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Expedia Litigation

Date Filed: August 31, 2005

Court: Superior Court

Location: Washington

Ticker Symbol: EXPE

In 2005, HBSS filed a class-action lawsuit on behalf of Expedia customers claiming the online travel booking site paid taxes based on the wholesale price of hotel rooms, but collected taxes from customers based on the higher retail price, pocketing the difference.

Through discovery, the firm found that the scheme went further, involving the addition of a 'service fee' to each transaction, claiming to cover the company's expenses incurred in servicing a reservation. Plaintiffs claim Expedia charged excessive fees under false pretenses in millions of hotel transactions, lumping the additional charges under 'service fees' during the booking process.

According to court documents, Expedia bundled the service-fee charges with taxes into a single line item, failing to disclose the separate amounts of each to consumers.

The filed suit seeks to represent all customers who purchased a hotel reservation on Expedia.com from Jan. 10, 2001 through June 11, 2008.

To view a copy of the filed complaint, please click here.

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RECENT DEVELOPMENTS:
June 1, 2009 - A King County judge ruled in favor of consumers, ordering Expedia to pay $184 million for repeatedly breaching its contractual obligations to consumers by charging service fees under false pretenses.

The judgment is the largest in Washington state history for a consumer class action.

The Judge ruled that Expedia collected a total of $184,470,452 in service fees, which she is ordering the company return to consumers who purchased hotel or travel packages including a hotel stay from Feb. 18, 2003 to Dec. 11, 2006.

To view the court's ruling, please click here.

Expedia must still defend itself under charges of violating Washington's Consumer Protection Act. Trial is set for July.

Class Members: Please note that this summary judgment ruling is a very positive development for the case, but there are a number of legal and procedural issues ahead of us. We are headed to trial on July 27 on the Consumer Protection Act claim, and until the trial is resolved, the summary judgment ruling will not be a final order. Once the trial has concluded, Expedia has the right to appeal from the summary judgment ruling, as well as any judgment against it after trial. Until the case concludes, Expedia will not be required to make any payments to class members, so there are no funds available from this ruling for distribution to class members. If Expedia were to win its appeal, that might mean that Expedia will never be required to make any payments to class members. In any event, it will be many months before this case is concluded. Check this site for updates.