Free Answer to Amended Complaint - 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 UNITED STATES DISTRICT COURT 14 SOUTHERN DISTRICT OF CALIFORNIA 15 MICHAEL SHAMES; GARY 16 GRAMKOW, on behalf of themselves and on behalf of all persons similarly situated, 17 Plaintiffs, 18 v. 19 THE HERTZ CORPORATION, a 20 Delaware corporation; DOLLAR THRIFTY AUTOMOTIVE GROUP, INC., 21 a Delaware corporation; AVIS BUDGET GROUP, INC., a Delaware corporation; 22 VANGUARD CAR RENTAL USA, INC., an Oklahoma corporation; ENTERPRISE 23 RENT-A-CAR COMPANY, a Missouri corporation; FOX RENT A CAR, INC., a 24 California corporation; COAST LEASING CORP., a Texas corporation; THE 25 CALIFORNIA TRAVEL AND TOURISM COMMISSION 26 Defendants. 27 28

Case No. 07 CV 2174 H BLM [Class Action]

ANSWER TO FIRST AMENDED COMPLAINT BY DEFENDANT AVIS BUDGET GROUP, INC.

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

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Defendant Avis Budget ru,n." B " t og i udrge cusl o i G opIc( G ) h uht ne i d one frt A ,r s sn , s

nw ro h it m ne C m ln dt Ma 120 ( e F C ) e od a flw t e r at e h ,s o 2 A s e tt F sA edd o p i ,a d y ,08 t "A " r pns sol so 3 the allegations of the FAC, and avers generally that the responses contained herein are with respect 4 to the allegations of the FAC directed to ABG only as it is not required to respond to allegations 5 put forth against any other defendant: 6 1. ABG admits that this is an action by consumers and that ABG operates at certain

7 California airports. ABG denies that ABG has engaged in any conspiracy, and denies the 8 remaining allegations of paragraph 1 of the FAC. 9 2. Paragraph 2 of the FAC contains legal conclusions to which no response is required,

10 and ABG further states that the referenced legislation speaks for itself. To the extent that 11 paragraph 2 contains allegations, they are denied. 12 13 14 15 16 3. 4. 5. 6. 7. ABG denies the allegations of paragraph 3 of the FAC. ABG denies the allegations of paragraph 4 of the FAC. ABG denies the allegations of paragraph 5 of the FAC. ABG denies the allegations of paragraph 6 of the FAC. ABG admits that plaintiffs purport to bring this action for injunctive relief, damages

n aony'e . B ei t p i f a ntd on nt e ee a ae ad t e e a a tf e i e j i i, 17 ad t resf s A Gdn sht lnis r etl t iucv rlfdm gs n t resf ,n dn sh e i allegations of paragraph 7 of the FAC. t e e e m ning 18 aony'esad ei t r a 19 8. Paragraph 8 of the FAC states legal conclusions to which no response is required.

20 To the extent that paragraph 8 contains allegations, ABG admits that plaintiffs purport to bring 21 their claims under the Clayton Act and Sherman Act and purport to base jurisdiction on 28 U.S.C. 22 § 1337, and ABG denies the remaining allegations of paragraph 8. 23 9. Paragraph 9 of the FAC states legal conclusions to which no response is required.

24 To the extent that paragraph 9 contains allegations, ABG lacks knowledge or information sufficient 25 to form a belief as to the truth of these allegations and, on that basis, denies the allegations of 26 paragraph 9. 27 28 1
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10.

The Court, in its order filed on July 24, 2008, dismissed all of the state-law causes

2 of action and therefore no responsive pleading is required to paragraph 10 of the FAC. 3 11. To the extent paragraph 11 of the FAC defines terms for purposes of the FAC, no

4 responsive pleading is required. To the extent paragraph 11 contains allegations, they are denied. 5 12. Paragraph 12 of the FAC states legal conclusions, to which no responsive pleading

6 is required. To the extent paragraph 12 contains allegations, ABG admits that plaintiffs purport to 7 bring this suit as a class action, and denies the remaining allegations of paragraph 12. 8 13. Paragraph 13 of the FAC states legal conclusions, to which no responsive pleading

9 is required. To the extent paragraph 13 contains allegations, they are denied. 10 14. Paragraph 14 of the FAC states legal conclusions, to which no responsive pleading

11 is required. To the extent paragraph 14 contains allegations, ABG denies that it was part of any 12 unlawful combination, and it lacks knowledge or information sufficient to form a belief as to the 13 remaining allegations of paragraph 14 and, on that basis, denies the remaining allegations of 14 paragraph 14. 15 15. Paragraph 15 of the FAC states legal conclusions, to which no responsive pleading

16 is required. To the extent paragraph 15 contains allegations, ABG denies that it was part of any 17 unlawful combination, and it lacks knowledge or information sufficient to form a belief as to the 18 remaining allegations of paragraph 15 and, on that basis, denies the remaining allegations. 19 16. ABG lacks knowledge or information sufficient to form a belief as to the truth of the

20 allegations of paragraph 16 of the FAC and, on that basis, denies the allegations of paragraph 16. 21 17. ABG lacks knowledge or information sufficient to form a belief as to the truth of the

22 allegations of paragraph 17 of the FAC and, on that basis, denies the allegations of paragraph 17. 23 18. ABG admits that Avis Budget Group Incorporated is a publicly traded corporation

24 headquartered at 6 Sylvan Way, Parsippany, N.J. 07054, and denies the remaining allegations of 25 paragraph 18 of the FAC. 26 19. ABG lacks knowledge or information sufficient to form a belief as to the truth of the

27 allegations of paragraph 19 of the FAC and, on that basis, denies the allegations of paragraph 19. 28 2
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20.

ABG lacks knowledge or information sufficient to form a belief as to the truth of the

2 allegations of paragraph 20 of the FAC and, on that basis, denies the allegations of paragraph 20. 3 21. ABG lacks knowledge or information sufficient to form a belief as to the truth of the

4 allegations of paragraph 21 of the FAC and, on that basis, denies the allegations of paragraph 21. 5 22. ABG lacks knowledge or information sufficient to form a belief as to the truth of the

6 allegations of paragraph 22 of the FAC and, on that basis, denies the allegations of paragraph 22. 7 23. ABG admits the California Travel and Tourism Commission (CTTC) is a California

8 non-profit corporation, and further states that the California Government Code Section 13995.40 et 9 seq. speaks for itself. Except as otherwise admitted, ABG lacks knowledge or information 10 sufficient to form a belief as to the truth of the allegations of paragraph 23 of the FAC and, on that 11 basis, denies the allegations of paragraph 23. 12 24. Paragraph 24 of the FAC states a legal conclusion, to which no responsive pleading

13 is required. To the extent paragraph 24 contains allegations, they are denied. 14 25. Paragraph 25 of the FAC states a legal conclusion, to which no responsive pleading

15 is required. To the extent paragraph 25 contains allegations, they are denied. 16 26. ABG admits that it has contracted to rent and rented cars to customers located

17 throughout the United States, and denies the remaining allegations of paragraph 26 of the FAC. 18 27. ABG admits that certain documents relating to the provision of car rental services

19 have been transmitted between ABG and its customers in interstate trade and commerce, and 20 denies the remaining allegations of paragraph 27 of the FAC. 21 28. ABG admits that it has used instrumentalities of interstate commerce to market its

22 rental cars and that it has contracted to rent cars in the United States, but denies the remaining 23 allegations of paragraph 28 of the FAC. 24 29. ABG states that the referenced statutes speak for themselves, and ABG otherwise

25 lacks knowledge or information sufficient to form a belief as to the truth of the allegations of 26 paragraph 29 of the FAC and, on that basis, denies the allegations of paragraph 29. 27 28 3
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30.

ABG states that the referenced statute speaks for itself, and ABG otherwise lacks

2 knowledge or information sufficient to form a belief as to the truth of the allegations of paragraph 3 30 of the FAC and, on that basis, denies the allegations of paragraph 30. 4 31. ABG states that the referenced statutes speak for themselves, and ABG otherwise

5 lacks knowledge or information sufficient to form a belief as to the truth of the allegations of 6 paragraph 31 of the FAC and, on that basis, denies the allegations of paragraph 31. 7 32. ABG states that the referenced statutes speak for themselves, and ABG otherwise

8 lacks knowledge or information sufficient to form a belief as to the truth of the allegations of 9 paragraph 32 of the FAC and, on that basis, denies the allegations of paragraph 32. 10 33. ABG states that the referenced statute speaks for itself, and ABG otherwise lacks

11 knowledge or information sufficient to form a belief as to the truth of the allegations of paragraph 12 33 of the FAC and, on that basis, denies the allegations of paragraph 33. 13 34. ABG states that the referenced statutes speak for themselves, denies that the CTTC

14 exercises state-unchecked power, and otherwise lacks knowledge or information sufficient to form 15 a belief as to the truth of the allegations of paragraph 34 of the FAC and, on that basis, denies the 16 remaining allegations of paragraph 34. 17 35. ABG states that the referenced statute speaks for itself, and ABG otherwise lacks

18 knowledge or information sufficient to form a belief as to the truth of the allegations of paragraph 19 35 of the FAC and, on that basis, denies the allegations of paragraph 35. 20 36. ABG states that the referenced legislation speaks for itself, and ABG otherwise

21 denies the allegations of paragraph 36 of the FAC. 22 37. ABG states that the referenced legislation speaks for itself, and ABG otherwise

23 denies the allegations of paragraph 37 of the FAC. 24 38. ABG states that the referenced legislation speaks for itself, and ABG otherwise

25 denies the allegations of paragraph 38 of the FAC. 26 39. ABG admits that the CTTC held meetings, that an ABG representative participated

27 in some of those meetings, and that ABG has received some emails from the CTTC, and ABG 28 4
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a tf characterization of those meetings and communications, including the allegations i is 1 denies pln f ' 2 that they resulted in an unlawful price-fixing agreement, and denies the remaining allegations of 3 paragraph 39 of the FAC. 4 40. ABG admits that it signed the Memorandum of Agreement, but denies plaintf is f'

5 characterization of the Memorandum of Agreement and other referenced documents, which speak 6 for themselves, and denies the remaining allegations of paragraph 40 of the FAC. 7 41. ABG states that the referenced documents speak for themselves. ABG denies

ln f ' hr a tf a 8 p i isca cterization of those documents and denies the remaining allegations as to ABG of 9 paragraph 41 of the FAC. 10 11 42. 43. ABG denies the allegations of paragraph 42 of the FAC. ABG states that the referenced legislation speaks for itself, but ABG admits that

12 AB2592 authorized the unbundling and separate listing of airport concession fees, effective 13 January 2007, and that base rental rates vary. ABG denies the remaining allegations of paragraph 14 43 of the FAC, except it lacks knowledge or information sufficient to form a belief as to the truth 15 of the allegations concerning average pricing and, on that basis, denies the allegations concerning 16 average pricing. 17 44. Paragraph 44 of the FAC states legal conclusions to which no response is required.

18 To the extent that paragraph 44 contains allegations, they are denied. 19 20 21 22 23 45. 46. 47. 48. 49. ABG denies the allegations of paragraph 45 of the FAC. ABG denies the allegations of paragraph 46 of the FAC. ABG denies the allegations of paragraph 47 of the FAC. ABG denies the allegations of paragraph 48 of the FAC. ABG admits that paragraph 49 of the FAC purports to reallege and incorporate each

24 and every allegation from paragraphs 1 through 48, and ABG likewise incorporates its responses to 25 paragraphs 1 through 48 as if fully set forth herein. 26 27 28 5 50. 51. ABG denies the allegations of paragraph 50 of the FAC. ABG denies the allegations of paragraph 51 of the FAC.
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52. 53. 54. 55.

ABG denies the allegations of paragraph 52 of the FAC. ABG denies the allegations of paragraph 53 of the FAC. ABG denies the allegations of paragraph 54 of the FAC. ABG denies the allegations of paragraph 55 of the FAC. SECOND, THIRD AND FOURTH CAUSES OF ACTION

56.

P r ato h C ut odr a d u 2,08t scn,h d n fut us nt t ors redt Jl 420, e eodti ad or u e ' e y h r h

7 causes of action (paragraphs 56 through 84 of the FAC) have been dismissed and therefore no 8 response to those paragraphs is required. 9 10 11 12 57. AFFIRMATIVE AND OTHER DEFENSES FIRST DEFENSE (Failure to State a Claim) The first cause of action in the FAC fails to state a claim upon which relief may be

13 granted. 14 15 16 17 18 19 59. 58. SECOND DEFENSE (Lack of Antitrust Injury) Plaintiffs and members of the putative class have not suffered antitrust injury. THIRD DEFENSE (Lack of Standing) At least some members of the putative class lack standing to assert the first cause of

20 action in the FAC. 21 22 23 60. FOURTH DEFENSE (Illinois Brick Doctrine) The claims of at least some members of the putative class are barred by the Illinois

24 Brick doctrine, which prohibits antitrust recovery by indirect purchasers. 25 26 27 28 6
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1 2 3 61.

FIFTH DEFENSE (Class Action Inappropriate) The putative class defined in the FAC does not constitute an appropriate class to be

4 certified pursuant to Rule 23 of the Federal Rules of Civil Procedure. 5 6 7 62. SIXTH DEFENSE (State Action Doctrine) Pa tf c is r barred by the state action doctrine, which immunizes ABG ln f ' lm a i is a e

8 from liability. 9 10 11 63. SEVENTH DEFENSE (Noerr/Pennington Doctrine) Pa tf c is r br d y h Noerr/Pennington doctrine, which immunizes ln f ' lm a a e b t i is a e r e

12 ABG from liability. 13 14 15 64. EIGHTH DEFENSE (Legitimate Business Conduct) Pa tf c i s barred, in whole or in part, because A G s ln f ' lm are i is a B 'actions were lawful,

16 constituted legitimate business competition, and were carried out in furtherance of A G s B ' 17 legitimate business interests. 18 19 20 21 22 23 66. 65. NINTH DEFENSE (Lack of Injuries Attributable to ABG) Pa tf iui , ayw r ntasd y n cnut f B . ln f 'n r si n, e o cue b ay odco A G i is j e f e TENTH DEFENSE (Lack of Injuries Attributable to Conspiracy) Pa tf iui , ayw r ntasd y conduct of the defendants or any ln f 'n r si n, e o cue b the i is j e f e

24 alleged conspiracy. 25 26 27 28 7
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1 2 3 67.

ELEVENTH DEFENSE (Speculative Damages/Lack of Mitigation) Plaintiffs are barred from recovery, in whole or in part, because their alleged

4 damages, if any, are speculative, uncertain, and not recoverable. To the extent plaintiffs have been 5 injured, which ABG denies, r oeys a e, w o o ipr b p i isf l eo igt e vr ibr d i hl rn a ,y ln f 'au t mt a c r n e t a tf i r i e 6 injury and their failure to mitigate damages. 7 8 9 68. TWELFTH DEFENSE (Consent) Pa tf c is r br d iw o o ipr bcue ln f ' lm a a e,n hl rn a ,eas plaintiffs directly or i is a e r e t

10 indirectly authorized, consented to, acquiesced in, or ratified some or all of the actions and 11 omissions of which they complain. 12 13 14 69. THIRTEENTH DEFENSE (Lack of Causation) Plaintiffs are barred from recovery, in whole or in part, because the alleged injuries

15 and damages claimed in the FAC, which ABG denies, were not legally or proximately caused by 16 any act or omission by ABG. 17 18 19 70. FOURTEENTH DEFENSE (Adequate Remedies at Law) Pa tf c iso eu alrlf barred, in whole or in part, because ln f ' lm fr qib eeare i is a t e i

20 plaintiffs have complete and adequate remedies at law. 21 22 23 24 25 72. 71. FIFTEENTH DEFENSE (Estoppel) Pa tf c is r br d in whole or in part, by the doctrine of estoppel. ln f ' lm a a e, i is a e r SIXTEENTH DEFENSE Any affirmative defenses pleaded by other defendants and not pleaded by ABG are

26 i opr e hr no h et thy o o cnlt i A G s fr av df ss n roa d e it t x nt d ntofcwt B 'a i t e e ne. c t e e e e i h fm i e 27 28 8
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1 2 73.

SEVENTEENTH DEFENSE ABG hereby gives notice that it intends to rely upon any other affirmative defense

3 that may become available or appear during the discovery proceedings in this case and hereby 4 reserves its right to amend its Answer to assert any such affirmative defenses. 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 9
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WHEREFORE, ABG prays that: A. B. C. Plaintiffs' FAC be dismissed with prejudice as to ABG; Defendant ABG recover its costs of suit; and Defendant ABG be awarded such further relief as the Court deems just and proper.

Dated: August 25, 2008 SKADDEN ARPS SLATE MEAGHER & FLOM, LLP By: s/ Michael L. Weiner _______________ Michael L. Weiner (Pro hac vice) Four Times Square New York, New York 10036 Tel.: (212) 735-2632 Douglas B. Adler (Cal. Bar No. 130749) 300 South Grand Avenue Suite 3400 Los Angeles, California 90071 Tel.: (213) 687-5120 Sara L. Bensley (Pro hac vice) 1440 New York Avenue, N.W. Washington, D.C. 20005-2111 Tel.: (202) 371-7000 Counsel for Defendant AVIS BUDGET GROUP, INC.