Expedia to appeal $184.5m fee ruling

June 02, 2009|Bloomberg News

NEW YORK - Expedia Inc., the online travel agency, said it will appeal a judge's order to pay $184.5 million in a case in which it was accused of inflating tax charges on hotel bookings and adding extra service fees.

Expedia received the order from Washington state court in Seattle on Friday, the company said yesterday in a regulatory filing.

"Because we believe that the court's decision is inconsistent with both the facts and the law, we will vigorously pursue our rights on appeal," Bellevue, Wash.-based Expedia said in the filing.

Expedia was accused in the 2005 lawsuit filed on behalf of customers of paying taxes based on wholesale prices while calculating fees using higher retail prices and pocketing the difference, according to a statement from Hagens Berman Sobol Shapiro LLP, the Seattle-based law firm that represented the consumers.

The travel service also added extra service fees that were pure profit and weren't used to cover costs, which went against the terms of service, according to the statement.

"Because Expedia only remits taxes based on the wholesale price - which it never disclosed to consumers - the taxes appear higher to consumers than they actually are," Andrew Volk, a Hagens Berman partner, said in the statement.

The damages award is the largest in Washington state for a consumer class action, or group lawsuit, according to the statement.