Expedia 2013 Annual Report Download - page 36

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
online 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 counties 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 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 July 9, 2012, the court held that past taxes are not due to counties and cities in
the State of Georgia. Based on prior Georgia Supreme Court precedent, the parties entered a settlement for
remittance of taxes going forward, and on August 16, 2012 the court approved the settlement. On December 13,
2013, the Eleventh Circuit Court of Appeals ruled in favor of the online travel companies and upheld the trial
court ruling that back taxes are not due. On January 3, 2013, plaintiffs filed a Petition for Rehearing and Petition
for Rehearing en Banc.
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 online 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. 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. The city has appealed.
City of Atlanta, Georgia Litigation. On March 29, 2006, the city of Atlanta, Georgia filed suit against a
number of online 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. In addition,
the court issued an injunction requiring the payment of taxes going forward 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. On September 30, 2013, the court granted summary judgment in favor of the
online travel companies on the city’s remaining common law claims for recovery of taxes, and maintained its
ruling that online travel companies are not liable for past occupancy taxes. On November 25, 2013, the city filed
a notice of appeal.
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 online 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
30