Expedia 2012 Annual Report Download - page 34

as claims of unjust enrichment, restitution, constructive trust, accounting and disgorgement and breach of
contract. It seeks damages in the amount of CA$50 million for the class as well as interest, fees and alternate
damages measures. On September 24, 2010, the court added Expedia, Inc. as a defendant and dismissed many of
the plaintiff’s claims with leave to amend. The class period was also limited. The plaintiff filed an amended
statement of claim on January 7, 2011. A class certification hearing took place from January 15-17, 2013 and the
court granted in part and denied in part plaintiff’s motion for class certification.
Consumer Cases against Hotwire. On September 12, 2012, a putative class action suit was filed in federal
district court in Connecticut against a number of credit card companies and e-commerce companies, including
Hotwire. Miller, et al. v. 1-800-Flowers.com, Inc., et al., Case No. 3:12-CV-00396-VLB (U.S. District Court,
District of Connecticut). The complaint generally alleges that the defendants failed to adequately apprise
consumers that they were providing their credit card information to Trilegiant Corporation, which offered
membership in discount or other services programs through promotions appearing on the e-commerce
defendants’ websites. The complaint asserts claims against Hotwire for violation of RICO, the Electronic
Communications Privacy Act, state consumer protection statutes and for unjust enrichment. On December 7,
2012, Hotwire filed a motion to dismiss the complaint. On December 5, 2012, a similar putative class action suit
was filed in federal district court in Connecticut against a number of credit card companies and e-commerce
companies, including Hotwire. Frank, et al. v. Trilegiant Corporation, Inc., et al., Case No. 3:12-CV-01721-SRU
(U.S. District Court, District of Connecticut).
Litigation Relating to Hotel Occupancy Taxes
Actions Filed by Individual States, Cities and Counties
City of Los Angeles Litigation. On December 30, 2004, the city of Los Angeles filed a purported class action
in California state court against a number of internet travel companies, including Hotels.com, Expedia and
Hotwire. City of Los Angeles, California, on Behalf of Itself and All Others Similarly Situated v. Hotels.com, L.P.
et al., No. BC326693 (Superior Court, Los Angeles County). The complaint alleges that the defendants are
improperly charging and/or failing to pay hotel occupancy taxes. The complaint seeks certification of a statewide
class of all California cities and counties that have enacted uniform transient occupancy-tax ordinances effective
on or after December 30, 1990. The complaint alleges violation of those ordinances, violation of Section 17200
of the California Business and Professions Code, and common-law conversion. The complaint also seeks a
declaratory judgment that the defendants are subject to hotel occupancy taxes on the hotel rate charged to
consumers and imposition of a constructive trust on all monies owed by the defendants to the government, as
well as disgorgement, restitution, interest and penalties. On July 26, 2007, the court signed an order staying the
lawsuit until the cities have exhausted their administrative remedies. The case is coordinated with the cases in
San Diego, Anaheim, Santa Monica and San Francisco. On September 9, 2009, the City of Los Angeles issued
assessments totaling $29.5 million against Expedia companies (Expedia, Hotels.com and Hotwire). An
administrative hearing challenging the assessments was held on December 3, 2009. On September 16, 2010, the
assessment review officer approved the assessments. A second level administrative review hearing was held in
December 2010. On August 16, 2011, the Board of Review entered a decision holding Hotels.com, Expedia and
Hotwire liable for hotel occupancy taxes. The city of Los Angeles’ claims will now be heard by the trial court in
the consolidated action involving claims brought by other cities in California, including Anaheim, Santa Monica,
San Diego and San Francisco. On January 17, 2013, the parties filed motions for judgment granting or denying a
writ of mandate. A hearing on those cross-motions is scheduled for April 18, 2013.
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. 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 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.
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