Chestnut Fleet Rentals, Inc. v. Hertz Corp.

72 F.R.D. 541
CourtDistrict Court, E.D. Pennsylvania
DecidedOctober 20, 1976
DocketCiv A. No. 75-1889
StatusPublished
Cited by19 cases

This text of 72 F.R.D. 541 (Chestnut Fleet Rentals, Inc. v. Hertz Corp.) is published on Counsel Stack Legal Research, covering District Court, E.D. Pennsylvania primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Chestnut Fleet Rentals, Inc. v. Hertz Corp., 72 F.R.D. 541 (E.D. Pa. 1976).

Opinion

MEMORANDUM AND ORDER

TROUTMAN, District Judge.

This action involves charges of antitrust violations in the airport automobile rental business. Plaintiffs allege that defendants conspired to fix prices, restrain trade in and monopolize the rental market and that they acquired and maintain monopoly power by illegally restricting competitors from gain[543]*543ing airport rental concessions in violation of §§ 1 and 2 of the Sherman Act, 15 U.S.C. §§ 1, 2. Plaintiffs, automobile rental companies which have business locations predominantly off-airport, are engaged in short-term rentals of automobiles to the general public. Defendants are the nation’s largest three automobile rental companies.

Plaintiffs seek certification under Rule 23, Fed.R.Civ.P. of a class consisting of all persons, firms, corporations, or other entities in the United States, other than defendants, their franchisees and co-conspirators, who are engaged in the business of leasing automobiles to the general public by the hour, day, week or other period of time which does not extend to long-term leasing. By stipulation, the parties agreed to proceed with discovery on this issue. The appropriate discovery was completed and reviewed. After hearing oral argument and considering the able briefs of the respective parties, we have concluded that this case is not appropriate for certification as a class action.

Plaintiffs bear the burden of satisfying all of the requirements of 23(a)1 and at least one of the subsections of 23(b), Aamco Automatic Transmissions, Inc. v. Tayloe, 67 F.R.D. 440, 447 (E.D.Pa.1975). Once the mandatory prerequisites of 23(a) have been met, the court considers whether the class may be certified under one of the subsections of 23(b). Katz v. Carte Blanche Corp., 496 F.2d 747 (3d Cir.) (en banc), cert. denied, 419 U.S. 885, 95 S.Ct. 152, 42 L.Ed.2d 125 (1974).2 Moreover, the central issue raised in a motion for certification is whether a class action is appropriate, not the probability of plaintiffs’ success on the merits of the substantive claims. Eisen v. Carlisle & Jacquelin, 417 U.S. 156, 94 S.Ct. 2140, 40 L.Ed.2d 732 (1974); Kahan v. Rosenstiel, 424 F.2d 161 (3d Cir.), cert. denied, 398 U.S. 950, 90 S.Ct. 1870, 26 L.Ed.2d 290 (1970).

“One or more members of a class may sue or be sued as representative parties on behalf of all only if (1) the class is so numerous that joinder of all members is impracticable, (2) there are questions of law or fact common to the class, (3) the claims or defenses of the representative parties are typical of the claims or defenses of the class, and (4) the representative parties will fairly and adequately protect the interests of the class.”

• While defendants have attacked the propriety of class certification on a number of broad fronts, it will be helpful to narrow the issues by reciting what is not in issue. Defendants have not disputed that the proposed class — estimated by plaintiffs to total between 13,000 and 15,000 members — is so numerous that joinder of all members is impracticable, satisfying the “numerosity” requirement of 23(a)(1), and they concede that the case presents some questions of law or fact common to the class, satisfying the “commonality” requirement of 23(aX2). Defendants readily admit that plaintiffs’ counsel are experienced, able and highly qualified to litigate a class action.3 However, they vigorously argue that the plaintiffs’ claims are not “typical” of those in the proposed class, 23(a)(3), and that the plaintiffs will not fairly and adequately protect the interests of the class members because not only do they have interests which are antagonistic to those of the rest of the class, [544]*544but they also lack standing to sue on behalf of the proposed class as required by 23(a)(4).

Defendants also contend that even if the requirements of 23(a) are deemed satisfied, certification would not be appropriate under 23(b)(3). Because the issues raised under 23(b)(3) are so closely related to their contentions raised under 23(a)(3), we will consider them together in order to present a coherent discussion of the reasoning for our conclusion that the case may not proceed as a class action. We discuss the 23(a)(4) issues first.

The 23(a)(4) Issues: Conflict of Interest and Standing

A representative plaintiff must fairly and adequately protect the interests of the class. Defendants contend that plaintiffs will not fairly and adequately protect the interests of the putative class members. Since the gravamen of the complaint is illegal foreclosure of the airport automobile rental market, they argue, that since the plaintiffs’ injury, as well as that of putative class members, must necessarily derive from the amount of business not done in a market that is limited and fixed, their interests are inherently antagonistic. The named plaintiffs will be interested in maximizing their own damage recovery, which must necessarily diminish the potential recovery of other class members. In addition, each potential class member who wishes to establish a rental location “on airport” necessarily has an interest in preventing other competitors, members of the class, from similarly competing “on airport”.4

In addition, defendants argue that the system used by the American International Rent-A-Car Corporation and the “AI” licensee plaintiffs herein constitutes an illegal price-fixing conspiracy,5 which will trigger an antitrust counter-claim against the named plaintiffs. In defending the counter-claim, the plaintiffs will be diverted from pressing their claims on behalf of the class by the necessary devotion of substantial effort and money to that defense.

Defendants also point out that one of the plaintiffs unsuccessfully litigated antitrust claims, similar to those asserted herein, concerning the Denver Airport, Trans World Associates v. City and County of Denver, 1974-2 CCH Trade Cases ¶ 75,293 (D.Colo.1974), and they argue that the res judicata effect of that final judgment will place plaintiffs on the horns of an insoluble dilemma — the Denver litigation will either bind plaintiffs as to all claims raised herein, thus rendering them inadequate as class representatives, or will bind them only as to the Denver Airport. In the latter case, therefore, plaintiffs would necessarily subscribe to defendants’ theory that the unique competitive situation prevailing at each airport compels an airport-by-airport evaluation of the law and facts, tantamount to more than two hundred minitrials.6

Finally, defendants contend that plaintiffs lack standing to assert claims on behalf of those class members who do not presently have concessions at airports where plaintiffs have established such concessions and, conversely, where other members are located, but where plaintiffs are not.

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Bluebook (online)
72 F.R.D. 541, Counsel Stack Legal Research, https://law.counselstack.com/opinion/chestnut-fleet-rentals-inc-v-hertz-corp-paed-1976.