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6 IN THE SUPERIOR COURT FOR THE STATE OF IN AND FOR 7 THE COUNTY OF KING

8 Cause No.: 9 DANIEL MAHONEY, an individual; JENNI R. STEPHENSON, an individual; and 10 COMPLAINT FOR UNFAIR TRADE JONATHAN MARKHAM, an individual, PRACTICES UNDER RCW 19.86.020 11 Plaintiffs, 12 v. 13 , INC., a Washington Corporation; 14 Defendant. 15 16 I. COMPLAINT 17 Plaintiffs, Daniel Mahoney, Jenni R. Stephenson, and Jonathan Markham bring 18 this Action Complaint against Defendant Expedia, Inc. (“Expedia”), alleging as follows:

19 II. NATURE OF ACTION

20 1. This Complaint comes during a global pandemic arising from a novel 21 coronavirus, COVID-19. Nationwide lockdowns sent unemployment to historic levels, 22 and the economic and health effects imposed great hardship on millions of Americans.

23 National and worldwide travel restrictions were imposed to protect health and welfare 24 during this public health emergency. 25 2. The pandemic dramatically impacted travel, particularly air travel. The 26 ability to travel was eliminated for many Americans.

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1 3. Airlines slashed flight schedules, resulting in thousands of flight 2 cancellations for millions of passengers. 3 4. Under U.S. law, airline passengers are entitled to a refund if the airline 4 cancels a flight, regardless of the reason the airline cancels the flight. 5 5. Some carriers honored this requirement, while others have not. 6 6. Some carriers offered only to rebook and/or provide travel vouchers to 7 passengers whose trips the airlines canceled.

8 7. Many of these carriers market and book their flights to consumers through 9 online travel agencies. 10 8. An online (OTA) is a web-based marketplace that allows 11 consumers to research and book travel products and services through a single 12 interface. 13 9. Millions of American consumers book airline travel through OTAs. 14 10. The largest OTAs have come to possess considerable leverage in the

15 travel marketplace, and most airlines offer flights through OTAs. 16 11. Expedia is the largest OTA in the with approximately 70 17 percent of the OTA market. Expedia operates Expedia.com, , Hotels.com, 18 , CheapTickets, Hotwire, HomeAway, and . 19 12. When using Expedia, the consumer books his or her flight directly with 20 Expedia rather than the airline. 21 13. Expedia acts as a “middleman” or broker in the transaction between the 22 consumer and the airline.

23 14. Expedia provides the consumer with confirmation of the flight, and 24 provides the consumer with other important notices about the flight thereafter, including 25 delays and cancellations. 26

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1 15. The consumer’s primary relationship with respect to his or her flight 2 purchase is with Expedia. 3 16. Expedia charges a booking fee to the airlines, and often that fee is passed 4 directly to consumers within the price of the flight. 5 17. During this unprecedented global health and economic crisis, consumers’ 6 need for refunds over travel vouchers is pressing. Travel vouchers provide little security 7 in this crisis, particularly where many individuals need money now to pay for basics like

8 food and rent. 9 18. When airlines began cancelling flights in the spring of 2020, customers 10 who had booked their flights through Expedia received notice of the cancellations 11 directly from Expedia. 12 19. Expedia told its customers what their options were, and told its customers 13 to contact Expedia to elect an option. 14 20. However, Expedia does not necessarily provide its customers with refunds

15 for canceled flights. 16 21. If an airline tells Expedia that a refund is not an option, Expedia tells its 17 customer that a refund is not an option. 18 22. In its role as middleman or broker, Expedia manages the consumer’s 19 purchase, but generally refuses to ensure that they receive refunds for cancelled flights 20 if an airline does not agree to do so. 21 23. Expedia’s actions have financially damaged Plaintiffs. Plaintiffs each 22 requested refunds for tickets on a cancelled flight and were entitled to a refund. But, as

23 with so many other passengers, Expedia denied them a refund. Expedia has engaged 24 in unfair and deceptive conduct through its policy to refuse refunds, limiting and forcing 25 customers into a rebooked flight or travel voucher instead of returning their money. 26

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1 24. As a result, Plaintiffs brings this action because Plaintiffs did not receive 2 refunds for cancelled flights booked through Expedia, lost the benefit of their bargain 3 and suffered injury to business or property, and are entitled to recover compensatory 4 damages, trebled, and attorney’s fees and costs.

5 III. JURISDICTION AND VENUE 6 25. This Court has jurisdiction over the subject matter of this action under 7 RCW 19.86.090.

8 26. This Court has personal jurisdiction over the Defendant because it is 9 headquartered and resides in King County, Washington. 10 27. Venue is appropriate in this Court because Defendant maintains its 11 principal place of business within King County. Upon information and belief, events and 12 transactions causing the claims herein, including Expedia’s decision-making regarding 13 its refund policy challenged in this lawsuit, has occurred within King County.

14 IV. PARTIES

15 28. Plaintiff Daniel Mahoney is a citizen and resident of the State of . 16 He purchased a ticket from Expedia in December 2019 for travel to Italy in July 2020 on 17 TAP Air Portugal. In May 2020, Expedia notified Plaintiff that his flights had been 18 cancelled. Despite requesting and being entitled to a refund for his cancelled flight, 19 Expedia refused to provide him a refund. 20 29. Plaintiff Jenni Stephenson is a citizen and resident of the State of Texas. 21 She purchased a ticket from Expedia in later February or early March 2020 for travel

22 from Houston, Texas, to Tokyo, Japan on Air Canada. Later in March, Expedia notified 23 Plaintiff that her flights had been cancelled. Despite requesting and being entitled to a 24 refund for her cancelled flight, Expedia refused to provide Plaintiff a refund. 25 30. Plaintiff Jonathan Markham is a citizen and resident of the State of 26 California. He purchased a ticket from Expedia in 2019 for travel from Los Angeles to

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1 Tokyo in May 2020 on All Nippon Airways. In April 2020, Expedia notified Plaintiff that 2 his flight had been cancelled. Despite requesting and being entitled to a refund for his 3 cancelled flight, Expedia refused to provide Plaintiff a refund. 4 31. Defendant Expedia, Inc. is a Washington corporation with a principal place 5 of business at 1111 Way W., Seattle, Washington, 98119-1111. It 6 provides online travel agency services to the general public, including the sale of airline 7 travel on a variety of airlines worldwide. 8 V. FACTS 9 32. On March 11, 2020, the World Health Organization declared COVID-19 a 10 pandemic. That same day, U.S. officials announced new travel bans blocking most 11 visitors from continental Europe to the United States.

12 33. Travel restrictions domestically began on March 16, 2020, with many 13 states, counties, and municipalities announcing shelter-in-place orders throughout the 14 weeks that followed.

15 34. Many other countries have instituted similar travel bans and restrictions. 16 At the time of the drafting of this complaint nearly one year later, most European nations 17 still have extremely strict limitations on Americans wishing to enter their countries. 18 35. As airlines announced flight cancellations (combined with decreased 19 bookings), some took a variety of steps to make it difficult, if not impossible, for 20 consumers to receive any refund on pandemic-cancelled flights. 21 36. Despite its role as middleman or broker in its customers’ purchase of air 22 travel on these airlines, Expedia generally did not intervene or take steps to ensure that

23 its customers were given the right to receive a refund on pandemic-cancelled flights. It 24 failed to do so despite consumers’ right to receive a refund for canceled flights, even 25 with nonrefundable tickets. 26

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1 37. According to the United States Department of Transportation’s April 3, 2 2020, Enforcement Notice, if any airline cancels a flight, passengers are entitled to 3 receive a full refund. 4 38. This notice was issued to “remind” both U.S. and foreign carriers that, 5 during the pandemic, their “obligation to refund passengers for cancelled or significantly 6 delayed flights remains unchanged.” 7 39. The DOT’s notice pointed out that this obligation to promptly refund airfare

8 for flights that a carrier cancels is “longstanding,” citing Enhancing Airline Passenger 9 Protections, 76 Fed. Reg. 23110-01 (April 25, 2011). 10 40. However, many airlines have attempted to keep passenger money 11 through providing travel credits, not refunds. 12 41. When customers purchased tickets from Expedia on flights that were later 13 cancelled, Expedia has not taken steps to ensure its customers have the option of 14 receiving a full refund.

15 42. According to the Department of Transportation, it is an unfair or deceptive 16 practice for an OTA to “fail[] or refus[e] to make proper refunds promptly when service 17 cannot be performed as contracted.” 14 C.F.R. § 399.80(l). 18 43. Expedia customers nationwide have spent hours trying to communicate 19 with Expedia about their failure to obtain refunds of pandemic-cancelled flights and 20 about the inadequacy of the remedies offered, and still Expedia refused to obtain them 21 refunds. 22 44. Many such customers were directed to or elected to contact the airlines

23 that operated the flights they purchased from Expedia, and many were told by those 24 airlines that they needed to contact Expedia with any refund requests. 25 45. In contrast to Expedia’s general policy and practice of accepting airlines’ 26 refusal to refund pandemic-cancelled flights, Expedia did obtain refunds for some

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1 customers—including some of the Plaintiffs herein—after they filed lawsuits or other 2 formal legal action against Expedia. 3 46. Thus, Expedia is capable of getting refunds from its reluctant airline 4 partners for its customers, but only chose to do so when forced, on a “one-time” basis. 5 47. Expedia’s failure to ensure all of its customers refunds, except some of 6 those who went to the trouble and expense of taking legal action, contradicts 7 established transportation requirements that operate for the benefit and protection of

8 OTA consumers, and constitutes an unfair or deceptive trade practice under 9 Washington law. 10 Plaintiff Mahoney 11 48. On or about December 6, 2019, Plaintiff Mahoney purchased a round trip 12 ticket from San Francisco to Milan from Expedia, on flights provided by TAP Air 13 Portugal. 14 49. According to his itinerary supplied by Expedia, he was to depart on

15 July 19, 2020, and return on July 27, 2020. 16 50. Mr. Mahoney was charged a total of $905.08 for these flights. 17 51. On May 24, 2020, Expedia notified Mr. Mahoney by email that the airline 18 had “made an involuntary schedule change” and “unfortunately your original flight is no 19 longer operating” due to the pandemic. 20 52. Expedia told Mr. Mahoney it had “worked closely with TAP Portugal to 21 come up with comparable flight options” and requested his “immediate response to this 22 email with the option [he] would like to proceed.”

23 53. Expedia gave Mr. Mahoney only one option:

24 OPTION 1 Depending on TAP Portugal policy, you may request a full refund for your 25 ticket. If you choose this option, you’ll need to make a new booking based on the flights and prices currently available. 26

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1 54. Expedia also promised to “contact [Mr. Mahoney] first by phone, then by 2 email if the option you choose is no longer available.” 3 55. The day after receiving this email, Mr. Mahoney went to Expedia’s website 4 and initiated a “chat” conversation with an Expedia agent. He requested a refund of his 5 purchase for the canceled flight. The agent said that he would instead receive a 6 voucher for his purchase price for use with American Airlines, valid until December 31, 7 2020. The agent indicated that the airline would not provide a refund. Mr. Mahoney

8 said he wanted a refund, and the agent disconnected the chat. 9 56. Mr. Mahoney promptly initiated a second chat with a second Expedia 10 agent. The second agent said the same thing as the first. The agent said that the 11 airline would only provide a voucher. Mr. Mahoney indicated he believed he had a legal 12 right to a refund. The second agent disconnected the second chat with the Mr. 13 Mahoney. 14 57. Mr. Mahoney spent between 30 and 60 minutes engaged in these two

15 chats with Expedia, to no effect. 16 58. Mr. Mahoney then called Expedia. After reaching an Expedia agent, the 17 agent told Mr. Mahoney the same thing the previous agents had—that that the airline 18 was not offering a refund but only a voucher for use on American Airlines. This agent 19 said the voucher would be valid until December 31, 2021. Again, when Mr. Mahoney 20 asserted he had a right to and wanted a refund, the agent disconnected the call. 21 59. Mr. Mahoney called Expedia a second time and, after reaching a fourth 22 Expedia agent, asked to speak to a supervisor. He explained his previous experiences

23 being disconnected, and the agent said if that happened again, Expedia would call him 24 back. Mr. Mahoney was put on hold. After about 45 minutes, Mr. Mahoney gave up 25 and disconnected. 26

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1 60. The Expedia agent called Mr. Mahoney back and connected him with a 2 supervisor. Mr. Mahoney explained all of his previous contacts and his belief that he 3 was entitled to a refund. The supervisor told Mr. Mahoney that Expedia would need 4 some kind of code from TAP Portugal to process a refund and that “without that code 5 my hands are tied.” The supervisor said he would check into the refund, and that Mr. 6 Mahoney would hear back from Expedia. 7 61. Mr. Mahoney spent over two hours engaged in these calls with Expedia.

8 62. Expedia did not contact Mr. Mahoney again. 9 63. Over a week later, on or about June 3, 2020, Mr. Mahoney called Expedia 10 a third time. When he reached an agent, he told her the entire story again, and again 11 asked for a refund. The agent told Mr. Mahoney she would check with the airline and 12 put Mr. Mahoney on hold. After about 30 or 40 minutes, the agent came back on the 13 line and again said that the airline would only offer him a voucher, not a refund. 14 64. Mr. Mahoney filed a class action lawsuit in this Court in July 2020. In

15 response to that lawsuit, Expedia insisted that Mr. Mahoney was obligated by Expedia’s 16 unilateral “Terms of Use” (dated February 1, 2018) to submit any claims he had against 17 Expedia to an arbitrator, on an individual, not class, basis. 18 65. Expedia threatened to seek sanctions against Mr. Mahoney and his 19 counsel if he did not dismiss his lawsuit and submit his claim instead to individual 20 arbitration. 21 66. Mr. Mahoney filed a voluntary dismissal of his lawsuit and on about 22 October 14, 2020, filed an individual claim against Expedia, pursuant to Expedia’s TOU,

23 with the American Arbitration Association (AAA), seeking treble damages, interest, other 24 actual damages, and injunctive relief. 25 67. The next day, Expedia informed Mr. Mahoney that he would receive a 26 refund from the airline for his canceled flight.

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1 68. On about October 5, Mr. Mahoney received a refund from the airline. 2 69. On about November 12, Expedia directed AAA to dismiss Mr. Mahoney’s 3 claim and force him to file his claim in “small claims court.” 4 70. On the basis of Expedia’s direction, AAA dismissed Mr. Mahoney’s 5 arbitration claim. 6 Plaintiff Stephenson 7 71. In late February or early March 2020, Plaintiff Stephenson purchased a

8 round trip ticket from Houston to Tokyo from Expedia, on flights provided by Air Canada. 9 72. Ms. Stephenson was charged a total of $1,186.85 for these flights. 10 73. On about March 6, 2020, Expedia notified Ms. Stephenson by email that 11 the airline had “made a schedule change to your upcoming trip, and your original flight 12 option is no longer available” due to the pandemic. 13 74. Plaintiff Stephenson spent hours attempting to obtain a refund for this 14 flight through Expedia, and on May 13, 2020, Expedia confirmed that it had “advocated

15 [her] request to the vendor and [was] glad to inform [her] that the airline [had] provided 16 flight options,” including a refund. 17 75. Plaintiff Stephenson promptly confirmed that same day that she wanted a 18 refund. 19 76. However, the next day, Expedia contacted Plaintiff Stephenson again to 20 say that she would receive an “airline credit” valid for 24 months. 21 77. Plaintiff Stephenson then spent several more hours attempting to contact 22 and persuade Expedia to honor the refund it had offered and she accepted, to no avail.

23 78. On about October 1, 2020, Ms. Stephenson contacted Expedia and was 24 told that she would indeed receive a refund within “nine business days.” 25 79. Then on about October 14, 2020, Expedia informed Ms. Stephenson she 26 would receive a refund in 6-8 weeks.

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1 80. On about October 30, 2020, Ms. Stephenson made a legal claim against 2 Expedia through counsel, and on about November 13, 2020, she filed a formal claim in 3 arbitration with AAA, seeking a refund, treble damages, interest, other actual damages, 4 and injunctive relief. 5 81. On November 18, 2020 Plaintiff Stephenson received an email from 6 Expedia indicating that they were “excited to confirm that we processed your refund 7 application today,” and “most refunds will be issued within 12 weeks, but some refunds

8 could take longer, depending on the airline.” 9 82. On about December 23, 2020, Expedia directed AAA to dismiss Ms. 10 Stephenson’s claim and force her to file her claim in “small claims court.” 11 83. On the basis of Expedia’s direction, AAA dismissed Ms. Stephenson’s 12 arbitration claim. 13 84. Ms. Stephenson has not received any refund. 14 Plaintiff Markham

15 85. On or about August 31, 2019, Plaintiff Markham purchased a round trip 16 ticket from Los Angeles to Tokyo from Expedia, on flights provided by All Nippon 17 Airways. 18 86. According to his itinerary supplied by Expedia, he was to depart on May 19 14, 2020, and return on May 26, 2020. 20 87. Plaintiff was charged a total of $491.00 for these flights. 21 88. In April 2020, Expedia notified Plaintiff by email that the airline had 22 cancelled his flights due to the pandemic, and offered him a flight credit.

23 89. Plaintiff Markham spent hours attempting to obtain a refund for his 24 cancelled flight, to no avail. 25 90. On about November 13, 2020, Mr. Markham made a legal claim against 26 Expedia through counsel, and on about December 1, 2020, he filed a formal claim in

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1 arbitration with AAA, seeking a refund, treble damages, interest, other actual damages, 2 and injunctive relief. 3 91. On about December 21, 2020, Expedia notified Mr. Markham through 4 counsel that he would be receiving a refund. 5 92. On about December 23, 2020, Expedia directed AAA to dismiss Mr. 6 Markham’s claim and force him to file his claim in “small claims court.” 7 93. On the basis of Expedia’s direction, AAA dismissed Mr. Markham’s

8 arbitration claim. 9 94. Mr. Markham has not received any refund. 10 Arbitration 11 95. In response to Plaintiff Mahoney’s first lawsuit in July 2020, Expedia 12 insisted that he and all of its customers are bound by its “Terms of Use” (TOU) to bring 13 any claims against Expedia in individual private arbitrations with the AAA. 14 96. Yet, when Mr. Mahoney complied with this demand and filed his claim with

15 the AAA, Expedia insisted that the claim be dismissed and resolved in court, albeit 16 “small claims court.” 17 97. Throughout the fall and winter of 2020, Expedia customers filed individual 18 claims against Expedia with the AAA, pursuant to Expedia’s TOU. In each case, 19 Expedia insisted that the claim be dismissed and resolved in “small claims court.” 20 98. Expedia has forfeited any right to compel its customers to bring their 21 claims in individual arbitrations.

22 VI. CAUSES OF ACTION 23 VIOLATIONS OF THE WASHINGTON CONSUMER PROTECTION ACT 24 99. Plaintiffs restate, re-allege, and incorporate herein by reference the 25 preceding paragraphs as if fully set forth herein and further allege as follows: 26

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1 100. Defendant’s acts and practices, including its failure to ensure that 2 customers whose flights were cancelled due to the pandemic received refunds, and 3 forcing customers to undertake the time and expense of formal legal action to get a 4 refund, are unfair or deceptive practices in trade or commerce and therefore violate the 5 Washington Consumer Protection Act, Wash. Rev. Code § 19.86.010, et seq. 6 101. Defendant’s acts and practices violate federal Department of 7 Transportation rules, including its April 3, 2020, Enforcement Notice; Enhancing Airline

8 Passenger Protections, 76 Fed. Reg. 23110-01 (April 25, 2011); and14 C.F.R. § 9 399.80(l). 10 102. Defendant’s acts and practices caused damage to the business or 11 property of Plaintiffs in connection with the sale and refunds of airline tickets. 12 103. Defendant’s acts and practices causes substantial harm to consumers that 13 is not reasonably avoidable by the consumers and is not outweighed by substantial 14 benefits to consumers.

15 104. Plaintiffs seek monetary damages, treble damages, and such other and 16 further relief as set forth in each of the above-enumerated statutes. 17 VII. PRAYER FOR RELIEF 18 WHEREFORE, Plaintiffs request that the Court enter an order or judgment 19 against Defendant including:

20 A. Damages and refunds in the amount of unrefunded monies paid for tickets 21 sold by Defendant for flights that have been cancelled; 22 B. Actual damages, including compensation for the time spent investigating

23 and responding to Expedia’s unfair practices; 24 C. Treble damages under RCW 19.86.090; 25 26

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1 D. An injunction requiring Defendant to obtain and/or issue refunds to all of 2 its United States customers who purchased flights from Defendant which were canceled 3 due to the pandemic and who have not used any airline credits provided to them. 4 E. Pre-judgment and post-judgment interest on all such monetary relief; 5 F. The costs of bringing this suit, including reasonable attorney’s fees; and 6 G. All other relief to which Plaintiffs may be entitled by law or in equity. 7

8 Dated: March 26, 2021

9 BRESKIN JOHNSON & TOWNSEND, PLLC 10 By: s/ Daniel F. Johnson 11 Daniel F. Johnson, WSBA #27848

12 s/ Cynthia J. Heidelberg Cynthia J Heidelberg, WSBA #44121 13 1000 Second Avenue, Suite 3670 14 Seattle, WA 98104 Tel: (206) 652-8660 15 [email protected] [email protected] 16 Attorneys for Plaintiffs 17 18 19

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