Expedia 2010 Annual Report Download - page 30

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.
City of San Diego v. Hotels.com, L.P. et al., Judicial Council Coordination Proceeding No. 4472 (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 asserts 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. 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 the named 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 online travel companies
appealed, and following further administrative hearings during the week of January 11, 2010, the hearing officer
held that the online travel companies are liable for hotel accommodations taxes, including assessments totaling
$16.5 million for the Expedia companies. The online travel companies filed a petition for writ of mandate and
cross-complaint in August 2010. This case is coordinated with the Anaheim, San Francisco, Santa Monica and
Los Angeles lawsuits.
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. 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 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. Plaintiff’s motion for summary judgment was denied on January 20, 2011.
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. 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 asserts 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. Plaintiff’s first amended complaint was filed on October 23,
2009. On July 22, 2010, the court ruled on the parties’ cross-motions for summary judgment and held that online
travel companies are not innkeepers required to collect and remit taxes under the Atlanta ordinance. The court
also issued an injunction requiring the payment of taxes in the future on the grounds that the online travel
companies are third-party tax collectors. Both parties have appealed.
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. 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 asserts 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. The parties executed a settlement agreement in October 2010 and the case has been dismissed.
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. 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 asserts claims for
violation of that ordinance, common-law conversion, and declaratory judgment. The complaint seeks damages in
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