Class action plaintiff against Hertz told to arbitrate toll fee claims; Judge says 'reasonable person' should know they're bound to contract

By Elizabeth Alt | Jun 15, 2018

SAN DIEGO (Legal Newsline) – A California court has granted Hertz Corp.’s motion to compel arbitration in a case over allegations that Hertz overcharged for a toll violation fee, noting that the plaintiff was bound by contract to arbitrate all claims.

SAN DIEGO (Legal Newsline) – A California court has granted Hertz Corp.’s motion to compel arbitration in a case over allegations that Hertz overcharged for a toll violation fee, noting that the plaintiff was bound by contract to arbitrate all claims.

The court order on March 18 by U.S. District Court for the Southern District of California Judge Cynthia Bashant stated, “A reasonable person in plaintiff’s position would believe that renting a vehicle from Hertz—as a Hertz Gold Member at a Hertz location—would bind him to a contract he received from Hertz before leaving the company’s lot with its vehicle.”

The order stated New Jersey resident Moises Olivas signed up to be a Gold Program member through Hertz’s website in 2006, in which he provided personal information and an electronic signature. In 2014, Olivas rented a car online to be picked up at the John Wayne Airport in California and clicked the “submit” button, which Hertz’s website states to mean the party has read and understood the terms and provisions. 

The order stated that Olivas alleged that he picked up the car from the Hertz rental stall and was handed several folded documents before he drove off the lot. Olivas alleged that there was a line of cars behind him, and he drove out of the lot. The folded documents were Hertz’s Rental Record.

Olivas claimed after returning the car he received an email from Hertz notifying him that he would be charged a $30 toll violation fee for not paying a FasTrak toll on his drive to San Diego and his credit card on file was then charged. Olivas states that the fee Hertz charges is not to pay the toll violation but is a fee simply to transfer the violation into Olivas’ name. 

Olivas filed suit, claiming the toll fee was inflated. Olivas seeks to certify a putative class action, and filed claims for breach of contract, breach of the implied covenant of good faith and fair dealing, conversion, and violation of California’s Unfair Competition Law, California Business & Professions Code.

Hertz motioned to compel arbitration, arguing that every Rental Record, which Olivas admits he was given, states in bold print that by accepting the car, the party is bound to arbitrate any claims in arbitration or small claims court, and that jury trials or class actions are not allowed. Hertz claims that “the parties expressly agreed in the Gold Agreement that their contractual relationship would be supplemented for each future rental by the terms contained in each future Rental Record.”

Olivas claims he did not agree to the arbitration clause, arguing that he should have been given the Rental Record before he got the car, not when he was driving off the lot with a line of cars behind him. 

The court agreed with Hertz, stating “The Rental Record invited plaintiff’s acceptance by conduct—accepting and taking the company’s rental car.”

The court order stated that “The parties have clearly and unmistakably delegated arbitrability issues to the arbitrator,” and ordered the parties to proceed to arbitration, staying any further judicial proceedings.

U.S. District Court for the Southern District of California case number No. 17-cv-01083-BAS-NLS

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