Expedia 2007 Annual Report Download - page 28

amended on February 17, 2006, alleges that Hotwire is improperly charging and/or failing to pay hotel
occupancy taxes and engaging in other deceptive practices in charging customers for taxes and fees. The
complaint seeks certification of a nationwide class of all persons who were assessed a charge for “taxes/fees”
when booking rooms through Hotwire. The amended complaint alleges violation of Section 17200 of the
California Business and Professions Code, violation of the California Consumer Legal Remedies Act, and
breach of contract, and seeks imposition of a constructive trust on monies received from the plaintiff class, as
well as damages in an unspecified amount, disgorgement, restitution, interest and penalties. The Court held a
hearing on January 16, 2007, on plaintiffs’ motion for class certification. On March 15, 2007, the court
certified a class of all residents of the United States to whom Hotwire charged “taxes/fees” for the facilitation
of reservations for stand-alone hotel rooms on its website. The court has not yet required that Hotwire provide
notice to the potential class members. A case management conference is scheduled for March 18, 2008.
Consumer Case against Various Internet Travel Companies. On February 17, 2005, a purported class
action was filed in California state court against a number of internet travel companies, including Expedia
Washington, Hotels.com, Priceline.com and Orbitz. See Ronald Bush et al. v. CheapTickets, Inc. et al.,
No. BC329021 (Superior Court, Los Angeles County). The complaint alleges that the defendants are
improperly charging and/or failing to pay hotel occupancy taxes and engaging in other deceptive practices in
charging customers for taxes and fees. The complaint seeks certification of a statewide class of all California
residents who were assessed a charge for “taxes/fees” when booking rooms through the defendants and alleges
violation of Section 17200 of the California Business and Professions Code and common-law conversion. The
complaint seeks the imposition of a constructive trust on monies received from the plaintiff class, as well as
damages in an unspecified amount, disgorgement, restitution and injunctive relief. 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
Washington 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 also 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. On
July 12, 2006, the lawsuit filed by the city of San Diego was coordinated with this lawsuit. On January 17,
2007, the defendants filed additional demurrers and a motion to strike class allegations. On March 2, 2007, the
plaintiffs filed a third amended complaint and on March 7, 2007, the court denied defendants’ demurrers on
misjoinder. On April 11, 2007, the defendants filed additional demurrers. On June 11, 2007, a hearing took
place on defendant’s demurrers and motion to strike class allegations and on July 26, 2007, the court signed
an order staying the lawsuit until the cities have exhausted their administrative remedies.
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 Washington. 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
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