Expedia Reaches Settlement with Hotels After Falsely Claiming Hotels Were ‘Unavailable’

On Friday, Judge Vince Chhabria of the Northern District of California issued an amended order approving the motion for attorney’s fees and the class-action settlement, thus ensuring that Expedia and its affiliates will no longer falsely advertise non-partnering or unaffiliated hotels as “sold out” or “unavailable” on its website and platform.

Previously, Buckeye Tree Lodge and Sequoia Village Inn sued Expedia in 2016 over claims that the online travel booking company used deceptive online ads targeting customers who searched for hotels that were not available on Expedia. Reportedly, customers were directed to pages listing fake phone numbers for non-partnering hotels and falsely stated they were unavailable or sold out. This allegedly was designed to redirect customers to hotels that partnered with Expedia. Expedia argued this was a technical issue that has since been fixed.

These allegations are similar to some restaurants’ false partnership claims against third-party food delivery services like DoorDash and Postmates. Meanwhile,

Pursuant to the approval, the court confirmed class certification, appointing law firms Patterson Law Group APC, Cuneo Gilbert & LaDuca LLP, Pratt & Associates, and Richa Law Group P.C. as class counsel and David Pfau, Ted Spero, Dennis Villavicencio, and Fred Wickman as class representatives. The court added that the class action settlement is approved as it is fair, adequate, and reasonable and meets Rule 23(e)(2) requirements. In particular, the court noted that the following weighed in favor of granting approval: “the strength of the plaintiffs’ case”; “the risk, expense, complexity, and likely duration of further litigation”; “the risk of maintaining class action status throughout the trial”; “the extent of discovery completed and the stage of the proceedings”; and “the experience and views of counsel.” The court stated that notice is not required, so there is no need for a preliminary approval hearing.

The injunction for the settlement agreement, which is valid for three years from its approval date, provided that within 30 day of the approved order, Expedia:

  • “(S)hall use best efforts to ensure that properties with which Expedia does not have a contract and that have no relationship with a third party provider to the Websites (‘class member properties’) do not appear in search results on the Websites with unavailability messaging or on a property details page with unavailability messaging.”
  • “(S)hall remove from the Websites any property that terminates its contract with Expedia and that is not available to Expedia through a third party provider to the Websites.”
  • “(S)hall use best efforts to ensure that search engine marketing, search engine optimization, and social media advertisements for the Websites do not identify by name class member properties that are not in and of themselves attractions.”
  • “(N)otify (to the extent it has not done so) all third party providers that when a hotel with which the third party has contracted terminates its agreement with that third party, the third party must provide accurate availability information to Expedia to allow it to remove the property from the Websites.”
  • And perform an audit every six months confirming that a sample of hotels on its website are affiliated with Expedia either directly or via a third party.

The court also approved $2.1 million in stipulated attorney’s fees and costs and $12,500 for each of the four class representatives as a stipulated incentive award.

Expedia is represented by Covington & Burling LLP.