A fight over how deep lawyers can dig into the books of major online travel sites landed in a Clark County courtroom on Thursday, as a judge weighed the scope of discovery in a long-running tax case that could be worth hundreds of millions of dollars to Nevada.
The lawsuit, filed in 2020, claims that third-party booking platforms charged customers hotel taxes based on higher retail room rates but then paid state and local governments using lower wholesale rates, leaving a gap that plaintiffs say could add up to hundreds of millions. They have estimated that the total disputed revenue could top $1 billion.
The case was brought by Las Vegas communications consultants Sig Rogich and Mark Fierro and targets several large online booking platforms. According to the complaint filed with Foster Garvey, the plaintiffs are seeking damages on Nevada’s behalf under the state’s False Claims Act. Their billion-dollar-plus revenue estimate has appeared in prior coverage of the litigation, including national trade reporting.
Judge Hears Arguments On How Deep Discovery Can Go
As reported by the Las Vegas Review-Journal, lawyers argued Thursday in front of Eighth Judicial District Court Judge Mark Denton, who took the discovery motion under submission rather than ruling on the spot.
The immediate clash was over whether the plaintiffs can pursue broad discovery, including documents and testimony from related lawsuits in other states, or whether they have to keep their fishing net closer to home. Denton left the hearing planning to issue a written decision on how far those requests can reach.
Defendants Push To Keep The Case Narrow
Defense lawyers urged the court to cap discovery at the statutory period that begins in 2015, arguing that older materials would have little or no bearing on Nevada’s claims. Earlier reporting on the broader litigation noted that the travel companies have repeatedly tried to get the case tossed out or trimmed back and have asked higher courts to step in.
The companies say they pay hotel taxes based on what they actually pay the hotels, not on the higher amount charged to travelers, and they point to legal rulings in other states that they argue back up that approach.
Timeline And What Comes Next
Judge Denton did not rule from the bench and said he would weigh the parties’ arguments before issuing a written order, which means the discovery fight is likely to drag on. According to the Las Vegas Review-Journal, the case is still on a court calendar that pegs a trial date in 2027. How much discovery Denton allows will heavily influence what documents and testimony each side can put on the table as that distant trial date creeps closer.
Legal Angle
The plaintiffs are proceeding under Nevada’s False Claims Act, which lets private "qui tam" relators sue on behalf of the government when someone knowingly hides or improperly avoids obligations to state or local agencies. Nevada’s version is set out in NRS Chapter 357, including NRS 357.040, which covers so-called reverse false-claim theories that involve alleged underpayments to the government.
If Denton ultimately allows more expansive discovery, that could strengthen the plaintiffs’ effort to show a pattern of under-remittance and, if they win at trial, could expose the defendants to recovery of unpaid taxes, interest and civil penalties. For a deeper look at the statute, see the discussion of NRS 357.040 at Justia.
