Expedia 2009 Annual Report Download - page 30

On April 23, 2007, the plaintiffs in the shareholder derivative suits filed a notice of appeal to the
United States Court of Appeals for the Second Circuit from the District Court’s order of dismissal. On June 14,
2007, on consent of the parties, the appeal was withdrawn from active consideration by the Court of Appeals,
subject to reinstatement by no later than March 31, 2008.
On May 15, 2007, the plaintiffs in the securities class action filed a second amended complaint. The new
pleading continues to allege that the defendants failed to disclose material information concerning problems at
the Company’s then-travel businesses and to assert the same legal claims as its predecessor. On August 15, 2007,
the defendants filed a motion to dismiss the second amended complaint. A hearing on the motion has not been
scheduled.
Expedia believes that the claims in the class action and derivative suits lack merit and will continue to
vigorously defend against them.
hotels.com. On May 6, 2003, a purported class action was filed in Texas state court against hotels.com,
L.P. (“hotels.com”), Mary Canales, Individually and on Behalf of All Others Similarly Situated v. hotels.com,
L.P., No. DC-03-162 (District Court, 229th Judicial District, Duval County). The complaint, as amended, alleges
that hotels.com breached its contract with its customers by charging customers “taxes” that exceed the amount
required by or paid to the applicable taxing authorities and by charging customers “fees” that do not correspond
to any specific services provided. On April 29, 2005, the court issued an order granting the plaintiff’s motion for
class certification. On February 1, 2006, the court of appeals reversed the holding certifying the class and
remanded the case to the trial court. On April 20, 2006, Canales filed a fourth amended petition and a new
motion for class certification. On June 23, 2009, plaintiff filed an amended class action petition. Plaintiff filed an
amended motion to certify a class on September 18, 2009. Defendant filed a motion for summary judgment on
September 18, 2009. Plaintiff filed a response and cross-moved for summary judgment on October 22, 2009.
These motions remain pending.
Expedia®Washington. On February 18, 2005, three actions filed against Expedia, Inc., a Washington
corporation and wholly-owned subsidiary of the registrant (“Expedia Washington”) — C. Michael Nielsen et
al. v. Expedia, Inc. et al., No. 05-2-02060-1 (Superior Court, King County), Bruce Deaton et al., v. Expedia, Inc.
et al., No. 05-2-02062-8 (Superior Court, King County), each of which was filed January 10, 2005 and Jose Alba,
on Behalf of Himself and All Others Similarly Situated v. IAC/InterActiveCorp et al., No. 05-2-04533-7 (Superior
Court, King County) filed February 3, 2005 — were consolidated under the caption In re Expedia Hotel Taxes
and Fees Litigation, No. 05-2-02060-1, pending in King County Superior Court. The consolidated complaint
alleges that Expedia Washington 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
Expedia Washington. The complaint alleges violation of the Washington Consumer Protection Act and
common-law conversion 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. Six of the seven
originally named plaintiffs have withdrawn from the suit. On May 7, 2008, the court entered an order granting
plaintiff’s motion to certify the class. Both sides filed Motions for Summary Judgment on April 27, 2009. On
May 28, 2009, the court granted the plaintiffs’ motion for summary judgment on their breach of contract claim,
without the benefit of an actual trial on the merits. The plaintiffs’ breach of contract claim was based on
Expedia’s website Terms of Use that were in effect from February 2003 through December 2006. The court
concluded that the damages for the alleged breach are $184,470,451. On July 8, 2009, Expedia reached an
agreement in principle on a proposed settlement of all claims with the plaintiffs. Plaintiffs filed a Motion for
Preliminary Approval of the proposed settlement and the settlement was approved on December 1, 2009. Three
objectors filed appeals before the December 31, 2009 deadline. These appeals are pending.
Hotwire. On April 19, 2005, three actions filed against Hotwire, Inc. (“Hotwire”) were consolidated and
now are pending under the caption Bruce Deaton v. Hotwire, Inc. et al., Case No. CGC-05-437631, in the
Superior Court of the State of California, County of San Francisco. The consolidated complaint, which was
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
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