Hotel Operators Join Expedia ‘Bait And Switch’ Class Action Lawsuit

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Two hotel operators have joined forces in a false advertising class action lawsuit against the travel booking website Expedia.

The hotel operators claim that defendant Expedia Inc. and several of its affiliated travel booking websites have been unlawfully luring hotel customers by using a “bait and switch” tactic.

According to the hotels’ consolidated class action complaint, Expedia draws in potential customers using advertisements of bargains at the plaintiffs’ hotels – even though the plaintiffs have no arrangement with Expedia to offer such deals. Expedia then diverts these lured-in customers to offers by its own affiliated hotels, the plaintiffs claim.

Despite Expedia’s alleged advertisement of the plaintiffs’ hotels, they claim they have no business relationship with Expedia at all. The hotels say they do not reveal their vacancies to Expedia and that they do not accept reservations through Expedia.

The plaintiffs point out that Expedia was fined €367,000 in 2011 when members of a French hotel and restaurant association accused the company of falsely advertising reduced rates at their hotels and of showing their available hotel rooms as being booked.

Plaintiff Buckeye Tree Lodge and Sequoia Village Inn LLC began this false advertising class action lawsuit in August 2016. Buckeye alleged Expedia falsely told its customers that no rooms were available at Buckeye hotels and instead suggested reservations at competitor hotels.

Buckeye’s claims were narrowed down in January of this year by U.S. District Judge Vince Chhabria. The judge dismissed Buckeye’s claims for unjust enrichment as well as intentional and negligent interference with prospective economic advantage, but allowed Buckeye to amend its pleadings to cure the defects in those claims.

The judge allowed Buckeye to proceed on its claims under the Lanham Act and the California Business and Professions Code.

In March, Judge Chhabria consolidated Buckeye’s claims with similar claims by co-plaintiff 2020 O Street Corporation Inc., which runs The Mansion on O Street in Washington, D.C.

Buckeye and 2020 O Street are now seeking to represent a plaintiff Class that would cover all hotels and similar services whose names appeared on Hotels.com, Expedia.com or Orbitz.com, and who did not have a booking agreement with the defendants.

The Class would also include hotels who did have a booking agreement with the defendants to sell a limited number of rooms and whose names continued to appear on the defendants’ websites even after the specified number of rooms were sold.

The plaintiffs are asking the court to award damages, disgorgement of profits related to the alleged false advertisement, court costs and attorneys’ fees, and any other relief the court deems proper.

The hotel operators are represented by attorneys Allison H. Goddard, James R. Patterson and Elizabeth A. Mitchell of Patterson Law Group, Pierce Gore of Pratt & Associates, Charles J. LaDuca, Joel Davidow and Alexandra C. Warren of Cuneo Gilbert & LaDuca LLP, and Tony C. Richa of Richa Law Group PC.

The Expedia Hotel Booking Class Action Lawsuit is Buckeye Tree Lodge and Sequoia Village Inn LLC, et al. v. Expedia Inc., et al., Case No. 3:16-cv-04721, in the U.S. District Court for the Northern District of California.

UPDATE: On Oct. 11, 2017, a federal judge summarily did away with defendant Expedia Inc.’s attempt to limit the claims it’s facing, concluding that “[i]t’s not even a close question” whether the hotel plaintiffs have adequately pled their claims. Therefore, the Expedia hotel booking class action lawsuit will continue.

UPDATE 2: On Feb. 22, 2018, two hotels have filed a motion to certify a class action lawsuit accusing Expedia Inc., Hotels.com GP LLC and Orbitz LLC of engaging in a “classic bait and switch marketing scheme” by redirecting consumers to book reservations at hotels that are unaffiliated with the travel-booking sites, but which provide the companies with a cut of the booking.

UPDATE 3: On March 13, 2019, a federal judge partially certified a Class of hotel businesses that were allegedly harmed by Expedia redirecting customers to hotels that provide a cut of the booking to the travel reservation giant.