Litigation

Breaking News: Big Win for Automobile Dealers in Lease Documents Cases

By Bruce Nye

For at least seven years, plaintiffs' counsel have tenaciously prosecuted In re Vehicle Lease Documents Cases (Trygar) in Los Angeles Superior Court.  This Unfair Competition Law case was brought by Ed Masry (of Erin Brockovich fame) on behalf of Louis Trygar and several other plaintiffs against nearly every new car automobile dealership in California.  (Mr. Masry passed away, and the case is now being prosecuted by two of his former associates.) 

Plaintiffs initially challenged the use of "pay-off adjustment forms" in connection with consumer vehicle leases as violations of the "single document rule."  Then, when that claim crashed on the Proposition 64 shoals, they proceeded with a purported class claim against all the dealerships based on claims that the dealerships hid "negative equity" -- amounts owed on traded in vehicles -- in new car leases.

Among many other problems, of course, was that neither Trygar nor the several other plaintiffs ever had a case against any of the dealerships other than the ones where they leased their vehicles.  And under Proposition 64, they couldn't sue dealerships that hadn't caused them injury in fact.  So Trygar moved for leave to conduct discovery against all 1400+ dealerships so that he could go through their records finding customers who could serve as class representatives against each of the defendants.

The parties soon realized that this discovery motion was the entire battle, and the battle lasted more than a year, with some four sets of briefs filed by either side.   

Monday, Los Angeles Superior Court Judge Anthony Mohr ruled, and it's a slam dunk for the defense:  no discovery allowed.  The Plaintiffs are invited to bring a writ petition to the Court of Appeal.  But assuming the appeal fails, the case very probably is effectively over.  Judge Mohr's decision is here.

A very good day for the defense.  (Full disclosure:  CalBizLit doesn't usually engage in overly obvious bragging or shameless self-promotion, but will make an isolated exception here -- Bruce Nye was primary author of the defense briefs, working in consultation with an able and very helpful steering committee).

Full post as published by CalBizLit on November 29, 2007 (boomark / email).