Fairview Heights fable
There once was a Metro-East city that tried to collect a tax from some of its own people, and others in Illinois, too.
City leaders in Fairview Heights didn't come up with the idea. A Lakin Law Firm class action lawyer, Richard Burke, brought it to them with a promise.
Let Burke represent the city in a massive class action lawsuit against the online travel industry-- it sold rooms to travelers without charging them municipal room taxes--and he'd deliver a fat pot of cash. And he'd do it at no cost to Fairview Heights.
Last week, seven online travel companies told U.S. District Judge Richard Herndon that, not only were they not liable for not taxing their customers, as Burke had suggested in his lawsuit, but Fairview Heights itself may have been legally prohibited from levying a room tax.
Representing Orbitz, Priceline, and others, Edwardsville lawyer Robert Schulz told the court on Jan. 21 that Fairview Heights' municipal room tax ordinance had never been legitimately enacted and the city may have been mistakenly taxing its hotels for years.
Now, rather than that fat pot of cash Burke once promised, the city faces broader scrutiny of a revenue source and the potential of blowing a big fat hole in its budget.
So much for the idea of "no cost" to Fairview Heights taxpayers.
Adding insult to this looming injury is a recent analysis of just how much money Fairview Heights claims to have lost. From Orbitz and Priceline in seven years, the total would be approximately $3,500. That's what the two companies would owe, if Burke's theory had held and Judge Herndon had ruled in his favor.
In light of Schulz' latest arguments and recent precedent--a federal judge in a similar North Carolina case recently ruled the travel companies aren't liable--Burke's effort to make a big bucks mountain out of this molehill seems unlikely to prove successful. And he'll have to go searching for a fresh class action opportunity to put a buck in his pocket.
There are some hotel owners in Fairview Heights who may need representation.