Expedia 2014 Annual Report Download - page 38

amount of $24 million for the time period from the fourth quarter of 2007 through the fourth quarter of 2011. On
May 14, 2014, the court heard oral argument on the Expedia companies’ contest of the prepayment requirement
for the additional assessments and held that the Expedia companies were required to prepay in order to litigate
the legality of the assessments. On May 26, 2014, the Expedia companies paid $25.5 million under protest in
order to contest the additional assessments. The California Court of Appeals has stayed this case pending the
California Supreme Court’s decision in the City of San Diego, California Litigation.
Pine Bluff, Arkansas Litigation. On September 25, 2009, Pine Bluff Advertising and Promotion Commission
and Jefferson County filed a class action against a number of online travel companies, including Expedia, Inc.,
Hotels.com, and Hotwire. Pine Bluff Advertising and Promotion Commission, Jefferson County, Arkansas, and
others similarly situated v. Hotels.com LP, et. al. CV-2009-946-5 (In the Circuit Court of Jefferson, Arkansas).
The complaint alleges that defendants have failed to collect and/or pay taxes under hotel tax occupancy
ordinances. The trial court denied defendants’ motion to dismiss. Plaintiffs filed a motion for class certification,
which was granted on February 19, 2013. Defendants appealed the class certification decision, and on
October 10, 2013 the Arkansas Supreme Court affirmed that decision.
Leon County, Florida et. al. Litigation. On November 3, 2009, Leon County and a number of other counties
in Florida filed an action against a number of online travel companies, including Expedia, Inc., Hotels.com and
Hotwire. Leon County, et. al. v. Expedia, Inc., et. al. Case No: 2009CA4319 (Circuit Court of the Second Judicial
Circuit, Leon County, Florida). The complaint alleges that defendants have failed to collect and/or pay taxes
under the county’s tourist development tax ordinances. Flagler, Alachua, Nassau, Okaloosa, Seminole, Pasco,
Pinellas, Hillsborough, Lee, Charlotte, Escambia, Manatee, Saint Johns, Polk, Walton and Wakulla counties were
added as plaintiffs. On April 19, 2012, the court granted the defendant online travel companies’ motion for
summary judgment, denied the plaintiffs’ motion and held that online travel companies have no obligation to
remit hotel occupancy taxes. On February 23, 2013, the court of appeals affirmed the trial court decision in the
Leon County, Florida litigation that online travel companies are not liable for hotel occupancy taxes. Thereafter,
on April 16, 2013, the court of appeals denied the counties’ request for rehearing en banc, but granted its petition
for certification to the Florida Supreme Court. On September 10, 2013, the Florida Supreme Court informed the
parties that it would review the decision of the court of appeals. The appeal remains pending before the Florida
Supreme Court. Oral argument before the Florida Supreme Court took place on April 30, 2014.
Leon County v. Expedia, Inc., Florida Department of Revenue Litigation, et al. Litigation. On December 14,
2009, Leon County filed an action against a number of online travel companies and the State of Florida
Department of Revenue for recovery of state taxes for hotel occupancy. Leon County v. Expedia, Inc., et al., Case
No. 2009CA4882 (Circuit Court of the Second Judicial Circuit, Leon County, Florida). Leon County has sued the
online travel companies and the Florida State Department of Revenue for failure to collect state hotel occupancy
taxes. The court denied defendants’ motion to dismiss. On December 21, 2011, the Florida Department of
Revenue filed a motion for summary judgment. The online travel companies also moved for summary judgment.
On September 19, 2012, the court granted the online travel companies and the Florida Department of Revenue’s
motions for summary judgment dismissing all claims in the case on the basis that Leon County does not have the
right to seek recovery of state sales taxes. On August 16, 2013, the court of appeals affirmed the trial court’s
dismissal of all claims on the basis that Leon County does not have the right to seek recovery of state taxes for
hotel occupancy. On October 9, 2013, plaintiff’s motion for rehearing en banc, for certified question of great
public importance and for written opinion was denied. On October 21, 2013, plaintiffs filed a petition to invoke
discretionary review of the Florida Supreme Court. On December 31, 2013, the Florida Supreme Court stayed
this case pending review and decision in the Leon County, Florida et. al. Litigation.
State of Montana Litigation. On November 8, 2010, the state of Montana filed suit against a number of
online travel companies, including Hotels.com, Expedia and Hotwire. State of Montana Department of Revenue
v. Priceline.com, Inc., et al. Case No. CD-2010-1056 (Montana First Judicial District, Lewis and Clark County).
The complaint includes claims for declaratory relief, injunctive relief, violation of the Lodging Facility Use Tax
Statute, violation of the Lodging Facility Sales and Use Tax Statute, violation of the Rental Vehicle Sales and
Use Tax, conversion, unjust enrichment, imposition of a constructive trust, and damages. The complaint seeks
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