Fuel Service Charge Class Action In California
In Schnall v. Hertz Corp. (2000) - a class action:
The Court of Appeal rejected the plaintiff's claim of unfair business practices based on the amount of the refueling charge:
"In other words, where the allegedly unfair business practice has been authorized by the Legislature, no factual or equitable inquiry need be made, as the court can decide the matter entirely on the law.
We conclude that, by authorizing avoidable fuel service charges, Civil Code section 1936, subdivision (m)(2) insulates the reasonableness of such charges from judicial scrutiny." (Schnall, supra, 78 Cal. App. 4th at pp. 1160-1161, fn. omitted.)
Immediately appended to this paragraph was footnote 9, which rejected most of the plaintiff's remaining legal claims: "Partly for this reason, we reject appellant's claim that the fuel service charge is unconscionable.
Not only does this charge fail to 'shock the conscience' (California Grocers Assn. v. Bank of America [(1994)] 22 Cal. App. 4th [205,] 215 [27 Cal. Rptr. 2d 396]), appellant's claim does not even meet the less stringent standard of a & M Produce Co. v. FMC Corp. (1982) 135 Cal. App. 3d 473, 486 [186 Cal. Rptr. 114], which stated that the doctrine of unconscionability ' "has generally been recognized to include an absence of meaningful choice on the part of one of the parties together with contract terms which are unreasonably favorable to the other party." '
It is enough to reiterate that Hertz's customers have a 'meaningful choice,' because the rental agreement adequately informs renters that if they reject the fuel purchase option and return the rented car with a full tank they will pay no fuel service charge.
Because we find as a matter of law that the fuel service charge was not unconscionable, it is unnecessary to address appellant's related claims that the fuel service charge violates . . . sections 1670.5, subdivision (a) (relating to the enforceability of an unconscionable contract or clause thereof); 1670.5, subdivision (b) (affording the parties an evidentiary hearing on a claim of unconscionability); 1671 (invalidating certain liquidated damages provisions); and 1770, subdivision (a)(19) (declaring that insertion of an unconscionable provision in a contract constitutes 'an unfair method of competition and unfair or deceptive act or practice')." (Schnall, supra, 78 Cal. App. 4th at p. 1161, fn. 9.)
the unfair competition law (Bus. & Prof. Code, 17200 et seq.) prohibits unfair competition, which is defined as "any unlawful, unfair or fraudulent business act or practice . . . ." ( 17200.)
"Because Business and Professions Code section 17200 is written in the disjunctive, it establishes three varieties of unfair competition--acts or practices which are unlawful, or unfair, or fraudulent." (Podolsky v. First Healthcare Corp. (1996) 50 Cal. App. 4th 632, 647 [58 Cal. Rptr. 2d 89].)
The "unfairness" prong of the unfair competition law is " 'intentionally broad . . . ." (Podolsky v. First Healthcare Corp., supra, 50 Cal. App. 4th at p. 647.)
However, the scope of the law "is not unlimited. Courts may not simply impose their own notions of the day as to what is fair or unfair. . . . If the Legislature has permitted certain conduct or considered a situation and concluded no action should lie, courts may not override that determination. When specific legislation provides a 'safe harbor,' plaintiffs may not use the general unfair competition law to assault that harbor." (Cel-Tech Communications, Inc. v. Los Angeles Cellular Telephone Co. (1999) 20 Cal. 4th 163, 182 [83 Cal. Rptr. 2d 548, 973 P.2d 527].)
The test of whether a business practice is unfair involves balancing the utility of the defendant's conduct against the gravity of the alleged victim's harm. (Id. at p. 182.)