Cases & Deals

Expedia defends against litigation involving hotel occupancy tax reimbursements and fees in Georgia

Clients Expedia, Inc., L.P., GP, LLC, Hotwire, Inc. and

Jones Day represented Expedia, Inc., L.P., GP, LLC, Hotwire, Inc. and, Inc. in connection with multiple lawsuits and a class action brought by the City of Rome and others on behalf of all Georgia municipalities to recover purportedly underpaid local option sales and hotel occupancy taxes. Plaintiff class members claimed they were entitled to assess and collect occupancy tax on the compensation retained by online travel companies ("OTCs") for their services in facilitating the reservation of hotel rooms for travelers and claimed "untold millions" in alleged damages dating back to when OTCs first began operating in Georgia. Jones Day headed a team of five law firms jointly representing the OTCs. In 2011, the OTCs entered into a partial settlement agreement to pay hotel occupancy tax on their marked up room rates on a prospective basis beginning after May 16, 2011, the date the Georgia Supreme Court ruled on the appropriate tax base. On July 9, 2012, after nearly seven years of litigation, the court issued a final dispositive ruling finding that the OTCs are not subject to the hotel occupancy tax laws and are therefore not liable to any class members for any past taxes, interest, penalties, litigation expenses, or other damages relating to any transactions occurring on or before May 16, 2011. The Eleventh Circuit affirmed the ruling on December 13, 2013.

City of Rome v., No. 4:05-CV-249-HLM (N.D. Ga., Rome Div.); No. 12-14588 (11th Cir.)