CINCINNATI (TDB) -- A federal magistrate recommends transferring to Toledo a lawsuit filed by Columbus and Dayton that contends several of the nation's largest online travel operators skimmed off a portion of hotel room occupancy taxes due cities across Ohio. Defendants include the major Intenet bookers, including Priceline, Travelocity, and Hotels.com. The case is a proposed class-action on behalf of all Ohio municipalities that levy bed taxes and says the e-travel operators should be forced to make restitution and pay interest.
So far, nobody has ventured an estimate about how much money is at stake, but the sum could be in the millions, the several millions. (City of Columbus et al, v. Hotels.com L.P et al; Southern District of Ohio, 2:06-cv-677.)
U.S. Magistrate Mark R. Abel of Columbus ruled Monday that the case should be sent to Toledo because the City of Findlay is already in federal court there against the e-bookers. (Findlay v. Hotels.com L.P et al; Northern District of Ohio, 3-05-cv-7443.) Abel said one of the factors for moving the case was docket congestion. He said the federal courts in Northern Ohio moved faster, with an average 9.8 months between filing and dispostion. The Southern District average was 11.6 months from start to finish.
Abel said it did not make much sense to have two cases about the same issue pending in two different courts at the same time. "Consideration of the factors, with particular attention to the interest in avoiding needless duplication of effort, suggest that transferring the case to the Northern District of Ohio is appropriate. Although none of the factors weigh heavily on one side or the other, judicial economy tips the balance in favor of the transfer,'' Abel said.
The International Travel Services Association is a trade group for the online companies and has disputed the lawsuits in Ohio and elsewhere as unfairly targeting the e-bookers. The industry contends hotels are responsible for paying room taxes.
[UPDATE: 11:55 a.m. Here are all the online travel sites named in the lawsuit: Hotels.com Inc.; Hotels.com GP, LLC; Hotwire Inc.; Cheap Tickets Inc.; Cendant Travel Distribution Services Group Inc.; Expedia Inc.; Internetwork Publishing Corp (dba Lodging.com); Lowestfare.com; Orbitz LLC; Priceline.com Inc.; Travelocity.com L.P.; Travelweb LLC; Travelnow.com Inc.]
In Ohio, cities can charge up to 3 percent. In Cuyahoga County, for example, the tax can reach 15 percent when city, county and state taxes are added together.