State Attorney General Jerry Brown, who last month joined in a lawsuit to overturn Pleasanton's housing cap, filed a lawsuit in Alameda County Superior Court yesterday against the Midas auto shop in Dublin and 21 other Midas service centers for allegedly using a "massive bait and switch scam" to lure customers.
The suit, seeking $222 million in civil penalties, costs and reimbursements to customers, was filed following 30 undercover sting operations over four years at 22 locations across Northern California, including Dublin, Campbell, Concord, Fremont, Hayward, San Jose, San Leandro and Walnut Creek.
"This is a classic bait and switch scam that lured customers and charged them hundreds more for services that they didn't need," said Scott Gerber, a spokesman with the attorney general's office.
The investigation was conducted by the California Bureau of Automotive Repair. It allegedly revealed a scheme in which Maurice Irving Glad's 22 Midas franchise shops, one of the world's largest providers of automotive services, advertised $79 to $99 brake specials to attract customers and then added on an additional $110 to $130 fee for unnecessary brake rotor resurfacing services, and hundreds of dollars more for repairs that were unnecessary or never performed, according to the attorney general's office.
Undercover agents posing as customers reported witnessing on several occasions shop managers, mechanics and employees making false or misleading statements to pressure customers to purchase unnecessary parts and services, according to the attorney general's office.
In 1989 the Alameda County Superior Court issued an injunction prohibiting Glad's shops from performing unnecessary repairs, charging for services not performed, or using scare tactics to convince customers to purchase unnecessary parts and services, the attorney general's office claimed.
Glad's attorney William Gagen issued a statement Tuesday saying his client would aggressively defend against the complaint.
In late June, the attorney general joined a San Francisco affordable housing coalition in a 2006 lawsuit that seeks to overturn the Pleasanton's 29,000-unit housing cap.
"Pleasanton's draconian and illegal limit on new housing forces people to commute long distances, adding to the bumper to bumper traffic along (Interstates) 580 and 680 and increasing dangerous air pollution," Brown said in a statement. "It's time for Pleasanton to balance its housing and its jobs and take full advantage of its underutilized land and proximity to BART."
The City Council, in a closed-door meeting, instructed City Attorney Michael Roush to defend the housing cap measure, which voters approved in 1996. Although some city officials, including Mayor Jennifer Hosterman, have said the law might not hold up in a court challenge, the only way the housing cap could be changed or cancelled would be in a court decision or by another public vote.
That case is pending in Alameda County Superior Court.