Alaska Rent-A-Car, Inc. v. Avis Budget Group, Inc.
738 F.3d 960
| 9th Cir. | 2013Background
- Alaska Rent-A-Car (an Avis licensee) had exclusive rights across Alaska since 1959 with subsequent expansions and first-refusal provisions.
- Avis settled licensee disputes in 1997, prohibiting use of Avis personnel to market additional Avis-affiliates; Alaska Rent-A-Car joined timely under New York law.
- Avis later acquired Budget, merged marketing/sales teams, risking diversion of customers from Alaska Rent-A-Car.
- Alaska Rent-A-Car sued Avis, alleging breach of the settlement agreement; district court granted partial summary judgment on party status and proceeded to damages trial.
- Jury awarded Alaska Rent-A-Car $16 million in damages; district court later applied Alaska Rule 82 for attorney’s fees and calculated prejudgment interest under New York law.
- Questions on which law applies to attorney’s fees and how prejudgment interest should be calculated were appealed and reviewed de novo.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Was Alaska Rent-A-Car a party to the settlement? | Alaska Rent-A-Car was an Avis system licensee; the agreement encompassed all licensees. | Only licensees with exclusive territories could join; Alaska Rent-A-Car’s joinder was untimely. | Alaska Rent-A-Car was a party by timely joinder under New York reasonableness. |
| Was the Batson challenge properly resolved on peremptory strikes? | Denying the strike of the Native juror was Batson error harming Alaska Rent-A-Car. | No discriminatory intent; step-three inference insufficient for reversal. | Abuse not shown; any error was harmless. |
| Were Alaska Rent-A-Car’s damages testimony admissible under Daubert? | Expert methodology valid; damages shown by comparable national benchmarks. | Challenged baseline choices and extrapolations; reliability disputed. | District court did not abuse discretion; testimony admissible and weight for jury. |
| Was damages certainty met and was prejudgment interest proper? | Lost profits proven with reasonable certainty; interest should be awarded. | Certainty arguable; interest may be improper if misapplied. | Damages proven with reasonable certainty; prejudgment interest awarded and then reduced by $57,739.51 on remand. |
| What law governs attorney’s fees in this diversity case and which state's law applies? | Alaska Rule 82 should apply as forum procedural rule; Alaska follows English Rule. | Choice-of-law may favor New York substantive rule; Alaska procedural rule should govern. | Forum state’s rule (Alaska) applies; Alaska Rule 82 is procedural for choice-of-law purposes, so Alaska law governs fee award. |
Key Cases Cited
- Daubert v. Merrell Dow Pharm., Inc., 509 U.S. 579 (Supreme Court 1993) (gateskeeping reliability of expert testimony)
- Batson v. Kentucky, 476 U.S. 79 (Supreme Court 1986) (racial discrimination in peremptory challenges)
- Rivera v. Illinois, 556 U.S. 148 (Supreme Court 2009) (overruled automatic reversal for improper denial of peremptory challenges)
- United States v. Lindsey, 634 F.3d 541 (9th Cir. 2011) (harmless-error review for erroneous denial of peremptory challenges)
- Greasy Spoon, Inc. v. Jefferson Towers, Inc., 75 N.Y.2d 792 (N.Y. 1990) (lost profits must be proven with reasonable certainty)
- Kenford Co. v. County of Erie, 67 N.Y.2d 257 (N.Y. 1986) (lost profits for unbuilt stadium too speculative)
- Alyeska Pipeline Service Co. v. Wilderness Society, 421 U.S. 240 (Supreme Court 1975) (Erie choice-of-law principles and substantive vs. procedural matters)
- Klopfenstein v. Pargeter, 597 F.2d 150 (9th Cir. 1979) (Erie/fee-shifting framework in diversity actions)