Consumer protection Class action waiver Auto lease.

Byline: R.I. Lawyers Weekly Staff

Where (1) a plaintiff who leased a car from the defendant has brought suit under the Rhode Island Deceptive Trade Practices Act and (2) the defendant, citing a class action waived in the leasing agreement, has moved for the entry of an order striking the class allegations with prejudice or dismissing with prejudice the class action claims, that motion should be denied because the class action waiver provision in the leasing agreement is unenforceable on public policy grounds.

"The question presented is: does a class action waiver in a car leasing agreement that does not contain an arbitration clause violate Rhode Island public policy, to wit, the Rhode Island Deceptive Trade Practices Act, R.I. Gen. Laws 6-13.1-5.2, such that it is unenforceable? Because the Court answers this question in the affirmative, it denies Defendant Grieco Hyundai LLC's Motion to Strike Class Action Allegations, or Alternatively to Dismiss the Class Action Claims.

"Plaintiff Elsie Metcalfe leased a car from Defendant Grieco Hyundai LLC ('Grieco') in May 2019. The Lease Agreement (ECF No. 33-3) provided that Ms. Metcalfe could purchase the vehicle at the end of the lease for the 'residual value' plus a few minor fees for a total of $9,520.80. Ms. Metcalfe purchased the car three years later for $11,520 about $2000 more than the agreed-to price.

"Ms. Metcalfe sued for (1) breach of contract; (2) violation of the federal Consumer Leasing Act (15 U.S.C. 1667a(5) and 12 C.F.R. 1013.4(i)); (3) violation of the Rhode Island Deceptive Trade Practices Act ('DTPA') (R.I. Gen. Laws 6-13.1); (4) tortious interference with contract; and (5) unjust enrichment. She seeks to have her case against Grieco proceed as a class action.

"Grieco moves for the entry of an order striking the class allegations with prejudice, pursuant to Fed. R. Civ. P. 12(f), or dismissing with prejudice the class action claims, pursuant to Fed. R. Civ. P. 12(b)(6). ... Ms. Metcalfe objects, claiming that the class action waiver contract provision violates public policy and therefore is unenforceable.

" Because the DTPA explicitly allows collective actions, the class action waiver provision in the...