deceptive resort fee case against Marriott survives

Hall v. Marriott Int’l, Inc., No. 19-CV-1715 JLS (AHG), 2020
WL 4727069 (S.D. Cal. Aug. 14, 2020)

A class action against Marriott for deceptive “resort” and
other added fees that make the total price of a hotel room impossible to
determine/compare with other prices until late in the transaction (at best)
proceeds. Marriott advertises its available rooms and daily room rates online
through its own website and the websites of third-party online travel agencies
(OTAs), such as Priceline and Expedia.

On its own site, search results by destination and date list
various hotels and rooms with matching availability, but the quoted daily room
rate for each hotel doesn’t include or mention the mandatory resort fee a
consumer must pay.

Once a consumer selects an option, another webpage lists
available rooms with daily rates. This time there’s a light blue box at the top
of the page with blue bold font that states that a “daily destination amenity
fee will be added to the room rate,” followed by the hours for the property’s
concierge lounge. If a consumer selects a specific room, there is a “USD
subtotal” for the reservation consisting of the “USD/Night” added to “USD Taxes
and Fees.” Although there’s a stopwatch graphic ticking that allegedly
encourages consumers to complete their reservation quickly, if the consumer
clicks the “Summary of Charges” menu, they get summary breaking down the
overall costs of the reservation by room rate, “Destination Amenity Fee,” and
“Estimated government taxes and fees.” In smaller and lighter-colored font, the
page displays “Additional Charges,” including on-site parking and valet parking
fees.
At some properties, there’s no amenity fee, and the “USD Taxes and Fees”
consists solely of government taxes and fees. This is allegedly misleading
because Marriott “USD Taxes and Fees” to represent one component of the hotel
room charge, regardless of whether the “USD Taxes and Fees” includes an amenity
fee or not. Plaintiff also alleged that the website was misleading because of
inconsistent representations regarding what amenities are covered by the
amenity fee or are offered complimentary. For example, a hotel may indicate
that the amenity fee “includes high speed Internet/resort equipment
rentals/fitness classes and more” and simultaneously advertise that fitness
classes are “[c]omplimentary” and that the “[f]itness center is free of charge
for hotel guests.”

Marriott also allegedly misleadingly fails to include resort
fees in the rates advertised by OTAs. On Expedia, for example, the quoted room
rate does not include or mention any resort or amenity fee. When a consumer
clicks “Select your room,” Expedia directs the consumer to another page
containing the same quoted room rate. Selecting the quoted price then directs
the consumer to yet another page that fails to display a resort or amenity fee.
Instead, the page includes only the discounted bargain price and the “Taxes and
Fees,” indicating that there is a “Mandatory property fee: Collected by
property” with a link to “Details.” Only by clicking on “Details” does the
consumer learn the amount of the resort fee and what it claims to include.
Nonetheless, Expedia may advertise that a room includes “Free WiFi,” while
simultaneously indicating that the “Resort fee” includes “Internet access.”
Expedia also allegedly encourages consumers to complete a booking by displaying
stopwatches indicating how many other people are viewing the property and how
many of that room type are still available.

Plaintiff brought the usual California claims, alleging
deceptiveness because: (1) Marriott doesn’t include mandatory resort fees in
initially advertised room rates; (2) Marriott doesn’t break out the cost of
mandatory resort fees when later listing the summary of charges for a hotel
room; (3) Marriott includes mandatory resort fees within the broader heading of
“taxes and fees,” which leads consumers to believe the resort fees are
government-imposed charges; (4) Marriott doesn’t inform consumers of the
services included in the resort fee; (5) Marriott falsely states that certain
amenities are complimentary when it later describes them as covered by the
resort fee; and (6) Marriott provides such pricing information to consumers in
an inconsistent manner across different hotels, compounding the confusion.

The court rejected Marriott’s argument that the plaintiff
couldn’t challenge statements made on third-party OTAs because he himself did
not rely on any OTA websites when booking a Marriott hotel room, but he was an
acceptable representative plaintiff for the allegedly consistent false
advertising, “regardless of whether those prices were displayed directly on Defendant’s
website or indirectly on third-party OTAs’ websites.” This was a question for
the certification stage.

He also sufficiently alleged an injury even though he was aware
of the total amount he paid, including the resort fee.  He alleged that he “paid hotel charges that
were not as advertised,” and paid a higher price than he would have “in the
absence of Defendant’s misrepresentations and omissions.” In Hinojos v. Kohl’s
Corporation, 718 F.3d 1098 (9th Cir.), as amended on denial of reh’g and reh’g
en banc (July 8, 2013), even when the consumer knew how much he’d pay for
allegedly falsely advertised “discounted” merchandise, the court found that the
plaintiff stated a claim because “regular” price matters to consumers even when
they’re receiving discounts.  “[A]lthough
Plaintiff may have known the full amount of money he would be charged for his
hotel room, the room’s regular or baseline price matters, and the inclusion or
omission of resort fees affects that consumer valuation.”

For similar reasons, he had standing to seek injunctive
relief. The Ninth Circuit has already held that, “[i]n some cases, the threat
of future harm may be the consumer’s plausible allegations that she will be
unable to rely on the product’s advertising or labeling in the future, and so
will not purchase the product although she would like to.” Here, the plaintiff
alleged that, “[u]ntil Marriott changes its practices, Plaintiff will be unable
to determine what his true hotel charges will be and what a specific fee covers,
as some Marriott hotels do not disclose what is and is not included in which
fees, and other Marriott hotels state that an amenity is both complimentary
when it in fact is being charged for in a fee.”

And he sufficiently alleged misleadingness: (1) Marriott allegedly
omits the resort fee from its initial advertised price, luring customers in
with an artificially low advertised rate; (2) by combining the resort fee with
taxes under the heading “Taxes and Fees,” Marriott misleads consumers into
believing that the additional fees are government-imposed (which, among other
things, suggests that consumers couldn’t avoid them by choosing a different
hotel); and (3) Marriott misleads consumers by representing that the resort fee
covers certain amenities that are advertised as complimentary or by
representing that the resort fee covers certain expenses that are charged
separately.

Marriott argued that, because the consumer is twice informed
of the resort fee before committing to a reservation, “no reasonable consumer
would believe Marriott does not charge a $30 resort fee above and beyond the
$369 rate for the room at the Marriott Marquis San Diego.” And the countdown
clock, it argued, “is not deceptive,” but rather “put[s the consumer] on notice
that the rate is subject to change if booking is delayed.”

But that wasn’t the alleged misleadingness. Bait and switch
was the problem. [And really why regulators should take action, given the
barriers to consumer class actions here.] On a motion to dismiss, the court
wasn’t going to conclude as a matter of law that the alleged failure to
disclose the resort fee until a consumer is invested in the booking process wouldn’t
deceive a reasonable consumer.

So too with the alleged concealment of the resort fee in
“Taxes and Fees.” “Although this theory is the weakest of Plaintiff’s alleged
misrepresentations, the Court is not prepared to conclude at this stage as a
matter of law that no reasonable consumer would be misled.”

Failure to disclose covered amenities: The alleged
misleadingness was the representation that certain amenities are offered
“complimentary,” whereas the consumer is really paying for them through the
resort fee. This theory also survived the motion to dismiss.

Reliance was also sufficiently alleged at this stage.

Finally, Marriott argued that hotel rooms were neither
“goods” nor “services” covered by the CLRA.  Fairbanks v. Superior Court, 46 Cal. 4th 56
(Cal. 2009), held that insurance was not a good or service under the CLRA
because the California Legislature deliberately excluded “insurance” from the
statutory definition of services that had appeared in the National Consumer
Act, on which the CLRA was modeled. But that case didn’t establish that hotel
rooms and related amenities were not covered by the CLRA.

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