CHICAGO —A federal judge put the brakes on a class action accusing PlatePass, which provides electronic tolling services for rental cars, of hitting its users with large, unexpected fees.
In October 2020, attorney Paul Geske with the firm of McGuire Law P.C., of Chicago, filed suit in Cook County Circuit Court against PlatePass, which is based in Arizona and licensed to do business in Illinois through its parent company, Verra Mobility. PlatePass offers its devices in cars rented through Hertz.
Named plaintiff Bartosz Grabowski is identified only as an Illinois resident. PlatePass removed the complaint to federal court in November, then asked U.S. District Judge John Blakey to stay the proceedings and force the matter into arbitration. In an opinion issued May 17, Blakey granted the request.
PlatePass said rental agreements involving its product include a delegation clause that refers all issues that can be resolved through arbitration — including the very question of whether a complaint is arbitrable — to an arbitrator. It noted Hertz has included this provision for rentals to U.S. customers as far back as early 2014.
Blakey agreed with that position, noting the clear language in the contract: “In any arbitration under this Arbitration Provision, all issues are for the arbitrator to decide, including his or her own jurisdiction, and any objections with respect to the existence, scope or validity of this Arbitration Provision.”
He also said the contract spells out the involvement of the American Arbitration Association and its rules for settling consumer disputes. Referencing a 2010 U.S. Supreme Court opinion in Rent-A-Center v. Jackson, which also turned on a contractual clause, Blakey said “this broad, robust language conferring authority on the arbitrator evinces clear and unmistakable intent to delegate arbitrability.”
According to his initial complaint, Grabowski rented a vehicle from Hertz in October 2017 in Des Plaines. Over about 10 days, Grabowski passed through three Illinois Tollway toll plazas, for which he should have incurred tolls of no more than 75 cents per plaza.
However, Blakey wrote, “PlatePass charges toll costs, additional toll fees and administrative fees for each day of the car rental term.”
Grabowski, who said he could have used his own I-PASS transponder, paid in the cash lane or made an online payment, ended up paying Hertz $28.85 for tolls. In addition to saying he would’ve requested the PlatePass device be deactivated had he known of the fee structure, Grabowski argued PlatePass wasn’t a party to his rental agreement with Hertz, nor was it a third-party beneficiary, giving it no ability to enforce the arbitration provision against him. However, Blakey said that dispute isn’t his to resolve.
“Regardless of whether this argument has merit, the question of whether a purported nonsignatory can enforce an arbitration agreement concerns a question of arbitrability and, thus, must be decided by the arbitrator,” he wrote.
Blakey gave the parties 10 days to provide notice of either an arbitration decision or any action ending the arbitration process.
PlatePass has been represented in the case by attorneys Garrett L Boehm Jr. and Michael J. Linneman, of the firm of Johnson & Bell, of Chicago.