Fairview Heights to disclose settlement agreement with online travel companies

By Amelia Flood | Apr 23, 2009


Fairview Heights Mayor Gail Mitchell indicated he would make public a settlement agreement the city reached with 13 online travel companies.

Mitchell said on Thursday he would direct attorney Al Paulson, who helped represent the city in its lawsuit over hotel room taxes, to provide the Record with the agreement, as well as other documents related to attorneys' fees.

Paulson is away from his office until Monday, according to a person who answered the phone at his firm.

The Record requested the information to determine the total amount Fairview Heights took away from its four years of litigation with companies such as Orbitz, Expedia and others.

In the lawsuit, which originally began as a class action, the city alleged that online travel companies were collecting taxes from customers but not turning that money over to the local communities in which the rooms were booked. Fairview Heights also contended that the travel companies were charging customers retail room rates while only paying taxes on wholesale room rates, and not paying a transient occupancy tax.

Fairview Heights had proposed to represent 50 Illinois cities and towns. However, after the case was removed to federal court, a judge ruled that the city did not fit into the class covered by the suit.

U.S. Circuit Judge David Herndon denied class certification. But the city was free to pursue individual claims.

All 13 defendants settled. The last one, Orbitz and three of its subsidiaries, settled in late March.

The Orbitz lawsuit netted the city just over $55,000 and costs, according to Mitchell and the city's Treasurer's Office.

Fairview Heights aldermen will be briefed on the full extent of the settlements in an executive session, Alderman Linda Arnold said. Arnold said she is not sure when that session will take place.

Alderman Bonnie Crossley said she could not recall any discussions of the city paying attorneys. This echoes statements made by Mitchell.

The Record has also requested documents related to what, if anything, the city paid out to the attorneys who represented it.

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