Fresh on the heels of losing a high-profile case brought by one its former top executives, the St. Louis company must defend itself against charges that it's been ripping off car-rental customers in its home state.
A lawsuit filed in St. Louis Circuit Court alleges Enterprise is making customers pay a surcharge disguised as a government tax. In tiny type on its rental agreements, Enterprise says the surcharge "represents a portion of expenses Owner incurs in the rental of each car."
According to the lawsuit, filed last summer by St. Louis law firms Simon, Lowe & Passanante and Meyerkord & Steward, the charges represent "hidden revenues and profits" for the company. Customers allegedly are misled into thinking they're paying a tax, a violation of state consumer laws, the suit claims.
The case, which seeks unspecified actual and punitive damages and attorneys' fees, isn't exactly breaking new ground: Enterprise faced a similar class-action lawsuit in Alabama over a surcharge in 1993. Enterprise spokesman Patrick Farrell says that the company settled that case. It agreed to pay $150,000 to the plaintiffs and issue coupons to some of its customers. But he says the company did not agree to stop the practice.
The company's use of surcharges was one of the business practices former Enterprise controller Thomas Dunn said he was asked to review after it was sued in Alabama. Dunn claims that he recommended that Enterprise stop the practice or move the charge up higher on the contract and label it an additional charge by the company. Dunn, who alleged he was fired in 2001 for digging in his heels on questionable company practices, recently won a $4 million judgment after a four-week jury trial in St. Louis County. Enterprise's lawyers are working on post-trial motions, hoping to get Judge Jack L. Koehr to set aside the verdict in the Dunn case.
Dunn's already been deposed in the surcharge case. Farrell is confident the company will prevail, arguing that Missouri law "permits the charging of a surcharge by rental-car companies as long as there is a disclosure of the surcharge where it is readily viewable."
As for the Dunn case, Farrell says the company didn't understand the jury's verdict: "A large portion of their case was thrown out because at no point was it ever proven that our company did something illegal."