SAN

ANTONIO – A San Antonio federal judge has issued findings of fact and

conclusions of law following the nation’s first jury verdict against

online travel companies over

unpaid hotel occupancy taxes.

Judge

Orlando Garcia of the U.S. District Court for the Western District of

Texas in San Antonio presided over the trial won by the City of San

Antonio and 172 additional Texas

cities. Jurors in the 2009 trial awarded the cities almost $20 million

against a group of 11 defendants, including Expedia.com, Hotels.com,

Hotwire.com, Priceline.com, Travelocity.com, Orbitz.com, and others.

The City of San Antonio and the other Texas cities were represented by attorneys from

McKool Smith, including lead counsel

Gary Cruciani and

Steven Wolens, fellow firm principals

Tom Graves and

Rosemary Snider, and firm associate

Michael Fritz. Co-counsel for the cities included San

Antonio attorneys Frank Herrera and Trey Martinez Fischer, and the Dallas law firms Baron & Budd and Diamond McCarthy.

In the

findings issued July 1, 2011, Judge Garcia held that the defendant

companies are obligated under the cities’ hotel tax ordinances to

collect and pay hotel occupancy

taxes on the total amount that hotel guests pay for rooms. Contrary to

this requirement, the online travel companies have remitted taxes on the

lower “wholesale” rate that they pay hotels for the right to sell rooms

rather than the higher “retail” rate that

online travel companies charge hotel guests. As a result of this

practice, the court found that “virtually every transaction resulted in

underpayment of the hotel occupancy tax.”

In

addition to affirming the jury’s award of almost $20 million in actual

damages through the date of trial, Judge Garcia also found that the

cities were entitled to additional

actual damages that have continued to accrue since the 2009 verdict,

plus penalties and interest. The court also ordered that the online

travel companies must devise a system within six months from the date a

judgment is entered in order to report the amount

of hotel occupancy taxes that are paid to individual cities in the

future.

McKool

Smith also represents multiple cities and state and local governments

outside Texas in similar claims, including the California cities of San

Francisco, San Diego, and

Anaheim, and the Florida counties of Broward and Osceola, among others.

With

more than 130 litigators working as an integrated team across offices in

New York, Washington, D.C. and Texas, McKool Smith has established a

reputation as one of America’s

leading trial firms. The firm has been recognized by The National Law Journal and

VerdictSearchfor winning more Top 100 verdicts than any other

U.S. law firm during the past three years. McKool Smith represents

leading clients across a broad range of practice areas, including

complex commercial litigation, intellectual property,

bankruptcy, and white collar defense.

For more information on the ruling, contact Bruce Vincent at 800-559-4534 or

bruce@androvett.com.

Texas cities included in the ruling:

Abilene
Addison
Alice
Alvin
Amarillo
Angleton
Aransas Pass
Argyle
Austin
Azle
Balch Springs
Baytown
Beaumont
Bedford
Bellville
Benbrook
Big Spring
Boerne
Borger
Brenham
Bridge City
Bridgeport
Bryan
Burkburnett
Burleson
Canyon
Carrollton
Castroville
Cedar Hill
Cedar Park
Cleburne
Cleveland
Coleman
College Station
Colleyville
Columbus
Commerce
Conroe
Coppell
Copperas Cove
Corpus Christi
Corsicana
Dallas
Decatur
Deer Park
Denton
DeSoto
Dickinson
Duncanville
Eagle Pass
Edinburg
El Paso
Euless
Fairview
Farmers Branch
Flatonia
Flower Mound
Forest Hill
Forney
Fort Stockton
Fort Worth
Fredericksburg
Friona
Frisco
Gainesville
Garland
Georgetown
Gonzales
Grand Prairie
Granbury
Grapevine
Greenville
Groves
Haltom City
Harker Heights
Haslet
Hedwig Village
Henrietta
Hidalgo
Hillsboro
Humble
Hurst
Ingleside
Irving
Jersey Village
Junction
Kaufman
Kerrville
Kilgore
Killeen
La Feria
La Marque
La Porte
Lacy-Lakeview
Lake Dallas
Lake Jackson
Lancaster
Laredo
League City
Lewisville
Lockhart
Longview
Lorena
Lubbock
Mansfield
Marble Falls
Marshall
McAllen
McKinney
Mesquite
Mexia
Midland
Mission
Mount Pleasant
Muleshoe
Nacogdoches
Nassau Bay
New Braunfels
North Richland Hills
Odessa
Palestine
Pasadena
Pearland
Pharr
Port Aransas
Port Arthur
Red Oak
Richardson
River Oaks
Rockport
Rockwall
Rosenberg
Round Rock
Rowlett
Saginaw
San Angelo
San Antonio
San Marcos
Sanger
Santa Fe
Schertz
Seabrook
Sealy
Seguin
Selma
Shenandoah
Sherman
Sonora
South Houston
Stafford
Stephenville
Sugar Land
Temple

Terrell
Texarkana
Texas City
Tomball
Tyler
Universal City
Victoria
Vidor
Waco
Weatherford
Webster
Weimar
Westlake
Wharton
White Settlement
Whitney
Wichita Falls
Winnsboro
Wolfforth
Wylie