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Wash. Superior Court Orders Expedia To Pay $185M

The Associated Press

NEW YORK (AP) — Expedia Inc. said Monday it plans to appeal a Washington state Superior Court summary judgment ordering the online travel agency to pay $184.5 million in damages for breaching its contract with consumers.

The plaintiffs alleged Expedia charged service fees under false pretenses in violation of its "Terms of Use" agreement with consumers. The lawsuit was filed in 2005 on behalf of Expedia customers by a Seattle law firm and applies to transactions on Expedia.com from Feb. 2003 through Dec. 2006.

In the summary judgment ruling last week, King County Superior Court judge Monica J. Benton agreed with the plaintiffs that Expedia charged service fees to add to its profit, as well as to defray its costs.

"We believe that the court's decision is wrong on the law and wrong on the facts," Expedia said in a statement. "Expedia.com charged its customers a service fee for certain transactions during (the Feb. 2003 to Dec. 2006 period that) was fully disclosed to each customer before a booking was completed, and we are confident that we have fulfilled all applicable obligations to our customers."

The company said it will pursue an appeal.

Bellevue, Wash.-based Expedia noted that the summary judgment order is not yet a final judgment. Upon final judgment, the company will be ordered to post a bond or another security for the full amount or a smaller amount agreed to by the plaintiffs.

Benton denied the plaintiffs' motion for a summary judgment ruling on claims that the company violated the Washington Consumer Protection Act; Expedia will defend those charges in a trial.

Expedia shares closed Monday up 7 cents to $17.38.