Rental Car Class Action Lawsuit Alleges Unlawful Fees

A class action lawsuit claims that car rental companies in California wrongfully charge a special tax to consumers that’s disguised as a “user fee.”

According to the rental car lawsuit, Payless Car Rental, Dollar Rent A Car, Fox Rent A Car, and Advantage Rent A Car all charge their customers a $3.50 fee for car rentals originating at the San Diego International Airport.

Plaintiff Jeffrey Garvin claims that this fee aims to cover a $3.50 special tax which has been overturned.

The special tax reportedly originated in April 2018 from the Board of Port Commissioners of the San Diego Unified Port District. This tax allegedly aimed to collect fees from car renters in order to pay for a new parking structure. Garvin argues that this tax was unlawful since special taxes are required to be approved by two-thirds of voters.

“Because the tax was not approved by local voters, it is an unconstitutional tax and thus unlawful and invalid,” the car rental class action lawsuit states.

Due to the reportedly unlawful nature of the special tax, Enterprise and Hertz car rental companies reportedly filed a complaint in June 2018 seeking to have the tax reversed. In October 2019, the court reportedly determined that the tax was, in fact, unlawful.

Despite this ruling, Garvin argues that Payless and other car rental companies charged their customers a $3.50 fee on all rentals. Although Payless “only recently” stopped assessing the fees, according to Garvin, the other three car rental companies have allegedly continued to charge the fees “despite knowing that the fee was illegal and improper.”

Garvin says he has been charged the unlawful $3.50 fee several times during his travels between New Mexico and San Diego since April 2018. He claims that he was charged the fee each time he rented a vehicle from the defendant car rental companies.

“Defendants improperly and illegally assess each car rental a $3.50 fee which is not authorized by law, purportedly claiming that they are required to asses this fee by the Port of San Diego,” the car rental class action lawsuit claims. “Defendants knew when they began imposing this fee that it was illegal and improper.”

The car rental class action lawsuit claims that charging the unlawful fee is a violation of the California Consumers Legal Remedies Act and California’s Unfair Competition Law. The suit seeks restitution, disgorgement, injunctive relief, court costs, and attorneys’ fees.

Garvin seeks to represent a Class of consumers who rented a vehicle from one of the defendant car rental companies since April 10, 2018 and were assessed an unlawful $3.50 fee.

Did you rent a vehicle from Dollar Rent a Car? Share your experiences in the comment section below.

Garvin and the proposed Class are represented by Helen I. Zeldes, Ben Travis, Paul L. Hoffman, and John C. Washington of Schonbrun Seplow Harris Hoffman & Zeldes LLP.

The San Diego Car Rental Class Action Lawsuit is Garvin v. Payless Car Rental Inc., et al., Case No. 3:20-cv-00172-AJB-WVG, in the U.S. District Court for the Southern District of California.

UPDATE: August 2020, the San Diego Airport car rental class action settlement is now open. Click here to file a claim. 

Read More Lawsuit & Settlement News:

Birth Injury Lawsuit Awards to Help Finance Injured Children’s Care

What are Common Car Accident Injury Symptoms?

IKEA Age Discrimination Class Action Moves Forward

Honeywell Leaky Water Heater Valve Class Action Dismissed