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U.S. District Court Judge Approves Class-Action Status in
OTA Lawsuit Affecting 59 Counties in Florida

By Ryan McCarthy, Florida Keys Keynoter, MarathonMcClatchy-Tribune Regional News

Mar. 21, 2010--Monroe County won a significant skirmish this week in its fight to recover more than $12 million worth of bed-tax dollars it claims it's owed from online travel companies.

U.S. District Court Judge Michael Moore has granted class-action status to the county's 2009 lawsuit alleging popular travel Web sites Expedia, Orbitz and Priceline, among others, are illegally pocketing Keys tax dollars. Chief Assistant County Attorney Bob Shillinger informed the County Commission Wednesday.

"The proposed class will be the 59 counties in Florida who've adopted a tourist development tax," Shillinger told the Keynoter. "The online travel companies have been aggressively defending these and it gives us much greater leverage because we're talking about potentially every county in Florida. The stakes are much higher for them."

The crux of the county's suit is the difference in tax dollars generated when online travel companies buy rooms at wholesale rates and re-sell them to Internet patrons at higher prices. They then pocket the difference in bed-tax dollars.

Tourist Development Council Director Harold Wheeler said he provided information to the county indicating the travel companies have skimmed more than $12 million since 1999.

"It was based on our visitor profile study that showed 37 percent of lodging reservations were made through the online sites. And then we looked at our average daily rate during that time period. The online sites get a markup of about 30 percent," he said.

A big addition to the suit would be Miami-Dade County, which is in the midst of a similar lawsuit of its own with the travel companies.

"We've already had preliminary discussions with Miami-Dade and they're thinking about [joining the] suit. They've already been stymied in their litigation," Shillinger said.

The travel companies have the right to appeal Moore's decision to award class action, but a trial date is already set for July 19 at the Freeman Justice Center in Key West.

Wheeler told the Keynoter a class-action suit is the best way to go about curtailing the travel companies' practices.

"That's the way I think you have to go to make this work. I'm concerned about the approaches the online agencies have used. In one case in Columbus, Ga., they have refused to promote those lodging companies filing suit against them," he said.

Shillinger urged commission members on Wednesday to contact peers in other counties to encourage them to join the lawsuit, the thinking being that there is strength in numbers.

"The next step is our lawyers will put together some class notification notices. We'll send them out and they have the right to opt out. There's already about 10 or 12 counties that are in litigation right now," he said.

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To see more of the Keynoter, or to subscribe to the newspaper, go to http://www.keysnet.com.

Copyright (c) 2010, Florida Keys Keynoter, Marathon

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