Council votes to settle Expedia lawsuit for $586,000

Mowen@ledger-enquirer.comNovember 27, 2012 

Columbus Council voted tonight to approve a settlement of the city’s lawsuit against online travel websites Expedia.com and Hotels.com for approximately $586,000.

In addition to the money, the companies agree to remit the full amount of hotel occupancy taxes due to the city and to re-list local hotels on their websites, City Attorney Clifton Fay said.

The total amount of the settlement was close to $1.6 million, Fay said. The law firms Pope, McGlamry, Kilpatrick, Morrison and Norwood of Atlanta and Columbus and Bryan, Cave of Atlanta will get attorney fees of $401,000 and out-of-pocket expenses of about $600,000, Fay said.

Terms of the city’s contract with the lawyers were revealed last fall when a local hotelier and the Ledger-Enquirer sought them under the Freedom of Information Act. After being directed by Georgia Attorney General Sam Olens to release the terms, the city did, revealing an agreement to split the settlement 50-50 between the city and the lawyers.

Fay said Tuesday that the out of pocket expenses come off the top and the rest is split, adding that the city actually got better than 50-50 in that regard.

Local attorney and former state senator Seth Harp said such an agreement would not be out of the ordinary, especially on a long-running case, in which a law firm can run up a lot of bills with no guarantee that it will ever get anything. .

“We are pleased with the settlement and pleased the litigation will soon be concluded,” Fay said. “Columbus hotels will be re-listed and hotel tax will be paid pursuant to Georgia law going forward.”

The Expedia case is the second such case the city has settled with online travel sites. The city settled with Orbitz for $230,000 in 2010 and Priceline settled with the city for about $72,000 with no litigation. Those bring the city’s total in settlements to just over $888,000.

The litigation between the city and the online travel brokers began in 2006, when the city sued, claiming the companies were not remitting the proper amount of hotel occupancy taxes. Ostensibly in reaction to the lawsuits, many online brokers stopped listing Columbus hotels on their websites, costing local hoteliers business.

If travelers entered Columbus into the websites, they were directed to hotels in nearby cities instead.

Mayor Teresa Tomlinson’s husband, Trip Tomlinson, worked on the case for Pope, McGlamry, and the mayor has recused herself from discussions of the case in open council and in executive session, she said, because of the conflict of interest.

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