357 F. Supp. 3d 401
D.N.J.2018Background
- Plaintiffs (seven named renters) allege Payless/Avis charged unauthorized ancillary fees and filed a putative nationwide class action asserting state consumer-protection claims, unjust enrichment, conversion, and seeking injunctive relief.
- Six plaintiffs rented in the U.S. and signed one-page in-person receipts that stated they agreed to “all notices & terms here and in the rental jacket”; the separate "Rental Terms and Conditions" ("Rental Jacket") containing an arbitration clause was routinely handed to customers only after they signed the receipt.
- One plaintiff (Lee) rented in Costa Rica on a single-sheet form: a front-side fill-in receipt she signed and a back-side set of preprinted terms (including arbitration) she did not sign; a video shows the agent did not direct her to the back side.
- Five plaintiffs booked rentals via third-party websites (Expedia, Hotwire, Priceline); defendants produced archived website Terms of Use with arbitration clauses but relied on an Avis employee’s later screenshots and the Wayback Machine; plaintiffs dispute admissibility and assent.
- Court conducted limited discovery on arbitrability and considers whether (1) the Rental Jackets/Costa Rica back-side terms were effectively incorporated into the signed agreements and (2) whether website Terms of Use supply a binding arbitration agreement.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether U.S. one-page receipts incorporated the Rental Jacket arbitration clause | Receipts’ brief reference to a “rental jacket” was not descriptive, customers got jackets only after signing, so no mutual assent | Customers were given access and are bound by terms they could have read; incorporation or constructive notice suffices | Denied motion to compel arbitration for all U.S. plaintiffs — incorporation failed under NJ and FL law because jackets were not described or shown before signing |
| Whether Lee (Costa Rica) agreed to arbitration on reverse-side terms | Lee did not sign or was not directed to back-side terms; no clear notice that back contains separate terms | Defendants say both sides form an integrated agreement; constructive notice existed | Summary judgment denied as to Lee — disputed facts about whether reverse-side terms were reasonably called to her attention require factfinder |
| Whether third-party booking websites’ Terms of Use bind plaintiffs to arbitrate | Plaintiffs deny admissible proof of assent and/or that site terms cover post-rental overcharge claims | Defendants rely on website Terms (archived) and employee certification that booking process required assent | Record insufficient: admissibility/foundation of screenshots and proof of assent inadequately supported — further discovery allowed |
| Whether class-action waivers require individual arbitration if arbitration clauses enforceable | Plaintiffs: no agreement to arbitrate or scope excludes post-rental charges; even if assent, unconscionability/notice issues | Defendants: arbitration provisions and class waivers apply and bind plaintiffs (including via equitable estoppel/agency for non-signatories) | Not reached substantively for U.S. plaintiffs (because no agreement); remains open re: websites and Costa Rica if arbitrability later established |
Key Cases Cited
- Guidotti v. Legal Helpers Debt Resolution, L.L.C., 716 F.3d 764 (3d Cir. 2013) (framework for summary-judgment adjudication of arbitrability)
- Gilmer v. Interstate/Johnson Lane Corp., 500 U.S. 20 (1991) (FAA establishes pro-arbitration federal policy)
- Kindred Nursing Centers Ltd. P’ship v. Clark, 137 S. Ct. 1421 (2017) (FAA preempts state rules that discriminate against arbitration agreements)
- AT&T Techs., Inc. v. Communications Workers of America, 475 U.S. 643 (1986) (arbitration is a matter of contract; court must find assent)
- Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc., 473 U.S. 614 (1985) (scope doubts resolved in favor of arbitration)
- Atalese v. U.S. Legal Servs. Grp., L.P., 219 N.J. 430 (2014) (New Jersey requires clear mutual assent for arbitration clauses)
- Alpert v. Quinn (Quinn is reported at), 410 N.J. Super. 510 (App. Div. 2009) (incorporation-by-reference requires identity ascertainable beyond doubt and assent)
- State ex rel. U-Haul Co. of W. Va. v. Zakaib, 232 W. Va. 432 (2013) (external-document incorporation fails where document is provided only after signature)
- James v. Global TelLink Corp., 852 F.3d 262 (3d Cir. 2017) (mutual assent and reasonable notice required to bind non-reading party to arbitration clause)