Please ensure Javascript is enabled for purposes of website accessibility

Lawsuit against Priceline, others withstands challenge

Baltimore City Solicitor, George A. Nilson

Baltimore County’s lawsuit against several online hotel booking companies for allegedly unpaid hotel-room occupancy taxes has survived a motion to dismiss in U.S. District Court in Baltimore.

Judge Marvin J. Garbis granted in part and denied in part the defendants’ motion to dismiss for failure to state a claim. The judge dismissed the unjust enrichment claim because the plaintiff failed to plead that it conferred a benefit on the defendant, as required under Maryland law.

The judge also dismissed all freestanding claims for relief under a state statute that is not applicable to the county.

Other claims survived, including allegations that the defendants violated the county’s transient occupancy tax code, as well as claims of conversion and imposition of a constructive trust.

The county’s case is against some of the largest online hotel booking companies, including Inc., Hotwire Inc., Expedia Inc., Orbitz Inc. and Inc.

The county’s lawsuit — like others filed by jurisdictions around the state and nationally — says the hotel booking companies must pay room taxes on the rates charged to customers, not on the lower rates they actually pay to the hotels for the rooms.

In a hypothetical situation illustrated in the suit, Priceline would pay a hotel $108 for a room for one night — $100 for the room and $8 to cover the county’s 8 percent tax — while charging the customer $220.

Baltimore County’s attorney, Michael E. Field, did not respond to a request for comment. The county’s outside attorneys in Atlanta also did not respond to a request for comment.

Defense attorney J. Steven Simms, with Simms Showers LLP in Baltimore, did not return a call for comment.

In September, Baltimore City reached a $390,000 settlement of its hotel occupancy tax lawsuit against Inc., LLC and Travelweb LLC. Its case against defendants Orbitz, Travelocity and Expedia continues.

“I like the fact that Judge Garbis is denying motions to dismiss on similar ordinances,” said Baltimore City Solicitor George A. Nilson, who said he had looked through the opinion but had not studied it thoroughly.

Baltimore County’s transient occupancy tax ordinance says, “at the time payment for a room rental is made, a person receiving payment for the room rental shall collect the amount of the transient occupancy tax from the transient on whom the tax is levied … .”

Worcester County, which contains the popular beach destination of Ocean City, settled its suit against Priceline and several other e-booking firms for $150,000 last summer. The Daily Record obtained the amount of the settlement through a Public Information Act request.

Worcester cannot bring a suit against the defendants for four years following the dismissal of the case.

Daily Record reporter Brendan Kearney contributed to this article.