Expedia 2008 Annual Report Download - page 34

Town of Mt. Pleasant, South Carolina Litigation. On May 23, 2006, the town of Mount Pleasant, South
Carolina filed suit in state court against a number of internet travel companies, including hotels.com, Hotwire
and Expedia Washington. See Town of Mount Pleasant, South Carolina v. Hotel.com, et al., 2-06-CV-020987-
PMD (United States District Court, District of South Carolina, Charleston Division). The case was removed to
federal court on July 21, 2006. The complaint alleges that the defendants have failed to pay to the city hotel
accommodations taxes as required by municipal ordinance. The complaint purports to assert claims for
violation of that ordinance, conversion, constructive trust and legal accounting. The complaint seeks damages
in an unspecified amount. On August 22, 2006, hotels.com GP, LLC was voluntarily dismissed. The
defendants answered the complaint on September 15, 2006. Discovery is ongoing. On April 26, 2007, the
court consolidated the lawsuits filed by the city of Charleston and the town of Mt. Pleasant. On May 14, 2007,
the town filed its first amended complaint. On June 4, 2007, the defendants filed a motion to dismiss. On
November 5, 2007, the court denied the defendants’ motion to dismiss. On November 30, 2007, the defendants
filed a motion for reconsideration or for certification of interlocutory appeal. On April 29, 2008, the court
denied defendants’ motions for reconsideration or certification for interlocutory appeal. On June 2, 2008, the
court issued an amended scheduling order setting the trial date for August 3, 2009.
Columbus, Georgia Litigation. On May 30, 2006, the city of Columbus, Georgia filed suit against
Expedia, Inc. and on June 7, 2006 filed suit against hotels.com — both in state court. See Columbus, Georgia v.
Hotels.com, Inc., et al., 4:06-CV-80; Columbus, Georgia v. Expedia, Inc., 4:06-CV-79 (United States District
Court, Middle District of Georgia, Columbus Division). The cases were removed to federal court on July 12,
2006. During this same time period, the city of Columbus filed similar lawsuits against other internet travel
companies. The complaints allege that the defendants have failed to pay the city hotel accommodations taxes
as required by municipal ordinance. The complaints purport to assert claims for violation of that ordinance,
unjust enrichment, imposition of a constructive trust, equitable accounting, and declaratory judgment. The
complaint seeks damages in an unspecified amount, restitution and disgorgement. The lawsuits were removed
to federal court on July 12, 2006. Defendants filed answers on July 26, 2006. On August 1, 2007, Expedia and
hotels.com filed motions for summary judgment based on the plaintiff’s failure to exhaust its administrative
remedies prior to filing the lawsuit. On October 5, 2007, the plaintiff filed a motion for declaratory judgment
and injunctive relief in the Expedia lawsuit. On November 5, 2007, Expedia and hotels.com re-removed the
lawsuit to federal court. On November 8, 2007, the plaintiff filed an emergency motion to remand the case to
state court. On November 16, 2007, the court denied expedited consideration of plaintiff’s emergency motion
to remand the case to state court. On November 26, 2007, the court granted the parties’ joint motion to stay
the proceedings pending the court’s decision on the plaintiff’s motion to remand. On July 30, 2008, the federal
court remanded the cases back to state court. On September 22, 2008, the court denied Expedia’s motion for
summary judgment for failure to exhaust administrative remedies and granted plaintiff’s motion for injunctive
relief against Expedia. On November 7, 2008, the court denied hotels.com’s motion for summary judgment for
failure to exhaust administrative remedies and granted plaintiff’s motion for injunctive relief against
hotels.com. On October 22, 2008, Expedia filed its notice of appeal and on December 3, 2008, hotels.com
filed its notice of appeal, both challenging the trial court’s denial of Expedia and hotels.com’s motion for
summary judgment and grant of plaintiff’s injunction.
Lake County, Indiana Convention and Visitors Bureau Litigation. On June 12, 2006, the Lake County
Convention and Visitors Bureau, Inc. and Marshall County filed a putative statewide class action in federal
court on behalf of themselves and all other similarly situated political subdivisions in the state of Indiana
against a number of internet travel companies, including hotels.com, Hotwire and Expedia Washington. See
Lake County Convention and Visitors Bureau, Inc., et al. v. Hotels.com, LP, 2:06-CV-207 (United States
District Court for the Northern District of Indiana, Hammond Division). The complaint alleges that the
defendants have failed to pay to municipalities hotel accommodations taxes as required by municipal
ordinances. The complaint purports to assert claims for violation of those ordinances, conversion, unjust
enrichment, imposition of a constructive trust, and declaratory judgment. The complaint seeks damages in an
unspecified amount. On August 17, 2006, the plaintiffs filed an amended complaint. The defendants filed a
motion to dismiss, which is pending. On July 14, 2008, the court denied the defendants’ motion to dismiss the
lawsuit.
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