Expedia 2015 Annual Report Download - page 38

lacked jurisdiction and re-filed in state court. County of Nassau v. Expedia, Inc., et al., (In the Supreme Court of
the State of New York, County of Nassau). The defendants filed a motion to dismiss the refilled state court case.
On June 13, 2012, the court denied the online travel companies’ motion to dismiss. On November 27, 2012,
plaintiff filed a motion for class certification. On April 11, 2013, the court granted plaintiff’s motion for class
certification. The online travel company defendants appealed both the court’s certification order and its prior
order denying their motion to dismiss. On September 10, 2014, the New York Supreme Court Appellate Division
reversed the trial court’s order granting the plaintiff’s motion for class certification. In a separate opinion, the
Appellate Division also affirmed in part and reversed in part the trial court’s denial of the online travel
companies’ motion to dismiss. On October 20, 2014, the online travel companies filed a motion for leave to
appeal the Appellate Division’s denial of their motion to dismiss. The plaintiff filed a motion for reargument or
for leave to appeal the Appellate Division’s reversal of the trial court’s certification order. These motions were
denied on February 10, 2015. On April 6, 2015, plaintiff filed a motion for leave to renew in the Appellate
Division, seeking either affirmance of the trial court’s certification decision or leave to appeal the reversal of
certification to the New York Court of Appeals, which the Appellate Division denied on June 1, 2015.
Thereafter, the parties filed cross motions for summary judgment, and on September 25, 2015, Erie County,
Orange County, Rensselaer County and Saratoga County, New York filed a motion seeking leave to intervene as
plaintiffs in the lawsuit; the defendant online travel companies have opposed the motion. Oral argument on the
intervention motion was heard for February 3, 2016. A decision by the court is pending.
City and County of San Francisco, California Litigation. On May 13, 2008, San Francisco instituted an
audit of a number of online travel companies, including certain Expedia companies, for hotel occupancy taxes
claimed to be due from 2000 through the third quarter of 2007. The city completed its audit and issued
assessments against the online travel companies. The online travel companies challenged those assessments
through an administrative process. The hearings examiner upheld that assessments. On May 9, 2009, the online
travel companies, including the Expedia companies, filed a petition for writ of mandate in the California Superior
Court seeking to vacate the decision of the hearing examiner and asking for declaratory relief that the online
travel companies are not subject to San Francisco’s hotel occupancy tax. Expedia, Inc. v. City and County of San
Francisco, et. al.; Hotels.com, Inc. v. City and County of San Francisco, et. al.; Hotwire, Inc. v. City and County
of San Francisco, et. al., (Superior Court of the State of California, County of San Francisco). On June 19, 2009,
the court granted the city’s demurrer on the “pay first” issue relating to pay-to-play provisions. Expedia and
Hotwire’s appeal of the “pay first” decision was denied, as was Hotels.com’s appeal. The total assessed amount
paid by the Expedia, Hotels.com and Hotwire was approximately $48 million. On February 6, 2013, the court
held that the online travel companies are not liable to remit hotel occupancy taxes to San Francisco. On
October 10, 2013, the court entered judgment in favor of the online travel companies. On December 9, 2013, San
Francisco filed a notice of appeal. San Francisco also has issued additional tax assessments against these Expedia
companies in the amount of $2 million for the time period from the fourth quarter of 2007 through the fourth
quarter of 2011. On May 14, 2014, the court held that the online travel companies were required to prepay in
order to litigate the legality of the assessments. On May 26, 2014, these Expedia companies paid $25.5 million
under protest in order to contest the additional assessments. In addition, Orbitz has paid in total $4.6 million to
the city of San Francisco in prepayment of taxes to contest these assessments issued against it by the city. 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 certain Expedia
companies. 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 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.
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