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A $10 million settlement was approved by Judge David Matia in the Cuyahoga County Common Pleas Court on 2005, on behalf of 74,000 Ohio consumers. This brings to an end five years of litigation involving a $97.50 fee Spitzer inserted, as a pre-printed line item, into its buyers agreement. The class of consumers were represented by David M. Paris of the Nurenberg, Paris, Heller & McCarthy law firm and Ronald I. Frederick.
Spitzer had been inserting a $97.50 fee in its buyer agreements since at least the early 1980s. In 1989, the Ohio Attorney General called this practice deceptive and forced Spitzer to stop charging this fee for what it described in its contracts as “delivery and handling.” However, Spitzer continued the practice by changing the description of the fee to “dealer overhead.”
In 2000, Lisa Washington and Carol Violand filed suit against the Spitzer Dealerships claiming that this fee violated the Ohio Consumer Sales Practices Act because it was deceptive, made consumers believe that it was non-negotiable, and, in effect, was an add-on item which raised the sales price of vehicles to be in excess of the advertised price.
120,000 consumer transactions were reviewed for the time period between August 1998 and December 2004. It was determined that consumers were charged and paid this fee in approximately 74,000 instances. The settlement requires that Spitzer pay damages to each customer in the amount of $134.20, which is comprised of a combination of cash and coupon. In addition, the settlement requires that Spitzer remove this pre-printed fee from its buyer agreements.
Spitzer denied that charging this fee was a violation of the consumer protection statutes and argued that in 1989, then Ohio Attorney General Anthony Celebrezze gave it permission to insert the charge in its buyer agreements.