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Verdicts & Settlements

Hertz Offers Settlement to Wrongfully Arrested Customers

— June 22, 2022

An attorney for many of the plaintiffs said Hertz’s true intentions remain unclear, as the company has earlier expressed an interest in settling only to later cease negotiations.

Hertz Corp. has settled three dozen lawsuits by people who claim they were arrested after the rental car company erroneously reported them for automobile theft.

According to The Los Angeles Times, the tentative settlement comes after Colleen Batcheler was appointed as general counsel for the company.

During her first month in the position, Batcheler made it her top priority to end lawsuits filed by an estimated 230 customers who said that Hertz reported them to the police for frivolous reasons.

As has reported before, Hertz routinely informed law enforcement that “overdue” renters had stolen their vehicles.

However, in many cases, the renters had been seeking to extend or renew existing rental contracts.

“We’ve tried to take a step back and say, how can we make progress in a way that is fair to our customers and is based on individual facts and circumstances?’” Batcheler told The Los Angeles Times.

Hertz, adds the Times, lost a critical court case earlier this month, when a federal judge permitted at least 70 Hertz clients to proceed with their claims against the company.

Up until the adverse judgment, Hertz had succeeded in halting litigation, pressing for the lawsuits to remain under the supervision of a Delaware-based bankruptcy court.

The Los Angeles Times notes that many of the wrongfully arrested customers were detained at gunpoint.

Roof of police car with blue light lit; image by Pixabay, via
Roof of police car with blue light lit; image by Pixabay, via

A small number of complaints suggest that Hertz employees sometimes committed serious errors, resulting in law enforcement notifications even when customers were driving lawfully rented automobiles still within the period of their rental contracts.

While Hertz has offered its terms for settlement, the claims must still be reviewed and approved by the plaintiffs.

Francis Alexander Malofiy, a Philadelphia-based attorney representing many of the plaintiffs, told the Los Angeles Times that Hertz’s true intentions remain uncertain.

“Hertz has indicated interest in settlement in the past, only to reveal they were not serious about addressing the full scope of the harm they have caused,” Malofiy wrote in an email.

Malofiy further told the Times that Hertz must agree to withdraw in-process theft reports it has filed against 40 clients.

According to 6-ABC, Malofiy ascribes much of the blame for the wrongful arrests to Hertz’s internal payment and reporting systems.

“We have some clients who spent seven months in jail, we have some clients who spent one day in jail, we have some clients who were sexually assaulted and beaten in jail,” Malofiy said.

One of the alleged victims, says 6-ABC Action News, is Kelly Grady, who was eventually awarded $100,000 for wrongful arrest.

“I was in jail for 12 days,” Grady said. “It was humiliating. It was scary. It was horrible. It was degrading. I was sexually assaulted and gang beaten.”

Earlier this year, Hertz C.E.O. Stephen Scherr admitted that the company had made mistakes.

Scherr also said that “rectifying” the company’s mistakes is now a “priority.”

6-ABC Action News also released a statement from Hertz, which reads:

“Hertz cares deeply about our customers, and we successfully provide rental vehicles for tens of millions of satisfied travelers each year. While we remain steadfast in our commitment to defend the company’s interest against those that intend harm, we also want to do right by our customers.

Today Hertz has sent settlement offers to about three dozen individuals who had a negative experience with our company.

This is the first set of offers and is not exhaustive. We are moving through all the claims to ensure that each unique situation is reviewed and considered on its individual merits. We expect some of our offers will be for more money than the proof of claim filed for these individuals, and some of our offers will be significantly less. We look forward to reaching resolutions in the months ahead as we work through the process.”


Hertz makes settlement offers to end false-arrest lawsuits

Hertz settles dozens of customer lawsuits after Action News investigation

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