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Michael Margolis v. U-Haul International

October 12, 2011


The opinion of the court was delivered by: Judge Beryl A. Howell


In June 2005, plaintiff Michael Margolis rented a U-Haul truck to facilitate his move from Maryland to Mexico. The plaintiff's rental truck broke down twice during his cross-country drive and necessitated time-consuming repairs. In addition to the inconvenience and delay to his schedule, the plaintiff was overcharged for his rental in the amount of $1,025.69. The plaintiff filed this case alleging in three counts that defendants U-Haul International, Inc. (hereinafter "UHI") and U-Haul Company of Maryland, Inc. (hereinafter "UHMD") falsely advertised and misrepresented the quality of their vehicles in violation of the District of Columbia Consumer Protection Procedures Act (hereinafter "CPPA"). Both defendants have moved for summary judgment, arguing, inter alia, that Maryland law governs this dispute because the advertisement of which the plaintiff complains was published, approved, and viewed in Maryland by a Maryland resident. The Court agrees that the instant dispute does not have a sufficient connection to the District of Columbia to warrant application of D.C.'s Consumer Protection statute. Accordingly, the defendants' motions for summary judgment are granted.


The undisputed facts material to resolution of the defendants' summary judgment motions are as follows. In June 2005, plaintiff Michael Margolis, who was then a resident of Maryland and is now a resident of Pennsylvania, decided to move from his home in Maryland to accept a teaching position in Guanajuata, Mexico. Pl.'s Response to Def. UHMD's Statement of Undisputed Material Facts, ECF No. 40, (hereinafter "Pl.'s SUMF"), ¶ 14; Am. Compl. ¶ 1. While in Maryland, the plaintiff searched a yellow page directory for a company from which to rent a moving truck. Pl.'s SUMF, ¶ 15. He ultimately decided to rent a U-Haul truck after noticing a U-Haul advertisement. Id. ¶¶ 15-17. While in Maryland or Ohio, but not in D.C., the plaintiff reserved a U-Haul vehicle and a tow dolly for a seven-day rental through the internet website for pick-up on June 29, 2005 in the "Maryland area" and for return on July 6, 2005 at a U-Haul location in Texas. Id. ¶ 17; Am. Compl. ¶¶ 24, 30. The U-Haul website required him to input a zip code for preferred pick-up locations, but the plaintiff did not otherwise request a specific pick-up location for his rental equipment. Pl.'s SUMF, ¶ 18.

Shortly before the scheduled rental date, the plaintiff was informed that he should pick-up his reserved U-Haul equipment from U Street Rentals located at 919 U Street, N.W. in Washington, D.C.*fn1 Id. ¶¶ 5, 19. On June 29, 2005, the plaintiff arrived at U Street Rentals, where he found the truck he reserved in disrepair and the odometer reading 233,420 miles. Id. ¶ 21. The plaintiff relayed his dissatisfaction with the condition of the vehicle to U Street Rentals, but was told "that there was just nothing else around" and "it was all that was available." Id. A U Street Rentals' representative also informed the plaintiff that they did not have a tow dolly, which he had previously reserved, and he would have to pick that item up from another location in Rockville, Maryland. Id. ¶ 25. The plaintiff then signed the rental agreement, paid U Street Rentals for the equipment, and returned to Maryland to pick-up the tow dolly he had reserved. Id. ¶¶ 22, 25. After the plaintiff picked up his tow dolly from the Rockville location, he was then forced to return to U Street Rentals to have it installed on the truck. Id. ¶ 25.

Upon returning home with his U-Haul truck, the plaintiff noticed a substantial amount of oil leaking from the vehicle and exhaust fumes entering the cabin. Id. ¶ 26. The plaintiff called U-Haul's roadside assistance number, and U-Haul sent a mechanic to make the necessary repairs, which delayed the start of the plaintiff's journey by one day. Id.; Am. Compl. ¶¶ 33-34.

Three days into his move, while driving through Louisiana, the plaintiff realized the exhaust issues had not been resolved, forcing him to stop at a gas station and again call U-Haul roadside assistance for help. Am. Compl. ¶ 35. After inspecting the vehicle, U-Haul agents determined that it would take several days to make the necessary repairs and, the following day, gave the plaintiff a replacement vehicle. Id. ¶ 37. The plaintiff then signed a revised contract, which stated that he had to return the replacement vehicle in Texas by July 7th. Id. ¶¶ 36-38. Following the breakdown of his vehicle in Louisiana, the plaintiff contacted U-Haul to complain. He requested, and was allegedly promised, a refund and reimbursement for hotel accommodations. Id. ¶ 39; Pl.'s SUMF, ¶ 26.

Two days later, the plaintiff reached the drop-off location and asserts that he timely returned his vehicle pursuant to the original contract. Am. Compl. ¶¶ 40-41. The drop-off location was closed when the plaintiff arrived, and the plaintiff left the keys in the designated after-hours drop box. Id. ¶ 40. The plaintiff returned to the location the next day to ensure that the vehicle was dropped-off and gain more information about his refund. Id. ¶ 41. At the Texas location, the plaintiff was told that there would be an additional $1,025.69 charge on his credit card due to the late return of the truck and for dropping the truck off at the wrong location. Pl.'s SUMF ¶ 27. The late fee charged on his credit card appeared from "U-Haul-Highway-Stora#327 McAllen TX." Id. As a result of this late fee, as well as the delay and expense caused by the malfunction of the U-Haul rental vehicle, the plaintiff estimates that he was injured in an amount between $4,000 and $5,000. Id. ¶ 28.

On July 30, 2007, the plaintiff filed a Complaint in District of Columbia Superior Court against U-Haul International, a business incorporated in Nevada with its principal place of business in Phoenix, Arizona, on behalf of himself and in a representative capacity, alleging misrepresentation and false advertising under the CPPA.*fn2 On September 19, 2007, defendant UHI removed the case to the U.S. District Court for the District of Columbia pursuant to 28 U.S.C. § 1332(a), diversity jurisdiction, and 28 U.S.C. § 1332(d)(2), which grants federal courts original jurisdiction over certain class action complaints. The district court and the D.C. Circuit determined that it did not have subject matter jurisdiction because the total possible damages did not meet the $75,000 threshold requirement for diversity jurisdiction, and the plaintiff had not alleged a class action, but was only proceeding in a representative capacity under the CPPA.*fn3

Consequently, the court remanded the case back to Superior Court on May 15, 2009. In re U-Haul Int'l, Inc., No. 08-7122, 2009 WL 902414 (D.C. Cir. Apr. 6, 2009) (per curiam); Margolis v. U-Haul Int'l, Inc., No. 07-cv-1648 (Order dated Sept. 8, 2008) (Collyer, J.).

After three months of discovery in D.C. Superior Court, defendant UHI moved to dismiss the plaintiff's complaint on grounds, inter alia, that Maryland law should apply to the plaintiff's misrepresentation and false advertising claims and the plaintiff should not be able to assert claims under the CPPA. The D.C. Superior Court denied defendant UHI's motion to dismiss, ruling that the allegations in the Complaint were sufficient to maintain an action under D.C. law. Margolis v. U-Haul Int'l, Inc., 2009 D.C. Super. LEXIS 8 (D.C. Sup. Ct. Dec. 17, 2009). The court also ruled that while the plaintiff could seek injunctive relief in a representative capacity, the plaintiff could not seek money damages on behalf of third parties without obtaining class certification and complying with Rule 23 of the D.C. Superior Court Rules of Civil Procedure. Id. at *4-5.

On January 15, 2010, the plaintiff amended his complaint in D.C. Superior Court to assert a class action pursuant to Rule 23 of the D.C. Superior Court Rules of Civil Procedure, see Compl. ¶¶ 45-60; see also D.C. CODE, § 28--3905(k), and also added as a defendant U-Haul Company of Maryland, a Maryland corporation with its principal place of business in Hyattsville, Maryland. Pl.'s SUMF, ¶ 1. The plaintiff's Amended Complaint asserts three counts under the CPPA, alleging that the defendants engaged in misrepresentation and false advertising by (1) "representing that their rental trucks are the 'newest trucks for household movers' . . . when, in fact many were old and deteriorated;" (2) failing to honor confirmed reservations and meet the demand for advertised goods and services; and (3) failing to disclose late fee, return of equipment, and credit card charge policies. Am. Compl. ¶¶ 14, 93, 95, 112. The plaintiff seeks injunctive relief directing the defendants to cease their allegedly unlawful acts; monetary damages, including statutory and/or treble damages pursuant to D.C. CODE § 28- 3905(k)(1)(A); punitive damages; an accounting of the late fees and additional charges imposed; disgorgement; and attorney's fees. Am. Compl. (Prayer For Relief).

On January 29, 2010, the defendants removed this case to federal court pursuant to the Class Action Fairness Act ("CAFA"), which grants district courts original jurisdiction over class actions where there is diversity between a member of the proposed class and a defendant, and the aggregate amount in controversy exceeds $5,000,000. 28 U.S.C. § 1332(d)(2)(A), (B); see also Exxon Mobil Corp. v. Allapattah Servs., Inc., 545 U.S. 546, 571 (2005) ("Subject to certain limitations, the CAFA confers federal diversity jurisdiction over class actions where the aggregate amount in controversy exceeds $5 million. It abrogates the rule against aggregating claims . . . .").

On June 11, 2010, defendants UHI and UHMD moved separately for summary judgment, arguing, inter alia, that Maryland, not District of Columbia, law was more properly applicable to the dispute.*fn4 ECF Nos. 21-22. On July 1, 2010, the plaintiff requested the Court to "continue or deny" the defendants' summary judgment motions pursuant to FED. R. CIV. P. 56(f) because, according to the plaintiff, the defendants' motions "were filed before merits discovery [had] commenced." ECF No. 23, at 1. The Court granted in part and denied in part the plaintiff's motion, ruling that briefing regarding defendant UHI's summary judgment motion should proceed because the plaintiff had the opportunity for three months to obtain discovery from this defendant in D.C. Superior Court prior to removal, but stating that the plaintiff was entitled to discovery regarding defendant UHMD's motion. Orders dated Aug. 24, 2010 (Collyer, J.), ECF Nos. 35-36.

Following approximately two months of discovery, defendant UHMD filed a renewed motion for summary judgment on December 1, 2010. ECF No. 39.*fn5 On September 2, 2011, the Court held oral argument on the defendants' motions for summary judgment. Both of these motions are pending before the Court.

As explained below, the Court concludes that the law applicable to the plaintiff's misrepresentation and false advertising claims is the law of the State of Maryland, not the law of the District of Columbia. The plaintiff therefore may not assert claims under the CPPA. Accordingly, the defendants' motions for summary judgment are granted.


Pursuant to Federal Rule of Civil Procedure 56, the Court will grant a motion for summary judgment "if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law" based upon the pleadings, depositions, and affidavits and other factual materials in the record. FED. R. CIV. P. 56(a), (c); Talavera v. Shah, 638 F.3d 303, 308 (D.C. Cir. 2011); Tao v. Freeh, 27 F.3d 635, 638 (D.C. Cir. 1994). The Court "need consider only the cited materials, but it may consider other materials in the record." FED. R. CIV. P. 56(c)(3). "The evidence is to be viewed in the light most favorable to the nonmoving party and the court must draw all reasonable inferences in favor of the nonmoving party." Talavera, 638 F.3d at 308 (citing Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250, 255 (1986)); Tao, 27 F.3d at 638. However, "[t]he mere existence of a scintilla of evidence in support of the plaintiff's position will be insufficient; there must be evidence on which the jury could ...

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