Plaintiffs, Nikita Turik and Eric Balk, by and through their attorneys, on behalf of themselves and all others similarly situated, bring this Class Action Complaint against Expedia, Inc. ("Expedia"), Hotels.com LP ("Hotels.com"), Travelocity.com LP ("Travelocity"), Sabre Holdings Corporation ("Sabre Holdings"), Booking.com B.V., Booking.com (USA), Inc. (Booking.com B.V. and Booking.com (USA), Inc. will be referred to as "Booking.com"), and Priceline.com, Inc. ("Priceline"), Orbitz Worldwide, Inc. ("Orbitz") (collectively, "the Online Retailer Defendants"), and Hilton Worldwide, Inc. ("Hilton"); Marriott International, Inc. ("Marriott"); Trump International Hotels Management, LLC, ("Trump"); Intercontinental Hotels Group Resources Inc. ("Intercontinental"), Starwood Hotels &Resorts Worldwide, Inc. ("Starwood"), and Kimpton Hotel &Restaurant Group, LLC ("Kimpton") (collectively, "Hotel Defendants") and allege, based upon personal knowledge as to themselves and their own acts, and as to all other matters upon information and belief, as follows:
1. Plaintiffs purchased hotel room reservations online ("Room Reservations") directly from one or more of the Online Retailer Defendants in the United States. Plaintiffs bring this direct purchaser antitrust action to challenge the Online Retailer Defendants' conspiracy with the Hotel Defendants to enter into, maintain and/or enforce minimum resale price maintenance ("RPM") agreements. Plaintiffs seek damages and equitable relief from Defendants under Section 1 of the Sherman Antitrust Act, 15 U.S.C. § 1, and under California Business & Professions Code §§ 16720, et seq.
2. The Online Retailer Defendants are among the dominant online travel companies that act as retailers for Room Reservations in California and the United States. Here, the Online Retailer Defendants conspired with the Hotel Defendants and agreed to impose an RPM scheme that would fix the retail price for Room Reservations at the price the Hotel Defendants were selling the Room Reservation ("Rack Rates") and restrain competition for Room Reservations ("Defendant Retailer-Hotel Agreements") in the market for online reservations. The Defendant Retailer-Hotel Agreements included express terms to set, maintain, and enforce minimum prices at the Rack Rates.
3. Pursuant to the Defendant Retailer-Hotel Agreements, the Hotel Defendants were charged with enforcing the RPM scheme against Online Retailers that competed or attempted to compete with the Online Retailer Defendants on price. Thus the Defendant Retailer-Hotel Agreements were part of an anti-competitive scheme under which the Online Retailer Defendants leveraged their substantial market power and dominance to induce the Hotel Defendants into agreeing to do one or more of the following: (a) impose minimum resale price maintenance agreements on the Retailers ("Hotel-Online Retailer Agreements");
4. As a result of the concerted RPM scheme by the Online Retailer Defendants, each Defendant Retailer-Hotel Agreement with the major hotel chains including the Hotel Defendants provides that Room Reservations will not be sold to Plaintiffs and members of the Class for less than the Rack Rate. Because all of the Online Retailer Defendants have the same clause in most or all of their contracts, whether oral or written,
5. Defendant Sabre, which operates Travelocity.com and Booking.com, has admitted that this RPM scheme:
6. However, the Online Retailer Defendants' "best price guarantees" are nothing more than a cover for their conspiracy to fix prices, such that the Online Retailer Defendants do not have to compete on price but can offer the "best price" to their customers knowing that all of the Online Retailer Defendants will offer the same anti-competitive price. There is in reality no "best price" but instead there is a fixed uniform price.
7. Absent Defendants' anti-competitive and deceptive conduct, Plaintiffs and the other Class members would have paid less for each of the Room Reservations purchased during the Class Period. The direct consequence of Defendants' unlawful conduct was that Plaintiffs and other Class members paid overcharges on their purchases of Room Reservations throughout the Class Period. Plaintiffs thus seek damages and equitable relief under Sections 4 and 16 of the Clayton Act, 15 U.S.C, §§ 15(a) and 26, for violations of Section 1 of the Sherman Antitrust Act, 15 U.S.C. § 1, and for violation of California's False Advertising Law, and Cal. Bus. & Prof. Code § 17500 et seq. In addition, a subclass of California residents who purchased Room Reservations brings a claim for violations of California Business &Professions Code Sections 16720, et seq.
8. Nikita Turik is a resident and citizen of Chicago, Illinois. In January 2010, Mr. Turik purchased a Room Reservation at The Westin Beale Street Memphis through Travelocity.com. Mr. Turik has been damaged by the conduct alleged herein.
9. Eric Balk is a resident and citizen of Cedar Falls, Iowa. In June 2012, Mr. Balk purchased a Room Reservation at the Holiday Inn Express Hotel & Suites Bloomington, which is a brand owned by Defendant Intercontinental. Mr. Balk has been damaged by the conduct alleged herein.
10. Defendant Expedia, Inc. is a Delaware corporation with its principal place of business at 333 108th Avenue NE, Bellevue, Washington 98004.
11. Defendant Hotels.com LP is an affiliate of Expedia. Hotels.com LP is a Texas limited partnership with its headquarters located at 10440 North Central Expressway, Suite 400, Dallas, Texas 75231.
12. Defendant Travelocity.com LP is a Delaware limited partnership with its principal place of business located at 3150 Sabre Drive, Southlake, Texas 76092. Travelocity is owned by Defendant Sabre.
13. Defendant Booking.com B.V. is a company based in Amsterdam, the Netherlands, with its principal place of business at Herengracht 597, 1017 CE, Amsterdam, Netherlands. Booking.com B.V. owns and operates Booking.com, the leading worldwide online Room Reservations agency by room nights sold, attracting over 30 million unique visitors each month via the Internet from both leisure and business markets worldwide. Booking.com B.V. is a wholly owned subsidiary of Priceline.com Incorporated.
14. Defendant Booking.com (USA), Inc. is a Delaware corporation with its primary place of business located at 100 William Street, Suite 750, New York, New York 10038. Booking.com (USA), Inc. is a wholly owned subsidiary of Priceline.com Incorporated.
15. Defendant Priceline.com Incorporated is a Delaware corporation with its primary place of business located at 800 Connecticut Avenue, Norwalk, Connecticut 06854.
16. Defendant Orbitz Worldwide, Inc. is a Delaware corporation and its corporate headquarters are located at 500 W. Madison Street, Suite 1000, Chicago, Illinois 60661.
17. Defendant Sabre Holding Corporation, incorporated in Delaware, is headquartered at 3150 Sabre Drive, Southlake, Texas 76092.
18. Defendant Intercontinental Hotels Group Resources, Inc. is a Delaware corporation with its primary place of business located at 3 Ravinia Drive, Suite 100, Atlanta, Georgia 30346-2149.
19. Defendant Starwood Hotels &Resorts Worldwide, Inc. is a Maryland corporation with its principal place of business at One StarPoint, Stamford, Connecticut 06902. Starwood's hotels are primarily operated under the brand names St. Regis®, The Luxury Collection®, Sheraton®, Westin®, W®, Le Méridien®, Four Points® by Sheraton, Aloft®and Element®.
20. Defendant Marriott International, Inc. is a Delaware corporation with its principal place of business at 10400 Fernwood Road, Bethesda, Maryland 20817-1102.
21. Defendant Trump International Hotels Management, LLC, doing business as The Trump Hotel Collection, is a Delaware limited liability company headquartered at 725 Fifth Avenue, New York, New York 10022.
22. Defendant Hilton Worldwide, Inc. is a Delaware company doing business as Hilton Hotels &Resorts with its primary place of business located at 7930 Jones Branch Drive, McLean, Virginia.
23. Defendant Kimpton Hotel &Restaurant Group, LLC is a Delaware limited liability company with its principal place of business located at 222 Kearny Street, Suite 200, San Francisco, CA 94108.
24. Various other persons, firms and corporations, not named herein as Defendants have participated as co-conspirators with the Defendants and have performed acts and made statements in furtherance of the conspiracy. Some of these firms are as yet unidentified. The acts alleged against the Defendants in this Complaint were authorized, ordered, or done by their officers, agents, employees, or representatives, while actively engaged in the management and operation of Defendants' businesses or affairs.
25. Each Defendant acted as the principal, agent, or joint venturer of, or for, other Defendants with respect to the acts, violations, and common course of conduct alleged by Plaintiff.
26. Whenever this complaint refers to an act, deed or transaction of a corporation or entity, the complaint is alleging that the corporation or entity engaged in the act, deed or transaction by or through its officers, directors, agents, employees or representatives while they were actively engaged in the management, direction, control or transaction of the corporation or entity's business or affairs.
27. Plaintiffs bring this action pursuant to Sections 4 and 16 of the Clayton Act, 15 U.S.C. §§ 15(a) and 26, to recover treble damages, equitable relief, costs of suit and reasonable attorneys' fees for Defendants' violations of Section 1 of the Sherman Act, 15 U.S.C. §1. Subject matter jurisdiction is proper pursuant to Section 4(a) of the Clayton Act, 15 U.S.C. §15 (a), and 28 U.S.C. §§1331 and 1337, because the action arises under the laws of the United States.
28. Venue is proper in this judicial district pursuant to 15 U.S.C. §§ 15 and 22, and 28 U.S.C. §1391(b) and (c), in that at least one of the Defendants resides in this judicial district, is licensed to do business or is doing business in this judicial district.
29. Intradistrict Assignment: Assignment to the San Francisco or Oakland division of this Court is proper pursuant to Northern District of California Local Rule 3-2(d) because a substantial part of the events giving rise to the claims arose in this District.
30. As recently as 1997, the concept of an "internet travel company" or Online Retailer — an entity organized to effectuate travel plans, reservations and purchases via the worldwide web — was virtually unknown. In recent years, the internet travel industry has seen explosive growth. By some estimates, more than half of all hotel bookings in the United States are made online, many through internet travel companies owned by the Online Retailer Defendants.
31. Through their web portals, the Online Retailer Defendants allow consumers to rent hotel rooms in many different hotels throughout the country and the world. These companies offer their services to Hotel Defendants and consumers through several different business models, including the "Agency Model," the "Merchant Model,"
32. Under the Agency Model, Online Retailers charge a "service fee" to hotel operators on a transaction basis for booking customers into rooms at a given hotel and the consumer pays the hotel for the room directly. Under the Agency Model, the hotels should be setting — and the Online Retailers should be requiring — a competitive price for Room Reservations to increase business and compete against other Online Retailers offering the same service.
33. Under the Merchant Model, the Online Retailers do not function merely as service providers collecting a fixed transaction fee from the hotels. Rather, the Merchant Model consists of two independent but related transactions whereby an internet travel company: (i)first purchases and takes title to inventories of hotel rooms at negotiated rates from the Hotel Defendants ("wholesale" rates); and (ii) then re-sells the rooms to consumers at higher retail, keeping the difference as profit. Under this Merchant Model, the Online Retailers should be competing on price by increasing or decreasing the margin added to the wholesale rates to set the retail rate.
34. The third model is the "Wholesale Model," whereby smaller price-cutting Online Retailers obtain access to rooms through wholesalers. Wholesalers, or intermediaries between the Online Retailers and the hotels, work directly with Hotel Defendants to obtain last minute blocks of rooms that need to be filled. The wholesalers then make those rooms available to smaller Online Retailers at a wholesale rate. The Online Retailers then, like in the Merchant Model, re-sell the rooms to consumers at higher retail, keeping the difference as profit. Under this Wholesale Model, the Online Retailers should also be competing on price by increasing or decreasing the margin added to the wholesale rates to set the retail rate.
35. Through the Agency Model and Merchant Model, the Online Retailer Defendants gained a dominant presence in the online sale of Room Reservations. The Online Retailer Defendants now hold more than a 50 percent market share in the internet travel business market. Just Expedia and its subsidiaries alone account for approximately 50% of the internet travel business market. Moreover, currently, the Online Retailer Defendants have become increasingly important to the Hotel Defendants' business — generating as much as 50% of the Hotel Defendants' Room Reservation traffic. Thus, the Hotel Defendants believe that they need access to the Online Retailer Defendants' distribution network.
36. As a result of their dominance, and knowing that the Hotel Defendants cannot afford to lose access to their distribution network, the Online Retailer Defendants devised an illegal RPM scheme to combat new or more efficient internet retailers, including those that obtained access to hotel rooms through the Wholesale Model, by exacting agreements from the Hotel Defendants that desired to sell Room Reservations through the Online Retailer Defendants to require, on penalty of termination and as a condition of doing business with the Online Retailer Defendants, that the Hotel Defendants ensure that competing online retailers refrain from discounting from the Rack Rate.
37. The Defendant Retailer-Hotel Agreements are and were part of an overall agreement to impose and enforce the RPM scheme. For example, in 2004, multiple hotels, including Defendants Hilton and Kimpton, and Online Retailers, including Defendant Priceline, met together in Las Vegas for Eye for Travel's second annual Revenue Management and Pricing in Travel conference.
38. As part of the Defendant Retailer-Hotel Agreements, the Hotel Defendants demonstrated their compliance by requiring that competing online retailers agree to raise and maintain retail prices at the Rack Rate. As a further sign of their agreement with the Online Retailer Defendants, in some instances, the Hotel Defendants threatened Online Retailers with legal action and/or refused to allow Online Retailers, such as Skoosh.com, to sell Room Reservations if the Online Retailers refused to price fix and maintain resale prices at the Rack Rate in compliance with the RPM scheme. Further pursuant to their agreement with the Online Retailer Defendants, in some instances, the Hotel Defendants required the wholesalers to stop providing rooms to price-cutting Online Retailers, such as Skoosh.com, if they refused to price fix and maintain resale prices at the Rack Rate.
39. For example, Skoosh has publicly complained that it tried to sell discounted Room Reservations on its online travel site but was thwarted by the resale price maintenance scheme:
40. In fact, Skoosh has claimed that the Agreements have "created a Mafia-style atmosphere and an intolerable climate for new businesses. Skoosh has been directly threatened and, in turn, has defended its right to discount hotel prices."
41. Skoosh published a letter dated August 31, 2010, from its CEO to Online Retailer Defendant and Skoosh's competitor Booking.com, complaining about Booking.com's enforcement of the Defendant Retailer-Hotel Agreements. The letter states, in part:
42. The fact that Booking.com has threatened to cut off the sale of Room Reservations for Hotel Defendants that do not enforce the RPM scheme is entirely consistent with the Rate Assured Hotel Program implemented by Booking.com's parent Defendant Sabre (which also owns Defendant Travelocity). Sabre's Rate Assured Hotel Program requires the Hotel Defendants to enforce the RPM scheme:
43. In fact, Sabre, which owns Travelocity and Booking.com, also runs a division called "Sabre Hospitality Solutions," which expressly markets and encourages hotels to adopt rate parity — in effect, the RPM scheme. See, e.g., http://www.sabrehospitality.com/blog/2011-10-27/how-hotels-can-leverage-ota-relationships-without-killing-their-pricing-strategy; http://www.sabrehospitality.com/blog/2011-11-30/three-top-trends-in-hospitality-marketing-and-distribution-to-consider-when-planning-for-2012.
44. Thus, pursuant to the Defendant Retailer-Hotel Agreements, the Hotel Defendants are enforcing the RPM scheme on price-cutting competing online retailers. For example:
a. Defendant Hilton required Skoosh's wholesale supplier in the United States, AlliedTPro, to entirely cut off its contract with Skoosh as a result of Skoosh's discounting and Defendant Hilton's enforcement of the Defendant Retailer-Hotel Agreements. AlliedTPro wrote to Skoosh: "Trust me I would welcome the additional business but cannot risk our contracts with Hilton."
b. Defendant Trump expressly admitted it was enforcing the Defendant Retailer-Hotel Agreements, emailing Skoosh:
c. Defendant Intercontinental wrote to Skoosh "demanding that Skoosh either raise[] its rates to the same as the hotels and its other distribution partners (a practice known in the industry as `rate parity' * * *) or remove the hotels entirely from our site."
d. In 2003, Defendant Marriott announced "a sweeping overhaul of its transient pricing, bringing parity to all Marriott distribution channels — offline and online."
e. Defendant Starwood enforces the RPM scheme. "In one email to a hotel discounter, an executive at Starwood, which runs Le Meridien, Westin, W and Sheraton hotels, said: `Should a wholesaler decide to sell the rooms on a room only basis, he has to make sure that the per contract agreed minimum mark-up is guaranteed.' The employee said the `violation' of Starwood's Best Rate Guarantee was `really serious' and the breach was reported to the Brussels headquarters."
45. Similarly, Kayak.com, which is a price comparison website, told Skoosh on several occasions that it had to"play the Orbitz game,"
46. Each of these actions was taken directly because of the pressure die Online Retailer Defendants were placing on Hotel Defendants to protect the Online Retailer Defendants' margins by enforcing the RPM scheme. The Online Retailer Defendants enforced the RPM scheme because they feared losing access to the Online Retailer Defendants' website to sell their rooms if they did not. As one industry consultant explained:
47. Blink Booking, a mobile-only hotel booking service, echoed the claims of competing online retailers, saying: "We've long believed that the big online travel agents have been guilty of denying consumers the best prices — and that hotels' hands are tied by price parity agreements. The online travel market may appear to offer plenty of choice and competition, but the reality is that there are lots of different shop windows selling the same rooms at the same prices — with those prices agreed through parity deals between the big groups and the big OTAs [online travel agents]."
48. The Hotel Defendants knew that the Online Retailer Defendants would enforce the Agreements or refuse to sell the Hotel Defendants' rooms. For example, in 2009, Defendant Expedia refused to list or sell Room Reservations from Choice Hotels. Expedia's CEO and President Dara Khosrowshahi explained:
49. Thus, the Online Retailer Defendants sought and received agreements from the Hotel Defendants that they would only sell to Online Retailers who would not discount the Rack Rate for Room Reservations, even if and when it reduced the Hotel Defendants' sales and/or profits by slowing sales of the Room Reservations.
50. More specifically, the Hotel Defendants agreed to work with the Online Retailer Defendants to implement and enforce the RPM scheme to ensure that pricing by competing Online Retailers be restrained.
51. The Online Retailer Defendants sought and obtained the agreement of the Hotel Defendants to impose and enforce "rate parity" — i.e., restraint on price competition — solely for the Online Retailer Defendants' benefit and not for any legitimate pro-competitive reason.
52. The Online Retailer Defendants are driven to maintain their product and profit margins, as their margins are threatened by newer, more efficient internet retailers. That dominant retailers, like the Online Retailer Defendants, would react anti-competitively to threats to their pricing freedom, such as those posed by new or more efficient retailers, has been acknowledged by the United States Supreme Court.
53. The Supreme Court not only recognized that minimum resale pricing may be imposed by a dominant retailer for that retailer's benefit, but stated that such behavior violates the antitrust laws. Indeed, the Supreme Court cautioned that:
Leegin Creative Leather Prods., Inc. v. PKS, Inc., 127 S.Ct. 2705, at 2719-20 (2007).
54. The RPM Scheme has achieved its illegal goal: Online Retailer Defendants do not compete on the basis of price for Room Reservations. Rather, all online sales of Room Reservations for the same rooms are at the Rack Rate.
55. Deposition testimony of Tim Gordon, Senior Vice President, of Priceline makes clear that each of the Online Retailer Defendants buys the rooms and sells the rooms to the public at exactly the same price:
56. In fact, a federal court in the Western District of Texas recently commented on the similarity of the business models and pricing structures of the Online Retailer Defendants:
57. The Court determined, based upon deposition testimony, that the margins of each of the Online Retailer Defendants were identical to the other Online Retailer Defendants:
58. This rate parity is demonstrated by examples of hotel rooms available for reservation on the Online Retailer Defendants' internet sites:
59. That the rate parity results from the RPM scheme is clear. The Online Retailer Defendants employ "market managers" who "monitor closely a hotel's rates across all channels, and if a preferential rate was given to one over the other that hotel could face dire penalties.
60. An industry expert recounts that Hotel Defendants seeking to promote price discounts in order to have consumers buy directly from the hotel were met with the Online Retailer Defendants demanding price competition cease. According to the industry source, "Hilton, for example, is promoting like crazy to get the customer to book direct. `Book with us and get 500 extra points or free Internet.'" But this competition was unacceptable to the Online Retailer Defendants and contrary to the RPM scheme. "That's where the [Online Retailer Defendants] were forced to become big proponents of rate parity." So the Online Retailer Defendants ensured that the Hotel Defendants could not "undercut,"
61. As a result of the "success" of the RPM scheme, the Online Retailer Defendants are confident that all of the prices listed between them for the same room will be identical. Thus, they each offer a near identical "best price" guarantee — knowing it is the only price available even among competitors. Examples follow:
62. Absent the RPM scheme, the Online Retailer Defendants could not offer the best price guarantees unless they engaged in price competition and discounted the Rack Rates.
63. The RPM Agreements, and the scheme in restraint of trade, have harmed competition in the relevant market(s) and caused prices to be higher in the relevant market(s) then the prices would have been without the Agreements.
64. In addition, the uniform adoption and enforcement of "rate parity" and most favored nation clauses by the Online Retailer Defendants is a horizontal per se price fixing agreement.
65. The Agreements were specifically intended to protect the Defendants from price competition — both from Hotel Defendants and other highly efficient retailers — offering the same inventory, Thus, Defendants agreed to restrain competition by mandating higher price levels and thereby neutering the competition or by eliminating the price cutting entirely. This scheme achieved its goals, and thereby substantially inflated prices to consumers like Plaintiffs.
66. This price-fixing conspiracy is evidently not confined to the United States. The British Office of Fair Trade ("OFT") recently issued a"Statement of Objections" alleging that Expedia, Inc. infringed competition through the very same price fixing agreements with respect to British hotel rooms. The Telegraph reported that Expedia admitted that "it has engaged in cartel conduct on breach of the law," and is "providing information on its rivals under a `leniency deal'" with the British authorities.
67. The British revelations leave no room for doubt: the Online Retailer Defendants are entering into contracts with the same Hotel Defendants in this country and to the same anti-competitive effect. The Agreements are part of an anti-competitive scheme under which the Online Retailer Defendants leveraged their substantial market power and dominance to induce the Hotel Defendants into agreeing to do one or more of the following: (a) impose minimum resale price maintenance agreements on completing Online Retailers; (b) enforce the price maintenance agreements as to the Online Retailers; and/or (c) cut off supply to price-cutting Online Retailers.
68. In sum, the Hotel Defendants did not and are not simply or unilaterally:
a. refraining from selling to uncongenial retailers;
b. suggesting resale prices that were widely followed;
c. sanctioning, terminating or refusing to sell to retailers who failed to maintain a minimum resale price;
d. announcing and enforcing policies of sanctioning, terminating or refusing to sell to retailers who failed to maintain a minimum resale price; or
e. sanctioning, terminating or refusing to sell to other retailers following, or in response to, complaints by retailers such as the Online Retailer Defendants.
69. Rather, the Agreements represent a conscious commitment to a common scheme, designed to achieve an unlawful objective, between the Online Retailer Defendants, the Hotel Defendants (including Intercontinental), and other online retailers.
70. The Hotel Defendants did not act unilaterally or independently, or in their own economic interests, when:
a. entering into the Defendant Retailer-Hotel Agreements;
b. seeking online retailers' acquiescence to, and compliance with, the terms of the Hotel-Online Retailer Agreements;
c. seeking to have retailers charge minimum resale prices; or
d. terminating or refusing to sell to online retailers for violating the Agreements. In fact, absent threatened penalties or sanctions by the Online Retailer Defendants, it would not be in the Hotel Defendants' economic interest to enter into, maintain, or enforce the Agreements.
71. The relevant product market in this case is direct online retail sales of Room Reservations.
72. The relevant geographic market in this case is the United States and/or the State of California.
73. By virtue of their power to control prices and exclude competition in the relevant market(s), the Online Retailer Defendants at all relevant times possessed monopoly power in the relevant market(s). The Online Retailer Defendants and their subsidiaries hold over a 50 percent market share in the internet travel business market. Just Expedia and its subsidiaries alone account for approximately 50% of the internet travel business market. Moreover the Online Retailer Defendants possess a dominant share of the market(s) for online retail sales of Room Reservations.
74. The overall effect of Defendants' anti-competitive, exclusionary scheme has been to substantially foreclose and impair competition (and the threat of such competition) from lower-priced Room Reservations. As alleged above, had the Defendants not improperly foreclosed or stifled actual or potential competitors from competing in the market for Room Reservations, other actual or potential rival retailers would have achieved much greater sales than they actually did (or threatened to do), given the lower prices that they charged (or could have charged upon entry), and would have posed a far greater competitive threat to the Defendants. Additionally, absent the Defendants' exclusionary conduct, barriers to entry to the market would have been lower, which: (a) would have made it easier for existing or new competitors to enter or expand their positions in the market for Room Reservations, and (b) would have caused existing or potential competitors to be attracted to the Room Reservation market because of the supra-competitive prices that the Defendants were charging. As a result, absent the Defendants' misconduct, the Defendants would have rationally perceived that there was a greater threat of potential competition in the relevant market if the Defendants did not reduce their supra-competitive prices.
75. The presence of unfettered competition from actual or potential competitors, which were selling lower-priced Room Reservations, would have forced the Defendants to lower the prices for their Room Reservations in order to remain competitive and/or to counter a perceived threat of additional entry.
76. During the relevant period, Plaintiffs and the other members of the Class purchased Room Reservations directly from the Defendants. As a result of the Defendants alleged illegal conduct, members of the Class were compelled to pay, and did pay, artificially inflated prices for the Room Reservations they purchased. Plaintiffs would have been able to, inter alia, purchase less-expensive Room Reservations had potential competitors been able to engage in unfettered competition. The prices that Plaintiffs and the other Class members paid for Room Reservations during the Class Period were substantially greater than the prices that Plaintiffs and the Class members would have paid absent the illegal conduct alleged herein because: (1) the prices of all Room Reservations were artificially inflated by the Defendants' illegal conduct; and (2) Class members were deprived of the opportunity to purchase Room Reservations from the Defendants' competitors at substantially lower prices. Thus, Plaintiffs and the Class have, as a consequence, sustained substantial damages in the form of overcharges.
77. Pursuant to Rule 23 of the Federal Rules Of Civil Procedure, Plaintiffs bring this class action on behalf of themselves and all members of the following class (the "Class"):
78. Pursuant to Rule 23 of the Federal Rules Of Civil Procedure, Plaintiffs bring this class action on behalf of themselves and all members of the following subclass (the "California Class"):
79. Plaintiffs believe that the Class and California Class include thousands of consumers and businesses across the United States, though the exact number and the identities of the Class members are currently unknown.
80. The members of the Class and California Class are so numerous that joinder of all Class members is impracticable.
81. Common questions of law and fact exist as to all members of the Class and California Class and predominate over any questions affecting solely individual members of the Class and California Class. Nearly all factual, legal, and statutory relief issues raised in this Complaint are common to each of the members of the Class and California Class and will apply uniformly to every member of the Class and California Class. Among the questions of law and fact common to Class and California Class members are:
a. whether Defendants engaged in agreements, contracts, combinations, and conspiracies, which had the purpose and/or effect of unreasonably restraining competition and limiting purchaser access to competing and lower-priced Room Reservations;
b. whether Defendants unreasonably restrained trade;
c. whether Defendants' anti-competitive contracts, combinations, and conspiracies have caused Plaintiffs and the other members of the Class and California Class to suffer antitrust injury in the nature of overcharges;
d. whether Defendants' unlawful conduct caused Plaintiffs and other Class and California Class members to pay more for the Room Reservations than they otherwise would have paid;
e. the appropriate Class-wide measure of damages;
f. whether, and in what amount, Plaintiffs and the other Class and California Class members are entitled to recover treble damages, court costs, and attorneys' fees;
g. whether Defendants' anti-competitive conduct is continuing, thus entitling the Class and California Class to injunctive relief to promote unrestrained trade and free and fair competition.
82. Plaintiffs' claims are typical of the claims of other members of the Class and California Class because Plaintiffs and every member of the Class and California Class have suffered similar injuries as a result of the same practices alleged herein. Plaintiffs have no interest adverse to the interests of the other members of the Class and California Class.
83. Plaintiffs will fairly and adequately represent and protect the interests of the Class and California Class. Plaintiffs have retained able counsel with extensive experience in class action litigation. The interests of Plaintiffs are coincident with, and not antagonistic to, the interests of the other Class and California Class members.
84. The questions of law and fact common to the members of the Class predominate over any questions affecting only individual members, including legal and factual issues relating to liability and damages.
85. Plaintiffs and other members of the Class have suffered damages as a result of Defendants' unlawful and wrongful conduct. Absent a class action, Defendants will retain substantial funds received as a result of their wrongdoing, and such unlawful and improper conduct shall, in large measure, go unremedied. Absent a class action, the members of the Class will not be able to effectively litigate these claims and will suffer further losses, as Defendants will be allowed to continue such conduct with impunity and retain the proceeds of its ill-gotten gains.
86. A class action is superior to other available methods for the fair and efficient adjudication of this controversy because joinder of all Class members is impracticable. Moreover, because the damages suffered by individual members of the Class are relatively small, the expense and burden of individual litigation make it impossible for members of the Class to individually redress the wrongs done to them. The Class is readily definable, and prosecution of this action as a class action will eliminate the possibility of repetitious litigation. There will be no difficulty in the management of this action as a class action.
87. Plaintiffs repeat and reallege each of the foregoing allegations as if fully set forth herein.
88. Plaintiffs did not discover and could not have discovered through the exercise of reasonable diligence the existence of the claims sued upon herein until immediately prior to commencing this civil action.
89. Any applicable statutes of limitation have been tolled by Defendants' affirmative acts of fraudulent concealment and continuing misrepresentations, as the facts alleged above reveal.
90. Because of the self-concealing nature of Defendants' actions and their affirmative acts of concealment, Plaintiffs and the Class assert the tolling of any applicable statutes of limitations affecting the claims raised herein.
91. Defendants continue to engage in the deceptive practice, and consequently, unwary consumers are injured on a daily basis by Defendants' unlawful conduct. Therefore, Plaintiffs and the Class submit that each instance that Defendants engaged in the conduct complained of herein and each instance that a member of the Class purchased a Room Reservation constitutes part of a continuing violation and operates to toll the statutes of limitation in this action.
92. Defendants are estopped from relying on any statute of limitations defense because of their unfair or deceptive conduct.
93. Defendants' conduct was and is, by its nature, self-concealing. Still, Defendants, through a series of affirmative acts or omissions, suppressed the dissemination of truthful information regarding their illegal conduct, and have actively foreclosed Plaintiffs and the Class from learning of their illegal, anti-competitive, unfair and/or deceptive acts.
94. By reason of the foregoing, the claims of Plaintiffs and the Class are timely under any applicable statute of limitations, pursuant to the discovery rule, the equitable tolling doctrine, and fraudulent concealment.
95. Plaintiffs hereby incorporate each preceding and succeeding paragraph as though fully set forth herein.
96. The Agreements, and their enforcement, constitute contracts, combinations and conspiracies that substantially, unreasonably, and unduly restrain trade in the relevant market(s), and harmed Plaintiffs and the Class thereby.
97. The Agreements cover a sufficiently substantial percentage of relevant market(s) to harm competition.
98. The Defendants are liable for the creation, maintenance, and enforcement of the Agreements under a per se, "quick look" and/or rule of reason standard.
99. The Defendants possess market power.
100. The Agreements harm competition by artificially raising and stabilizing prices.
101. There is no legitimate, pro-competitive business justification for the Agreements or any of them that outweighs their harmful effect. Even if there were some conceivable justification, the Agreements are broader than necessary to achieve such a purpose.
102. Plaintiffs and members of the Class were injured in their business or property by the collusion and conspiracy alleged above which facilitated, enabled, assisted or furthered Defendants' substantial foreclosure and exclusion of competition in the relevant market(s).
103. Without limiting the generality of the foregoing, Plaintiffs and the other members of the Class have been forced to pay higher prices for Room Reservations than they would have paid in the absence of Defendants' unlawful conduct.
104. Plaintiffs hereby incorporate each preceding and succeeding paragraph as though fully set forth herein.
105. Defendants engaged in price-fixing and a per se violation of the Cartwright Act.
106. Plaintiffs hereby incorporate each preceding and succeeding paragraph as though fully set forth herein.
107. This Count is asserted against the online retailer defendants.
108. The Consumers Legal Remedies Act, Civil Code Section 1750 et seq. (hereinafter "CLRA") was designed and enacted to protect consumers from unfair and deceptive business practices. To this end, the CLRA sets forth a list of unfair and deceptive acts and practices in Civil Code Section 1770.
109. The CLRA applies to Defendants' actions and conduct described herein because it extends to the sale of goods or services for personal, family or household use.
110. At all relevant times, Plaintiffs and members of the Class were "consumers" as that term is defined in Civil Code Section 1761(d).
111. The transactions from which this action arises include transactions involving the sale or lease of goods or services for personal, family or household purposes within the meaning of Civil Code Section 1761.
112. Each of these defendants represent that their rates are the "Best Price" or a "Low Price," or similar words intended to convey to consumers that the consumer was obtaining a good deal.
113. These representations are false and misleading in that there is no "Best" or "Low" price, just a fixed and uniform price.
114. Plaintiffs were injured by overpaying for their hotel rooms.
115. Plaintiffs incorporates and realleges, as though fully set forth herein, each of the paragraphs set forth above. This count is asserted against the online retailer defendants.
116. Defendants' use of various forms of advertising media to advertise, call attention to or give publicity to the sale of their goods and services, and other practices, as set forth above, which are not as advertised or as otherwise represented, constitutes unfair competition, unfair, deceptive, untrue or misleading advertising, under Business & Professions Code Section 17500 et seq. These advertisements and practices have deceived, and are likely to deceive, the consuming public, in violation of those sections.
117. Defendants' business acts and practices, as alleged herein, has caused injury to the Plaintiffs who would not have paid as much for online rooms had they known the truth.
118. Plaintiffs and the Class are entitled to restitution and/or other equitable relief in light of the practices described herein.
119. Defendants' practices in connection with the marketing and sale of online rooms violate the CLRA in at least the following respects:
120. Defendants' misrepresentations, failure to disclose, and knowing concealment of the prices for online rooms are misrepresentations, omissions, and concealments of material fact that constitute unfair and/or deceptive business practices in violation of Civil Code Section 1770(a) and caused harm to Plaintiffs and Class members who would not have purchased and/or paid as much for their rooms had they known the truth.
121. In accordance with Civil Code § 1780(a), Plaintiffs and members of the Class seek injunctive and equitable relief for violations of the CLRA. In addition, after mailing appropriate notice and demand in accordance with Civil Code § 1782(a) & (d), Plaintiffs will subsequently amend this Class Action Complaint to also include a request for damages. Plaintiffs and members of the class request that this Court enter such orders or judgments as may be necessary to restore to any person in interest any money which may have been acquired by means of such unfair business practices, and for such other relief, including attorneys' fees and costs, as provided in Civil Code § 1780 and the Prayer for Relief.
122. Plaintiffs incorporate and reallege, as though fully set forth herein, each of the paragraphs set forth above.
123. This Court is asserted against the Online Retailer Defendants and the California subclass.
124. Defendants have engaged in unfair competition within the meaning of California Business & Professions Code Section 17200 et seq. because Defendants' conduct is unlawful, misleading, and unfair as herein alleged.
125. Defendants' business practices are unlawful because they violate the CLRA, as well as other statutes alleged herein.
126. The practices are misleading because they were likely to deceive consumers into believing that they are obtaining the "best price" or a "low price" for their hotel room.
127. Defendants' business practices, and each of them, are unfair because they offend established public policy and/or are immoral, unethical, oppressive, unscrupulous and/or substantially injurious to consumers, which harm greatly outweighs any benefit associated with the business practice, in that consumers are led to believe that the rooms they were paying for had qualities that it did not.
128. Plaintiffs have standing to pursue this claim because they have been injured by virtue of suffering a loss of money and/or property as a result of the wrongful conduct alleged herein. Plaintiffs would not have purchased their hotel rooms or paid as much for it had they known the truth.
129. Plaintiffs and the Class are entitled to relief, including full restitution and/or restitutionary disgorgement, to the greatest extent permitted by law, which may have been obtained by Defendants as a result of such business acts or practices, and enjoining Defendants to cease and desist from engaging in the practices described herein.
WHEREFORE, Plaintiffs, on their behalf and on behalf of the Class, pray for judgment, as follows:
A. For an Order certifying this case as a class action against Defendants and appointing Plaintiffs as Representatives of the Class;
B. For money damages against Defendants and in favor of Plaintiffs and the Class on all claims asserted in this Complaint;
C. For costs of suit incurred herein;
D. For prejudgment interest to the extent allowed by law;
E. For penalties as allowed by law;
F. For permanent injunctive relief to enjoin further violations of the law; and
G. For such other and further relief as this Court may deem just and proper.
Plaintiffs hereby demand a trial by jury on all issues triable of right by jury.
