Alawsuit was recently filed in Cook County, Illinois, against Airport Parking Reservations Inc. and Gomez Travel Services Inc., focusing on allegedly deceptive pricing practices on their parking reservation websites. Although the plaintiffs used the services at Illinois airports, they are bringing their claims under California consumer protection laws, specifically the Unfair Competition Law, False Advertising Law and the Consumer Legal Remedies Act.
The plaintiffs argue that California law should apply because the companies are headquartered in California and made key decisions about pricing and marketing there, even though the actual services were rendered in Illinois. The complaint alleges that the companies advertised low base rates for airport parking but hid mandatory service fees until several screens into the booking process, making the true cost less visible to consumers at the outset.
What's notable here is the legal theory that companies that provide services outside California, but that allow California residents to purchase the services in California, could still be subject to California consumer protection laws. This could have wide-ranging implications for businesses that serve California customers remotely, even if their operations or service delivery occur elsewhere.
For example:
Car rental companies based outside California that allow California residents to reserve vehicles online or by phone for use in other states could face claims under California law if pricing and marketing practices are controlled or directed toward California consumers.
Ticketing platforms selling event tickets to California residents for out-of-state events could be held accountable under California consumer protection statutes, even though the event itself takes place outside the state.
Hotels and resorts outside California that take reservations and payments from California consumers for stays in other states could face litigation under California law based on their interactions with California residents.
Tour operators and travel experience providers outside California marketing and contracting services with California residents for activities in other states may also be exposed to California laws.
Other examples might include moving and storage companies, educational and training services, professional services and subscription-based businesses that contract with California consumers for out-of-state services.
This case serves as an important reminder that plaintiff's class action attorneys may be looking at businesses that allow California residents to purchase services in the state even when providing those services in another state. The legal theory here could be a blueprint for future consumer claims targeting companies whose pricing and marketing practices affect California consumers, regardless of where the service is physically provided.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
