Free Reply - District Court of California - California

Case 3:07-cv-02174-H-BLM

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1 Michael L. Weiner (Pro hac vice) SKADDEN ARPS SLATE MEAGHER & 2 FLOM LLP Four Times Square 3 New York, New York 10036-6522 Telephone: (212) 735-3000 4 Douglas B. Adler (Cal. Bar No. 130749) 5 SKADDEN ARPS SLATE MEAGHER & FLOM LLP 6 300 South Grand Avenue, Suite 3400 Los Angeles, California 90071-3144 7 Telephone: (213) 687-5000 8 Sara L. Bensley (Pro hac vice) SKADDEN ARPS SLATE MEAGHER & 9 FLOM LLP 1440 New York Avenue, N.W. 10 Washington, D.C. 20005-2111 Telephone: (202) 371-7000 11 Attorneys for Defendant 12 AVIS BUDGET GROUP, INC. 13 [Additional Counsel Listed on Signature Page] 14 15 UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF CALIFORNIA

16 MICHAEL SHAMES; GARY GRAMKOW, on behalf of themselves and 17 on behalf of all persons similarly situated, Case No. 07 CV 2174 H BLM 18 19 v. 20 THE HERTZ CORPORATION, a Delaware corporation; DOLLAR 21 THRIFTY AUTOMOTIVE GROUP, INC., a Delaware corporation; AVIS BUDGET 22 GROUP, INC., a Delaware corporation; VANGUARD CAR RENTAL USA, INC., 23 an Oklahoma corporation; ENTERPRISE RENT-A-CAR COMPANY, a Missouri 24 corporation; FOX RENT A CAR, INC., a California corporation; COAST LEASING 25 CORP., a Texas corporation; THE CALIFORNIA TRAVEL AND TOURISM 26 COMMISSION and CAROLINE BETETA 27 28 Defendants. Plaintiffs, [Class Action]

REPLY MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF THE RENTAL CAR DEFENDANTS' REQUEST FOR JUDICIAL NOTICE Date: April 1, 2008 Time: 10:30 a.m. Place: Courtroom 13 Honorable Marilyn L. Huff

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Defendants The Hertz Corporation, Dollar Thrifty Automotive Group Inc., Avis Budget Group Incorporated, Vanguard Car Rental USA, Inc., Enterprise Rent-A-Car Company, Fox RentA-Car Incorporated, and Coast Leasing Corp. (collectively, the " Rental Car Defendants" ) respectfully submit this Reply Memorandum of Points and Authorities in Support of their Request for Judicial Notice. INTRODUCTION Plaintiffs contend that this Court should not take judicial notice of a letter that their own counsel submitted to the California Legislature. They take this position despite the fact that this letter ( e Fl e L tr is indisputably a part of the legislative history of a statute that lies at t "em t ee ) h l h t" t ro o Pa tf prot c i s See Req. for Jud. Notice in Supp. of Rental Car DefsMo. h ot f ln f ' upr d lm . e i is e a ' t t Ds i ( J " E h i ( x. B& C. The Fellmeth Letter, h h lniscounsel wrote o i s " N ) xit " s ) m sR , bs E " w i Pa tf c i f' in opposition to California Assembly Bill ( B ) " " 2592, was incorporated in the legislative history A of California Civil Code § 1936.01 and therefore is a proper subject of judicial notice. See, e.g., Chaker v. Crogan, 428 F.3d 1215, 1223 & n.8 (9th Cir. 2005). Since the existence and contents of the Fellmeth Letter a "o sb ct r snb d ptit tt y r . . . capable of accurate r ntuj to e oal i uen h [ e a ] e e a e s a h e and ready determination by resort to sources whose accuracy cannotesnb b qet nd r oal e usoe, a y i " judicial notice of the existence and contents of the Fellmeth Letter is mandatory. See Fed. R. Evid. 201(b), (d).1 This Court also should take judicial notice of California Senate Bill 1057 (RJN, Ex. D), because it bears directly on the interpretation of statutes at issue here. In particular, Senate Bill 1057 is relevant to whether Plaintiffs seek to challenge conduct that California law expressly allows, and whether Plaintiffs fail to allege any misrepresentations regarding the CTTC assessment as a matter of law. Since Plaintiffs do not object to this Court'taking judicial notice of an Assembly Floor s
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It et g , ln f r s n oj t no h C ut t i nte f xit ,n n r i l Pa tf a e o b co t t s orsa n oi o E h iA a e sn y i is i ei i ' kg c b Assembly Floor Analysis of AB 2592. Plaintiffs apparently would have this Court consider some, 27 but not all, of the legislative history of AB 2592. 28 1
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Analysis of AB 2592 (RJN, Ex. A ,r f lnisr t ar m n (J , x. &F, this )o o Pa tf e a ge et R N E sE ) i f' n l e s Court also should take notice of each of these documents. ARGUMENT I. This Court Should Take Judicial Notice Of The Fellmeth Letter. A. Judicial Notice Of The Fellmeth Letter Is Proper, Because Its Existence And Contents Are Not Subject To Reasonable Dispute.

In ruling on a motion to dismiss, " court may take judicial notice of matters of public [a]

e r ..so a t a s oi d r o sb ct r oal i ue c n e c c e e a e s . 8 r od .a l g sh f tnte a ntuj to esnb d pt"Intri-Plex Techs., Inc. 9 v. Crest Group, Inc., 499 F.3d 1048, 1052 (9th Cir. 2007) (alteration in original) (internal quotation
2 ln f d ntn cno d ptt dcm n otn wt n s t e a tf s a s ae h a ts 10 marks omitted). P i is o o ad ant i uehtou etcn i d i ia t u '

11 official legislative history are matters of public record. Nor could Plaintiffs dispute that the 12 Fellmeth Letter is part of the official legislative history of California Civil Code § 1936.01, or that h s t ese vnt Pa tf c i s i at l i is a 13 t st u ir eato ln f ' lm . Because Plaintiffs do not and cannot dispute the 14 existence and contents of the Fellmeth Letter, its existence and contents may be judicially noticed. 15 See Intri-Plex, 499 F.3d at 1052. 16 Plaintiffs seek to prevent this Court from taking any notice of the Fellmeth Letter by

h et C r e nat r et ot r o ln f ' s t n, e a e s q . ry a tf ei 17 mischaracterizing t R n l a D f dn 'eus C n a t P i isasrosthe Rental 18 Car Defendants are not requesting that this Court accept the truth of the statements made in the 19 Fellmeth Letter. Instead, the Rental Car Defendants request that this Court notice the existence of 20 the Fellmeth Letter and the fact that its author, who went on to become counsel for Plaintiffs, 21 predicted in writing to the California Legislature that enactment of AB 2592 would result in the 22 parallel conduct that Plaintiffs now allege in their Complaint, without stating that such parallel 23 conduct would require some antitrust conspiracy. Since these facts are not subject to reasonable 24 dispute, this Court may take notice of the existence and contents of the Fellmeth Letter. This Court 25 26 Pa tf o n u oi s s b s t th C ut a t e oi o t eiec o ln f ' w at ri et lh h t s orm y a nte fh x t e f i is h t e ai a i k c e sn public records. See Lee v. City of L.A., 250 F.3d 668, 689 (9th Cir. 2001); Marsh v. San Diego 27 County, 432 F. Supp. 2d 1035, 1043 (S.D. Cal. 2006). 28 2
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may consider these properly noticed facts in deciding for itself on the pending motion to dismiss whethr ln f ' lgt n p ui y ugsa atrscnp ay e Pa tf aeaos l s lsgetn nt tosic. i is l i a b iu r 3 B. Plaintiffs Fail To Provide This Court With Any Basis For Not Taking Notice Of The Fellmeth Letter And Its Contents.

Plaintiffs attempt to obfuscate what should be a simple issue by mischaracterizing the

ii t n e e "d d av" n " g li f s sn i w u ci e s te c . 6 d t co bten aj i t e ad l iav"at An adjudicative fact is merely one that ` le ]o h a i ad t r cv i ' ra [ e ts e its" s 7 " e t stt pre [n]hiat ie. Fed. R. Evid. 201 advisory committee'note 8 (quoting 2 Administrative Law Treatise 353). To the extent that Plaintiffs are suggesting that 9 legislative history cannot be an adjudicative fact, or that a court may consider legislative history 10 only for the purpose of interpreting statutory language or the legislative intent, those suggestions 11 have no legal (or logical) support and Plaintiffs cite none. Legislative history can be an
4 12 adjudicative fact that may be judicially noticed. See, e.g., Chaker, 428 F.3d at 1223 & n.8.

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Since a court may take judicial notice of legislative history ­ like any public record ­

us n t R l 0,n t x t e n cn n fh em t ee a ntuj to u e e sn es e l h t e e 14 pr ato u 21ad h eiec ad ot to t Fl e L trr "o sb ct 15 T iC ut a a p gonso i i Pa tf prot S em n cc i fr h orhs m l rud t d m s lnis upr d hr a A tlm o s e s s i f' e a failure to state a claim for which relief can be granted, even without considering the Fellmeth m P & . upo R n l a D f' t o i s R py m P & .n n a s . m s 17 Letter. See Me . . A iS p. f et C r e .Mo t Ds i ; elMe . . A i S p.f et C r e .Mo t Ds i. i eh eiec ad ot to t Fl e upo R n l a D f' t o i s Sn t x t e n cn n fh em t a s . m s c e sn es e l h L tr er n h iusa e iPa tf l sit, however, judicial notice of the Fellmeth e ebao t s e r sd n lnis a u t es i i f' w 18 Letter and its contents is appropriate. 19 4 The Ninth Circuit in Chaker cited Rule 201(b) in taking judicial notice of the legislative history of a California state statute. Plaintiffs suggest that the Ninth Circuit should not have cited 20 to Rule 201 because the facts it noticed must be characterized as " legislative." 21 The question of how best to characterize the facts noticed in Chaker is ultimately not 22 relevant here because, contrary to Plaintiffs' unsupported suggestion, a fact is not always and only legislative" simply because it is contained in legislative history. The same fact can be either fact 23 a " legislative or adjudicative " depending on context."See, e.g., United States v. Bello, 194 F.3d 18, 22-23 (1st Cir. 1999). When the fact is germane to the parties and their activities in the case at 24 hand, it is adjudicative. Id. The same fact can also be legislative when it is used to formulate 25 common law policy or interpret a statute. See id. The existence and content of the legislative history of AB 2592, including the Fellmeth Letter, relate to the conduct alleged in the Complaint. 26 In this context, they are adjudicative. 27 16 28 3
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r snb d pt"uiante fh eiec ad ot to t Fl e L t rs e oal i u ,j c loi o t x t e n cn n fh em t e ei a e s e di c e sn es e l h t mandatory. See Fed. R. Evid. 201(b), (d). II. This Court Should Take Judicial Notice Of Senate Bill 1057. Plaintiffs object to this C ut t i j iante f afriSenate Bill ( B ) orsa n u c loi o C lon ' kg di c i a " " 1057 S (RJN, Ex. D) solely on the basis of their claim that SB 1057 is irrelevant to this dispute. Like the Fellmeth Letter, however, SB 1057 confirms that conduct of which Plaintiffs complain ­ here, the separate stating and passing on of the airport concession fee and tourism commission assessment ­ is allowed under California law. In addition, SB 1057 erd et o Pa tf aeao t tD f dn ms peet ba icy n lnis lgt n h " e nat iersn sr l i f' l i a e s r to consumers that the 2.5% surcharge is owed by consumers to the CTTC [when] [i]n fact, the only ass et h hs w ds w d y e natnt y osm r"Complaint ¶ 49.B. Section s s n w i io e io e b D f dn o b cnu e . em c e s s 1936.01(a)(3) of the California Civil Code df e " ui cm i i ass eta " e ns t rm o ms o s s n s the i o s sn e m " charge collected by a rental company from a renter that has been established by the California Travel and Tourism Commission pursuant to Section 13995.65 of the Government Code."Cal. Civ. Code § 1936.01(a)(3) (emphasis added). Given this definition of the tourism commission assessment, Defendants did not make any misrepresentation as to who owed the assessment as a matter of law. Furthermore, Senate Bill 1057 establishes the absence of any such misrepresentation, because SB 1057 would amend Section 1936.01(a)(3) a flw :" orm so o s T ui l s cm i i ass etm ash ca e o m s o s s n en t hr collected by a rental company from a renter that has sn e m " e g been established by the California Travel and Tourism Commission pursuant to Section 13995.65 of the Government Code and assessed to a rental company."R N E . ,t 2. such, SB J , xD aE 4 As 15'pooe amendment to Section 1936.01(a)(3) establishes the point that, currently under 07s rpsd Section 1936.01(a)(3), it is the renter (rather than the rental car companies) who owes the tourism commission assessment. Thus, because SB 1057 id et r eato lnispurported claims, s icy e vn t P i f ' r l l a tf this Court should take notice of it.

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