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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' MOTION TO DISMISS Date: April 1, 2008 Time: 10:30 a.m. Place: Courtroom 13 Honorable Marilyn L. Huff

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1 2 I. 3 II. 4 A. 5 6 7 1. 8 9 10 11 12 4. 13 C. 14 15 III. 16 A. 17 18 19 20 21 22 23 24 25 26 27 28 IV. C. B. 3. 2. B.

TABLE OF CONTENTS INTRODUCTION ...............................................................................................1 P A N IF ' H R NACT CLAIM SHOULD BE DISMISSED. ...............2 L I TF S S E MA The Alleged Parallel Conduct Is Plainly Understandable As Independent Business Decisions. ..............................................................2 Plaintiffs Fail To Allege Any Facts That Make An Inference Of A Conspiracy Plausible. ...............................................................................3 The Fact, Timing And Context Of Alleged Communications Do Not Support An Inference Of Conspiracy. ...............................4 The Alleged Fact That The Communications Concerned The " ey u br ts e D e N t uprA If ec Of V r N m e A I u" os o S pot n ne ne s r Conspiracy. ...................................................................................4 The Alleged Simultaneous Imposition Of The Charges Does Not Support An Inference Of Conspiracy......................................5 PlaintfAl e o t rm rprPu" atr .....................5 is lg N Oh I poe "l Fc s f e e s o.

The Ninth Circuit Recently Affirmed The Dismissal Of A Complaint Containing Essentially The Same Allegations That Plaintiffs Make Here. ........................................................................................................6

P A N IF ' U P R E UCL CLAIM SHOULD BE DISMISSED.............7 L I TF S P R O T D Plaintiffs Cannot State A UCL Claim Based On Allegations That Defendants Engaged In Conduct That Violates The Sherman Act. ............7 Plaintiffs Cannot State A UCL Claim Based On Their Allegations That The Rental Car Defendants Improperly Described The CTTC Assessment...............................................................................................8 Plaintiffs Do Not And Cannot Provide Any Factual Basis For Their Conclusory Allegation That The Rental Car Defendants " vr a e" utm r .......................................................................9 O e hr d C s e . c g o s

CONCLUSION..................................................................................................10

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TABLE OF AUTHORITIES CASES

3 Bell Atl. Corp. v. Twombly, 127 S. Ct. 1955 (2007) ................................................................ passim 4 Belton v. Comcast Cable Holdings, LLC, 151 Cal. App. 4th 1224 (2007) ................................... 2, 8 5 Buckland v. Threshold Enters., Ltd., 155 Cal. App. 4th 798 (2007) ........................................... 9, 10 6 Cel-Tech Commc' Inc. v. L.A. Cellular Tel. Co., 20 Cal. 4th 163 (1999) .....................................8 ns, 7 DM Research, Inc. v. Coll. of Am. Pathologists, 170 F. 3d 53 (1st Cir. 1999) ............................... 10 8 In re Elevator Antitrust Litig., 502 F.3d 47 (2d Cir. 2007) ..............................................................3 9 In re Late Fee & Over-Limit Fee Litig., 528 F. Supp. 2d 953 (N.D. Cal. 2007) ....................... 3, 4, 5 10 In re Universal Serv. Fund Tel. Billing Practices Litig., 219 F.R.D. 661 (D. Kan. 2004) ................3 11 12 Kendall v. Visa U.S.A., Inc., No. 05-16549, __ F.3d. ___, 2008 WL 613924 (9th Cir. Mar. 7, 2008) ................................................................................................................................ 6, 7

13 K or vMa 'oC l Ic 14 Cal. App. 4th 612 (1993) ......................................................... 10 huy . l s f a ,n. y . , 14 New.Net, Inc. v. Lavasoft, 356 F. Supp. 2d 1090 (C.D. Cal. 2004) ..................................................8 15 United Mine Workers of Am. v. Pennington, 381 U.S. 657 (1965) ..................................................4 16 STATUTES

17 California Unfair Competition Law, Cal. Bus. & Prof. Code § 17200..............................................2 18 Cal. Bus. & Prof. Code § 17204 ................................................................................................ 9, 10 19 Cal. Civ. Code § 1936.01 ........................................................................................................ 2, 7, 8 20 Cal. Gov'C d § 39. .................................................................................................... 2, 8, 9 t oe 195 5 6 21 Cal. Gov'Code § 13995.90............................................................................................................8 t 22 Cal. Gov'Code § 13995.92.................................................................................................... 4, 5, 7 t 23 OTHER

24 HON. WILLIAM W. SCHWARZER ET AL., CALIFORNIA PRACTICE GUIDE: FEDERAL CIVIL PROCEDURE BEFORE TRIAL (The Rutter Group 2007) .......................................................... 10 25 26 27 28 ii
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I.

INTRODUCTION

Pa tf O psi fails to point to a single fact in the Complaint suggesting that the ln f ' poi n i is t o

3 Rental Car Defendants conspired with each other ­ either to pass on the California Travel and 4 T ui C m i i ( T C ) s s eto ut e o t "nud "h Arot ocso orm o m s o " T " as s n t cs m r ro ubnl t i rC nes n s sn C em o s e e p i 5 Fee without reducing the base rate.1 Ide,tpe o t re r, ln f ' poi nedsi d fh ht i Pa tf O ps rp e o c i is tion 6 bs ay cue t R n l a D f dn o "o g h sm t n,cui Pa tft ai l acssh et C r e nat fdi t a eh g as g ln f o cl e a e s n e i " n i is 7 conclude that an antitrust violation must have occurred. However, the Supreme Court has spoken 8 o tiiu:N atrsv li lso "o g h sm ti . See Bell Atl.Corp. v. Twombly, n h s e o nt t iao i fr di t a eh g ss iu o t n e n e n" 9 127 S. Ct. 1955, 1965-66 (2007). 10 T eycp o Pa tf a u etshth C utip so lasm a osic h l hi f ln f 'r m n it t ors l hu s e cnp ay n n i is g a e m y d u r

11 because the Rental Car Defendants allegedly availed themselves, in parallel, of a change in the law 12 that they had lobbied for ­ change that allows them to pass on the CTTC assessment and the a 13 previously-bnl Arot ocs o Feo osm r H w vrP i iso n one ud d i rC nes n e t cnu e . o ee ln f ' w cusl e p i s , a tf 14 predicted that a natural consequence of the change in the law would be that each Rental Car 15 D f dn w u "nud "h Arot ocs o Fe pass it on to renters without lowering e nat ol ubnl t i rC nes n e and e d e e p i 16 the base rate. See D f' e.o JdN te " J " E s. B & C. Yet, without alleging any e .R qfru. o c ( N ) x s i R , 17 facts, Plaintiffs ask this Court to believe that this parallel behavior, predicted by their own counsel, 18 w s r u o sm cnp aynt d fr i aad o pti bs est t y n a rl a a e l fo e osi c i e o " t nln cm et e ui ssa g uit ay st r sa ao iv n re le l 19 po pe b cm o pr p os fh m re"Twombly, 127 S. Ct. at 1964. Plaintiffs cannot rm t y o m n e et n o t a t d c i e k. 20 point to any allegation in their Complaint that describes the contour of the alleged conspiracy or 21 that provides any details as to when or where the supposed participants formulated their alleged 22 conspiracy. As a consequence, Plaintiffs fail to state a Sherman Act claim. 23 24 In their Opposition, Plaintiffs state that their antitrust claim is based on the alleged uniform passing through of the CTTC assessment and the Airport Concession Fee. (See 25 Opposition to Motions to i i ( p'" a1 -8.) Because Plaintiffs have clarified that they Ds s " pn) t : m s O 6 d nthlne n nt sg ud t R n l a D f dn 'obi at ie o ar m n o o caeg o atr t r nsh et C r e nat l y g cv i rge et l iu o e a e s b n its e 26 to the CTTC assessment, this Reply does not address such activities. Any such challenge by Plaintiffs would have been futile as a matter of law. (See Mem. P. & A. in Supp. of Rental Car 27 D f' t o i i ( e .Me . a1-13.) e .Mo t Ds s " f' m" t 2 s . m sD s ) 28 1
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Pa tfa oflo te c i udr afri s na C m et n a ( C " Cal. ln f l a t s ta lm ne C lon 'U f r o pti L w " L ) i is s i a a i a i io U , Bus. & Prof. Code § 17200 et seq.. Because Pa tf S em n cc i f l Pa tfcno lnis hr a A tlm as lnis ant i f' a i, i f rely on conduct underlying the alleged Sherman Act violation to maintain a claim under the UCL. Belton v. Comcast Cable Holdings, LLC, 151 Cal. App. 4th 1224, 1240 (2007). Moreover, Pa tff lo lg ay m s peet i " s m tr fa . i l, ln f f lo lg ln f a t aee n " ier n t n a a a eo l Fn l Pa tf a t aee i is i l r s ao t w ay i is i l with particularity any claim based on their conclusory allegation that the Rental Car Defendants sm hw"vr a e" utm rfrh C T ass et o eo oe hr d cs e o t T C s s n c g o s e em . As the Supreme Court recognized in Twombly, antitrust discovery can be enormously expensive, and courts must carefully scrutinize antitrust complaints and weed out defective claims at the pleading stage. Twombly, 127 S. Ct. at 1967. Pa tf C m ln ipei lt t e f ln f ' o p i s r s yh y o i is at ce e p deficient pleading that Twombly intended to eliminate. This Court should grant Defendants' motion and dismiss the Complaint. II. A. PLAINTIFFS' SHERMAN ACT CLAIM SHOULD BE DISMISSED. The Alleged Parallel Conduct Is Plainly Understandable As Independent Business Decisions.

As in Twombly, Plaintiffs have failed to place their allegati s ia ot thta e a o " cn xt rss n n e a i

17 suggestion of a preceding agreement, not merely parallel conduct that could just as well be n pnetco. d i " 18 i eedn at n Id. at 1966. 19 First, Plaintiffs argue that their allegations of parallel conduct by the Rental Car Defendants

20 in passing on to customers the entire CTTC assessment and separately stating both the CTTC 21 assessment and the Airport Concession Fee somehow demonstrate a conspiracy. However, 22 California law expressly allows the Rental Car Defendants to do each of these things, and Plaintiffs 23 allege that the Rental Car Defendants specifically lobbied the Legislature to obtain this result. See o'Code § 13995.65(f); Complaint ( o p " ¶¶ 32, 36.2 " m l) C . 24 Cal. Civ. Code § 1936.01(b)(4); Cal G vt 25 Thus, the alleged parallel conduct is explainable solely in terms of independent business decisions 26 Plaintiffs concede that the Rental Car Defendants are immune from liability for purported 27 lobbying at ie. O pn t 1 -5.) cv i ( p' a2: it s 3 28 2
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by the Rental Car Defendants to avail themselves of the new statutory provisions. See In re Late Fee & Over-Limit Late Fee Litig., 528 F. Supp. 2d 953, 963 n.8 (N.D. Cal. 2007) (dismissing antitrust action under Twombly and noting that a new regulation allowed fee increases in 2005, the year the alleged increases began). Second, Plaintiffs again allege mere lawful parallel conduct in asserting that the Rental Car D f dn "nud d t Airport Concession Fee without reducing their base rates. Since the e nat ubnl "h e s e e parallel conduct allegedly occurred coincident with when AB 2592 went into effect ­ s lnis a P i f' a tf counsel predicted ­ta b ep i d s " t nln cm et e ui ssa gy unilaterally i n e xln a a r i aad o pti bs est t c ae ao iv n re po pe b cm o pr p os fh m re"Twombly, 127 S. Ct. at 1964. Indeed, these rm t y o m n e et n o t a t d c i e k. "o m n e et n" e sa d y lniscusli sl (See RJN, Exs. B & C.) Again, cm o pr pi s w r hr b Pa tf oneh e . c o e e i f' m f Pa tfhv nt l e t iaeaos ia ln f ae o p cd h r lgt n " context that raises a suggestion of preceding i is a e l i n ar m n nt e lpr l cnuthtolj ts e b i eedn at n Id. at 1966; ge et o m r y a llodct cu u a w l en pnetco. e , e ae a d s l d i " see also In re Elevator Antitrust Litig., 502 F.3d 47, 51-52 (2d Cir. 2007) (ecr m ( Si ir prui )" ] l a [ ma pricing cn ugscm et n tesa p ui y sta sgetncm et e osi c. . a sgeto pti al ts l s l a icn ugsato pti cnp ay ) io a a b i iv r " T u, ln f ' lgt n f l s ta lmudrh S e a A t hsPa tf aeaosa t te c i net hr n c3 i is l i io a a e m . B. Plaintiffs Fail To Allege Any Facts That Make An Inference Of A Conspiracy Plausible.

Plaintiffs claim to have pleaded allegations that make an inference of conspiracy plausible

p' a2 1 1 T e a o cm ui t n,h i ad ot t f c ci em e 19 in light of Twombly. (See O pn t : -14 (" h f t fo m n aost t e n cn xo 20 the communications, the fact that the communications concerned the very number at issue, the 21 simultaneous imposition of the aberrational price increase, and no apparent cost ).) ln f ' i is 22 justification . . . ." Plaintiffs are wrong. Taken either individually or collectively, Pa tf 23 bare allegations fail to state a claim sufficient to survive a motion to dismiss. 24 P i isr i c o In re Universal Service Fund Telephone Billing Practices Litigation, ln f 'ea e n a tf ln 25 219 F.R.D. 661 (D. Kan. 2004), is misplaced. That decision involved a request for class certification and, in making the statemetht" arlcm et e a e df dn ' S n t ,i t y o pti m r t e nat U F a n u iv k, e s 26 sr a e a shu a ub b l e "h cut a m rlpr hai a elao uc r r e so l r al eo r t orw s e y a pr n dc r i hg t d g y w , e e a sg a tn submitted by one of the parties. Id. at 681. The court did not pass on the accuracy of this 27 declaration. See id. 28 3
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1.

The Fact, Timing And Context Of Alleged Communications Do Not Support An Inference Of Conspiracy.

Alleged opportunities to conspire are insufficient under Twombly to show that parallel 3 conduct was the result of a conspiracy. See Twombly, 127 S. Ct. at 1971 & n.12; In re Late Fee & 4 5 Furthermore, every meeting alleged in the Complaint took place after January 1, 2007, the 6 date on which the alleged parallel conduct began. (See Compl. ¶¶ 51-58.) To the extent that 7 Plaintiffs are suggesting that Defendants communicated with one another to lobby the California 8 Legislature prior to January 1, 2007, any such communications are indisputably protected by the 9 10 violate the antitrust laws even though intended to eliminate competition."See United Mine 11 12 [and] the time and context of communications" cannot give rise to an inference of conspiracy. 13 2. 14 15 The Alleged Fact That The Communications Concerned The " Very Number At Issue" os o Support An Inference Of Conspiracy. D eN t Workers of Am. v. Pennington, 381 U.S. 657, 670 (1965).4 Thus, " fact of communications, the Noerr-Pennington doctrine, which provides that " [j]oint efforts to influence public officials do not Over-Limit Fee Litig., 528 F. Supp. 2d at 963-64. (See also Defs Mem. at n.6 (citing authorities).) . '

Although they argue that a conspiracy should be inferred based on alleged communications

16 among D f dn cne i t "e nm e aiu,Plaintiffs fail to identify the e nat ocr n h vr u br ts e e s ng e y s " 17 communications to which they are referring. Presumably, Plaintiffs are referring to purported 18 communications about the CTTC assessment, including perhaps participation in the CTTC 19 referendum. However, communications regarding the referendum cannot be construed as evidence 20 of an agreement in restraint of trade because the Legislature directed that very activity. See Cal. 21 G vt oe 195 2 r u i t C T t sb ia e r dmt t ps ne r t cr o'C d § 39. ( qin h T C o umt r e nu o h as gre a a 9 e rg e fe e e nl 22 industry). Neither Twombly nor any cases following it have suggested that Defendants should be 23 penalized for merely abiding by legal obligations, and Plaintiffs cite no such legal authority. 24 25 26 Plaintiffs themselves concede that even misleading statements made to the Legislature are 27 immunized from antitrust liability. (See O pn t 1 -5.) p' a2: 3 28 4
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3.

The Alleged Simultaneous Imposition Of The Charges Does Not Support An Inference Of Conspiracy.

No conspiratorial inference can be drawn from Plaintiffs' allegation that the Rental Car 3 Defendants all simultaneously began to engage in parallel conduct on January 1, 2007. As 4 5 AB 2592. (See Compl. ¶¶ 33-36.) Since it is not surprising that each Rental Car Defendant 6 independently would decide to separate out the relevant charges at the time first permitted by AB 7 8 In re Late Fee & Over-Limit Fee Litig., 528 F. Supp. 2d 953, 963 & n.8, 965 (N.D. Cal. 2007) 9 (finding that a change in regulations is a plausible and non-conspiratorial explanation for alleged 10 parallel increases in credit-card fees). 11 4. 12 13 Opp' at 9:3-11.) n 14 15 establishing the complained-of pass-throughs, and the uniformity of the alleged pass-throughs, see 16 id., is easily explained, not by an agreement among Defendants but rather by reference to the date 17 on which AB 2592'pass-through authorization went into effect. See In re Late Fee & Over-Limit s 18 Fee Litig., 528 F. Supp. 2d at 963 n.8, 965. 19 Second, the claim that the change in legislation itself resulted in a motivation to conspire is 20 baseless. To the contrary, as the Northern District of California recently explained, a change in 21 legislation or regulations provides a non-conspiratorial explanation for the alleged parallel conduct. 22 See id. Plaintiffs fail to address the In re Late Fee case or its relevant logic. 23 Third, the assertion that the Rental Car Defendants charged supra-competitive prices cannot 24 25 the Complaint. And the only legal support that Plaintiffs muster for the notion that a bare assertion 26 of supra-competitive pricing may evidence an agreement is a pre-Twombly District of New Mexico 27 case decided in 1979, which considered a transfer of venue motion. (See Opp' at 9:6 (citing In re n 28 5
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2592, P i isaeaos to coincident timing do not support an inference of conspiracy. See ln f ' lgt n as a tf l i

Plaintiffs Allege No Other Improper " Plus" Factors.

Plaintiffs' attempt to articulate " [n]umerous additional plus factors" utterly anemic. (See is

First, the " short time frame" which the Rental Car Defendants all allegedly acted in in

be a Twombly " plus" factor because it is a bare assertion unsupported by any factual allegations in

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Uranium Indus. Antitrust Litig., 466 F. Supp. 958, 962 (D.N.M. 1979)).) Finally, in this regard, Plaintiffs admit in both their Complaint and Opposition that the Rental Car Defendants continue to compete on base rates. (See C m l 3; p' a9 o p ¶ 6O pn t :8-10.) . C. The Ninth Circuit Recently Affirmed The Dismissal Of A Complaint Containing Essentially The Same Allegations That Plaintiffs Make Here.

In a recent case involving similar allegations, Kendall v. Visa U.S.A., Inc., No. 05-16549,

h i h i i pe h ir tors e t ct d e si ' 7 __ F.3d. ___, 2008 WL 613924 (9th Cir. Mar. 7, 2008), t Nn Cru uhlt d tccut failed to plead any evidentiary facts beyond 8 dismissal, with prejudice, of antitrust claims that "
5 9 parallel conduct . . . ."Id. The Kendall plaintiffs alleged two conspiracies: First, that the Visa

10 and MasterCard consortiums had conspired to set the interchange fee charged to member banks, 11 and, second, that the credit-card issuing member banks of those consortiums conspired to pass on h n r ag f o e hn ,uh sh sl sit om fh m r at i on e tc e c s e v e e c s " 12 t i e hnee t m r at sc a t m e e,n h fr o t " e hn d cut
6 13 charged for credit card transactions. See Kendall, 2008 WL 613924, at *1-2.

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As to the second alleged conspiracy, the Ninth Circuit hlt tmerely charging, adopting e h " d a

15 or following the fees set by a Consortium is insufficient as a matter of law to constitute a violation 16 of Section 1 of the Sherman Act."Id. at *4 (emphasis added). Noting that the Kendall plaintiffs not 17 did " allege any facts to support their theory that the Banks conspired or agreed with each other the 18 or with the Consortiums to restrain trade," Ninth Circuit affirmed dismissal. Id. Like the 19 20 21 22 23 24 25 26 In Kendall, t d tccut r t t df dn 'it oi fr i i aad h irtorga e h e nat fsm t n o d m s ln e si nd e e s r o s s instructed plaintiffs to conduct limited discovery for purposes of amending their complaint. See Kendall v. Visa U.S.A., Inc., No. C 04-04276, 2005 WL 2216941, at *1, 2 n.1 (N.D. Cal. 2005) (describing earlier proceedings). After plaintiffs deposed two individuals, they filed an amended complaint. See Kendall, 2008 WL 613924, at *2. The defendants then moved for dismissal of the amended complaint, which the district court granted and the Ninth Circuit affirmed. Id., at *7. Significantly, the district court proceedings all took place before the Supreme Court decided Twombly, which requires that defective claims be dismissed to prevent expensive antitrust discovery. Twombly, 127 S. Ct. at 1967. In light of Twombly, a court faced with allegations such as those in Kendall or this case should dismiss with prejudice in the first instance.
6 5

The Ninth Circuit held that the merchant plaintiffs lacked standing to challenge the first 27 alleged conspiracy. Id. at *5-6. 28 6
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Kendall plaintiffs, Plaintiffs here fail to allege any facts supporting a theory of concerted action. Pa tf prot Sherman Act claim likewise should be dismissed. 7 ln f ' upr d i is e Significantly, the Ninth Circuit also held that, " least for the purposes of adequate [a]t pleading in antitrust cases, the [Twombly Supreme] Court abrogated the usual ` notice pleading' rule, found in Federal Rule of Civil Procedure 8(a)(2) and Conley v. Gibson."Kendall, at *3 n.5. The rationale for this heightened pleading standard is rooted in inescapable realities: " [D]iscovery in antitrust cases frequently causes substantial expenditures and gives the plaintiff the opportunity to extort large settlements even where he does not have much of a case."Id. at *3. Plaintiffs must satisfy every element of this heightened Twombly/Kendall standard for their claim to proceed. Since they cannot do so, their purported Sherman Act claim should be dismissed. III. P A N IF ' U P R E UCL CLAIM SHOULD BE DISMISSED. L I TF S P R O T D

Pa tf purported UCL claim is based entirely on three allegations: (1) Defendants ln f ' i is purportedly engaged in conduct that violates the Sherman Act; (2) the Rental Car Defendants somehow improperly described the CTTC assessment in their rental agreements; and (3) the Rental Car Defendants supposedly collected more money in CTTC assessments than they passed on to the CTTC. (See O pn p' 17:11-24.) None of these conclusory allegations support a UCL claim. A. Plaintiffs Cannot State A UCL Claim Based On Allegations That Defendants Engaged In Conduct That Violates The Sherman Act.

The olbs fr ln f ' n ai o Pa tf claim of UCL unlawfulness is their allegation that Defendants y s i is

p' at 20 violated the Sherman Act. (See O pn 19:22-20:10.) In fact, Plaintiffs do not dispute that if 21 22 23 24 25 26 27 28 7 Plaintiffs attempt to distinguish Kendall on the grounds that the Rental Car Defendants, unlike the banks in Kendall, e " dpneto ptosnt i d oe e b ay o m n w r i eedn cm etr o j n tgt r y n cm o en i , oe h ntok ad hth C T ass etn t Arot ocso Fe " e nt ia d re e r, n t t T C s s n ad h i rC nes n es w r o d t e o st w " a e em e p i e ct in any way by a legitimate member association (i.e., i ad s r r) ( p' a7 .)I Vs n Mat c d. O pn t n . n a ea " 5 making this argument, Plaintiffs ignore their allegation that the Rental Car Defendants were members of the CTTC, and that the CTTC assessment was indirectly established by the Legislature and set by the CTTC-run referendum. See C l o'C d 195 2a C m l 3. a G vt oe 39. ( ; o p ¶ 1 . 9 ) . Furthermore, the Airport Concession Fees, which are dictated by the airports, were specifically authorized by statute to be unbundled. See Cal. Civ. Code § 1936.01(b)(2). Thus, the alleged parallel conduct is plainly understandable as unilateral conduct like the adherence to the interchange fees at issue in Kendall.
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their Sherman Act claim fails, their claim of UCL unlawfulness fails as well. See, e.g., New.Net, Inc. v. Lavasoft, 356 F. Supp. 2d 1090, 1111-12 (C.D. Cal. 2004). Moreover, an inability to plead a Sherman Act claim precludes any finding that the conduct alleged to violate the Sherman Act is sm hw"na " ne t U L Belton v. Comcast Cable Holdings, LLC, 151 Cal. App. 4th o eo uf r udrh C . i e 1224, 1240 (2007). Thus, because Plaintiffs fail to state a Sherman Act claim for the reasons discussed above, Plain f ' n t saeaos antoma aif a UCL claim. 8 tf atr tlgt n cno fr bs or is iu l i s B. Plaintiffs Cannot State A UCL Claim Based On Their Allegations That The Rental Car Defendants Improperly Described The CTTC Assessment.

In alleging that the Rental Car Defendants somehow misrepresented that customers (as

10 opposed to rental car companies) owed the CTTC assessment (see Compl. ¶ 49.B), Plaintiffs ignore h t eia r epe l e nd h [orm o m s o s s n s the a e st sy i e t s sn e m " 11 t th L g lue xr s df e t " ]ui cm i i ass eta " charge h hs en s b se b t C T ] .. a a ai e " . 12 collected by a rental company from a renter t t a be et lhd yh [T C .. C l 13 Civ. Code § 1936.01(a)(3) (emphasis added). Since the assessment is a charge rental car
9 14 companies collect from renters, Defendants made no misrepresentation as a matter of law.

15

Plaintiffs d nt i u t th C ut a t eu iante f ln f ' w r t o o d pt h ti orm y a j c loi o Pa tf o n e a s e a s k di c i is nl

ge et w i f h et lh h bec o ay ier n t n P i f hm s e s c re a i e r s ao a tf 16 ar m n , h h ut r s bs t asne fn ms peet i . lni S a e' ge et i l s t C O e h m as S IN S E S N . , he lni 5 l if 17 ar m n wt Aa o t e " AC MMISO A S S ME T@ 2 %"w i Pa tf a kw s ge et i n rre et a C m ay f a Fac c ( R C F) e h e s -A-C r o pn o Sn r i o " A -S " ns E 18 Grm o 'ar m n wt E t pi R n te T U IM E as . . 5 19 s t " O RS F E@ 2 %" Plaintiffs also do not dispute that the amount of the CTTC p' a2 5 1 20 assessment actually is 2.5%. (See, e.g., O pn t : -16.) Nor do Plaintiffs point to any law 21 In addition, Plaintiffs acknowledge that, pursuant to Section 13995.90 of the California 22 Governmet oecm lne i t C lon T ui ad ren A tt " T " n C d,o pi c wt h afri orm n Ma t g c( e C MA ) a h e i a s ki h poi s cm le e ne t a atrsU Lat n ( p' a1: rv e a o p tdf s " n nt t C co. O pn t 8 -5.) Because the CTMA d e e o iu / i " 3 23 expressly allows the Rental Car Defendants to pass on the CTTC assessment to customers, and to separately state this charge, such conduct is immunized from UCL liability. See C l o'C d a G v oe . t 24 §§ 13995.65(f), 13995.90. 25 This Court also should reject any arguments that the alleged representations were sm hw"na . I a u g hth C uthu ak ht r e nat cnuts o eo uf r n r i t t s orsol s w e e D f dn 'odci i" gn a i d h e s 26 "ee cl " na , ln f ak h C uto plt sm s na sht ae en e c d s gnr ay ufrPa tf s ti ort ap h a e t dr t hv be r et a i l i i is s y e a d a j e " o m rhu" yh C lon S pe e or See Cel-Tc C m c sIcvLA C l l t a opos b t afri ur C ut o e i a m . eh o m ' ,n.. .. eu r n la 27 Tel. Co.,0 a 4 1315 19)O pn t 2 3 2 C l t 6,8 (99; p' a2: -23:8. .h 2 28 8
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stating how this charge must be described. The CTMA provides only that rental car companies m y separately identify or itemize the assessment,C l o'C d § 39. (, a" " a G vt oe 195 5f demonstrating . 6 ) that the Legislature did not intend for rental car companies to describe it in any particular way. Plaintiffs also lack standing to challenge the Rental Car Defendants' descriptions of the CTTC assessment. First, Plaintiffs do not dispute that they did not rent from Defendants Hertz, Avis Budget, Dollar Thrifty, Fox, or Coast at a California situs airport after January 1, 2007. Since Plaintiffs did not rent from these Defendants, Plaintiffs have no standing to allege that these Defendants engaged in UCL fraud. Buckland v. Threshold Enters., Ltd., 155 Cal. App. 4th 798, 812 (2007) (stating that proe f rpsi 6 w s t peetbs e C at n b ups o Pooio 4 a " r n aui U L cos y tn o v v i aony w oe ln hd o be ` j e if to ue t df dn s rdcad e i " t res hs cet a nten iu d n a ' r sd h e nat poutn sr c ) t i s nr c e e ' ve. Second, Plaintiffs do not and cannot allege that t yot oe o poe y s r u o Aa os h l m ny r rpr a a e l f l ' e s t st m and ERAC-S 'dsr t n o t C T assm n a r u e b Pooio 6. Cal. Bus. Fs ec pi s fh T C s s et se id y rpsi 4 See io e e , qr tn & Prof. Code § 17204 (mandating that a consumer may bring a UCL claim only if the consumer "a sf r i hsuf e n in fact and has lost money or property as a result of the ufr o pti " e d jury na cm et n) i io . That is, Plaintiffs do not and cannot allege that, but for how Alamo or ERAC-SF described the CTTC assessment in their rental agreements, Plaintiffs would not have rented from them. Thus, Plaintiffs have no standing to pursue a claim of UCL fraud against any Rental Car Defendant. C. Plaintiffs Do Not And Cannot Provide Any Factual Basis For Their Conclusory Allegation That The Rental Car Defendants " vrh re" utmes O ecagd C s r. o

T e n o e prot bs fr lnisU Lc i iPa tf vge n cnl oy h ol t r upr d ai o Pa tf C lm s ln f ' au ad oc sr y h e s i f' a i is u

lgt nm d o m r n r ao ad ee h " e nat r rnfl clcn m r l i e f i i, a e s e l ei 21 aeao, ae n e i om t n n blft tD f dn a w ogu y ol t g oe T C" 22 money from the [CTTC] surcharge than they are turning over to the C T . (Compl. ¶ 49.B.) ehr ln f ' o p i o Pa tf poio lgs t i is at i f' tn l 23 N ie Pa tf C m ln nr lnisO psi aee any facts to support this vague and oc sr aeao. eas a C ln f m ss twt e oal a i a t h a s u l i a tf a h a e tu ry e c 24 cnl oy lgt n B cue U Lp i i " utte i r snb prcl i t f t 25 26 27 28 9
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supporting the statutory elem n o t v li ,t s upr d aifr C lb i so lb et fh iao "h prot bs o U L i i y hu e s e o tn i e s al t d dismissed. K or vMa 'oC lIc 14 Cal. App. 4th 612, 619 (1993).10 huy . l s f a,n. y . , T iC uthu r et lnisa u ethth "r i prm t s ft aee] h orsol e cP i f 'r m n t t pe s a e ro [ e lgd s d j a tf g a e ce a e h l overcharge have not been pled because they r u e i oey .. (O pn 21:17-18.) As e i d cvr .. qr s " p' at nm ru at ri hv hl " e r e fn yee t d cvr,so p i i t aee u e s u oi s ae e ,t pi o et ,vn o i oeyifr ln f o lg a o h t e d h c r s a tf l factual predicate concrete enough to warrant further proceedings, which may be costly and burdensome. Conclusory allegations in a complaint, if they stand alone, are a danger sign that the p i i ieggd n fh g xei n DM Research, Inc. v. Coll. of Am. Pathologists, 170 ln f s nae ia i i epd i . a tf sn t " o F.3d 53, 55 (1st Cir. 1999), quoted with approval in HON. WILLIAM W. SCHWARZER ET AL., CALIFORNIA PRACTICE GUIDE: FEDERAL CIVIL PROCEDURE BEFORE TRIAL ¶ 8:27a (The Rutter Group 2007). Because Plaintiffs fail to allege any factual predicate for their allegation as to prot "vr a e,their purported claim should be dismissed. 11 upr d oe hr s e c g " IV. CONCLUSION

Pa tfhv f l t s ta lmt thu sri t R n l a D f dn ' oi ln f aeae o te c i h sol uv eh et C r e nat m t n i is id a a a d v e a e s o to dismiss. Plaintiffs support their conspiracy claim on nothing more than lawful and independent parallel conduct. In opposition to the present motion, Plaintiffs can only argue that certain Rental Car Defendants participated in CTTC meetings that took place months after the alleged pricefixing scheme went into effect. Such argument is both irrelevant and insufficient to support their conspiracy claim. Plaintiffs also fail to allege a claim under the UCL. A cri l Pa tf cod gy ln f ' n , i is Complaint should be dismissed with prejudice.

Pa tf r i c o cssnov g upr d vrhre poi Pa tfwt n ln f 'ea e n ae i ln prot oe a s rv e lnis i o i is ln v i e c g d if h 24 help here since Plaintiffs allege no facts sufficient to show that the Rental Car Defendants ever "vrhre" utm r ( O pn t 7 -10.) oe a d cs e . See p' a2: c g o s 1 25 11 Since Plaintiffs do not and cannot allege that they rented from Defendants Hertz, Avis 26 Budget, Dollar Thrifty, Fox, or Coast, Plaintiffs also lack standing to pursue these Defendants for any alleged overcharges. Cal. Bus. & Prof. Code § 17204; Buckland v. Threshold Enters., Ltd., 27 155 Cal. App. 4th 798, 812 (2007). 28 10
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