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Spotswood v. Hertz Corp.

United States District Court, D. Maryland

February 7, 2019



          Richard D. Bennett U.S. District Judge

         Plaintiff Robert Spotswood (“Plaintiff” or “Spotswood”) brings this class action lawsuit against Defendant Hertz Corporation (“Defendant” or “Hertz”), alleging that Hertz improperly fined customers who damaged their Hertz rental vehicles. Currently pending is Plaintiff's Motion for Class Certification. (ECF No. 85.) The parties' submissions have been reviewed, and no hearing is necessary. See Local Rule 105.6 (D. Md. 2018). For the reasons stated below, Plaintiff's Motion for Class Certification (ECF No. 85) is DENIED.


         I. Spotswood's Factual Allegations.

         The allegations contained in Spotswood's Amended Complaint (ECF No. 48) have been addressed in a prior Memorandum Opinion of this Court.[1] See Spotswood v. The Hertz Corporation, WMN-16-1200, 2016 WL 6879938 (D. Md. Nov. 22, 2016). This Court once again recounts those allegations to provide context for the pending Motion for Class Certification.

         This case arises from Hertz's assessment of “Administrative, ” “Loss of Use” and “Diminishment of Value” fees (collectively, the “fees”) against Hertz customers who damaged their rental cars. (ECF No. 48, at ¶ 1.) The Plaintiff, Spotswood, is an Alabama lawyer who has previously served as co-counsel with the law firm representing him in this case. (ECF No. 100, at 17.) On July 3, 2013, he utilized his American Express Card to rent a car from Defendant at the Baltimore Washington International Airport. (Id. at ¶ 10.) Like other Hertz customers, Spotswood agreed to the terms of a “Rental Record” which contained terms specific to the transaction. (Id. at ¶¶ 11, 12.) Additionally, as a member of the Hertz #1 Gold Club, he had previously entered into a “Rental Agreement” with Hertz. (Id. at ¶ 12.) It is undisputed that the Rental Agreement and the Rental Record form the entire contract between the two parties. (Id. at ¶ 14; ECF No. 90, at 4.)

         The Agreement provides that the renter of the vehicle is “responsible for any and all loss of or damage to the car resulting from any cause including but not limited to collision, rollover, theft, vandalism, seizure, fire, flood, hail or other acts of nature or God regardless of fault.” (ECF No. 16-2, at 12.) The Agreement further provides that the renter's “responsibility will not exceed the greater of the retail fair market value of the car and its manufacturer buyback program value at the time the car is lost or damaged, less its salvage value, plus actual towing, storage and impound fees, an administrative charge and a reasonable charge for loss of use.” (Id.) The Agreement also permits Defendant to charge the renter's “credit, charge or debit card for these losses, costs and charges, together with any other applicable charges, at or following the completion of the rental.” (Id.) Spotswood alleges that all members of the putative class, whether members of the Gold Club or otherwise, must consent to a substantially similar agreement to rent vehicles from Hertz. (Id.) The Agreement is allegedly non-negotiable; all renters of Hertz vehicles must accept the contract, drafted by Hertz, without change. (Id. at ¶ 13.)

         On July 5, 2013 Spotswood was involved in a minor parking lot accident which left the car he had rented from Hertz safely operable but slightly damaged. (Id. at ¶ 18.) After returning the rental vehicle, Hertz demanded the following charges related to the accident:

Repairs to the vehicle: $662.90
Administration Fees: $85.39
Loss of Use: $362.94
Diminishment of Value: $111.80

(Id. at ¶ 20.)

         Because Spotswood had declined Hertz's loss damage insurance, the claim for this accident was submitted to American Express which provided car rental insurance through Spotswood's American Express credit card. (Id. at ¶ 19.) American Express agreed to pay, and has paid for, the Repairs and for one half of the Loss of Use fee, but has declined to pay the Administrative and Diminishment of Value Fees. (Id. at ¶ 21.) Hertz maintains that Spotswood is responsible for the fees unpaid by American Express, which amount to $378.66. (Id. at ¶ 22.) Spotswood's position is that Hertz has breached its Rental Agreements by imposing the Loss of Use, Administrative, and Diminishment of Value fees. (Id. at ¶ 55.) Accordingly, he has refused to pay these fees. (Pl.'s Dep. at 103:14-104:11, ECF No. 85-9.)

         II. Procedural History

         Plaintiff initially filed this suit as a putative class action in the Superior Court of New Jersey, Bergen County, on April 6, 2015. (ECF No.1-1.) Hertz removed this case to the United States District Court for the District of New Jersey (ECF No. 1) and subsequently moved to transfer this action to this Court. (ECF No. 11.) Defendants' Motion was granted on October 27, 2015. (ECF No. 28.) On May 20, 2016, Spotswood filed an Amended Complaint, which listed six counts (ECF No. 48). On June 3, 2016 Hertz moved to dismiss the Amended Complaint. (ECF No. 50.)

         On November 22, 2016, Judge William M. Nickerson of this Court dismissed five of the six counts in Spotswood's Complaint, allowing him to proceed only with his breach of contract claim. In reaching this decision, this Court found that the Rental Agreement permitted Hertz to charge all three types of fees at issue in this lawsuit (i.e., the Administrative, Loss of Use, and Diminishment of Value fees). Spotswood, 2016 WL 6879938, at *3. Accordingly, Spotswood could only pursue a breach of contract claim on the narrow theory that the fees charged, while not foreclosed by the Rental Agreement, may not have been “reasonably related” to the actual costs Hertz incurred. Spotswood, 2016 WL 6879938, at *5-6. This theory requires individualized fact findings with respect to each type of fee. The Administrative fees, while not necessarily required to precisely match the actual administrative costs associated with each and every accident, must at least be “reasonably related” to Hertz's actual costs. Id. at *4. As to the Loss of Use fees, this Court determined that they, too, must represent a “reasonable” reimbursement for Hertz's temporary inability to rent one of its vehicles, and might require a showing of financial loss. Id. at *5. Finally, the Diminishment of Value fee must also be “reasonably related to the actual harm suffered” by Hertz, which would require an assessment of the vehicle's change in market value before and after its repair. Id. at *6. Altogether, the narrow theory of recovery this Court permitted Spotswood to pursue would require an analysis of each vehicle accident and corresponding fee assessed.

         III. Class Certification Arguments.

         Following an initial round of discovery, Spotswood filed the pending Motion for Class Certification (ECF No. 85.) In the Motion, Plaintiff seeks certification of one of two alternative classes: a Seven Jurisdiction Class and a Maryland Class.[2] Spotswood defines the Seven Jurisdiction Class as follows:

All persons and entities who rented a Hertz vehicle in the District of Columbia, Maryland, Massachusetts, New York, Rhode Island, South Carolina, or Virginia under the Hertz Gold Member form contract and who were charged during the class period a diminishment of value fee, a loss of use fee, and/or an administrative fee.

(ECF No. 85-1, at 3.)

         Spotswood proposes the following class period for the Seven Jurisdiction Class:

The class period for the Seven Jurisdiction Class begins six years before April 6, 2015, or the number of years of the limitation periods of the states in the class, and ends on or shortly after October 23, 2016, when the form contract at issue was discontinued by Hertz.


         Alternatively, Spotswood seeks to certify a Maryland Class, which is defined similarly to the Seven Jurisdiction Class but includes only persons and entities who rented a Hertz vehicle in Maryland. (Id. at 4.) The class period for the proposed Maryland Class begins on April 6, 2012 and ends on or shortly after October 23, 2016. (Id.) Excluded from both classes are five categories of persons and entities:

(1) Municipalities, governmental entities, any individual or entity currently in bankruptcy, any individual or entity whose obligations have been discharged through bankruptcy, and any judicial officer who has presided over this case;
(2) All Hertz Platinum Members who commenced a Hertz rental under the “Hertz Platinum Terms and Conditions” on or after March 4, 2016;
(3) All persons and entities whose rental commenced pursuant to an agreement with certain known insurance companies who have an agreement with Hertz to waive or alter the Fees;
(4) All persons and entities whose rental commenced from non-Hertz, corporate-owned locations;
(5) All persons and entities who were covered by Hertz's insurance loss ...

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