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Moretti v. The Hertz Corporation

United States District Court, D. Delaware

September 30, 2018

ENRICO MORETTI, individually and on behalf of Class Members, Plaintiff,



         Presently before the Court is Plaintiff Enrico Moretti's (“Plaintiff”) motion to compel production of documents by Defendants, the Hertz Corporation (“Hertz”) and Dollar Thrifty Automotive Group, Inc. (“DTAG”) (collectively “Defendants”). (D.I. 179) For the reasons that follow, the Court will grant Plaintiff's Motion.

         Plaintiff alleges that he was forced to pay for unwanted insurance services and charged an inflated foreign currency exchange rate when he went to pick up his rental car, which he had previously reserved online while in the United States, upon arrival in Mexico for a vacation. Plaintiff alleges he was made to pay several hundred dollars more than what he had been quoted as the final price when he had made the original online reservation. Plaintiff asserts that these practices - forcing customers to purchase insurance and using inflated exchange rates - were widespread and seeks to represent a class encompassing many thousands of rental car transactions in Mexico over a nine-year period. The relevant rental car companies in Mexico are operated by DTAG's Mexican licensee, Garpa Arrenda S.A. (“Garpa”), and Hertz's Mexican licensee, Alquiladora de Vehiculos Automotores, S.A. de C.V. (“Avasa” and, collectively with Garpa, “Licensees”). Plaintiff seeks an order compelling Defendants “to produce documents sufficient to identify who picked up their reserved rental cars in Mexico; what contract forms they signed; whether they purchased additional insurance or damage-waiver products; how much they paid; and the currency conversion rate applied to the transaction.” (D.I. 180 at 2)

         Federal Rule of Civil Procedure 34 (“Rule 34”) allows “[a] party . . . [to] serve on any other party a request . . . to produce . . . in the responding party's possession, custody or control . . . any designated documents . . . .” “In the absence of control by a litigating corporation over documents in the physical possession of another corporation, the litigating corporation has no duty to produce.” Gerling Int'l Ins. Co. v. C.I.R., 839 F.2d 131, 140 (3d Cir. 1988). “In the context of Fed.R.Civ.P. 34(a), so long as the party has the legal right or ability to obtain the documents from another source upon demand, that party is deemed to have control.” Mercy Catholic Med. Ctr. v. Thompson, 380 F.3d 142, 160 (3d Cir. 2004).

         The parties' primary dispute is whether Defendants have “control” over the documents Plaintiff seeks, as those documents are in the possession and custody of their Licensees in Mexico. Plaintiff argues that the inspection provisions in the contracts between Defendants and their respective Licensees are sufficient to establish control under Rule 34. (D.I. 180 at 2) Defendants insist that they do not have control over the requested documents because, in their view, the contracts provide only limited rights to audit the documents at their Licensee's locations in Mexico and to do so for limited purposes - purposes which do not include making those documents available to third parties for litigation in the United States. (D.I. 186 at 3)

         The Court agrees with Plaintiff. Defendants have control over the disputed documents under Rule 34 and, thus, are required to produce those documents in this litigation. The record further establishes that Defendants have the practical ability to obtain these documents. Defendants' arguments for a contrary conclusion are unpersuasive.

         A contractual right to obtain documents in the possession of a third party can constitute control for Rule 34 purposes. See, e.g., Integra LifeSciences Corp. v. HyperBranch Med. Tech., Inc., 2016 WL 675553, at *1 (D. Del. Feb. 12, 2016) (stock purchase agreement with third party provided requisite control); Lofton v. Verizon Wireless (Vaw) LLC, 2014 WL 10965261, at *1 (N.D. Cal. Nov. 25, 2014) (audit provisions in vendor contracts provided control over third party's documents); Haskins v. First Am. Title Ins. Co., 2012 WL 5183908, at *2 (D.N.J. Oct. 18, 2012) (contracts provided control over and access to third party agents' files).

         Contrary to Defendants' arguments, the relevant contractual provisions governing Defendants' access to documents in the physical custody of their Licensees do provide Defendants “the legal right or ability to obtain the documents . . . upon demand.” Mercy Catholic, 380 F.3d at 160.

         The contract between Hertz and Avasa states in relevant part:

To allow representatives of International or Hertz, at any time during normal business hours, to inspect the premises, records, and vehicles of the Licensee used in operation as a Hertz System Licensee and to examine Licensee's records ascertaining and verifying the number of vehicles owned, leased, used or kept by the Licensee for use in Licensee's Vehicle Renting Business, the revenues therefrom and any - other information required by Hertz with respect to the Licensee's Vehicle Renting Business.

(D.I. 181-24 Ex. 24 at pp. 18-19 of 79) (emphasis added) Thus, as the plain language of the agreement shows, Hertz has the right “to inspect” and “to examine” Avasa's “records” and “any - other information required by Hertz with respect to the” business Avasa engages in with Hertz.

         Similarly, the contract between DTAG and Garpa states in relevant part:

At any time during normal business hours, representatives of Licensor may inspect any Station in the Territory and the other business premises, Vehicles, books and records of Licensee and the books and records of the Owners and their Affiliates, which relate in any way to the Licensed Business, and may photograph or copy any parts thereof.

(D.I. 181-24 § 205(K)(5)) (emphasis added) Thus, as the plain language of this agreement shows, DTAG has the right to “inspect” Garpa's “books and records” “which relate in any way to the Licensed Business.” The documents Plaintiff seeks - records showing customers who used rental cars, any rental insurance bought, any contracts signed, the amount paid, and the currency conversion rate used - relate to the ...

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