Thursday, July 23, 2009

Expedia Reaches Proposed Settlement in Washington State Consumer Class-Action

Expedia Inc. reached a proposed settlement with a certified class of consumers in Washington State related to hotel taxes and service fees.

The amount of the proposed settlement was not disclosed, but in late May, Superior Court Judge Monica Benton found that $184.5 million in damages, allegedly covering "services fees" collected from Feb. 18, 2003, to Dec. 11, 2006, "based on Expedia's breach of contract is warranted."

In that earlier proceeding, Benton, hearing the case in Washington's King County, found that Expedia had breached its contract in a previous version of its Terms of Use regarding the way the online travel company collects taxes and service fees in merchant model hotel sales.

The breach finding apparently led to settlement talks.

On July 8, attorneys for the plaintiffs and Expedia signed a proposed settlement, which would satisfy remaining claims in the case.

The court is scheduled to hear a motion for preliminary approval of the settlement on Aug. 10.

The development follows procedural setbacks for Expedia, Hotwire, Priceline and Travelocity in San Francisco, where they were required to "pay first" before challenging assessments, and in Columbus, Ga. The latter two litigations, however, were brought by municipalities, and not by consumers, as was the case in the Washington State.

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