Expedia 2011 Annual Report Download - page 31

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 asserts 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. The parties have filed cross-motions for summary judgment.
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 statewide class action in federal court 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 asserts 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 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 sixteen 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. The court
granted in part plaintiffs’ motion for class certification. On September 23, 2011, defendants filed a motion to
deposit funds into the court for the payment of future hotel occupancy taxes. Defendant online travel companies
have filed a motion for summary judgment.
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. On May 6, 2011, the city filed a motion for judgment denying the online travel
companies’ writ of mandate, and the online travel companies filed a motion for judgment granting writ of
mandate. On September 6, 2011, the court granted the online travel companies’ motion for judgment granting
writ of mandate, denied the city’s motion for judgment, and held that the online travel companies are not liable
for hotel occupancy taxes. 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. The parties
entered a settlement agreement on November 1, 2011.
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