Class Action Suits Against Foreign Firms Can Be Heard in Israel, Attorney General Says

Opinion offered as Supreme Court weighs appeal from Hotels.com

Avichai Mendelblit, Israel's attorney general.
Tomer Appelbaum

Attorney General Avichai Mandelblit is taking the position that an Israeli plaintiff has the right to file a class action suit in Israeli court against an overseas company even if the company explicitly states on its website that legal action must be carried out according to the laws of another country.

Mandelblit’s opinion, which was presented to the court on Tuesday by Limor Peled, a lawyer in the State Prosecutor’s Office, came in response to a suit filed in September 2016 against the travel website Hotels.com.

Mandelblit asserts that Israel is the proper venue for the suit because the alleged deception occurred in Israel and the site appears in Hebrew for Israeli users. “All this ties the dispute to the Israeli arena,” Peled quoted him as saying.

The suit claims that Hotels.com had misled Israeli consumers by posting hotel rates without including Israel’s 17% value-added tax, which Israeli citizens are required to pay at Israeli hotels. The company responded to the suit by saying the case should not be heard in Israel, noting that it has no operations in the country and that the site states that class action suits must be adjudicated in the state of Texas. Hotel.com’s offices are in Texas and the internet servers involved are based in the Netherlands, it added.

Because Hotels.com has no offices in Israel, the plaintiff received permission from Tel Aviv Magistrate’s Court to file a claim that would be heard in Israel. The company unsuccessfully appealed to Tel Aviv District Court and is now seeking a decision from the Supreme Court.