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.