Expedia 2012 Annual Report Download - page 36

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 appealed. On May 16, 2011, the Georgia Supreme Court
affirmed the trial court decision. The case is proceeding on the city’s conversion claim and amended complaint
seeking back taxes. The other online travel company defendants in the case have filed a petition for mandamus
against the trial court judge on the grounds that the Georgia Supreme Court decision ended the litigation and
further proceedings are not appropriate. The online travel companies have filed a motion for summary judgment
to dispose of the remaining claims in the case.
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
an unspecified amount, restitution and disgorgement. On October 30, 2009, a jury verdict was entered finding
that defendant online travel companies “control hotels,” and awarding approximately $15 million for historical
damages against the Expedia companies. 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. On
July 1, 2011, the court entered findings of fact and conclusions of law holding defendant online travel companies
liable for hotel occupancy taxes. The parties filed cross motions to amend the court’s findings of fact and
conclusions of law. On January 16, 2013, the court denied the defendants’ motion to amend. On January 17,
2013, the court denied the cities’ motion to add and amend findings of fact and conclusions of law regarding the
calculation of penalties. On January 29, 2013, the court issued amended findings of fact and conclusions of law.
We anticipate a final judgment and final damages award in early 2013.
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. 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 asserts 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. Plaintiff filed its first amended complaint on January 16, 2009. The court certified the class on July 7,
2009. On March 1, 2010, the court denied the city’s motion for summary judgment and held that the online travel
companies do not have tax obligations under the city’s ordinance and that defendants have not collected taxes
that have not been remitted. On February 18, 2011, defendants filed a motion for summary judgment.
Columbus, Georgia Litigation. On May 30, 2006, the city of Columbus, Georgia filed suit against Expedia,
Inc. in state court and on June 7, 2006 filed suit against Hotels.com in state court. Columbus, Georgia v.
Hotels.com, Inc., et al., SU-06-CV-1893-8 (Superior Curt of Muscogee County); Columbus, Georgia v. Expedia,
Inc, SU-06-CV-1794-7 (Superior Court of Muscogee County). The complaints allege that the defendants have
failed to pay the city hotel accommodations taxes as required by municipal ordinance. The complaints assert
claims for violation of that ordinance, unjust enrichment, imposition of a constructive trust, equitable accounting,
and declaratory judgment, and seek damages in an unspecified amount, restitution and disgorgement. On
September 22, 2008, the court issued an injunction requiring Expedia and Hotels.com to collect and remit taxes
on services on an ongoing basis. Expedia and Hotels.com subsequently paid approximately $110,000 in
outstanding past tax amounts demanded by the city and ceased to list Columbus, Georgia hotels on their
websites. In June 2010, the parties filed cross-motions for summary judgment. Plaintiff also filed a motion to
require Expedia and Hotels.com to again list Columbus, Georgia hotels on their sites. On January 28, 2011, the
court granted the city’s motion for summary judgment and denied Expedia’s motion for summary judgment. On
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