Plaintiffs In Visa Zipcar Class Action Settlement Seek Final Approval

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Plaintiffs who are part of class action settlement with Visa are asking for final approval of the settlement over the class action lawsuit filed against Visa alleging that it failed to fulfill its promise to cover theft or damage to rental vehicles because it said that Zipcar was not recognized as a rental car company.

Plaintiff Ron Davis of Washington state is asking for the California federal judge to grant final approval to the Visa Zipcar class action settlement on March 6, which gives Visa cardholders who incurred costs for damage caused to Zipcar rental vehicles a total of $160,000 to share to cover their costs.

“Even though plaintiff believes he could establish liability were the case to go to trial, this settlement represents a 100 percent recovery for class members and, going forward, the case is hardly an easy win,” according to the motion for final approval of the Visa class action settlement.

“Whether Zipcar qualifies as a rental agency under the terms of the benefit agreement is a question which has not been definitively answered or addressed in any case,” the class action settlement motion added.

According to the class action settlement motion for final approval, Visa will offer collision benefits “to all qualified cardholders — which Visa did so prior to approval, starting Nov. 6. 2014. Visa retains the right to take action exclude Zipcar rentals from the benefit after April 1, 2015.”

However, if Visa does decide to exclude Zipcar from rental cars that it will not cover, “the settlement agreement requires that Visa provide clear notice to consumers of the change in policy.”

Davis filed the Visa Zipcar rental car insurance class action lawsuit in November 2013 after using his Alaska Airlines Signature Visa credit card to rent a car from Zipcar on Oct. 14, 2012.

Visa’s Auto Rental Collision Damage Waiver “provides reimbursement for damage due to collision or theft up to the actual cash value of most rental vehicles.” The damage waiver is enacted when a cardholder turns down the damage waiver offered by the rental car company.

Zipcar would not allow Davis to turn down the mandatory insurance for his rental, but he did turn down Zipcar’s optional insurance that would cover the deductible. By doing so he believed that he “activated VISA’s Auto Rental CDW benefit.”

While Davis was using the car, it sustained about $720 in damages, according to the Visa Zipcar class action lawsuit. “The deductible for Zipcar’s mandatory insurance was $750,” which means that Davis was responsible for covering the whole bill.

As class representative, Davis will receive $2,000 and Visa will pay $57,000 in attorneys fees toward the attorney representing the class.

The 266 class members in the Visa Zipcar class action settlement are expected to receive an average of $650 each for claims that Visa allegedly denied.

Visa had filed a motion to have the class action lawsuit dismissed in March 2014, citing Zipcar’s website, which states that “we’re really not a rental car company,” telling customers to verify with their credit card companies if their rental cars are covered if damages are incurred.

Zipcar is a car sharing company, which allows customers to use a fleet of vehicles for hours or days at a time.

However, Davis argued that Zipcar is in fact a rental car company, because customers aren’t owners of the vehicles and don’t possess the title to Zipcar vehicles.

Visa is represented by Jaclyn Ann Blankenship, Richard Blair Goetz and Matthew David Powers of O’Melveny & Myers LLP.

Davis is represented by Charles David Marshall of Marshall Law Firm.

The Visa Zipcar Class Action Lawsuit is Ron Davis v. Visa Inc., Case No. 3:13-cv-05125, in the U.S. District Court for the Northern District of California.