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Wednesday, February 20, 2019
SFALP Clinic Helps Secure $3.65M Settlement in Hertz Consumer Protection Case
Yale Law clinic students scored a major victory this week when the San Francisco City Attorney announced a $3.65 million settlement with Hertz Corporation and its business partner, American Traffic Solutions (ATS).
Over the past two years, students in the San Francisco Affirmative Litigation Project (SFALP) at Yale Law School helped the City Attorney litigate against Hertz and ATS for defrauding tens of thousands of consumers who crossed the Golden Gate Bridge. Although the bridge moved entirely to cashless, electronic tolling in 2013, the companies continued to falsely advertise and charge for “PlatePass,” a service billed as allowing drivers to bypass cash toll lanes.
“The Hertz case was a wonderful opportunity to learn how local governments can use litigation to tackle violations of consumer protection laws.”
— Isabelle Hanna ’20
Once the bridge went cashless, Hertz customers no longer had the option of using a cash lane to avoid PlatePass’s steep cost. Simply by crossing the bridge, they incurred up to $24.75 in fees on top of bridge tolls for a service that brought them no benefit, according to the clinic. For many consumers, this meant paying more than $30 to cross the Golden Gate Bridge just once — four times the actual bridge toll. Hertz made it particularly difficult for customers to avoid these charges by misleading them about how to opt out of PlatePass.
The City’s lawsuit alleged that Hertz and ATS violated a raft of state and federal consumer protection laws, including California’s Unfair Competition Law and state legislation prohibiting abusive practices in the rental car industry.
SFALP students played a pivotal role in the litigation. SFALP partners students with lawyers in the San Francisco City Attorney’s Office to bring groundbreaking public interest lawsuits. It is a unique and innovative model that has produced successful results for more than 10 years. SFALP students contributed to every stage of the Hertz case, helping the deputy city attorneys make the most of discovery, sharpen their legal theories, and strategize how to resolve the action.
Thanks to these efforts, consumers nationwide will see meaningful results. The $3.65 million that Hertz and ATS have agreed to pay will go toward funding future consumer protection enforcement. The suit has also induced the companies to halt their practice of charging toll service fees for every day a car is rented. Instead, Hertz and ATS now only charge customers on days PlatePass is used — a shift that has already saved consumers millions of dollars since taking effect last year.
“This settlement is a significant win for consumers, who will benefit from a fairer and more affordable rental experience,” said James Horner ’19. “It shows that San Francisco’s leadership on consumer protection has an impact far beyond its city limits.”
“This favorable settlement not only represents a victory for the City Attorney and the people of San Francisco, it also serves to protect those who choose to visit the Bay Area and explore the wonders of the Marin Peninsula and the Golden Gate Bridge,” said Ben Hand ’19.
“The Hertz case was a wonderful opportunity to learn how local governments can use litigation to tackle violations of consumer protection laws,” added Isabelle Hanna ’20. “Through working on Hertz, I learned not only how to write memos to support active litigation but also how to engage with expert witness reports and tackle legal subjects that I hadn’t encountered in my black-letter courses.”
“Our students have been working on consumer-protection cases since this clinic began,” said Professor Heather Gerken, the Dean of Yale Law School and director of SFALP. “This case is a good example of why this work is so important.”