Chiste v. Hotels.com L.P.
756 F. Supp. 2d 382
S.D.N.Y.2010Background
- Consolidated four related putative consumer class actions against Hotels.com, Expedia, Priceline, Travelocity and Orbitz for allegedly deceptive practices, undisclosed markups, and tax handling; cases involve four named plaintiffs in various states and a fifth suit by Peluso against Orbitz; Schultz’s Travelocity suit is severed and transferred to Texas under a forum-selection clause; the court stays Peluso’s case pending these motions; the court analyzes four main defendants’ motions to dismiss under Rule 12(b)(6) and a transfer under 28 U.S.C. §1404(a).
- Plaintiffs allege merchant or NYOP models with undisclosed markups, Tax Delta, bundled taxes/fees, and breach of contract through User Agreements; six identical counts across the four complaints plus a seventh unjust-enrichment claim by Peluso; purported class includes consumers who reserved in New York hotels.
- The court addresses which claims are actionable under New York G.B.L. § 349, and multistate choice-of-law issues that govern the common-law claims (conversion, fiduciary duty, and breach of contract).
- The court applies New York law for choice-of-law on each plaintiff’s common-law claims, considering each User Agreement’s governing law clause (Texas, Washington, Delaware, Connecticut, Illinois, Colorado, Virginia, etc.).
- The court ultimately grants in part and denies in part the motions: Schultz’s suit is severed and transferred to Texas; the Hotels.com/Expedia/Priceline complaints are mostly dismissed (Lamattina’s G.B.L. § 349 claim survives); Lamattina’s and Sidener’s conversion claims are dismissed; most fiduciary-duty and contract claims are dismissed or transferred; Peluso’s case to be addressed similarly with a brief due in 14 days.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Schultz's Travelocity suit should be dismissed or transferred. | Schultz argues the forum-selection clause should not force transfer. | Travelocity argues forum-selection clause is mandatory and entitled to transfer. | Granted: Schultz severed and transferred to Northern District of Texas. |
| Whether G.B.L. § 349 claims survive against Hotels.com, Expedia, Priceline. | Chiste, Schroud, Gutman allege deceptive practices; Lamattina alleges substantive deception. | Defendants contend no New York nexus for non-New York plaintiffs; Lamattina’s claims lack sufficient plausibility. | Chiste/Schroud/Gutman claims dismissed; Lamattina’s G.B.L. § 349 claim survives in part. |
| Whether Lamattina's G.B.L. § 349 claim against Hotels.com is adequately pleaded. | Lamattina alleges bundling, tax delta, and hidden profit violate § 349. | Disclosure in the User Agreement and invoice foreclose deception; no misrepresentation alleged. | Partially survives: material misrepresentation re tax delta alleged; other aspects dismissed. |
| Whether declaratory judgments and injunctions are proper remedies here. | Plaintiffs seek declaratory relief/injunctions accompanying § 349. | These are remedies, not independent claims. | Dismissed as to all plaintiffs except potentially Lamattina’s related relief if she prevails on § 349. |
| Whether common-law (conversion, fiduciary duty, contract) claims survive under multistate law. | Plaintiffs rely on varying state-law theories and choice-of-law clauses. | Defendants argue multistate, forum-driven choice-of-law issues compel dismissal/transfer. | Conversion and fiduciary duty claims mostly dismissed; many contract claims dismissed; remaining claims may be transferred or stayed per court’s orders. |
Key Cases Cited
- Goshen v. Mutual Life Ins. Co. of New York, 98 N.Y.2d 315 (N.Y. 2002) (GBL §349 territorial reach; deception must occur in New York)
- New Moon Shipping Co. v. MAN B&W Diesel AG, 121 F.3d 24 (2d Cir. 1997) (forum-selection clause not jurisdictional; transfer under §1404(a))
- Licensed Practical Nurses, Technicians and Health Care Workers of New York, Inc. v. Ulysses Cruises, Inc., 131 F. Supp. 2d 393 (S.D.N.Y. 2000) (forum-selection clause; venue analysis separate from jurisdiction)
- New York v. Stewart Org., Inc., 487 U.S. 22 (1988) (significant weight given to forum-selection clause in transfer analysis)
- POSVEN, C.A. v. Liberty Mut. Ins. Co., 303 F. Supp. 2d 391 (S.D.N.Y. 2004) (multi-factor §1404(a) balancing factors; case-by-case)
- Citigroup Inc. v. City Holding Co., 97 F. Supp. 2d 549 (S.D.N.Y. 2000) (no rigid formula for §1404(a) transfers; factors weigh in balance)