Expedia 2010 Annual Report Download - page 35

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motion. The trial court’s ruling that the online travel companies had no obligation to pay the tax assessments
before commencing litigation was affirmed on appeal. The lawsuit is coordinated with the San Diego, San
Francisco, Santa Monica and Los Angeles matters. On February 1, 2010, the court ruled in defendants’ favor that
taxes are not due to the city of Anaheim. The city amended its complaint and the court again granted relief in
favor of the online travel companies dismissing the city’s claims. On December 16, 2010, judgment was entered
dismissing the case. The city has appealed.
City of San Francisco, California Litigation. On May 13, 2008, the city of San Francisco instituted an
audit of a number of internet travel companies, including Expedia, Hotels.com, and Hotwire, for hotel occupancy
taxes. On or before October 31, 2008, the city completed its audit and issued assessments against each of those
online travel companies. The online travel companies challenged those assessments through an administrative
appeals process and in hearings that took place during January 2009. The hearing examiner upheld the city’s
assessments. On May 11, 2009, the online travel companies filed a petition for writ of mandate in the California
superior court seeking to vacate the decision of the hearing examiner and asking for a declaratory judgment that
the online travel companies are not subject to San Francisco’s hotel occupancy tax. Expedia, Inc. v. City and
County of San Francisco, et. al.; Hotwire, Inc. v. City and County of San Francisco, et. al., (Superior Court of
the State of California, County of San Francisco). The case is coordinated with the Los Angeles, Anaheim, Santa
Monica and San Diego lawsuits. On June 19, 2009, the court granted the city’s demurrer on the “pay first” issue
relating to pay-to-play provisions. Expedia and Hotwire’s appeal of the “pay first” decision was denied and
Expedia and Hotwire paid the assessed amounts on July 13, 2009. A hearing on the Hotels.com assessment
appeal was held on August 12, 2009. Hotels.com paid the assessed amount on November 30, 2009. The total
assessed amount paid by the Expedia companies was approximately $48 million. The court has denied the city’s
demurrer to the defendants’ petitions.
City of Jacksonville, Florida Litigation. On July 28, 2006, the city of Jacksonville, Florida filed a putative
class action in state court against a number of internet travel companies, including Expedia, Hotels.com, and
Hotwire. The lawsuit was dismissed for failure to exhaust administrative remedies. In February 2009, the court
gave leave for plaintiffs to refile its complaint. Plaintiffs’ amended complaint was filed on March 10, 2009. City
of Jacksonville v. Hotels.com LP, et. al., 2006-CA-005393-XXXX-MA, CV-B (Circuit Court, Fourth Judicial
Circuit, Duval County, Florida). The complaint alleges that the defendants have failed to pay to the city the
tourist and convention development taxes as required by state and municipal ordinance. The complaint seeks
damages in an unspecified amount. The city did not opt out of the Monroe County Florida class action and this
case was settled on January 6, 2011, as part of the final approval of the settlement of the Monroe County case.
City of Bowling Green, Kentucky Litigation. On March 10, 2009, the city of Bowling Green, Kentucky
filed an individual action against a number of internet travel companies, including Expedia, Inc., Hotels.com and
Hotwire. City of Bowling Green, Kentucky v. Hotels.com, L.P., et. al., Civil Action 09-CI-409, Commonwealth of
Kentucky, Warren Circuit Court. The complaint alleges that the defendants have failed to pay transient room
taxes as required by municipal ordinance. On April 8, 2010, defendants’ motion to dismiss was granted. The city
has appealed.
County of Genesee, County of Calhoun, County of Ingham and County of Saginaw, Michigan
Litigation. On February 24, 2009, four Michigan Counties (Genesee, Calhoun, Ingham and Saginaw) filed an
individual action against a number of internet travel companies, including Expedia, Inc., Hotels.com and
TravelNow.com, Inc. County of Genesee, Michigan v. Hotels.com, L.P., et. al., 09-265-CZ (Circuit Court for the
County of Ingham, Michigan). The complaint alleges that the defendants have failed to pay hotel accommodation
taxes as required by county ordinance. Defendants filed a motion for summary disposition on June 29, 2009. On
August 21, 2009, the court denied defendants’ motion for summary disposition. On September 9, 2010, plaintiffs
filed a motion for summary judgment.
St. Louis County, Missouri Litigation. On July 6, 2009, St. Louis County, Missouri filed an action against
a number of online travel companies, including Expedia, Hotels.com, Hotwire, and TravelNow.com, Inc. St.
Louis County, Missouri v. Prestige Travel, Inc., et. al., Case No. 09SL-CC02912 (21st Judicial Circuit Court, St.
Louis County, Missouri). The complaint alleges that the defendants have failed to
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