Size of Units Approximate

By Christopher A. LaVoy, Esq.
Tiffany & Bosco, P.C.

As bad as a normal lawsuit is for a business owner, a class action lawsuit is a thousands times worse. The damages typically sought in such cases are ruinous for the average business.

I raise the point because of a case I just heard about. A major self-storage operator was recently sued in California for class relief for allegedly overstating the size of its units. A disgruntled renter claimed to have been told the unit was 4 by 5 feet, but his own measurement supposedly showed it was “18.3%” smaller. He sued on behalf of himself and all other similarly situated renters. Lest you think the court would laugh this lawsuit out the doors, it found that “an adequate prima facie case for this stage of a lawsuit has been made.” In legal speak that means the judge thought the plaintiff had a chance of prevailing based on his allegations. It also means this operator is probably going to spend a ton of money defending the case.

I have no idea whether this plaintiff’s class action will succeed. I am not even sure how you go about measuring a unit—Do you measure from the center of the dividing wall or from the outside of it? However you do it, you should probably make this clear in the information you provide to customers. There is certainly no reason an operator could not be sued for (even accidentally) overstating the size of its units just like a seller of land could be sued for overstating its acreage. While any one customer’s damages would be small, aggregated together in a class action they could be devastating.

AZSA has been on the lookout for claims that could be turned into class actions against its members in the past. Several years ago it learned of “late-fee” class actions breading around the country, where customers sued for recovery of substantial late fees they were charged (e.g., movie rental late fees). Seeing the obvious threat to the self-storage industry, AZSA successfully obtained legislation in Arizona shielding operators from such lawsuits so long as the late fees they charge are within the statutorily prescribed range. This legislation was a great piece of work. (If your late fees are above this range, you should immediately lower them to protect yourself.)

None of this is to suggest there will be a flood, or even a trickle, of new overstated unit space class actions—this may be an isolated, nutty case. It is, however, to highlight the importance of thinking about general business practices, liability that can result from them, and risks associated with widespread standardized practices in particular. Since lawyers looking for a profitable case will be thinking about this, you should also.

[This article deals with a law related subject at a general level and is not intended for you to rely on. You should consult a lawyer before making a final decision in a situation involving any legal issues.]

Christopher A. LaVoy is partner in the law firm, Tiffany & Bosco, P.C., and serves as AZSA’s legal counsel.

Source: Behind Closed Doors, AZSA Newsletter Archives