Lopinto v. Expedia, Inc. (WA)
| Decision Date | 23 December 2021 |
| Docket Number | 21-CA-132 |
| Citation | 335 So.3d 432 |
| Parties | Joseph P. LOPINTO, III, Sheriff and Ex-Officio Tax Collector for the Parish of Jefferson v. EXPEDIA, INC. (WA), et al. |
| Court | Court of Appeal of Louisiana — District of US |
COUNSEL FOR PLAINTIFF/APPELLANT, JOSEPH P. LOPINTO, III, SHERIFF AND EX-OFFICIO TAX COLLECTOR FOR THE PARISH OF JEFFERSON, Drew M. Talbot, Baton Rouge, Alexandria E. Seay
COUNSEL FOR DEFENDANT/APPELLEE, EXPEDIA, INC. (WA), HOTELS.COM, LP, HOTWIRE, INC., EGENCIA, LLC, TRIP NETWORK, INC., ORBITZ, LLC, INTERNETWORK PUBLISHING CORP. (D/B/A LODGING.COM), THE PRICELINE GROUP INC. (F/K/A PRICELINE.COM INCORPORATED, K/N/A BOOKING HOLDINS INC.), TRAVELWEB, LLC, AND PRICELINE.COM LLC, Edward D. Wegmann, Marjorie A. McKeithen, Matthew A. Mantle, Allison B. Kingsmill, New Orleans
COUNSEL FOR DEFENDANT/APPELLEE, TRIP NETWORK, INC., ORBITZ, LLC, INTERNETWORK PUBLISHING CORP. (D/B/A LODGING.COM), EXPEDIA, INC. (WA), HOTELS.COM LP, HOTWIRE, INC. AND EGENCIA, LLC, Winstol D. Carter, Jr., Elizabeth B. Herrington
COUNSEL FOR DEFENDANT/APPELLEE, TRAVELOCITY.COM LP (N/K/A TVL, LP) AND SITE 59.COM LLC, Kelly E. Ransom, New Orleans
COUNSEL FOR DEFENDANT/APPELLEE, THE PRICELINE GROUP INC. (F/K/A PRICELINE.COM INCORPORATED AND N/K/A BOOKING HOLDINGS INC.), TRAVELWEB LLC AND PRICELINE.COM LLC, Anne Marie Seibel, Tiffany Degruy
Panel composed of Judges Jude G. Gravois, Robert A. Chaisson, and Hans J. Liljeberg
Plaintiff/appellant, Joseph P. Lopinto, III, in his official capacity as the duly elected Sheriff of Jefferson Parish and the Ex-Officio Tax Collector for the Parish of Jefferson, appeals the trial court's September 16, 2020 judgment which granted the motion for summary judgment filed by defendants, four groups of online travel companies, and which denied the cross-motion for partial summary judgment filed by plaintiff, finding that defendants did not owe plaintiff sales and occupancy taxes on certain amounts charged by defendants to consumers to facilitate online reservations between Jefferson Parish hotels and the consumers. Plaintiff also appeals the trial court's June 12, 2019 judgment which dismissed his Louisiana Unfair Trade Practices Act claim. For the following reasons, we affirm.
On January 2, 2019, plaintiff/appellant, Joseph P. Lopinto, III, in his official capacity as the duly elected Sheriff of Jefferson Parish and the Ex-Officio Tax Collector for the Parish of Jefferson (the "Sheriff"), filed suit against defendants/appellees, four groups of online travel companies (the "OTCs")1 who facilitated online reservations for hotel rooms located in Jefferson Parish between consumers and hotels. The petition alleged that the OTCs breached their statutory obligations as "dealers" operating in Jefferson Parish to remit Jefferson Parish sales and occupancy taxes to the Sheriff that were charged to and collected from the OTCs’ customers, such taxes being due and owing to the Sheriff under relevant tax ordinances properly enacted and levied by the relevant taxing authorities within Jefferson Parish, as further described below. Specifically, the Sheriff alleged that the subject taxes were due and owing to the Sheriff "on taxable sales of services in the form of furnishing sleeping rooms to transient guests,"2 and that the OTCs were "all engaged in the business of furnishing sleeping rooms under the relevant definitions of both the sales tax and the occupancy tax." The Sheriff's suit seeks taxes from the OTCs going back almost 20 years.
The petition alleged that under what is commonly known as the "merchant model," the OTCs entered into contracts with the individual lodging places wherein the parties agreed on a "wholesale" price for the rooms and the OTCs acquired the right to display, offer, and facilitate reservations of the rooms to the public at a higher "retail" rate, with the OTCs being given broad discretion in establishing the higher "retail" rate that they ultimately charged to consumers. The petition further alleged that the OTCs did not separately disclose to the consumer (1) the "wholesale" rate the hotel charges for the room, (2) the amount retained by the OTCs from the amount collected from the consumer for its travel-related services and fees, and (3) the amount of sales and/or occupancy taxes charged to the consumer as a result of the transaction. The petition alleged that the OTCs have total control over the price they offer the lodging to the consumer, and therefore control the profit they make from their "mark-up." The petition further alleged that the OTCs "sell" rooms to the consumers, and collect payments, including sales and occupancy taxes, from the consumers at the time of booking, but do not remit the full sales and occupancy tax amounts collected directly to the Sheriff. The petition asserted that the OTCs did not maintain documentation that any amounts they collected from the consumers in sales and occupancy taxes are paid to the Sheriff, nor did the OTCs properly file regular, periodic Jefferson Parish sales and occupancy tax/returns/reports, as required by statutory law for all "dealers." The petition further asserted that the OTCs are collecting sales and occupancy taxes from consumers on the "retail" rate charged to consumers, but are not reporting and remitting those taxes to the Sheriff, thereby depriving the Sheriff and the taxing authorities in Jefferson Parish of the full amounts due and owing to them from each sale of Jefferson Parish lodging to the consumers.
The petition goes on to assert eight specific causes of action or claims for relief:
The OTCs filed answers to the petition, first of all denying that the "fees" portions of the subject transactions were taxable "sales of services" under the Uniform Local Sales Tax Code ( La. R.S. 47:337.1, et seq . ). They further denied that they were "dealers" under said Tax Code who were responsible for collecting and remitting taxes to the Sheriff. Defendants also filed exceptions of no right of action, no cause of action, and prescription, as well as affirmative defenses to the allegations in the Sheriff's petition.
Defendants also collectively filed a motion for judgment on the pleadings with supporting memorandum regarding Claims Four through Eight of the Sheriff's petition. The Sheriff filed an opposition thereto, to which the OTCs replied. The motion for judgment on the pleadings was heard on May 29, 2019. The trial court took the matter under advisement and rendered judgment thereon on June 12, 2019. The judgment granted the motion in part, dismissing Claim Four: Louisiana Unfair Trade Practices Act ("LUTPA") , Claim Five: Unjust Enrichment , and Claim Eight: Summary Determination of Damages . The judgment further denied the motion in part with respect to Claim Six: Imposition of Constructive Trust , and Claim Seven: Breach of Fiduciary Duty .
On May 27, 2020, the OTCs collectively filed a motion for summary judgment as to liability concerning the remaining claims (Claims One, Two, Three, Six, and Seven ), arguing that the "fees" collected by the OTCs for facilitating the online hotel reservations for consumers in Jefferson Parish were not taxable "sales of services" under the Uniform Local Sales Tax Code, specifically under La. R.S. 47:301(14)(a). Due to the...
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