A recent decision from the U.S District Court for the District of New Jersey denied certification of a nationwide class of rental car customers, holding that common questions did not predominate within the class because of variations in the applicable law. In Dawn Valli v. Avis Budget Rental Car Group, LLC, No. 14-6072, 2023 WL 6579150 (D.N.J. Oct. 10, 2023), the court held that, where the laws of “all fifty states” could govern the claims of class members, the court could not properly instruct a jury on the applicable law, and as a result choice of law issues “swallowed” any common issues. Id. at *6.
The operative complaint alleged that the defendants made misrepresentations to rental car customers relating to charges for traffic infractions; the plaintiffs asserted violations of the New Jersey Consumer Fraud Act, breach of the implied covenant of good faith and fair dealing, unjust enrichment, and unconscionability. The plaintiffs moved to certify a class of “[a]ll United States residents who rented an Avis or Budget brand vehicle during the Class Period and whose rented vehicle was the subject of an alleged parking, traffic, toll or other violation,” who were then charged the costs of the violation allegedly without their consent. Id. at *4.
Although the plaintiffs argued that New Jersey law applied to the claims of all class members, the court performed a choice of law analysis and rejected this argument, finding that none of the causes of action would be governed by New Jersey law for all class members. The court then held that because “there is the potential for laws of all fifty states to apply to the class members, it would be impossible for the court to instruct a jury.” Id. This defect was alone sufficient to defeat certification of plaintiffs’ broad nationwide class.
The court nonetheless proceeded to certify a nationwide subclass of “preferred” Avis and Budget customers. The court held that because the rental contracts for “preferred” customers included a New Jersey choice of law provision (which was not included in the standard rental contracts), New Jersey law applied to all members of the subclass, therefore avoiding the predominance issue that defeated certification of the broader class.
This decision follows those of other courts confirming that significant choice of law issues may alone be sufficient to defeat a proposed nationwide class. Although the court in Dawn Valli ultimately certified a subclass of customers whose claims would be subject to the law of a single state, it was not prepared to undertake the difficulty and confusion that would result from certifying a broad class for which a broad multiplicity of state laws would govern.