Class action suit over U-Haul's gas policy on the road to arbitration

By Andrew Thomason | Apr 29, 2014

A class action lawsuit targeting U-Haul's gasoline return policy stalled earlier this month after an Illinois appeals panel sided with the moving truck company.

In an unpublished order filed on April 23, a panel of the Second District Appellate Court affirmed Kane County Associate Judge Edward Schreiber's decision to grant U-Haul's motion to compel arbitration as it was included in the two plaintiffs' rental contracts.

Plaintiffs Jana Swanson and Tyler Simpson filed the complaint last year, individually and on behalf of all others similarly situated, against U-Haul International and its daughter company, U-Haul Company of Illinois, claiming the two changed the gasoline return policy without proper disclosure to customers.

U-Haul previously required customers to return a rental truck with a full tank of gas, but its current policy asks customers to estimate how many gallons of gas they used, and return the truck with half a tank of gas, or another predetermined amount.

Failure to fill up the tank to the agreed upon level results in a $5 fine for each gallon short a customer's rental truck is, plus an additional $30.

In their suit, the plaintiffs, whom rented trucks separately, argued the new policy is nearly impossible to meet, so people err on the conservative side when adding gas before returning their rental.

They also alleged the policy revision was done so U-Haul could obstinately charge more for rentals without disclosing that to customers. Their suit accused U-Haul of violating the Consumer Fraud and Deceptive Business Practices Act, as well as unjust enrichment.

In response to the suit, U-Haul moved to compel arbitration. The company cited its rental contracts, which contains an arbitration agreement.

The plaintiffs countered by arguing that the gasoline policy was not covered by the agreement.

The appellate court order cites the plaintiffs' as saying, “While the arbitration agreement used by U-Haul may very well be enforceable for those issues which are disclosed, Plaintiffs submit that a consumer cannot possibly agree to arbitrate an issue which the consumer is not aware of," namely the gas return policy.

Schreiber, the trial judge, granted U-Haul's motion to compel arbitration, rejecting the plaintiff's overarching argument.

And in the order issued earlier this month, an appeals panel made up of Justices Ann B. Jorgensen, Kathryn E. Zenoff and Joseph E. Birkett agreed with the lower court.

Writing for the panel, Jorgensen explained that both plaintiffs "rented trucks from U-Haul after documents containing the arbitration agreement were completed and presented (or made available) to them, which shows their acceptance of, as relevant here, the Arbitration Agreement."

The plaintiffs also argued that even if they did agree to an enforceable arbitration agreement, the gasoline return policy was unconscionable, thus making the agreement unenforceable.

The appeals panel, however, declined "to reach the merits of this alternative challenge to the Arbitration Agreement because it is forfeited."

Jorgensen noted that the plaintiffs had forfeited their argument regarding the unconscionably of the gas return policy, including how it relates to the arbitration agreement, by raising it for the first time in their reply brief, rather than in their suit.

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