State Law

Alamo and National said in a lawsuit filed Friday in the Circuit Court of Cook County, Illinois, that Orbitz is willfully violating their online listing agreement and is misleading consumers by removing both Alamo and National from Oribiz's main rental car matrix.

The lawsuit said that Orbitz demanded a $1.5 million payment not required by their joint listing agreement, which runs through Dec. 31, 2008. When the owners of Alamo and Nation refused to make the additional payment, Orbitz retaliated and deliberately violated its contract by removing the rental car companies from its main rental car matrix, according to the lawsuit.

"This isn't just about Orbitz deliberately violating its contracts with Alamo and National - it's also about violating the trust of consumers," Greg Stubblefield, president of Alamo Rent A Car and National Car Rental, said in a statement. "We hope this lawsuit sends a powerful message that our company and our industry won't tolerate this kind of conduct."

A spokesman for Chicago-based Orbitz (NYSE: OWW) said the lawsuit lacks merit and Vanguard is just upset with the way that Orbitz sorts its rental car search results. In August 2007, Enterprise Rent-A-Car acquired Tulsa, Okla.-based Vanguard Car Rental Group Inc., which operates the National Car Rental and Alamo Rent A Car brands.

"Vanguard wants those results to be sorted in a way that is not required, and which would take away reservations from other valued suppliers," said Brian Hoyt, Vice President of Corporate Communication and Government Affairs for Orbitz. "The bottom line is that Vanguard is trying to use a lawsuit to get a sorting result from Orbitz that Vanguard and Orbitz did not agree to. In short, Vanguard is trying to use its lawsuit to get something for nothing."

In the lawsuit, Alamo and National asked the court for a temporary restraining order, a preliminary injunction and a permanent injunction, specific performance damages, punitive damages, and attorneys' fees.

Alamo estimates that the alleged breach of contract by Orbitz could cost the company more than $27 million in revenue through the remainder of 2008 especially as people begin booking summer vacations.

Hoyt added that Orbitz will vigorously defend itself against Vanguard's "baseless" attempts.

The Taylor Family of St. Louis owns and operates Alamo Rent A Car, National Car Rental and Enterprise Rent-A-Car.

Full post as published by Showmeblawgs on May 04, 2008 (boomark / email).