In the Daniel Klein case, what did the plaintiffs allege regarding Budget's Travel Rewards Program?
Budget Franchise · 2025 FDDAnswer from 2025 FDD Document
practices. The case was settled with ABG paying $3.25 million on June 2, 2016.
Daniel Klein and Stephanie Klein, on behalf of themselves and others similarly situated v. Budget Rent A Car System, Inc. and Avis Budget Car Rental, LLC (United States District Court for the District of New Jersey, Case No. 2:12-CV-07300-JLL-MAH). On November 27, 2012, Plaintiffs Daniel Klein and Stephanie Klein, participants in Budget's travel rewards program ("Travel Rewards Program"), filed a putative class action against ABCR and Budget, alleging a failure to adequately disclose to participants in the Travel Rewards Program that defendants impose a surcharge for frequent flyer miles earned through online rental transactions. Plaintiffs have asserted claims for violations of the New Jersey Consumer Fraud Act, breach of contract, breach of implied covenant of good faith and fair dealing, and seek monetary damages, and injunctive and declaratory relief. The District Court granted final approval to a class action settlement in this matter on June 21, 2016. Pursuant to the district court's final approval order, payment of $3,050,000 in attorneys' fees and $10,000 in incentive awards was paid by ABG on December 5, 2
Source: Item 3 — LITIGATION (FDD pages 12–16)
What This Means (2025 FDD)
According to Budget's 2025 Franchise Disclosure Document, the case of Daniel Klein and Stephanie Klein v. Budget Rent A Car System, Inc. involved allegations regarding Budget's Travel Rewards Program. The plaintiffs, who were participants in the Travel Rewards Program, filed a class action lawsuit on November 27, 2012. They alleged that Budget failed to adequately disclose to participants that the company imposed a surcharge for frequent flyer miles earned through online rental transactions.
The plaintiffs asserted claims for violations of the New Jersey Consumer Fraud Act, breach of contract, and breach of the implied covenant of good faith and fair dealing. They sought monetary damages, as well as injunctive and declaratory relief. This means they wanted the court to order Budget to change its practices and to declare the existing practices unlawful.
The District Court granted final approval to a class action settlement in this matter on June 21, 2016. As part of the settlement, ABG (Avis Budget Group) paid $3,050,000 in attorneys' fees and $10,000 in incentive awards on December 5, 2016. All settlement benefits were distributed to the class by February 20, 2017. This indicates that Budget chose to settle the case rather than continue with litigation, which can be a common practice to avoid further legal costs and potential negative publicity.