Michael Margolis is suing U-Haul in the District of Columbia on behalf of himself and the general public—other U-Haul customers—but is his case a class action? A federal appeals court in D.C. has to decide that question and decide where the suit is heard.
A Bryan Cave partner, tapped to represent U-Haul today in the U.S. Court of Appeals for the D.C. Circuit, argued that Margolis’ suit resembles a class action and belongs in federal court, not in D.C. Superior Court, where it was first filed.
Margolis’ suit claims a U-Haul advertisement offering the “newest trucks” for movers violates the District’s Consumer Protection Procedures Act. The truck that Margolis rented to move to Texas broke down—exhaust fumes seeped into the cabin, according to court records—and could not be repaired. Margolis got another truck.
The suit claims deceptive advertising and misrepresentations in policies. Bryan Cave lawyers tried to push the case to U.S. District Court for the District of Columbia, but a federal judge in September ruled that Superior Court is the proper venue because there is no evidence that the amount in dispute is greater than $75,000. Counsel for U-Haul appealed.
Lawrence Scarborough, managing partner in Bryan Cave’s Phoenix office, argued today that allowing the district court ruling to stand could open the door to attempts to circumvent the Class Action Fairness Act (2005), which gives the federal judiciary substantial control over class action complaints filed across the country.
Scarborough, who specializes in defending companies in class-action litigation, said Margolis' complaint resembles a class action and should be required to follow the procedure set out in the Class Action Fairness Act.
Ellen Eardley of D.C.’s Mehri & Skalet said in court that Margolis is part of a representative action that is neither a class claim nor a mass action, a complaint that does not follow the procedures for class action. “There has to be someone to represent the general public,” Eardley said.
Judge Merrick Garland, sitting with Judges Judith Rogers and Janice Rogers Brown, said the court does not want to create a loophole. And Rogers said from the bench that the court is “struggling” to determine whether Margolis’ case can be removed to federal court.