Class Action Lawsuit Filed Over Port’s ‘Bogus Tax’ on Airport Rental Cars - Voice of San Diego

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Class Action Lawsuit Filed Over Port’s ‘Bogus Tax’ on Airport Rental Cars

A New Mexico man who rented vehicles at the San Diego International Airport during trips to San Diego in recent years is suing several rental car companies over a fee that was deemed illegal by a San Diego Superior Court judge in December.

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This post has been updated.

A New Mexico man who rented vehicles at the San Diego International Airport during trips to San Diego in recent years is suing several rental car companies over a fee that was deemed illegal by a San Diego Superior Court judge in December.

The $3.50 fee – imposed by the Port of San Diego on car companies at and near the airport in May 2018 – was meant to last for decades and pay for a $40 million, 1,600-space parking garage in Chula Vista near a long planned $1.13 billion bayfront convention center, hotel, retail and park complex.

But the car companies sued in 2018, arguing it was an unlawful tax that would not benefit their customers. Superior Court Judge Katherine Bacal agreed in a recent tentative decision. Bacal said at a Dec. 4 hearing the Port charge “is not a true user fee and violates the California Constitution,” according to a hearing transcript. That case is ongoing.

The rental car fee has amassed the Port of San Diego nearly $7.3 million to date, according to Port officials, and remains in place amid the dispute.

In a Feb. 3 court filing, the Port of San Diego’s attorneys pushed back against efforts by the car companies to recoup funds, arguing, “Monetary relief, if any, should be left to those with standing to seek it or to legislative action.”

Now, if the court agrees to let the suit proceed, customers who paid the fee would be able to enter the legal fray and try to get their money back alongside Jeffrey Garvin, who is suing Payless Car Rental, Dollar Rent A Car, Fox Rent a Car, Advantage Rent a Car and others for assessing “a bogus tax on car rentals.”

Garvin pointed to the rental car lawsuit against the Port of San Diego, which includes Dollar’s parent company Hertz Corporation, as evidence “defendants knew when they began imposing this fee that it was illegal and improper.”

“Plaintiff seeks restitution of this illegal fee on behalf of himself and all others similarly situated as well as injunctive relief prohibiting Defendants from continuing to collect these fees,” Garvin’s lawsuit says. “Because the tax was not approved by local voters, it is an unconstitutional tax and thus unlawful and invalid.”

Douglas Sullivan, an attorney for Hertz, said in an email he expects a court order around Feb. 25 to provide a refund process for customers of the Enterprise, National and Alamo brands and Hertz, Dollar and Thrifty brands.

As for Garvin’s class action case, Sullivan said, “Dollar has mistakenly been named, as its customers are already covered by the claims of Hertz in the Port lawsuit.  We do not have comments on the viability of a federal court action with the claims against other rental car companies who did not join the Port lawsuit.  However, we note that the rental car companies were required by unconstitutional actions of the Port to collect the charges, and we understand that the Port has possession of the charges that the rental car companies have been forced to collect.”

Garvin’s attorneys did not respond to a request for comment.

It is not clear whether the court will sign off on the class action, or how it could be impacted if the trial court decision finding the charge unlawful is finalized and appealed by the Port of San Diego.

Some public officials first described the garage project as integral to the bayfront project, but recently downplayed the potential loss of the rental car fees, and said the garage could proceed with a different funding source, or could be built at a later date.

“This decision doesn’t stop, change or even slow our forward progress on our redevelopment plans, which have great momentum and strong support in the community,” Port Chairwoman Anne Moore, who represents Chula Vista, said last month.

Update: This post has been updated to include comments from Hertz’s attorney, provided after this story initially published.

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