Cohen Milstein Sellers & Toll, a plaintiffs firm that has a track record of partnering with public sector clients, earned $5.4 million for its work on behalf of Chicago in a suit looking to collect higher taxes from Expedia Inc.
The fees for Cohen Milstein, whose partner Carol Gilden served as outside counsel for the city of Chicago, come in connection with an $18 million settlement that Expedia and two subsidiaries—Hotwire and Hotels.com—paid to resolve tax-related litigation in Illinois’ Cook County Circuit Court. Sidley Austin represented Expedia in the case.
The company made the settlement payment in May, according to the Chicago Tribune, which first noted the agreement and Cohen Milstein’s fee in a report that cited information received through a public records request. A spokesman for Chicago’s law department confirmed the settlement and Gilden’s role on Wednesday, but did not immediately provide further comment on the matter.
The case itself dates back to 2005 and involves allegations that Expedia and its subsidiaries were failing to collect and pay the proper amount under a city ordinance known as the Chicago Hotel Accommodations Tax, according to court documents.
The city and its lawyers had the upper hand in the litigation at one point, convincing an Illinois judge in 2013 that Chicago deserved back taxes from the online travel companies. The court later entered a judgment of $29.1 million in Chicago’s favor.
But Expedia and its legal team from Sidley Austin mounted a challenge at the Illinois Appellate Court, First Judicial District, which issued a ruling this year siding with the Bellevue, Washington-based company.
On April 26, a three-judge appellate panel reversed the judgment against Expedia and its subsidiaries, sending the case back to a lower court with instructions to grant Expedia summary judgment. Two days later, Expedia noted in a filing with the U.S. Securities and Exchange Commission that it had reached a deal “in principle” to resolve the long-running tax litigation with Chicago. The agreement was formalized in court filings around the same time.
For Cohen Milstein, the Expedia case was just one of the firm’s recent engagements for the Chicago city government. In 2014, the Windy City tapped the firm’s public client practice group to file suit against a number of major drug companies, including OxyContin maker Purdue Pharma LP, accusing them of misleading the public about the addiction risks of opioid painkillers.
Leadership in the opioid case, however, traveled to Motley Rice along with Linda Singer, a former attorney general of Washington, D.C., now in private practice. Singer previously started and led Cohen Milstein’s public client group, which partners with state attorneys general and other government entities, but she jumped to Motley Rice early this year to lead a public client practice at the firm.
In the wake of Singer’s departure, Cohen Milstein installed Washington, D.C.-based partners Betsy Miller and Victoria Nugent as co-leaders of its public client group. Miller, who was once chief of staff in the D.C. attorney general’s office and senior counsel under Singer, had helped start Cohen Milstein’s public client group in 2009, while Nugent joined the practice in 2011.
Speaking with The American Lawyer in February, both Miller and Nugent said they expected Cohen Milstein’s public client group to remain active under their leadership. In the past, Miller has represented the state of Mississippi in probes of credit ratings agencies Moody’s Corp. and Standard & Poor’s Financial Services LLC stemming from the financial crisis. Nugent, for her part, has had a role representing Nevada in litigation alleging deceptive mortgage lending in the state.