VALLI v. AVIS BUDGET RENTAL CAR GROUP, LLC et al

Filing 264

OPINION re 241 MOTION for Partial Summary Judgment (ORAL ARGUMENT REQUESTED) filed by DAWN VALLI, 246 Amended MOTION to Compel Arbitraton filed by AVIS RENT A CAR SYSTEM, LLC, AVIS BUDGET GROUP, INC., AVIS BUDGET CAR RENTAL, LLC, BUDGET RENT A CAR SYSTEM, INC.. Signed by Magistrate Judge James B. Clark on 9/30/2024. (seb)

UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY
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DAWN VALLI, et al., individually and on
behalf of others similarly situated,
Plaintiffs,
v.
AVIS BUDGET RENTAL CAR GROUP,
LLC, et al.,
Defendants.

Civil Action No. 14-6072 (JBC)

OPINION

CLARK, Magistrate Judge
THIS MATTER comes before the Court on two motions: (i) a motion by Defendants Avis
Budget Group, Inc., Avis Budget Car Rental, LLC, Avis Rent a Car System, LLC, and Budget
Rent A Car System, Inc. (collectively “Defendants” or “ABG”) seeking to compel arbitration [see
Dkt. No 246]; and (ii) a motion by Plaintiffs Dawn Valli and Anton S. Dubinsky (collectively
“Plaintiffs”) seeking partial summary judgment [see Dkt. No 241]. Both motions are opposed. See
Dkt. Nos. 249, 251. The Court has reviewed the parties’ submissions in support of and in
opposition to the motions and decides the motions without oral argument pursuant to Fed. R. Civ.
P. 78(b) and L. Civ. R. 78.1(b). For the reasons set forth below, Defendants’ motion to compel
arbitration [Dkt. No. 246] is DENIED, and Plaintiffs’ motion for partial summary judgment [Dkt.
No. 241] is DENIED.
I.

BACKGROUND
Procedural History
On September 30, 2014, Plaintiff Dawn Valli (“Valli”) filed a class action complaint

against Defendants Avis Budget Rental Car Group, LLC and ATS Processing Services, LLC

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(“ATS”)1 regarding their alleged “misrepresentations and omissions concerning charging [car
rental customers] for alleged traffic infractions and an administrative fee without consent, without
disclosure, and without the opportunity to contest the allegation.” Dkt. No. 231 at 2. Avis Budget
Rental Car Group and ATS each filed motions to dismiss on December 8, 2014. See Dkt. Nos. 17,
19.
On January 22, 2015, Valli filed a First Amended Class Action Complaint against Avis
Budget Group, Inc., Avis Rent A Car System, LLC, and ATS alleging: (1) violations of the New
Jersey Consumer Fraud Act (“NJCFA”); (2) breach of the implied covenant of good faith and fair
dealing; (3) unjust enrichment; and (4) unconscionability under the laws of New Jersey. See Dkt.
No. 23.
On March 9, 2015, Defendants filed motions to dismiss [see Dkt. Nos. 26, 27], which were
administratively terminated on April 12, 2016 pending completion of jurisdictional discovery. See
Dkt. No. 42. On August 18, 2016, the ABG Defendants filed another motion to dismiss. See Dkt.
No. 49. These motions were filed pursuant to Fed. R. Civ. P. 12(b)(6) for failure to state a claim.
In arguing for dismissal, Defendants did not mention in any of the moving briefs that Plaintiffs’
claims were subject to arbitration. On May 10, 2017, the Court denied the ABG Defendants’
motion to dismiss in its entirety, finding, among other things, that the Rental Agreements—i.e.,
the contracts Defendants enter into with their car rental customers—neglected to state that
“Plaintiff would not have the opportunity to contest any such fines, and that [ABG] would pay the
fine prior to any adjudication of the underlying violation.” Dkt. No. 65 at 10. The Court noted that

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ATS, a third-party vendor that processes and administers the payment of fines accrued while customers rented
vehicles from Avis and Budget, see Dkt. No. 1 at ¶ 4, was voluntarily dismissed as a Defendant in August of 2016.
Dkt. No. 50.
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“[t]hese facts may constitute an affirmative act of misrepresentation,” which precluded dismissal.
Id.
After the Court denied Defendants’ motion to dismiss, discovery commenced with the
entry of the Pretrial Scheduling Order on May 15, 2017. See Dkt. No. 67. Since then, discovery
has been extended several times2 and the parties raised several discovery disputes.3 However,
discovery is not fully complete, and since October 30, 2023, discovery has been stayed pending
further order of the Court. Dkt. No. 234. On May 25, 2017, Defendants filed their Answer to the
First Amended Complaint and raised arbitration as a potential affirmative defense. Dkt. No. 68 at
p. 18-19, ¶¶ 33, 37, 38, Affirmative Defenses.
In response to Defendants’ contention that Plaintiff only had standing for discovery related
to the Avis brand because Valli was an Avis renter, and pursuant to the parties’ stipulation, on
June 26, 2018, Plaintiff filed a Second Amended Class Action Complaint adding Anton S.
Dubinsky (“Dubinsky”), a Budget brand renter, as a plaintiff and adding defendants Avis Budget
Car Rental, LLC and Budget Rent a Car System, Inc., wholly-owned subsidiaries of Avis Budget
Group, as defendants. See Dkt. No. 95. Generally, the allegations related to Dubinsky’s car rental
in the Second Amended Class Action Complaint closely tracked the First Amended Complaint. Id.
On September 25, 2018, Defendants filed their Amended Answer to the Second Amended
Complaint and again mentioned arbitration as a possible affirmative defense. See Dkt. No. 108 at
p. 24, ¶¶ 45, 49, 50, Affirmative Defenses.
On July 1, 2019, Plaintiffs filed their motion for class certification. See Dkt. No. 146. The
motion was administratively terminated and reinstated multiple times over the course of the next
three years in large part due to the parties engaging in both Court-ordered and private mediation.

2
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See Dkt. Nos. 75, 78, 81, 82, 118, 137, 149, 157, 172, 179, 185, 186, 189, 192.
See Dkt. Nos. 84, 88, 110, 124, 125, 127, 129, 130, 143, 150.
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See Dkt. Nos. 175, 180, 193, 198, 206. Thereafter, on February 28, 2023, Judge Cecchi signed and
entered a consent order executed by the parties consenting to the jurisdiction of the Undersigned
pursuant to 28 U.S.C. § 636 and Federal Rule of Civil Procedure 73. See Dkt. No. 218. On March
28, 2023, the Court reinstated Plaintiffs’ motion for class certification. See Dkt. No. 221.
On October 10, 2023, the Court issued a decision on Plaintiffs’ class certification motion
denying Plaintiffs’ proposed nationwide class and granting the motion as to a Preferred Members
Subclass created at the Court’s discretion pursuant to Rule 23(c)(4)(B). See Dkt. No. 231. More
specifically, the Court determined the Class Period to be September 30, 2008 through the Present
and defined the Preferred Members Subclass as:
All Avis Preferred and Budget Fastbreak members with a United States address
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,
where: (1) the ticket issuing authority sent notice of the ticket directly to ABG; (2)
ABG or its agent paid the fine and/or court costs associated with the alleged
violation; and (3) ABG charged the vehicle renter for such fine, penalty and court
costs, and/or an associated administrative fee.
Dkt. No. 232. Additionally, the Court ordered that Valli be designated as the representative of the
Preferred Members Subclass. Id. As part of its decision on the class certification motion, the Court
also held that Defendants had waived their right to arbitration by having litigated the case against
Plaintiffs for years under the Third Circuit’s reasoning in White v. Samsung Electronics Am., Inc.,
61 F.4th 334 (3d Cir. 2023). Dkt. No. 231 at p. 23.
On October 24, 2023, Defendants filed a Petition for Permission to Appeal Under Rule
23(f) to the United States Court of Appeals for the Third Circuit. See Dkt. No. 246-1 at 8 (citing
Valli v. Avis, et al., App. No. 23-8047, at Doc. 1). Defendants requested, among other things, that
the Third Circuit review the impact of an arbitration clause on class certification. Id. On October
30, 2023, following a telephone status conference held with the parties, the Court entered a stay of

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proceedings and directed Plaintiffs to file a letter regarding their request to file a motion for partial
summary judgment under the NJCFA, with Defendants filing a reply shortly after. Dkt. No. 234.
On November 17, 2023, the Third Circuit denied Defendants’ Petition in its entirety. Dkt. No. 2371.
Thereafter, on December 14, 2023, the Court granted Plaintiffs leave to file their motion
for partial summary judgment and concurrently permitted Defendants to file their motion regarding
arbitrability. Dkt. No. 239. The motions were filed on February 2, 2024. See Dkt. Nos. 240, 241,
242, 243, 244. On February 7, 2024, Defendants filed an amended motion to compel arbitration.
Dkt. No. 246.
Statement of Facts
Valli, a Florida resident and Avis Preferred member, rented an Avis brand car from
Defendants’ Maryland facility at Baltimore-Washington International Airport on June 11, 2014,
and was ticketed by an automatic traffic enforcement device which captured the rental vehicle
going 52 mph in a 35-mph zone in Washington, DC on that same day (the “Infraction”). Dkt. Nos.
244 at ¶¶ 3,7; 251-3 at ¶¶ 3,7. The D.C. Metropolitan Police Department issued a “Notice of
Infraction” to PV Holding Corp., a subsidiary of Defendants, as the owner of the vehicle. Dkt. No.
251 at p. 2. The Notice of Infraction stated: “[y]our vehicle was photographed violating District of
Columbia traffic regulations on the date and time listed below. Under District law, the registered
owner of a vehicle is liable for payment of the fine for violations recorded using an automated
traffic enforcement system.” Dkt. No. 251-3 at ¶ 7 (citing Dkt. No. 243-1 Ex. G). The Notice of
Infraction also specified how to contest the ticket, such as when and where to appear for a hearing
and/or how to direct a mail adjudication request. Id.
On July 3, 2014, Avis sent Valli a “Vehicle Violation Notice” with a copy of the Infraction

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and notified Valli that, per the rental contract, it had paid the fine and that Valli owed the $150
fine plus a $30 administrative fee. Dkt. Nos. 244 at ¶¶ 12, 13; 251-3 at ¶¶ 12,13. Although the
deadline to contest the ticket was August 17, 2014, Avis indicated in its July 3, 2014 notice that it
had already paid the $150 fine. Id. at ¶ 10. After Valli did not pay the fee or fine through another
payment arrangement, Avis charged the credit card on file. Id. at ¶ 13.4
The parties dispute which agreement governed the rental and Defendants ability to pay and
charge for the tickets. Plaintiffs assert that the relevant clause is contained in the vehicle Rental
Agreement, which states the following:
You’ll pay all fines, penalties, and court costs for parking, traffic, toll, and
other violations, including storage liens and charges. You will also pay a
reasonable administration fee with respect to any violation of this agreement,
such as repossessing or recovering the car for any reason.
Dkt. No. 244 at ¶ 4. Defendants state that Defendants’ member programs, namely “Preferred” for
Avis and “Fastbreak” for Budget, contain different agreements than for non-members (“Preferred
Members Terms and Conditions”). Dkt. No. 251. Valli enrolled in Avis’ Preferred Member Service
on or about October 24, 2009. Dkt. Nos. 251-3 at p. 8, ¶ 1; 244 at p. 7, ¶ 1. Defendants claim that
the Preferred Members Terms and Conditions actually govern Valli’s rental when she received the
Infraction at issue. See Dkt. 251. That Preferred Members Terms and Conditions states, in pertinent
part:
You’ll pay all fines, penalties and court costs for parking, traffic, toll and other
violations . . . You will also pay a reasonable administrative fee with respect to any
violation of this agreement . . . if you do not pay all amounts due to us under this
agreement upon demand, including all charges, fees, expenses, fines, penalties
[and] administrative charges . . . associated with the rental of the vehicle including
. . . parking, red light and traffic fines and penalties . . . we will take the following
actions: (a) for all traffic and parking related offenses, you understand and agree
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Dubinsky, the other Named Plaintiff in this action, encountered similar circumstances when he was issued a
Summons by the San Francisco Police Department for running a red light on November 26, 2014. See Dkt. No. 231
at p. 4-5. Since the Court discussed the facts pertaining to his rental in its Class Certification Opinion [id.], the Court
need not reiterate them at length here.
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that all violations are issued to us as the owner of the vehicle and we, in our sole
discretion may elect to pay the fines, penalties and fees and bill you directly for
those amounts with a reasonable administrative fee.
Dkt. No. 251 at p. 7 (citing Dkt. No. 153, Ex. G-1 ¶ 26).
Defendants contend that the rental agreements are standard nationwide, with slight
variation in a handful of states, and that the Preferred Members Terms and Conditions are
universal. Dkt. No. 251-3 at ¶ 5. Further, Defendants claim the Preferred Members Terms and
Conditions have been updated periodically throughout the class period and that the addition of the
clause they claim governs Valli’s rental and subsequent Infraction was effective January 1, 2014,
prior to Valli’s rental. Dkt. No. 251-3 at p. 8, ¶¶ 3-4.
Among the periodic updates of the Preferred Members Terms and Conditions was the
addition of an alternative dispute resolution clause. As of April 1, 2016, Avis updated its Preferred
Members Terms and Conditions to include an arbitration provision and class action waiver. Dkt.
No. 246-1 at p. 5. The amendment for the arbitration clause was not retroactive and, therefore, did
not apply to Valli or Dubinsky’s 2014 rentals at issue. The added arbitration clause, in full, is as
follows:
ARBITRATION. Pre-Dispute Resolution Procedure: Before asserting a claim in
any proceeding (including, but not limited to, in an individual arbitration or in a
small claims proceeding), you and Avis agree that we shall give the other party
written notice of the claim to be asserted 30 days before initiating a proceeding and
make a reasonable good faith effort to resolve the claim. If you are intending to
assert a claim against Avis, you must send the written notice of the claim to
Attention: Avis Rent A Car System, LLC, 6 Sylvan Way, Parsippany, New Jersey,
07054 Attn: Legal Department. If Avis is intending to assert a claim against you,
we will send the written notice of the claim to you at your address appearing in our
records. NO SETTLEMENT DEMAND OR SETTLEMENT OFFER USED IN
THIS PRE-DISPUTE RESOLUTION PROCESS MAY BE USED IN ANY
PROCEEDING, INCLUDING AS EVIDENCE OR AS AN ADMISSION OF
ANY LIABILITY OR DAMAGES (OR LACK THEREOF).
Dispute Resolution (Not applicable if mandatory arbitration is prohibited by
consumer protection legislation, such as in Quebec): Except as otherwise provided
below, in the event of a dispute that cannot be resolved informally through the pre7

dispute resolution procedure, all disputes between you and Avis arising out of,
relating to or in connection with your rental of a car from Avis and these Terms and
Conditions shall be exclusively settled through binding arbitration through the
American Arbitration Association (“AAA”) pursuant to the AAA’s then-current
rules for commercial arbitration. There is no judge or jury in arbitration.
Arbitration procedures are simpler and more limited than rules applicable in court
and review by a court is limited. YOU AND AVIS AGREE THATANY [SIC]
SUCH ARBITRATION SHALL BE CONDUCTED ON AN INDIVIDUAL
BASIS AND NOT IN A CLASS, CONSOLIDATED OR REPRESENTATIVE
ACTION.
Notwithstanding any provision in these Terms and Conditions to the contrary, if
the class-action waiver in the prior sentence is deemed invalid or unenforceable,
neither you nor we are entitled to arbitration. If you are an individual (instead of,
for instance, a partnership, corporation, or other form of entity or non-natural
person), in the event that (1) your claim is less than $10,000, and (2) you are able
to demonstrate that the costs of arbitration will be prohibitive as compared to costs
of litigation, Avis will pay as much of your filing and hearing fees in connection
with arbitration as the arbitrator deems necessary to prevent the arbitration from
being cost-prohibitive as compared to the cost of litigation. This arbitration
agreement is subject to the Federal Arbitration Act. The arbitrator’s award may be
entered in any court of competent jurisdiction. Notwithstanding any provision in
these Terms and Conditions to the contrary, we agree that if Avis seeks to delete or
materially modify the agreement to arbitrate from this dispute resolution provision,
any such deletion or material modification will not apply to any individual claim(s)
that you had already provided notice of to Avis. Information on AAA, its rules and
procedures, and how to file an arbitration claim can be found by contacting AAA
at 800-778-7879 or on its website at http://www.adr.org. Disputes and claims that
are within the scope of a small claims court’s authority, as well as disputes and
claims regarding personal injury and/or damage to or loss of a car related to your
Avis rental, are exempt from the foregoing dispute resolution provision.
Dkt. No. 246-1 at p. 13-14; Exhibit B ¶ 30.
The applicability of the arbitration clause is the central issue in Defendants’ motion to
compel, while the aforementioned Rental Agreement and Preferred Members Terms and
Conditions are central to the issue of Plaintiffs’ summary judgment motion. The Court will first
address Defendants’ motion to compel arbitration followed by Plaintiffs’ motion for partial
summary judgment.

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II.

Motion to Compel Arbitration
As the parties are aware, this Court previously held that Defendants have apparently

waived their right to arbitration under the standard set forth by the Third Circuit in White, 61 F.4th
at 334. Dkt. No. 231 at p. 23-24. Defendants now contend that White is not analogous with the
circumstances in this matter and should not be followed. See Dkt. No. 246-1. Specifically,
Defendants argue that they could not have moved to compel arbitration before the class was
certified and, unlike in White, they were consistent in asserting their right to arbitrate by including
it in their Answers and throughout this litigation. Id. Defendants claim that Amansac v. Midland
Credit Mgmt., Inc., No. CV 15-8798, 2022 WL 14563253, at *1 (D.N.J. Oct. 24, 2022) is more
analogous to this matter and the Court should look to that decision for guidance. See Dkt. No. 2461 at p. 24-25. Based upon their arguments, Defendants contend that any member of the Preferred
Member Subclass who rented after April 1, 2016 must arbitrate their claims under the clause in
the updated Preferred Members Terms and Conditions. Id.
In opposition, Plaintiffs argue that this Court should follow its previous holding that
Defendants waived their right to arbitration and that their actions thus far have been inconsistent
in asserting that right. Dkt. No. 249 at p. 4-5. Furthermore, Plaintiffs argue that the small claims
court exception included in the arbitration agreement provides that these matters are exempt from
arbitration. See Dkt. No. 249 at p. 8-9. Defendants, in turn, argue that the inclusion of a small
claims provision, similar to the arbitration procedures, was “to bind the parties to a speedy,
efficient, and cost-effective dispute resolution process.” Dkt. No. 252 at p. 10.
A. Legal Standard
The Federal Arbitration Act (the “FAA”) requires courts to compel arbitration of claims
that the parties have agreed to arbitrate. See AT&T Mobility, LLC v. Concepcion, 563 U.S. 333,
339 (2011). The FAA provides that “[a] written provision ... to settle by arbitration a controversy
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... shall be valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity
for the revocation of any contract.” 9 U.S.C. § 2. The Supreme Court has interpreted the FAA as
“a congressional declaration of a liberal federal policy favoring arbitration agreements.” Moses H.
Cone Mem'l Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 24 (1983). When considering a motion
to compel arbitration, a court must consider whether (1) a “valid agreement to arbitrate exists” and
(2) “the particular dispute falls within the scope of that agreement.” Trippe Mfg. Co. v. Niles Audio
Corp., 401 F.3d 529, 532 (3d Cir. 2005).
This Court has already acknowledged that an arbitration agreement did exist in the
applicable agreements in its Class Certification Opinion. See Dkt. No. 231 at p. 23 (“[T]he Court
is persuaded that an arbitration agreement did exist in the applicable Rental Agreements, and
indeed, Plaintiffs seem to have conceded this point during oral argument.”) (citation omitted). For
the reasons that follow, the Court again finds that Defendants waived their right to compel
arbitration through their actions in litigation.
B. Discussion
“The contractual right to arbitrate, like any other right, can be waived.” KPH Healthcare Servs.
v. Janssen Biotech, Inc., No. 20-5901, 2021 WL 4739601, at *9 (D.N.J. Oct. 12, 2021). Waiver is
the “intentional relinquishment or abandonment of a known right.” Morgan v. Sundance, 142 S.
Ct. 1708, 1713 (2022) (internal quotation marks omitted) (quoting United States v. Olano, 507
U.S. 725, 733 (1993)). In the context of the right to compel arbitration, the waiver analysis focuses
“on the actions of the person who held the right.” Id. Such waiver occurs where a party has
“intentionally relinquished or abandoned a known right.” White, 61 F.4th at 339 (quoting Morgan,
596 U.S. at 417). A “case-specific waiver analysis is not susceptible to precise line-drawing.” Nino
v. Jewelry Exch., Inc., 609 F.3d 191, 212 (3d Cir. 2010); see also Gray Holdco, Inc. v. Cassady,

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654 F.3d 444, 460 (3d Cir. 2011) (stating “Nino does not establish a base line of what must be
shown for acquiescence in pre-trial orders to waive the right to arbitrate.”); Zimmer v. CooperNeff
Advisors, Inc., 523 F.3d 224, 232 (3d Cir. 2008) (“the length of the time period involved alone is
not determinative”) (citation omitted). Instead, waiver is informed by the “circumstances and
context of each case.” Gray Holdco, 654 F.3d at 452.
“The ‘circumstances and context’ can include considerations such as the timeliness of the
arbitration request, the extent of the movant's merits-based arguments up to that point, and its
participation in discovery.” Hejamadi v. Midland Funding, LLC, No. 18-CV-13203 (KSH)
(CLW), 2024 WL 3159316, at *5 (D.N.J. June 25, 2024) (citing Coronel v. Bank of Am., N.A., No.
CV 19-8492 (ES) (MAH), 2022 WL 3443985, at *4, n.4 (D.N.J. Aug. 17, 2022) (concluding that
“many of the Hoxworth factors relating to the moving party's litigation conduct . . . should still
inform a court's determination regarding waiver,” so long as they are applied to the updated
standard)). “Waiver will normally be found only where the demand for arbitration came long after
the suit commenced and when both parties had engaged in extensive discovery.” Nino, 609 F.3d
at 208 (citations omitted); see also Coronel, 2022 WL 3443985, at *6 (“unreasonably delaying its
motion for at least eighteen months, and by extensively participating in this litigation, [defendant]
has waived its right to compel arbitration.”); Nino, 609 F.3d at 199 (finding that the defendant
waived the right to arbitrate where he actively litigated the case for more than 15 months and
engaged in “no fewer than ten pretrial conferences” and “extensive discovery”); Ehleiter v.
Grapetree Shores, Inc., 482 F.3d 207, 223 (3d Cir. 2007) (noting that the parties engaged in
extensive discovery, and holding that the defendant therefore waived arbitration, where “both sides
exchang[ed] several sets interrogatories, requests for production of documents, and expert reports,
[and] participat[ed] in depositions of numerous witnesses”).

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Defendants’ argument in support of their contention that they have not waived their right
to arbitrate is two-fold. First, Defendants claim that because Valli, and later Dubinsky, “were not
subject to arbitration at the outset of the case nor at any time thereafter because their rentals at
issue took place prior to the addition of the arbitration and class waiver clauses,” Defendants could
not have raised the issue of arbitration prior to the filing of their Answer in May of 2017, when
Defendants first introduced their contention regarding arbitration. Dkt. No. 246-1 at p. 20.
Following that initial mention of arbitration, Defendants contend they have consistently indicated
their intentions regarding arbitration not only by asserting arbitration as an affirmative defense in
their Answers but also by raising the issue during various Court hearings and proceedings.
Secondly, Defendants argue that Amansac, 2022 WL 14563253, at *1, “underscores this
district’s principles that a defendant cannot move to compel arbitration until there is someone
before the court whose claims are actually subject to an arbitration clause.” Dkt. No. 246-1 at p.
25-26. Thus, Defendants argue, “until this court certified the Preferred Members Subclass, there
was no one before the Court at any time against whom Defendants could have moved to compel
arbitration.” Id. at p. 26.
Despite Defendants’ arguments to the contrary, the Court finds Defendants have waived
their right to compel arbitration by delaying enforcement of their right and because their actions
“evince a preference for litigation over arbitration.” See White, 61 F.4th at 340. Although
Defendants claim they frequently and consistently “at each stage of the litigation . . . apprised
[Plaintiffs] and this Court of the possibility of arbitration” and therefore did not waive their right
to arbitrate, the Court finds that Defendants’ various suggestions of arbitration cannot overcome
the untimeliness of their request and their extensive and lengthy participation in discovery. Dkt.
No. 246-1 at p. 22.

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Previously, Defendants sought dismissal of this matter on the merits on two occasions, with
the latter of their motions to dismiss being filed in August 2016, a few months after the April 1,
2016 date Defendants updated its Preferred Members Terms and Conditions to include the
arbitration provision and class action waiver. That motion to dismiss [Dkt. No. 49] did not mention
arbitration.

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Defendants first raised the issue of arbitration in their Answer to the Amended

Complaint filed on May 25, 2017, over a year after the arbitration provision was enacted.
Moreover, Defendants did not argue that arbitration was applicable to certain class members until
their opposition to the class certification motion was filed on August 30, 2019, and Defendants did
not formally seek to enforce arbitration until this motion was filed.6 Instead, Defendants sought to
litigate this case by engaging in extensive discovery over a number of years, in which they sought
multiple extensions, raised disputes, attended many conferences, and attended both court-ordered
and private mediation. While Defendants are indeed correct that the waiver of arbitration is “not a
bright-line inquiry,” Defendants cite to no authority in which a defendant litigated a case so heavily
and for so long as the present matter and succeeded on a delayed motion to compel arbitration.
The Court’s finding is unchanged by Defendants’ reliance on Amansac. In Amansac, the
Court denied a class certification motion finding that the named plaintiff could not satisfy the
requirements of Federal Rule of Civil Procedure 23 because the named plaintiff, “unlike virtually
every other putative class member,” was “not bound to the arbitration and class waiver provisions”
contained in the relevant agreements at issue. Amansac, 2022 WL 14563253, at *5 (citation
omitted). In denying the plaintiff’s motion for class certification, the Court “ma[d]e clear that at
class certification, the question for this Court to decide is not the validity of the agreement but

It is important to note that the arbitration clause was not enacted until two years into litigation. Thus, Defendants’
initial motion to dismiss clearly could not have mentioned it.
6
While Valli and Dubinsky were never subject to the arbitration agreement, this action was always conceived as a
class action.
5

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whether the presence of class members that are potentially subject to the [arbitration] provision
satisfies the requirements of Rule 23.” Amansac, 2022 WL 14563253, at *6. The Court further
stated that it would “not compel absent putative class members who are not before this Court to
binding arbitration or issue a ruling regarding the enforceability of the [arbitration] provision.” Id.
According to Defendants, Amansac “underscores this district’s principles that a defendant
cannot move to compel arbitration until there is someone before the court whose claims are
actually subject to an arbitration clause” and Defendants therefore could not have moved to compel
arbitration until the Preferred Members Subclass was certified. Dkt. No. 246-1 at p. 25-26. The
Court does not agree. As an initial matter, Amansac is a class certification ruling and does not
involve or discuss the issue of a waiver of a party’s right to arbitrate. Furthermore, although
unsuccessful, the defendants in Amansac, unlike Defendants here, moved to compel arbitration in
the initial stages of the case. Amansac, 2022 WL 14563253, at *3.
While Defendants are indeed correct that Amansac underscores the principle courts will
not compel putative class members who are not presently before them to binding arbitration,
“waiver is a unilateral concept” and to “decide whether a waiver has occurred, the court focuses
on the actions of the person who held the right; the court seldom considers the effects of those
actions on the opposing party.” Hill v. Xerox Bus. Servs., LLC, 59 F.4th 457, 469 (9th Cir. 2023)
(quoting Morgan v. Sundance, Inc., 596 U.S. 411, 417 (2022)). Indeed, for waiver purposes,
although a court cannot “compel nonparties to the case to arbitrate until after as class ha[s] been
certified,” the “knowledge of an existing right to arbitrate” does not require “a present ability to
move to enforce an arbitration agreement.” Hill, 59 F.4th at 469 (citing In re Cox Enterps., Inc.
Set-top Cable Television Box Antitrust Litig., 790 F.3d 1112, 1119 (10th Cir. 2015)). Accordingly,
the Court declines to adopt Defendants’ contention that that Amansac requires a finding that

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Defendants could not have asserted their right to arbitrate until after a decision on class
certification.
While Defendants did indeed mention their right to arbitrate in their Answers, opposition
to class certification, and at other times throughout litigation [see Dkt. No. 246-1 at p. 6-7], their
formal assertion of their right to arbitration has come after the passage of extensive time and
litigation. This fact, coupled with Defendants’ actions throughout the discovery period, evinces a
preference for litigation such that Defendants effectively abandoned their right to arbitrate.
Therefore, the Court finds that Defendants waived their right to compel arbitration.
III.

Motion for Partial Summary Judgment
Plaintiffs move for summary judgment on the issue of liability under the NJCFA (N.J. Stat.

Ann. § 56:8-1, et seq.). Specifically, Plaintiffs argue that there is no genuine issue of material fact
as to how the language in the Rental Agreement is interpreted. Thus, Plaintiffs claim that there is
no dispute that Defendants practice of charging customers, including Plaintiffs, for “tickets,” rather
than “violations,” without proper notice or the opportunity to dispute, constitutes an affirmative
misrepresentation under the NJCFA. See Dkt. Nos. 241, 242. For the reasons that follow, the Court
finds that a dispute as to a material fact exists which precludes summary judgment.
A. Legal Standard
Summary judgment is appropriate where “the movant shows that there is no genuine
dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed. R.
Civ. P. 56(a). A factual dispute between the parties must be both genuine and material to defeat a
motion for summary judgment. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-48 (1986). A
factual dispute is genuine “if the evidence is such that a reasonable jury could return a verdict for
the nonmoving party.” Id. at 248. A disputed fact is material where it would affect the outcome of

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the suit under the relevant substantive law. Scott v. Harris, 550 U.S. 372, 380 (2007). The movant
bears the initial burden to demonstrate the absence of a genuine issue of material fact for trial.
Beard v. Banks, 548 U.S. 521, 529 (2006). If the movant carries this burden, the non-movant
“must do more than simply show that there is some metaphysical doubt as to the material facts.”
Scott, 550 U.S. at 380 (citing Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574,
586-87 (1986)).
When considering a motion for summary judgment, all evidence submitted must be viewed
in the light most favorable to the nonmoving party. See Celotex Corp. v. Catrett, 477 U.S. 317,
322–32 (1986); Matsushita Elec. Indus., 475 U.S. at 587. At this stage, “the judge’s function is not
himself to weigh the evidence and determine the truth of the matter.” Anderson, 477 U.S. at 249.
Each party must support its position by “citing to particular parts of materials in the record . . . or
showing that the materials cited do not establish the absence or presence of a genuine dispute, or
that an adverse party cannot produce admissible evidence to support the fact.” FED. R. CIV. P.
56(c)(1).
B. Discussion
The NJCFA protects consumers from unconscionable and fraudulent practices in the
marketplace. N.J. Stat. Ann. § 56:8-1, et seq. The statute is to be liberally construed in favor of
protecting consumers. Barry v. Arrow Pontiac, Inc., 100 N.J. 57, 69 (1985). To establish a cause
of action under the NJCFA, the plaintiff must demonstrate: “(1) an unlawful practice by the
defendant; (2) an ascertainable loss by plaintiff; and (3) a causal nexus between defendant’s
allegedly unlawful behavior and the plaintiff’s ascertainable loss.” Arcand v. Brother Int’l Corp.,
673 F. Supp. 2d 282, 296 (D.N.J. 2009). The NJCFA prohibits several “unlawful practices,”
including:

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The act, use or employment by any person of any unconscionable commercial
practice, deception, fraud, false pretense, false promise, misrepresentation, or the
knowing, concealment, suppression, or omission of any material fact with intent
that others rely upon such concealment, suppression or omission, in connection
with the sale or advertisement of any merchandise or real estate, or with the
subsequent performance of such person as aforesaid, whether or not any person has
in fact been misled, deceived or damaged thereby. . . .
N.J. Stat. Ann. § 56:8-2.
The NJCFA prohibits affirmative misrepresentations to consumers in connection with the
sale of merchandise. Fenwick v. Kay American Jeep, Inc., 72 N.J. 372, 376-77 (1977); see N.J.
Stat. Ann. § 56:8-1 (defining the term “merchandise” to be “any objects, wares, goods,
commodities, services, or anything offered, directly or indirectly to the public for sale”, and
defining the term “sale” to include any rental or attempted rental). An affirmative
misrepresentation is a statement of fact that is found to be false, that is material to the transaction
and that was made to induce the buyer to make the purchase. Mango v. Pierce-Coombs, 851 A.2d
62, 69 (N.J. Super. Ct. App. Div. 2004); Arcand, 673 F. Supp. 2d at 299 (finding a statement made
in the connection with the sale or advertising of merchandise which was not factually accurate is
enough to constitute an affirmative misrepresentation as unlawful conduct under the NJCFA).
When a plaintiff claims an NJCFA violation is an affirmative act, a showing of intent is not
required. See N.J. Stat. Ann. § 56:8-2; Cox v. Sears Roebuck & Co., 138 N.J. 2, 17-18 (1994); see
also Vagias v. Woodmont Properties, et al., 384 N.J. Super. 129, 133 (App. Div. 2006) (allegations
of affirmative acts constituting a violation of the NJCFA “do not require proof of intent to
mislead”). 7 Instead, courts focus on the “capacity” of the misrepresentation to mislead consumers.
Cox, 138 N.J. at 17 (citing Fenwick, 72 N.J. at 378 (“The capacity to mislead is the prime ingredient
of deception or an unconscionable commercial practice.”)).

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Such a showing is necessary if the claimed violation is an omission. Cox, 138 N.J. at 18.
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Plaintiffs assert Defendants’ Rental Agreement violates the NJCFA by misrepresenting the
conditions under which rental car customers are charged for “violations.” See Dkt. No. 242 at p.
5. Specifically, Plaintiffs argue Defendants’ practice of charging customers for traffic tickets is
inconsistent with the terms of the Rental Agreement, which states that customers would be charged
for violations. Id. Thus, Plaintiffs allege Defendants, by conflating the terms “tickets” and
“violations” and charging Plaintiffs for tickets plus an administrative fee upon the issuance of a
ticket, make an affirmative misrepresentation in the Rental Agreement. Dkt. No. 242 at p. 7.
To support the alleged misrepresentation, Plaintiffs argue that “[a] ticket is not a violation.
A ticket is nothing more than an allegation of a violation.” Dkt. No. 242 at p. 7. In support of this
position, Plaintiffs cite to Black’s Law Dictionary, which states that a “violation” is “[a]n
infraction or breach of the law; a transgression” or “[t]he act of breaking or dishonoring the law;
the contravention of a right or duty.” VIOLATION, Black’s Law Dictionary (11th ed. 2019).
Comparatively, Plaintiffs argue that a “ticket” is a “court-issued writ that commands a person to
appear at a certain time and place to do something demanded in the writ, or to show cause for not
doing so.” TICKET, Black’s Law Dictionary (11th ed. 2019) (citing to CITATION, Black’s Law
Dictionary (11th ed. 2019)).
Defendants counter that their practices are clear, standard in the industry, do not constitute
misrepresentation, and that Plaintiffs themselves caused the loss suffered. See Dkt. No. 251 at p.
7, 8. First and foremost, Defendants argue that the Rental Agreement is not what governs here, but
rather that the ability to charge for tickets comes from the Preferred Members Terms and
Conditions. Dkt. No. 251. Furthermore, Defendants argue that Black's Law Dictionary, which
Plaintiffs also rely on, indicates that “violation” can also mean “infraction” and does not
necessarily require a finding of wrongdoing. Dkt. No. 251 at p. 16. Defendants maintain the term

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“violation” can reasonably be interpreted to include the issuance of a ticket, and contend that their
practice of paying and subsequently charging for tickets, considered and described as violations in
the Rental Agreement, is the industry standard. Id. Defendants also highlight that the notice of the
violation is titled “Notice of Infraction,” and the D.C. Code which Valli breached interchanges the
term “violation” with “infraction.” Dkt. No. 251 at p. 18.
In a motion for summary judgment where, as here, the issue is one of contract
interpretation, summary judgment is only proper where the contract is clear and unambiguous as
a matter of law, meaning that the contract can be read only one way. Starr v. Katz, 1994 WL
548209, at *7 (D.N.J. Oct. 5, 1994). If an ambiguity is found, then summary judgment is precluded
because the ambiguity creates a question of fact only a factfinder can resolve. Id. In evaluating
whether a contract is ambiguous, a court should not “torture the language of a contract to create
ambiguity where, fairly considered, none exists.” Id. Instead, courts consider the words used in the
contract as well as counsel's suggested alternative meanings, supported by extrinsic evidence. Id.
If a reasonable inference in the nonmovant's favor regarding the interpretation of a contract can be
found from any evidence, regardless of source, then summary judgment cannot be granted.
Vanguard Telecomm., Inc. v. Southern New England Tel. Co., 722 F.Supp. 1166, 1178 (D.N.J.
1989).
Here, viewing the evidence in the light most favorable to Defendants, the Court finds
Plaintiffs’ motion for summary judgment must be denied. Since the primary issue here is the
interpretation of a contract (i.e., the Rental Agreement/Preferred Members Terms and Conditions),
there cannot be any ambiguity as to the meaning of the language if the Court is to consider granting
summary judgment. However, the use and interpretation of the word “violations” is not
unambiguous and may be open to more than one interpretation, especially considering the evidence

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submitted by both sides. First, the Black’s Law definition of “violation” submitted by Plaintiffs
uses the word “infraction,” which is also used on the ticket—the “Notice of Infraction”—by the
D.C. Code. Moreover, the D.C. Code freely interchanges the term “violation” with “infraction.”
Thus, the Court finds Defendants have offered sufficient evidence to create a genuine dispute as
to whether an affirmative misrepresentation and the capacity to mislead exists based the use of the
term “violation” in either agreement.
Furthermore, the dispute as to which agreement applies is material to the issue of
affirmative misrepresentation. In theory, Valli was an Avis Preferred Member and would be
subject to the Preferred Members Terms and Conditions. Additionally, she executed a Rental
Agreement with Defendants to which she is also subject. The conflict between the two agreements
alone is enough to raise a dispute of a material fact. For these reasons, summary judgment is
denied, and these issues are to be decided by a jury.
IV.

CONCLUSION
For the foregoing reasons, Defendants’ motion to compel arbitration [Dkt. No. 246] is

DENIED, and Plaintiffs’ motion for partial summary judgment [Dkt. No. 241] is DENIED. An
appropriate Order accompanies this Opinion.

DATED: September 30, 2024

/s/ James B. Clark, III
JAMES B. CLARK, III
United States Magistrate Judge

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