Hotels.com, L.P. v. Pine Bluff Adver. & Promotion Comm'n

2021 Ark. 196

632 S.W.3d 742

HOTELS.COM, L.P.; Hotwire, Inc.; Trip Network, Inc. (d/b/a Cheaptickets.com); Expedia, Inc.; Internetwork Publishing Corp. (d/b/a Lodging.com ); Orbitz, LLC ; Priceline.com Incorporated (n/k/a Booking Holdings Inc.); Priceline.com LLC ; Travelocity.com L.P. (n/k/a TVL LP); Travelweb LLC; and Site59.com LLC, Appellants

v.PINE BLUFF ADVERTISING AND PROMOTION COMMISSION; Jefferson County, Arkansas; City of North Little Rock, Arkansas; and All Others Similarly Situated; and the State of Arkansas, Appellees

No. CV-20-663

Supreme Court of Arkansas.

Opinion Delivered: October 28, 2021

Quattlebaum, Grooms & Tull PLLC, by: Steven W. Quattlebaum, R. Ryan Younger, Little Rock, and J. Leon Holmes, for appellants.

Thrash Law Firm, P.A., by: Thomas P. Thrash, Little Rock, and Will T. Crowder ; and Law Offices of W. Jackson Williams, PLLC, by: W. Jackson Williams, Little Rock, for appellants Pine Bluff Advertising and Promotion Commission; Jefferson County, Arkansas; City of North Little Rock, Arkansas, and all others similarly situated.

Larry Jegley, Little Rock, Pulaski County Prosecuting Attorney, for appellee State of Arkansas.

ROBIN F. WYNNE, Associate Justice

Defendants in this long-running class-action case, certain online travel companies (the OTCs),¹ appeal the Jefferson County Circuit Court's orders denying intervention to 159 taxing jurisdictions and denying the OTCs’ motion for decertification of any "damages class." They present the following points on appeal: (1) the circuit court lacks jurisdiction to award class-wide damages because there has been no exhaustion of mandatory administrative remedies; (2) the circuit court abused its discretion by failing to follow the requirements of Rule 23 ; and (3) the circuit court abused its discretion by holding that Rule 23 ’s requirements were satisfied to allow certification of any damages issues and claims. We dismiss the appeal for lack of a final or otherwise appealable order.

I. Procedural History

On September 25, 2009, appellees Pine Bluff Advertising and Promotion Commission and Jefferson County, Arkansas, on behalf of themselves and others similarly situated, filed this declaratory-judgment action against the OTCs. Later, appellee the City of North Little Rock was permitted to intervene on behalf of itself and other similarly situated Arkansas cities. Essentially, appellees alleged that the OTCs failed to remit the full amount of taxes imposed by the appellee government entities on hotel accommodations, which the OTCs obtained at discounted rates and then sold to consumers at a higher retail rate. The circuit court granted class certification pursuant to Arkansas Rule of Civil Procedure 23, and this court affirmed. Hotels.com, L.P. v. Pine Bluff Advert. & Promotion Comm'n , 2013 Ark. 392, 430 S.W.3d 56.

After this court affirmed the class-certification order, the parties filed cross-motions for summary judgment. In May 2018, the circuit court denied the OTCs’ motion for summary judgment and granted appellees’ motion for summary judgment. The court ruled that the OTCs’ full gross receipts they receive from customers, including service fees, are subject to the applicable taxes. The circuit court also ruled that the named class members would have thirty days from the date of the order "to petition for additional relief permissible under the law relating to past taxes owed, supplemental relief or otherwise, including but not limited to amending the Complaint." The OTCs filed a petition for writ of prohibition or certiorari in this court, arguing that the circuit court lacked the authority to order additional proceedings on damages. (Case No. CV-18-455.) This court denied the petition. The OTCs also appealed from the summary-judgment order. This court dismissed that appeal for lack of a final order. Hotels.com, L.P. v. Pine Bluff Advert. & Promotion Comm'n , 2019 Ark. 384, 2019 WL 6869541.

In February 2020, appellee the State of Arkansas's motion to intervene was granted. Around that same time, appellees filed an amended and supplemental complaint requesting, in light of the declaratory-judgment determination, a judgment against the OTCs "for all unpaid taxes from 1995 to the present, plus penalties and interest" in an amount to be calculated from the OTCs’ transaction data. The named class members also filed a petition for supplemental relief. Numerous advertising and promotion commissions, cities, and counties—159 taxing jurisdictions total—then sought to intervene, but in July 2020, the circuit court denied intervention based on its findings that joinder is "impractical" and that the class representatives adequately represent the claims of all parties seeking intervention. Also in July 2020, appellees filed a second amended and supplemental complaint, along with an amended petition for supplemental relief. The OTCs filed a motion for clarification of the order denying intervention, requesting that the circuit court clarify that the order does not allow for damages on a class-wide basis, amend the order to remove the language suggesting a damages class is certified, and decertify as to any claimed right of the named plaintiffs to seek damages on a class-wide basis. In September 2020, the circuit court entered an order (1) denying the OTCs’ requests for clarification and amendment of the order and (2) ordering response and reply briefs regarding the request for decertification of any damages class. The OTCs filed a notice of appeal and amended notice of appeal from the July and September 2020 orders.

Meanwhile, the proceedings continued in the circuit court. After considering the parties’ briefs and holding a hearing, the circuit court entered an order in November 2020 denying the OTCs’ combined (1) motion to dismiss and strike plaintiffs’ second amended complaint and (2) motion to dismiss and response to plaintiffs’ amended petition for supplemental relief and the OTCs’ motion for decertification. The OTCs filed a notice of appeal from the November order.

On appeal, the OTCs ask this court to "reverse the Circuit Court's decision to certify class damages issues and claims through its July, September, and November 2020, orders and remand with appropriate instructions."

II. Is There an Appealable Order?

...