Avis Budget Group Secures Complete Dismissal of Consumer Class Action in Precedent-Setting Decision

Paul, Weiss secured a categorical win for Avis Budget Group when the D.C. Superior Court dismissed with prejudice the entirety of a consumer class action over “drip pricing,” or the practice of hiding taxes and fees until the “last minute,” or by only disclosing the total price on “the final checkout page.” In a precedential decision clarifying the scope of D.C.’s Consumer Protection Procedures Act (CPPA), the court held that a public interest organization lacks statutory standing under the CPPA to sue on behalf of District customers when the entire purported customer class is bound to individually arbitrate and has waived class or representative action rights.

The CPPA, which prohibits a set of so-called unfair and deceptive trade practices, allows nonprofit organizations such as Travelers United, Inc.—the plaintiff in the case—to sue on behalf of Washington customers even when the organization itself has not suffered any legally cognizable injury. Travelers has used this supposed expanded organizational standing to sue a number of companies. In this suit, it alleges that Avis and Budget engaged in drip pricing in renting vehicles to customers in the District.

Paul, Weiss filed a motion to dismiss or, in the alternative, compel arbitration and stay proceedings on behalf of Avis and Budget. We argued that dismissal was warranted on both standing and merits grounds. As for standing, because all of Avis and Budget’s Washington customers in the relevant limitation period agreed to an arbitration agreement and class/representative action waiver, any customer class that Travelers sought to represent was bound to individually arbitrate and could not participate in Travelers’ class action. The CPPA did not confer Travelers with statutory standing to represent customers bound to arbitration. To the extent that the court disagreed, we argued that Travelers had to be compelled to individually arbitrate as it stood in the shoes of the class it represented, which had agreed to individual arbitration.

D.C. Superior Court Judge Shana Frost Matini adopted our argument on standing, recognizing that any other holding would render countless arbitration agreements functionally unenforceable, and granted our motion to dismiss.

The Paul, Weiss team included litigation partners Randy Luskey and Paul Brachman.