Orbitz 2014 Annual Report Download - page 26

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Washington D.C.: In September 2012, the Superior Court of the District of Columbia granted the District’s motion for
partial summary judgment and denied the OTCs’ motion for summary judgment, finding the companies liable for sales tax on
hotel reservations dating back to the inception of the merchant model. On December 6, 2013, the Superior Court of the District
of Columbia granted the OTCs’ motion for partial summary judgment on the calculation of sales tax, and denied the District’s
motion for partial summary judgment on the same issue. On February 21, 2014, Orbitz entered into a stipulation agreement
with the District of Columbia. On February 24, 2014 the Superior Court entered final judgment in favor of the District of
Columbia. On March 25, 2014, Orbitz paid a judgment of $3.8 million, an amount that represented the sales tax attributable to
Orbitz.com hotel reservations through 2011. This amount is subject to a refund if Orbitz prevails in its appeal. On March 12,
2014, Orbitz filed its notice of appeal, and on March 17, 2014, the District cross-appealed on the issue of whether amounts
charged to consumers as a tax recovery charge should have been included in the Supreme Court’s damage calculation. On
September 30, 2014, the District of Columbia Court of Appeals heard oral argument in this case.
Nassau County, New York: On September 10, 2014, Supreme Court of the State of New York, Appellate Division,
affirmed in part, and reversed in part the trial court’s June 2012 order. The Supreme Court affirmed the trial court’s denial of
the OTCs’ motion to dismiss for failure to exhaust administrative remedies, conversion, and unjust enrichment. The Supreme
Court reversed the court’s denial of the OTCs’ motion to dismiss Nassau County’s claim for imposition of a constructive trust,
and the trial court’s decision to certify a class of municipalities in New York.
City and County of Denver, Colorado: On February 8, 2012, the City’s appointed hearing officer issued his final
administrative decision finding the OTCs are subject to Denver’s Lodger’s Tax, and approved an assessment against Orbitz in
the amount of $0.6 million. On February 13, 2012, the OTCs filed their notice of intent to appeal the hearing officer’s final
administrative decision. On March 30, 2012, the City filed a motion to dismiss the first claim for relief of the OTCs complaint.
On July 26, 2012, the District Court denied the City’s motion to dismiss. On October 2, 2012, the OTCs filed their brief
supporting their claim for relief. On March 12, 2013, the District Court, Denver, Colorado affirmed in part and reversed in part
the Hearing Officer’s February 8, 2012 ruling. The District Court found the Hearing Office did not abuse his discretion in
finding that the OTCs fall within the scope of the Lodging Tax statute; however, the District Court found the three year statute
of limitations period applied to Denver’s assessments. On April 26, 2013, the OTCs appealed. On May 10, 2013, the City filed
its notice of appeal regarding the District Court’s ruling that the three year statute of limitations period applied to Denver’s
assessments. On July 3, 2014, the Colorado Court of Appeals reversed in part the District Court’s decision and vacated all tax
assessments against the OTCs. On August 14, 2014, the City and County of Denver filed a Petition for Writ of Certiorari to the
Colorado Supreme Court. The petition has been fully briefed.
The following legal proceedings relating to hotel occupancy taxes we previously reported were concluded since
October 1, 2014:
North Carolina consolidated: On August 19, 2014, the North Carolina Court of Appeals affirmed the trial court’s
decision in favor of the OTCs. On December 19, 2014, the North Carolina Supreme Court denied the Counties’ petition for
discretionary review.
In addition to the current litigation, the following taxing authorities have issued assessments that are subject to further
review by the taxing authorities: the Colorado Department of Revenue; the City of Aurora, Colorado; the Maryland
Comptroller; the Texas Comptroller; the City of Portland, Oregon, and Multnomah County, Oregon; and Lake County, Indiana.
These assessments collectively total approximately $9.67 million.
Consumer Class Actions
On-Line Travel Company Hotel Booking Antitrust Litigation: On August 20, 2012, a putative consumer class action
was filed in the United States District Court for the Northern District of California against certain hotel chains and the major
OTCs, including Orbitz. The complaint alleged that the hotel chains and several major OTCs, including Orbitz, violated the
antitrust and consumer protection laws by entering into agreements in which OTCs agree not to facilitate the reservation of
hotel rooms at prices that are less than what the hotel chain offers on its own website. Following the filing of the initial
complaint, several dozen additional putative consumer class action complaints were filed in federal courts across the
country. On December 11, 2012, the Judicial Panel on Multidistrict Litigation issued an order consolidating these cases in the
United States District Court for the Northern District of Texas. On May 1, 2013, the plaintiffs filed a consolidated amended
complaint. On July 1, 2013, the defendants moved to dismiss the Complaint. On December 17, 2013, the District Court heard
oral argument on Defendants’ motion to dismiss. On February 16, 2014, the District Court granted the Defendants’ motion to
dismiss on all claims without prejudice. On October 27, 2014, the District Court denied Plaintiffs leave to amend their
complaint. Plaintiffs did not file a notice of appeal, thereby officially ending the case.