Expedia 2008 Annual Report Download - page 30

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. The trial on plaintiff’s Section 17200 claim that was set for the week of
January 12, 2009, has been postponed and a new trial date has not been set.
Consumer Case against Various Internet Travel Companies. On February 17, 2005, a putative 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. On August 6,
2008, the plaintiffs dismissed their lawsuit with respect to Expedia and hotels.com.
Consumer Case against Expedia, hotels.com and Hotwire. On December 8, 2008, a putative class action
was filed in federal court in New York state against Expedia, hotels.com and Hotwire. Similar lawsuits were
filed at or about the same time against Priceline and Travelocity. See Matthew R. Chiste, et al. v. Hotels.com,
L.P., et al., No. 08 CV 10676 (United States District Court for the Southern District of New York). 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 nationwide class of all persons who booked a hotel room in New York City through the defendants. The
complaint asserts claims for deceptive business practices, conversion, breach of fiduciary duty and breach of
contract and seeks a declaratory judgment, injunctive relief and damages in an unspecified amount, but exceeding
$5,000,000. The deadline for the defendants to respond to the lawsuit is March 6, 2009.
Litigation Relating to Hotel Occupancy Taxes
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
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