Reed v. Zipcar, Inc.
883 F. Supp. 2d 329
D. Mass.2012Background
- Reed sues Zipcar, alleging unlawful late fees charged to Zipcar members in a putative class action.
- Zipcar provides a car-sharing service with reservations, hourly rates, and a Membership Agreement including an annual fee and potential other charges.
- In Blay v. Zipcar, the court previously dismissed a similar complaint for failure to plead the alleged excessive, arbitrary, and disproportionate charges, without prejudice.
- Reed, a New York Zipcar member, filed an amended complaint focusing solely on late fees and proposing alternatives to avoid or reduce them.
- Zipcar moved to dismiss the Reed complaint; the court evaluated whether the late fees are an unlawful penalty, and whether quasi-contractual and Chapter 93A claims survive.
- The court ultimately grants Zipcar's motion and dismisses the Amended Complaint with prejudice.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Are Zipcar's late fees an unlawful penalty? | Reed argues penalties are grossly disproportionate to damages. | Zipcar contends fees are valid liquidated damages and not unlawful penalties. | Unlawful penalty claim fails; dismissed with prejudice. |
| Are quasi-contractual claims barred by the express contract and lack independent viability? | Reed asserts unjust enrichment and money had and received due to implied benefits. | Express Membership Agreement controls; equitable claims barred; 93A claim precludes quasi-contract claims. | Quasi-contractual claims barred; dismissed. |
| Is Reed's Massachusetts Chapter 93A claim viable independently? | Late fees are grossly disproportionate and unconscionable under 93A. | Allegations do not show a plausible unfair or deceptive act or practice under 93A beyond other claims. | 93A claim not saved by other claims; theories inadequate; dismissed. |
Key Cases Cited
- TAL Fin. Corp. v. CSC Consulting, Inc., 446 Mass. 422 (Mass. 2006) (unlawful liquidated damages analyzed; proportionality standard)
- Honey Dew Assocs., Inc. v. M & K Food Corp., 241 F.3d 23 (1st Cir. 2001) (unlawful penalty as a defense, not independent claim)
- Platten v. HG Bermuda Exempted Ltd., 437 F.3d 118 (1st Cir. 2006) (no override of express contract by unjust enrichment)
- Jelmoli Holding, Inc. v. Raymond James Fin. Servs., Inc., 470 F.3d 14 (1st Cir. 2006) (unjust enrichment/receipts closely tied to MA law)
- Mass. Eye & Ear Infirmary v. QLT Phototherapeutics, Inc., 552 F.3d 47 (1st Cir. 2009) (Massachusetts unfair or deceptive acts standard under 93A)
- In re Pharmaceutical Indus. Average Wholesale Price Litig., 582 F.3d 156 (1st Cir. 2009) (Chapter 93A claim could be independent of other claims)
- Horne v. Time Warner Operations, Inc., 119 F. Supp. 2d 624 (S.D. Miss. 1999) (unlawful penalty/contract defenses discussed in context)
- Cowin Equip. Co., Inc. v. Gen. Motors Corp., 734 F.2d 1581 (11th Cir. 1984) (no independent action to enforce an unconscionable term)
- Kelly v. Marx, 428 Mass. 877 (Mass. 1999) (damages/forecasting considerations for liquidated damages)