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City of San Antonio, Texas v. Hotels.com, L.P.

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Supreme Court of the United States
City of San Antonio, Texas v. Hotels.com, L.P.
Term: 2020
Important Dates
Argument: April 21, 2021
Decided: May 27, 2021
Outcome
Affirmed
Vote
9-0
Majority
Samuel Alito • Chief Justice John Roberts • Clarence Thomas • Stephen Breyer • Sonia Sotomayor • Elena Kagan • Neil Gorsuch • Brett Kavanaugh • Amy Coney Barrett

City of San Antonio, Texas v. Hotels.com, L.P. is a case argued before the Supreme Court of the United States on April 21, 2021, during the court's October 2020-2021 term.

In a unanimous opinion, the court affirmed the U.S. Court of Appeals for the 5th Circuit's ruling, holding that Rule 39 of the Federal Rules for Appellate Procedure does not allow a district court to change a court of appeals’ allocation of the costs listed in subdivision (e). Justice Samuel Alito delivered the opinion of the court.[1]

HIGHLIGHTS
  • The case: A class of 173 Texas municipalities filed a lawsuit against several online travel companies ("OTCs") alleging that the OTCs had not paid and/or had underpaid municipal taxes emanating from the OTCs' service fees. In separate but similar litigation, a federal district court held that the retail rate charged by OTCs was subject to hotel occupancy tax and a state court held that the hotel occupancy tax only applies to the discounted room rate that the OTC pays to the hotel. On appeal from the federal district court, the 5th Circuit ruled in favor of the OTCs, concluding that the state court's decision in the separate case was correct. The OTCs filed a bill of costs with the class of municipalities. The municipalities asked the district court to refuse or reduce the amount owed. The district court ruled that it lacked the discretion to alter the appeal bond costs. The municipalities appealed to the 5th Circuit. The 5th Circuit affirmed the district court's conclusion.
  • The issues: The case concerned Rule 39 of the Federal Rules for Appellate Procedure.
  • The questions presented: "Whether, as the Fifth Circuit alone has held, district courts “lack[] discretion to deny or reduce” appellate costs deemed “taxable” in district court under Fed. R. App. P. 39(e)."[2][3]
  • The outcome: The U.S. Supreme Court affirmed the U.S. Court of Appeals for the 5th Circuit's ruling.


    • The case came on a writ of certiorari to the United States Court of Appeals for the 5th Circuit. To review the lower court's opinion, click here.[4]

    Timeline

    The following timeline details key events in this case:

    Background

    In 2006, the city of San Antonio, Texas ("San Antonio") filed a class-action lawsuit[5] against several online travel companies ("OTCs")[6], alleging that the OTC service fees are part of the occupancy cost, which are subject to municipal taxes. The municipalities sought monetary damages for unpaid and underpaid hotel occupancy taxes and declaratory judgment that the OTCs must collect and remit occupancy taxes based on the retail rate, or the money collected for the combined room rate and service fee.[4]

    In 2011, the federal district court held that the retail rate was subject to the hotel occupancy tax. Meanwhile in similar litigation, the Texas Fourteenth District Court of Appeals, a state court, held that the hotel occupancy tax only applies to the discounted room rate that the OTC pays to the hotel.[7] Back in federal court, the OTCs moved for the district court to amend its judgment in light of the state court's ruling. The district court denied the motion and entered final judgment in favor of the municipalities in the class action suit, awarding them monetary damages in unpaid taxes, interest, and penalties. The OTCs sought approval for appeal bonds covering the judgment and 18 months' worth of interest and penalties. The court approved the amounts and stayed judgment until after all post-judgment motions and appeals were resolved. The OTCs filed their appeal bonds.[4]

    In 2013, the OTCs filed a motion for a new trial. More than two years passed without the district court deciding the OTCs post-judgment motion and the appeal bond amounts increased. In January 2016, the district court denied the post-judgment motions. In April of the same year, the court entered an updated judgment amount, reflecting the increased monetary penalties, taxes, and interest that had accrued since the first judgment. The parties cross-appealed to the U.S. Court of Appeals for the 5th Circuit.[4]

    On appeal, the 5th Circuit ruled in favor of the OTCs, concluding that the state court's decision was correct in ruling that the hotel occupancy tax only applies to the discounted room rate and that the same logic ought to be applied to this litigation. The 5th Circuit vacated the federal district court's ruling. Back in district court, the OTCs moved for final judgment in favor of the OTCs, releasing all monetary damages and awarding costs to the OTCs. The plaintiffs did not object and the district court entered the OTCs order. The OTCs filed a bill of costs in district court. San Antonio requested that the district court refuse to tax or reduce the appeal bond premiums sought by the OTCs. The district court held that it lacked the discretion to reduce the taxation of the bond premiums under Rule 39 of the Federal Rules of Appellate Procedure, and entered a bill of costs against San Antonio. The city appealed to the 5th Circuit.[4]

    On appeal, the 5th Circuit affirmed the district court's judgment, holding that under the Federal Rules of Appellate Procedure, the district court lacked the discretion to reduce or deny the appeal bond costs.[4]

    Questions presented

    The petitioner presented the following questions to the court:[2]

    Questions presented:
    “ Whether, as the Fifth Circuit alone has held, district courts “lack[] discretion to deny or reduce” appellate costs deemed “taxable” in district court under Fed. R. App. P. 39(e).

    [8]

    		”

    Oral argument

    Audio

    Audio of oral argument:[9]



    Transcript

    Transcript of oral argument:[10]

    Outcome

    In a unanimous opinion, the court affirmed the U.S. Court of Appeals for the 5th Circuit's ruling, holding that Rule 39 of the Federal Rules for Appellate Procedure does not allow a district court to change a court of appeals’ allocation of the costs listed in subdivision (e). Justice Samuel Alito delivered the opinion of the court.[1]

    Opinion

    In the court's majority opinion, Justice Samuel Alito wrote:[1]

    “ Civil litigation in the federal courts is often an expensive affair, and each party, win or lose, generally bears many of its own litigation expenses, including attorney’s fees that are subject to the so-called American Rule. Baker Botts L. L. P. v. ASARCO LLC, 576 U.S. 121, 126 (2015). But certain “costs” are treated differently. Federal Rule of Appellate Procedure 39 governs the taxation of appellate “costs,” and the question in this case is whether a district court has the discretion to deny or reduce those costs. We hold that it does not and therefore affirm the judgment below.[8] ”
    —Justice Samuel Alito

    Text of the opinion

    Read the full opinion here.

    October term 2020-2021

    See also: Supreme Court cases, October term 2020-2021

    The Supreme Court began hearing cases for the term on October 5, 2020. The court's yearly term begins on the first Monday in October and lasts until the first Monday in October the following year. The court generally releases the majority of its decisions in mid-June.[11]

    The court issued 67 opinions during its 2020-2021 term. Two cases were decided in one consolidated opinion. Ten cases were decided without argument. Click here for more information on the court's opinions.

    The court agreed to hear 62 cases during its 2020-2021 term. Of those, 12 were originally scheduled for the 2019-2020 term but were delayed due to the coronavirus pandemic. Five cases were removed from the argument calendar.


    See also

    External links

    Footnotes

    1. ↑ 1.0 1.1 1.2 U.S. Supreme Court, City of San Antonio, Texas v. Hotels.com, L.P., decided May 27, 2021
    2. ↑ 2.0 2.1 Supreme Court of the United States, "City of San Antonio, Texas v. Hotels.com, L.P.: Questions presented," accessed January 11, 2021
    3. ↑ Supreme Court of the United States, "City of San Antonio, Texas v. Hotels.com, L.P.: Petition for a writ of certiorari," September 10, 2020
    4. ↑ 4.0 4.1 4.2 4.3 4.4 4.5 U.S. Court of Appeals for the 5th Circuit, City of San Antonio v. Hotels.com, L.P., decided May 11, 2020
    5. ↑ The class included 173 Texas municipalities.
    6. ↑ Including Hotels.com, Hotwire, Orbitz, and Travelocity
    7. ↑ Texas Fourteenth District Court of Appeals, City of Houston v. Hotels.com, L.P., decided December 7, 2011
    8. ↑ 8.0 8.1 Note: This text is quoted verbatim from the original source. Any inconsistencies are attributable to the original source.
    9. ↑ Supreme Court of the United States, "Oral Argument - Audio," accessed April 22, 2021
    10. ↑ Supreme Court of the United States, "Oral Argument - Transcript," accessed April 22, 2021
    11. ↑ SupremeCourt.gov, "A Brief Overview of the Supreme Court," accessed April 20, 2015
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