Buckeye Tree Lodge and Sequoia Village Inn, LLC v. Expedia, Inc. et al

Filing 229

ORDER by Judge Vince Chhabria clarifying Class Definition; denying 199 Motion to Exclude opinions of Dr. Dennis; granting 200 Administrative Motion to File Under Seal; denying 201 Plaintiffs' Motion for Summary Judgment; granting [2 08] Administrative Motion to File Under Seal; granting in part and denying in part 209 Defendants' Motion for Summary Judgment; finding as moot 210 Administrative Motion re testimony; granting 213 Administrative Motion to File Under Seal. (vclc2S, COURT STAFF) (Filed on 9/9/2020)

UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF CALIFORNIA

BUCKEYE TREE LODGE AND
SEQUOIA VILLAGE INN, LLC, et al.,
Plaintiffs,
v.
EXPEDIA, INC., et al.,
Defendants.

Case No. 16-cv-04721-VC
ORDER CLARIFYING CLASS
DEFINITION, DENYING CROSS
MOTIONS FOR SUMMARY
JUDGMENT, AND DENYING
MOTION TO EXCLUDE
Re: Dkt. Nos. 199, 200, 201, 208, 209, 210,
213

Both the plaintiffs and Expedia have moved for summary judgment on whether Expedia
violated the Lanham Act and whether the plaintiffs are entitled to a permanent injunction.
Expedia also argues that the plaintiffs’ claims are moot, the class should be decertified, and the
opinions of Dr. Dennis should be excluded. These requests are denied, except that summary
judgment is granted to Expedia with respect to the allegedly misleading phone numbers. The
Court also recognizes an imprecision in its earlier class certification order, and clarifies the class
definition.
1. There are genuine disputes of fact regarding whether Expedia’s conduct violated the
false advertising prohibitions of the Lanham Act. In particular, there are genuine disputes about
whether: (1) the unavailability messages and Google ads were misleading; and (2) any deception
was material to consumers’ purchasing decisions. See Southland Sod Farms v. Stover Seed Co.,
108 F.3d 1134, 1139 (9th Cir. 1997).

With respect to the “false or misleading” element, a small number of Expedia’s

unavailability messages—most noticeably, “We are sold out”—are literally false when used to
describe availability at hotels for which Expedia never had any beds to sell. See id.; Crawford
Decl. ¶ 8 (Dkt. No. 208-5).1 Most of the other unavailability messages are not literally false but
nonetheless may be misleading. Take, for example, the message “Your dates are popular! Rooms
are unavailable for your trip dates on Expedia. Try new dates to check availability.” Crawford
Decl. ¶ 7. This message seems intuitively to imply that rooms are unavailable because of the
particular dates selected, rather than because Expedia is entirely incapable of booking rooms at
that hotel.2 Similarly, the ads Expedia placed on Google seem quite possibly misleading with
respect to class member hotels. See Dennis Report ¶ 25 (Dkt. No. 195-5); French Decl., Ex. 1 at
93–94 (Dkt. 200-3). Nonetheless, Expedia raises fair concerns about the reliability and probative
value of the plaintiffs’ survey evidence, and the question of whether these phrases were
misleading cannot be answered at summary judgment.
Furthermore, there is a genuine dispute over materiality that also precludes summary
judgment. The plaintiffs have offered competent evidence that the unavailability messages and
Google ads were material to consumers’ purchasing decisions, but Expedia presents contrary
evidence suggesting that the messages were not material in the actual context of how consumers
make travel decisions.
2. Summary judgment is granted to Expedia with respect to claims deriving from
Expedia’s allegedly misleading display of telephone numbers. The plaintiffs give these claims
only cursory treatment, and present no actual evidence that the phone number displays were

1

Other messages that appear literally false when applied to class member hotels, at least in some
circumstances, are: “Sorry, the [Hotel name] is not available for your travel dates. You may
choose alternatives dates OR select from the properties below.”; and “Fully booked! We’re sold
out for your travel dates on our site.” Stevenson Decl. ¶ 7 (Dkt. No. 208-13).
2
Many of the other messages are similar, e.g.: “This property has no availability for your travel
dates on [Expedia, Travelocity, or Orbitz]”; “[Hotel name] has no availability for your travel
dates on Hotels.com.” Other messages appear possibly, but perhaps less likely to be, misleading,
e.g., “Wait a minute. There is no availability for this hotel on Hotels.com. Please amend your
search.” And still other messages seem quite unlikely to have been misleading, e.g. “Sorry, we
aren’t taking reservations for this property on our site.” See Crawford Decl. ¶¶ 7, 9; Stevenson
Decl. ¶ 7.

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false, misleading, or material to consumers’ purchasing decisions.3
3. Expedia argues that regardless of whether the plaintiffs have established a Lanham Act
violation, their claims are moot and they are not entitled to the permanent injunctive relief that
they seek. But the Court cannot reach either of those conclusions on this summary judgment
record.
As a preliminary matter, Expedia seems to conflate standing and mootness in arguing that
there is no longer a live controversy. The named plaintiffs have standing to seek injunctive relief
because the alleged Lanham Act violations were ongoing at the time the complaint was filed (or
at the time the additional plaintiffs intervened). See Friends of the Earth, Inc. v. Laidlaw
Environmental Servs. (TOC), Inc., 528 U.S. 167, 184 (2000). Expedia itself admits that
potentially misleading information about Buckeye Tree Lodge was viewable on its websites for
eighteen months, and past the filing of the complaint.4 See Jolin Decl. ¶ 23 (Dkt. No. 209-27).
Expedia’s arguments that its post-lawsuit actions ended the live controversy are thus better
understood as claims of mootness. “A defendant’s voluntary cessation of allegedly unlawful
conduct ordinarily does not suffice to moot a case” and Expedia “bears the formidable burden of
showing that it is absolutely clear the allegedly wrongful behavior could not reasonably be
expected to recur.” Friends of the Earth, 528 U.S. at 174, 190.
Expedia has not met this burden on the current record. Expedia argues that it has
“resolved any errors” causing class member hotels to appear on its websites and has
implemented “proactive measures” to prevent these “errors” from reoccurring. Mot. for

3

One piece of potentially relevant evidence—an internal Expedia document acknowledging that
the placement of phone numbers on the sites often confuses consumers—appears in the
voluminous class certification record, but the plaintiffs did not introduce this document into the
record on summary judgment, nor did they even provide the Court with a citation to it. See Dkt.
130-14. In any case, the document at most provides evidence that the phone number displays
were misleading; it does not support a conclusion that the displays were material to any
purchasing decisions.
4
There is a question about whether Buckeye Tree Lodge’s change in ownership prevents
Buckeye LLC from seeking injunctive relief on behalf of the lodge. This question has not been
fully developed in the papers, but the parties should address it before trial including, if necessary,
substituting the proper entity.

3

Summary Judgment at 14 (Dkt. No. 209). For example, Expedia points to “investigations”
conducted by its “Health and Safety team” and to contractual obligations it imposes on the bed
banks it works with as proof that the allegedly wrongful conduct will not recur. See Jolin Decl. ¶
14 (Dkt. No. 209-27); Puig Sainz Decl. ¶¶ 4-5 (Dkt. No. 209-35). But these assertions—and the
evidence that accompanies them—are too vague and conclusory to meet the high burden of
showing mootness. Expedia also emphasizes recent policy changes ending the practice of
“calling” Global Distribution Systems for availability information and preventing Expedia from
bidding on Google ads for hotels that do not have availability for a certain period of time. See
Jolin Decl. ¶¶ 12-13 (Dkt. No. 209-27); Taylor Decl. ¶ 7 (Dkt. No. 209-47). But Expedia
portrays these reforms as business decisions, while failing to show that there is anything to keep
it from reversing these decisions if business considerations change. See EEOC v. Federal
Express Corp., 558 F.3d 842, 847-48 (9th Cir. 2009). Indeed, Expedia’s repeated assertions
about the dynamic and complicated nature of the online travel industry suggest that business
considerations in fact frequently do change, and undercut its arguments that the changes are
permanent or will prevent any future misrepresentations from occurring.
Relatedly, Expedia has not shown on this record that permanent injunctive relief is
categorically unavailable to the plaintiffs. As discussed above, there is a genuine question
whether class members are likely to be harmed in the future absent an injunction that either bars
Expedia from making misleading statements about hotels it is incapable of booking or requires
Expedia to institute reforms designed to minimize the chances of such statements inadvertently
appearing. See Sierra Club v. Trump, 963 F.3d 874, 895 (9th Cir. 2020) (stating that a permanent
injunction is warranted where, among other things, “a plaintiff will suffer an irreparable injury
absent injunction”) (citing eBay Inc. v. MercExchange, LLC, 547 U.S. 388, 391 (2006)). Genuine
questions similarly remain as to whether these future harms—or the harms the plaintiffs suffered
in the past—rise to the level of irreparable harm, and whether legal remedies are inadequate
compensation for these harms. See id.; Apple Inc. v. Pystar Corp., 658 F.3d 1150, 1152-53, 1161
(9th Cir. 2011).

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These rulings are without prejudice to Expedia renewing its arguments relating to
mootness or the availability of injunctive relief based on the record developed at trial.
4. At the class certification stage, the Court agreed that an injunctive relief class could be
certified but narrowed the class definition. See Dkt. No. 164. The narrower class definition was
not sufficiently precise, resulting in some confusion at the summary judgment stage and
prompting a suggestion by Expedia that the class should be decertified. The class does not need
to be decertified, but its composition needs to be clarified. Specifically, the class consisting of
“hotels that do not have booking agreements with Expedia and are not capable of being booked
through Expedia, but appear on Expedia’s websites” includes hotels that appeared on Expedia’s
websites when they were not capable of being booked through Expedia at some point during the
class period, regardless of whether they previously had booking agreements with Expedia or later
entered into agreements with Expedia that gave Expedia booking capabilities.5 In addition, it
includes hotels about whom Expedia will make similar statements in the future despite being
incapable of booking rooms at those hotels. See Ollier v. Sweetwater Union High School
District, 768 F.3d 843, 864, 868 (9th Cir. 2014); Walters v. Reno, 145 F.3d 1032, 1036, 1048
(9th Cir. 1998).The inclusion of these possible future class members helps satisfy the numerosity
and other requirements of Rule 23. See Saravia v. Sessions, 280 F.Supp.3d 1168, 1202-03 (N.D.
Cal. 2017), affirmed on other grounds 905 F.3d 1137 (9th Cir. 2018).
5. Expedia has not shown that Dr. Dennis’s opinion must be excluded, especially in the
context of a bench trial. See United States v. Flores, 901 F.3d 1150, 1165 (9th Cir. 2018); see
also Fortune Dynamic, Inc. v. Victoria's Secret Stores Brand Management, Inc., 618 F.3d 1025,
1036 (9th Cir. 2010).
6. A further case management conference is scheduled for October 6, 2020, at 2:00 p.m.
via Zoom. The parties should be prepared to discuss the scheduling of the pretrial conference and
For this reason, Expedia’s argument that Prospect is not a class member because Expedia
facilitated one reservation there in 2016 is incorrect. The fact that a hotel was capable of being
booked at some point in time does not automatically exclude that hotel from being a class
member if they later became incapable of being booked.
5

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trial, as well as any potential complications they foresee in conducting a bench trial over Zoom.
IT IS SO ORDERED.
Dated: September 9, 2020
______________________________________
VINCE CHHABRIA
United States District Judge

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