F.R.D. 651, 657 (D.
Nev. 2009) (implicit within the language "'damages that he has sustained,'" is a causation
requirement) (emphasis added); Perrone v. General Motors Acceptance Corp., 232 F.3d
433, 435-36 (5th Cir. 2000) (proof of causation and reliance necessary where a statute
allowed for recovery of "actual damages").
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c. Plaintiffs Could Not Have Shown the Necessary Elements of Their
Claims
Based on the foregoing analysis and black letter law, plaintiffs would bear the burden of
establishing causation, actual damages, and "unjust" conduct in order to recover any money in this
case. They could not have sustained that burden. Indeed, this Court has already found that "Hertz
quoted Plaintiffs the full price of their rentals," and "notified Plaintiffs that the total rental price
included additional charges on top of the base rate." (Court’s Order on Motions for Summary
Judgment, 18:9-11, Dkt. 111.) It also found that Hertz made "full disclosure" of its prices and did
not engage in any deceptive or misleading behavior. Id. at 18:13-15. Further, plaintiffs had full
knowledge of the price of the vehicles they rented when they rented, and they accepted and
enjoyed the benefits of their rentals. In light of these facts, they could not have established any
actual injury or damages resulting from Hertz’s conduct. For the same reasons, they could not
begin to establish the "unjust" element of unjust enrichment.
Stated simply, Hertz continues to deny all allegations that it acted in an unjust manner and
that plaintiffs or members of the settlement class suffered damage or harm by reason of any
conduct, statement, act or omission of Hertz.4 If the case were to proceed to trial, plaintiffs thus
would face a number of significant hurdles in further litigation. In light of these facts, the
Settlement is fair and adequate, and should be finally approved by the Court.
2. The Settlement Terms Are Generous
Although plaintiffs have described the terms of the Settlement in detail in their papers in
support of both preliminary and final approval, it bears repeating that members of the settlement
class will receive substantial benefits. Hertz denies that plaintiffs or settlement class members
have suffered any harm, but even if the Court were to credit their arguments, the monetary
damages that plaintiffs allege each class member suffered are undeniably minimal. The
Settlement affords settlement class members a $10 or $20 credit for car rentals, closely
4 Moreover, Hertz would oppose class certification for litigation purposes in the event the
Settlement were not approved.
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approximating the monetary damages allegedly suffered, as plaintiffs have described. (See
Plaintiffs' Memorandum of Points and Authorities in support of Preliminary Approval,
Conditional Certification, and Approval of the Form of Notice, p. 6:23-24, Dkt. 123 ("The four
lead plaintiffs actually paid between $6 and $14 each for the allegedly improper fees.")). This
payment is generous in light of the pervasive problems with plaintiffs' case, described above, and
the substantial risk that they would recover nothing if this litigation were to proceed. For this
reason, as well as many of the reasons plaintiffs set forth in their moving papers, the Settlement is
fair, reasonable, and adequate.
IV. CONCLUSION
Because the Settlement is fair, reasonable and adequate, and because Hertz complied with
the notice provisions of the Court's Order Granting Preliminary Approval of the Settlement
Agreement and Approval of the Form of Notice and with due process, Hertz respectfully requests
that the Court grant final approval so that this matter may be expeditiously resolved, to the benefit
of all parties and the settlement class members.
Dated: April 4, 2011 Respectfully submitted,
MORRIS PETERSON
SHEPPARD MULLIN RICHTER & HAMPTON LLP
By
/s/ Peter S. Hecker
PETER S. HECKER
Attorneys for Defendant
THE HERTZ CORPORATION
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