Trouble with the Gas Prices

Judge clears Avis in suit over rates for refueling
Thursday, February 22, 2007

By DAVID VOREACOS
BLOOMBERG NEWS

NEWARK -- Avis Budget Group Inc., the second-largest U.S. car rental company, won dismissal of a lawsuit by a customer claiming its $5.99-a-gallon refueling charge is illegal.

The customer, Andrew Ramon, said Avis' Budget Rent a Car System Inc. imposed an "unreasonably large" service charge to refuel cars returned with less than full tanks. Ramon didn't elect to prepay for a full tank of gas at a market rate of $2.14 a gallon.


U.S. District Judge William Martini in Newark ruled this week that the rental contract was clear.

Ramon "not only rejected the prepaid fuel option but agreed to the terms of the refueling service charge, an avoidable fee of $5.99 per gallon which was clearly identified and explained in the agreement," Martini ruled. "Ultimately, plaintiff was charged the precise amount he agreed to under the contract. The court fails to see how this could possibly amount to a breach."

Ramon, of San Antonio, spent $11.42 for the fuel after returning the car with the tank less than full. He sought class-action status for his suit, saying the $3.85 a gallon above the market rate was "pure profit."

This week, Avis -- formerly known as Cendant Corp. -- reported earnings from continuing operations of $4 million, or 4 cents a share, on sales of $1.33 billion.

Martini rejected Ramon's arguments on several legal grounds, including that the charge violated New Jersey consumer fraud law. Avis is based in Parsippany.

The complaint "fails to identify or describe any misrepresentations made by Budget with respect to the refueling service charge," Martini wrote in a 13-page opinion.

The company operates Avis Rent a Car System, Budget Rent a Car System and Budget Truck Rental System. It gets 79 percent of car-rental revenue from airport locations and ranks second in U.S. sales behind Enterprise Rent-A-Car.

Avis shares fell 51 cents to $26.89 at 4:17 p.m. in New York Stock Exchange composite trading.

NorthJersey.com