Expedia 2005 Annual Report Download - page 31

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On July 1, 2005, plaintiffs filed an amended complaint, adding claims pursuant to California's Consumer
Legal Remedies Act, Civil Code Section 1750 et seq., and claims for breach of contract and the implied
duty of good faith and fair dealing. On December 2, 2005, the court ordered limited discovery and ordered
that motions challenging the amended complaint would be coordinated with any similar motions filed in
the City of Los Angeles action.
City of Los Angeles Litigation. On December 30, 2004, the city of Los Angeles filed a purported
class action in California state court against a number of internet travel companies, including Hotels.com,
Expedia and Hotwire. City of Los Angeles, California, on Behalf of Itself and All Others Similarly
Situated v. Hotels.com, L.P. et al., No. BC326693 (Superior Court, Los Angeles County). The complaint
alleges that the defendants are improperly charging and/or failing to pay hotel occupancy taxes. The
complaint seeks certification of a statewide class of all California cities and counties that have enacted
uniform transient occupancy-tax ordinances effective on or after December 30, 1990. The complaint
alleges violation of those ordinances, violation of section 17200 of the California Business and Professions
Code, and common-law conversion. The complaint seeks a declaratory judgment that the defendants are
subject to hotel occupancy taxes on the hotel rate charged to consumers and imposition of a constructive
trust on all monies owed by the defendants to the government, as well as disgorgement, restitution, interest
and penalties. On September 26, 2005, the court sustained a demurrer on the basis of misjoinder and
granted plaintiff leave to amend its complaint. On February 8, 2006, the city of Los Angeles filed a second
amended complaint.
City of Philadelphia, Pennsylvania Litigation. On July 12, 2005, the city of Philadelphia filed an
action in Pennsylvania state court against a number of internet travel companies, including Hotels.com,
Hotwire and Expedia. City of Philadelphia v. Hotels.com, et al., No. 000860 (Court of Common Pleas,
Philadelphia County, Pennsylvania). The complaint alleges that the defendants have failed to pay to the
city hotel occupancy taxes as required by municipal ordinance. The complaint purports to assert claims for
violation of that ordinance, common-law conversion, imposition of a constructive trust, and an accounting.
The complaint seeks damages in an unspecified amount, restitution and disgorgement. On November 18,
2005, the city of Philadelphia filed an amended complaint. The case has been assigned a trial date of
January 7, 2008.
City of Bellingham, Washington Litigation. On September 20, 2005, the city of Bellingham,
Washington filed a purported state wide class action in state court against a number of internet travel
companies, including Hotels.com, Hotwire and Expedia. See City of Bellingham, individually and on
behalf of other entities similarly situated v. Hotels.com LP., et al., No. 05-2-02183 (Superior Court of
Washington for Whatcom County.) The complaint alleges that the defendants have failed to pay to the
city hotel occupancy taxes as required by municipal ordinance. The complaint purports to assert claims for
violation of that ordinance, violation of the consumer protection act, conversion and unjust enrichment.
The complaint seeks damages and other relief in an unspecified amount. On November 3, 2005,
defendants removed the case to the United States District Court of the Western District of Washington.
On January 10, 2006, defendants moved to dismiss the complaint. On February 16, 2006, the city of
Bellingham, with the agreement of the defendants, voluntarily moved to dismiss the case. On February 17,
2006, the court granted the motion and dismissed the action.
City of Fairview Heights, Illinois Litigation. On October 5, 2005, the city of Fairview Heights,
Illinois filed a purported state wide class action in state court against a number of internet travel
companies, including Hotels.com, Hotwire and Expedia. City of Fairview Heights, individually and on
behalf of all others similarly situated v. Orbitz, Inc., et al., No. 05L0576 (Circuit Court for the Twentieth
Judicial Circuit, St. Clair County). The complaint alleges that the defendants have failed to pay to the
city hotel occupancy taxes as required by municipal ordinance. The complaint purports to assert claims for
violation of that ordinance, violation of the consumer protection act, conversion and unjust enrichment.
The complaint seeks damages and other relief in an unspecified amount. On November 28, 2005,
defendants removed this action to the United States District Court for the Southern District of Illinois. On
January 17, 2006, the defendants moved to dismiss the complaint.
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