SAN FRANCISCO (CN) – A federal judge refused to toss a class action claiming that Zipcar charges excessive late fees of $50 an hour and slips liquidated damages into consumer contracts.
U.S. District Judge Thelton Henderson, wrote Tuesday that he is “concerned with the slow pace” of the litigation, but gave lead plaintiff Gabriela Bayol two weeks to amend her complaint, finding that doing so would not prejudice Zipcar.
Bayol claims the company’s late fee of $50 an hour, up to $150, is “unconscionable and unfair” and “unreasonably favorable to Zipcar.”
Henderson refused to dismiss the case in February and held his ground Tuesday, rejecting Zipcar’s argument that Bayol did not show that the class could recover the legally required $5 million.
Summing up Bayol’s proposed amounts of compensatory damages, punitive damages, attorney’s fees and the annual cost of compliance with an injunction, Henderson found the amount in controversy to be more than $7 million.
“Zipcar is trying to dismiss Bayol’s lawsuit prior to a determination of its merits,” he wrote.
Tim Fisher, Bayol’s attorney, said he was pleased with Henderson’s ruling.
“We look forward to swiftly moving forward with the case on behalf of Ms. Bayol and the other California residents who were charged late fees by Zipcar,” Fisher wrote in an email.
Zipcar could not be reached for comment Wednesday. It is represented by William Donovan, with Cooley in Santa Monica.
Fisher is with Bursor & Fisher in Walnut Creek.
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