Expedia 2009 Annual Report Download - page 32

November 22, 2005, defendants removed the case to the United States District Court for the Northern District of
Ohio. On January 30, 2006, the defendants moved to dismiss the case. On July 26, 2006, the court granted in part
and denied in part defendants’ motion to dismiss. The court has consolidated this lawsuit with the lawsuit filed
by the cities of Columbus and Dayton, Ohio. On February 22, 2008, plaintiffs filed a First Amended
Consolidated Complaint adding the city of Toledo, city of Northwood, city of Rossford, city of Maumee, city of
Perrysburg, Perrysburg Township and Springfield Township as plaintiffs in the lawsuit. On July 7, 2009,
plaintiffs amended their complaint to add the Franklin County Convention Facilities Authority as a plaintiff. The
court’s prior ruling on defendants’ motion to dismiss has been applied to the joined jurisdictions. The court has
held that the defendants are not directly obligated to pay the hotel occupancy taxes at issue, but may be liable for
taxes collected but not remitted.
City of Chicago Litigation. On November 1, 2005, the city of Chicago, Illinois filed an action in state
court against a number of internet travel companies, including hotels.com, Hotwire and Expedia Washington.
City of Chicago, Illinois v. Hotels.com, L.P., et al., No. 2005 L051003 (Circuit Court of Cook County). The
complaint alleges that the defendants have failed to pay to the city the hotel accommodations taxes as required by
municipal ordinance. The complaint purports to assert claims for violation of that ordinance, conversion,
imposition of a constructive trust and demand for a legal accounting. The complaint seeks damages, restitution,
disgorgement, fines, penalties and other relief in an unspecified amount.
City of Rome, Georgia Litigation. On November 18, 2005, the city of Rome, Georgia, Hart County,
Georgia, and the city of Cartersville, Georgia filed a purported state wide class action in the United States
District Court for the Northern District of Georgia against a number of internet travel companies, including
hotels.com, Hotwire and Expedia. City of Rome, Georgia, et al. v. Hotels.com, L.P., et al., No. 4:05-CV-249
(U.S. District Court, Northern District of Georgia, Rome Division). The complaint alleges that the defendants
have failed to pay to the county and cities the hotel accommodations taxes as required by municipal ordinances.
The complaint purports to assert claims for violation of excise and sales and use tax ordinances, conversion,
unjust enrichment, imposition of a constructive trust, declaratory relief and injunctive relief. The complaint seeks
damages and other relief in an unspecified amount. On February 6, 2006, the defendants moved to dismiss the
complaint. On May 9, 2006, the court granted in part and denied in part defendants’ motion to dismiss. On
June 8, 2006, plaintiffs filed an amended complaint adding 16 more municipalities and political subdivisions as
named plaintiffs. On May 10, 2007, the court stayed the litigation, concluding that the plaintiffs must exhaust
their administrative remedies before continuing to litigate their tax claims. On July 10, 2009, the court lifted the
stay of the litigation. Plaintiffs’ motion for class certification is due on February 8, 2010. The case has now been
stayed based upon the parties’ agreement to participate in mediation.
City of San Diego, California Litigation. On February 9, 2006, the city of San Diego, California filed an
action in state court against a number of internet travel companies, including hotels.com, Hotwire and Expedia
Washington. City of San Diego v. Hotels.com, L.P. et al., (Superior Court for the County of San Diego). 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, for violation of
Section 17200 of the California Business and Professions Code, conversion, imposition of a constructive trust
and declaratory judgment. The complaint seeks damages and other relief in an unspecified amount. An amended
complaint was filed on March 8, 2007. This case is coordinated with the Anaheim, San Francisco and Los
Angeles lawsuits. The case was stayed pending exhaustion of administrative procedures. In November 2008, the
city completed its audit and assessed hotel occupancy taxes against each of those online travel companies. The
online travel companies challenged those assessments through an administrative appeals process. The first
hearing on those challenges occurred on June 19, 2009. On July 28, 2009, the hearing board affirmed the
assessments. The Expedia defendants have appealed, and an administrative hearing took place during the week of
January 11, 2010.
Orange County, Florida Litigation. On March 13, 2006, Orange County, Florida filed an action in state
court against a number of internet travel companies, including hotels.com, Hotwire and Expedia Washington. See
Orange County et al v. Expedia, Inc., et al., 2006-CA-2104 Div. 39 (Circuit Court Ninth Judicial District, Orange
County, FL). The complaint alleges that the defendants have failed to pay the county hotel accommodations taxes
26