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Avis Denied Rehearing of Alaska Franchisee Case...Again

Photo from Avis Rent-A-Car website
Poster of Alaska Car Rental, Fairbanks airport. photo/bmm

ANCHORAGE – The Ninth Circuit Court of Appeals has once again denied Avis Budget Group’s request to have its case reheard against 95 year-old Alaska Rent-A-Car franchisee Robert Halcro, Jr.

The tenacious franchise owner has now been engaged in a vicious legal battle with the vehicle conglomerate giant for over ten years. With his family, the fifty-year rental car veteran operates ten Alaska Avis agencies that has a fleet of 1,400 vehicles.

Appellate judge Andrew J. Kleinfeld, with other members of the panel, ruled on June 19, 2013 that the district court’s decision should be upheld. The franchisee was a party to a settlement agreement in a lawsuit brought by franchisees. Avis breached that agreement by using the same personnel to sell and market both Avis and Budget Rent-A-Car vehicles, after purchasing its competitor. As part of the district court’s award of $16 million to Alaska Rent-A-Car, plus costs, interest and fees, the court also ruled that the prejudgment interest should be reduced by $57,739.51.

Finding ways to drag out the legal process against the franchisee

A main issue Avis attorneys argued in the case was that one “Alaska Native” was incorrectly allowed to be seated on the jury at trial over Avis’ objection. The lawyers were successful in having one of two Alaska Natives removed. The appellate court stated that since liability against Avis had already been established in its earlier decision, there was only one issue the jury had to decide: Had the franchisee proven there were damages to its business and if so, how much?

Because Avis had made a promise to Alaska Rent-A-Car and then broke it, the car rental giant was faced with the problem of justifying a zero or low damages award. The court said Avis needed a jury willing to deny an award to the victim of a broken promise. One Avis attorney said he had a feeling that the remaining native juror viewed punishment as appropriate for the breach of contract, regardless of whether there was actual harm to the franchisee. He assured the judge that there were no racial issues in wanting the juror removed.

The judge said he was not satisfied with striking both Native Alaska jurors from the case.

In last week’s appellate court decision, the judges stated that the petition by the franchisor for a rehearing en banc, a decision by the full court of all the appeals judges in the jurisdiction, was denied, and no future petitions for rehearing will be entertained.

Christopher Landau of Kirkland & Ellis in Washington, DC, representing Avis Budget Group in the appeal , said they had not decided what they will do. “We are just evaluating our options at this point.” He explained that a cert petition (petition for a writ of certiorari) was due in 90 days from this latest ruling, if they decided to ask the Supreme Court to hear the case.

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