NJ Court Certifies Avis Reward Fee Class Action Lawsuit

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Last Thursday, the Avis reward fee class action lawsuit gained class certification in regards to allegation accusing Avis Rent a Car System LLC of hiding additional fees in their travel reward program. In addition to class certification, the court also dismissed Avis’s bid to exclude expert witness testimony based on the expert’s alleged unreliability.

The Avis reward fee class action lawsuit was filed in 2011 by lead plaintiff Edward Schwartz who claimed that the car rental company misrepresented the benefits of the rewards program to him and to other Class Members. According to the Avis class action lawsuit, “Plaintiff brings this action on behalf of himself and a putative class of Avis customers who were charged a $0.75 surcharge for earning frequent-flyer miles and other rewards through their participation in Avis’s Travel Partner Program.”

The Avis Travel Partner Program allows Avis rental car customers to accrue frequent flyer miles or other rewards with participating Travel Partners, such as airlines and hotels. Because Avis pays their Travel Partners for not only the points and miles earned by their car rental customers, but also for the federal taxes on these purchases, Avis allegedly applies the $0.75 surcharge per each rental day to offset the various costs.

Schwartz alleges that this surcharge was not included in the itemized list of estimated rental cost attached to his Avis rental confirmation and that in other documents, this surcharge was only referred to as “FTP—SR.” Thus, Schwartz and his legal counsel allege that he and other Class Members were deceived into believing that they could gain frequent flyers miles free of charge through the Avis Travel Rewards Program.

During the course of this litigation, Avis submitted a motion to dismiss the expert testimony of Dr. Vicki Morwitz, who concluded—through analysis of Avis documents, website visitor data, data from other airline’s frequent flyer programs, and scholarly literature—that “during the relevant time periods, ‘virtually none’ of Defendants’ customers could have known that they were being charged a surcharge for earning frequent-flyer miles.” Avis’s defense counsel did not argue that Dr. Morwitz is not qualified to speak on the litigation’s issue, but rather claimed Morwitz opinions on the matter are “unreliable.”

However, the court tossed Avis’s bid to dismiss Dr. Morwitz expert testimony because Avis lacked evidence of other cases that conclude that an expert testimony is rendered inadmissible based on the absence of reliance of consumer survey.

With the preliminary Avis reward fee class certification, Schwartz will be able to represent himself, as well as a Class of individuals, which would include: “All Avis Preferred members with a United States address who, until June 14,2012, rented a vehicle through www.avis.com and who paid a surcharge for receiving frequent-flyer miles from any of Defendants’ travel partners.”

Schwartz is represented by Bruce D. Greenberg, Jeffrey Shooman and Susana Cruz Hodge of Lite DePalma Greenberg LLC, Daniel R. Karon and Laura K. Mummert of Goldman Scarlato Karon & Penny PC and Jay R. Faeges of Miller Goler Faeges Lapine LLP.

The Avis Reward Fee Class Action Lawsuit is Schwartz v. Avis Rent A Car System LLC, Case No. 2:11-cv-04052, in the U.S. District Court for the District of New Jersey.

UPDATE: On Jan. 22, 2016, rental car companies Avis and Budget agreed to pay more than $13.7 million in order to settle two nearly identical class action lawsuits that accused the businesses of intentionally hiding travel reward fees.

UPDATE 2: On Mar. 15, 2016, the Avis Budget Frequent Traveler Surcharge Class Action Lawsuit Settlement is now open! Click here to file a Claim Form or visit www.AvisBudgetSurchargeSettlement.com for more details.