U-Haul International Inc. has settled a class-action lawsuit that had accused the equipment rental giant of deceiving California customers through its reservations policy.
The settlement came amid U-Haul's appeal of a court ruling that found it had engaged in fraudulent business practices. In the 2006 ruling, Santa Cruz Superior Court Judge Samuel S. Stevens barred U-Haul agents from promising "confirmed reservations" for one-way equipment rentals in California.
The settlement, finalized Thursday, removes that injunction but in its place requires U-Haul to pay customers $50 if it fails to honor a guaranteed reservation. The original $3.1-million fee award to the class-action lawyers was also cut, to an undisclosed amount, under the deal.
Phoenix-based U-Haul, which dominates the do-it-yourself moving industry with more than 200,000 trucks and trailers, had denied that its reservations policy was deceptive. Dropping its appeal and settling "was a business decision," spokeswoman Jennifer Flachman said.
San Francisco lawyer Thomas A. Cohen, an attorney for the class, called the settlement "a terrific resolution" and said plaintiffs had a right to return to court to bring a contempt motion if U-Haul was "somehow using words in a way . . . confusing to a customer."
The case involved U-Haul's practice of accepting all advance reservations booked online or with telephone reservation agents. Under the company policy, customers were to be told their reservation was "confirmed" and that they would be called the day before their move with instructions on where and when to pick up their equipment. According to the suit, many customers were forced to wait hours or days and travel long distances for the pickup.
In his ruling, Stevens said U-Haul had used "the words 'confirmed reservation' in order to lock up customers as soon as possible and minimize the chances that customers are going to shop around."
Under the settlement, U-Haul will still contact customers the day before their move to schedule the pickup time and location. Once there is agreement, the reservation will be considered "guaranteed," and U-Haul will incur a $50 penalty if it fails to fill it. As a practical matter, however, it may be too late for customers who don't agree with the terms to find other moving equipment.
Cohen said he believed U-Haul had changed its reservations practices after the 2006 ruling. U-Haul officials declined to say whether the settlement required more operational changes.