Expedia 2009 Annual Report Download - page 33

as required by municipal ordinance. The complaint seeks a declaratory judgment regarding the county’s right to
audit and collect tax on certain of the defendants’ hotel room transactions. On March 9, 2007, the plaintiff filed
an amended complaint. Trial is scheduled for August 23, 2010.
City of Atlanta, Georgia Litigation. On March 29, 2006, the city of Atlanta, Georgia filed suit against a
number of internet travel companies, including hotels.com, Hotwire and Expedia Washington. See City of
Atlanta, Georgia v. Hotels.com, L.P., et al., 2006-CV-114732 (Superior Court of Fulton County, Georgia). The
complaint alleges that the defendants have failed to pay to the city hotel accommodations taxes as required by
municipal ordinances. The complaint purports to assert claims for violation of the ordinance, conversion, unjust
enrichment, imposition of a constructive trust, declaratory judgment and an equitable accounting. The complaint
seeks damages and other relief in an unspecified amount. On July 10, 2009, the case was transferred to Judge
Michael Johnson. Plaintiff’s first amended complaint was filed on October 23, 2009. Answers were filed on
November 30, 2009. The deadline to file motions for summary judgment, or other dispositive motions, is
February 15, 2010.
City of Charleston, South Carolina Litigation. On April 26, 2006, the city of Charleston, South Carolina
filed suit in state court against a number of internet travel companies, including hotels.com, Hotwire and Expedia
Washington. See City of Charleston, South Carolina v. Hotels.com, et al., 2:06-CV-01646-PMD (United States
District Court, District of South Carolina, Charleston Division). The case was removed to federal court on
May 31, 2006. The complaint alleges that the defendants have failed to pay 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
April 26, 2007, the court entered an order consolidating the lawsuits filed by the City of Charleston and the Town
of Mt. Pleasant. Trial is scheduled for June 17, 2010.
City of San Antonio, Texas Litigation. On May 8, 2006, the city of San Antonio filed a putative statewide
class action in federal court against a number of internet travel companies, including hotels.com, Hotwire, and
Expedia Washington. See City of San Antonio, et al. v. Hotels.com, L.P., et al., SA06CA0381 (United States
District Court, Western District of Texas, San Antonio Division). 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, common-law conversion, and declaratory judgment. The
complaint seeks damages in an unspecified amount, restitution and disgorgement. On October 30, 2009, a jury
verdict was entered finding that defendants “control hotels” and awarding approximately $15 million for
historical damages against the Expedia companies (Expedia, hotels.com and Hotwire). The jury also found that
defendants were not liable for conversion or punitive damages. The final amount of the judgment against the
Expedia companies has not been determined. In further proceedings, the court will determine, among other
things, whether the tax is actually due on the amounts that the online companies retained for their services and
the amount, if any, of penalties and interest, which could be significant.
City of Gallup, New Mexico Litigation. On May 17, 2006, the city of Gallup, New Mexico filed a putative
statewide class action in state court against a number of internet travel companies, including hotels.com, Hotwire
and Expedia Washington. See City of Gallup, New Mexico, et al. v. Hotels.com, L.P., et al., CIV-06-0549 JC/
RLP (United States District Court, District of New Mexico). The case was removed to federal court on June 23,
2006. The complaint alleges that the defendants have failed to pay to the city hotel accommodations taxes as
required by municipal ordinances. The complaint purports to assert claims for violation of those ordinances,
conversion, and declaratory judgment. The complaint seeks damages in an unspecified amount, restitution and
disgorgement. On April 18, 2007, the court granted plaintiffs’ motion to dismiss its own lawsuit. On July 6,
2007, the city of Gallup refiled its lawsuit. The defendants answered the complaint on August 27, 2007. Plaintiff
filed its first amended complaint on January 16, 2009. The court certified the class on July 7, 2009. Plaintiffs
filed a partial motion for summary judgment, which is pending. The court’s order approving class notice was
issued on October 22, 2009.
Town of Mount 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. Hotels.com, et al.,
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