Free Response to Motion - District Court of Federal Claims - federal

Case 1:05-cv-00956-CCM

Document 30

Filed 08/04/2006

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IN THE UNITED STATES COURT OF FEDERAL CLAIMS

DAVID S. and MALIA A. LITMAN, Plaintiffs, No. 05-956T v. THE UNITED STATES OF AMERICA, Defendant.

ROBERT B. and MICHELLE S. DIENER, Plaintiffs, No. 05-971T v. THE UNITED STATES OF AMERICA, Defendant.

HOTELS.COM, INC. and Subsidiaries (f/k/a HOTEL RESERVATIONS NETWORK, INC.) Plaintiffs, v. THE UNITED STATES OF AMERICA, Defendant. No. 06-285T Judge Christine O. C. Miller

HOTELS.COM'S RESPONSE TO THE UNITED STATES' MOTION FOR LEAVE TO FILE AMENDED COUNTERCLAIMS AGAINST THE LITMANS AND DIENERS Plaintiffs Hotels.com, Inc. and Subsidiaries ("Hotels.com") have no objection to the United States' motion for leave to amend its pleadings in order to assert protective claims for additional tax, interest and penalties against plaintiffs Robert and Michelle Diener and David and Malia Litman. 1
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Case 1:05-cv-00956-CCM

Document 30

Filed 08/04/2006

Page 2 of 2

However, contrary to the government's intimation, Hotels.com's assertion that the IPO Shares' value may be greater than $16.00 is nothing new. Hotels.com's refund claim, a copy of which was filed with its Complaint, alerted the IRS to this possibility: "Hotels.com reserves the right to offer additional evidence of the fair market value of the IPO Shares as of the date of issuance, which value may be greater than or less than the basis used in connection with the original 2000 Federal Income Tax Return or herein." See Hotels.com Complaint Ex. 6 (emphasis added). This position was again asserted in its Complaint, in virtually identical language: "In the alternative, Hotels.com is entitled to a refund of tax, penalties and interest paid, and interest provided by law, in amounts consistent with such other evidence of the fair market value of the IPO Shares as of the date of issuance, which value may be greater than or less than the basis used in connection with the original 2000 Federal Income Tax Return or herein." See Hotels.com Complaint ¶ 31. The parties exchanged expert reports on June 21, 2006, at which time Hotels.com's alternative valuation position was further articulated. So although in relation to the original Litman and Diener suits, filed in 2005, Hotels.com's assertion that the IPO Shares' value may be greater than $16.00 could be viewed as "recent," the assertion could not properly be characterized as surprise to any of the parties. Dated: August 4, 2006

By s/ Kim Marie K. Boylan KIM MARIE K. BOYLAN Attorney of Record Latham & Watkins LLP 555 Eleventh Street, N.W., Suite 1000 Washington, D.C. 20004-1304 (202) 637-2235 (202) 637-2201 [email protected] Of Counsel: KARI M. LARSON Latham & Watkins LLP 555 Eleventh Street, N.W., Suite 1000 Washington, D.C. 20004-1304 (202) 637-1018 (202) 637-2201 [email protected]

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