10/7/2016Toll Collector Battles To Stop Rental Car Fee-Avoidance App
Federal appeals court to hear case that could block smartphone app that saves automobile renters from paying hefty toll road fees.
Can a motorist use his own personal transponder account to pay tolls while driving a rental car? That is the issue underlying the battle between two electronic toll collectors that has just reached the Fifth Circuit US Court of Appeals. On one side, Highway Toll Administration (HTA) has lucrative deals with rental firms Alamo, Avis, Budget, Enterprise, National and Payless that allow car renters to use toll roads in exchange for substantial "administrative" fees that are added to their credit card statements. On the other side is BancPass, which created a smartphone app that allows motorists to register any license plate and pay any toll with a credit card -- avoiding the need for hefty fees.
Those fees can run as high as $25 for the use of a single toll road, sparking numerous lawsuits. Here, HTA sought to defend the fees by suppressing the "PToll" app. HTA convinced the Texas Department of Transportation to withdraw all support for payment through the app. HTA then lobbied Google and Apple to remove PToll from their respective app stores. Google did remove the app temporarily, but it has since been restored. In response, BancPass sued HTA for defamation, while HTA sued back claiming BancPass interfered with its rental car company contracts. From there, the litigation spiraled out of control.
"The parties' motions are complex and at times internally inconsistent, making it difficult to ascertain the specific contours of their respective requests for relief," US District Judge Sam Sparks observed in his August 24 ruling. "The parties do not even agree on what claims are presently live and ripe for decision."
After sorting through the claims, the court sided with BancPass on the most important issues. The judge cited provisions of the various contracts with rental car companies that described how motorists could "avoid the fees" by paying in cash or using an electronic toll device.
"The court finds BancPass does not induce rental car customers to breach their obligations under their rental contracts by using PToll," Judge Sparks ruled. "While 'electronic toll device' is not specifically defined elsewhere in the contract, the court agrees with BancPass that the plain and ordinary meaning of the phrase encompasses a smartphone on which an app specifically designed to manage the payment of tolls is installed."
Unhappy with the outcome, HTA appealed, and lawyers in the case must begin filing briefs by October 21. Oral arguments are tentatively scheduled for the second week of December.
A copy of the ruling is available in a 270k PDF file at the source link below.