CarMax 2016 Annual Report Download - page 73
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Future Minimum Lease Obligations
As of February 29, 2016
Operating
Capital Finance Lease
(In thousands) Lease (1) Leases (1) Commitments (1)
Fiscal 2017 $ 354 $ 48,390 $ 44,430
Fiscal 2018 354 47,199 44,853
Fiscal 2019 354 45,394 45,975
Fiscal 2020 354 44,876 44,221
Fiscal 2021 393 36,404 39,778
Fiscal 2022 and thereafter 4,417 556,774 469,694
Total minimum lease payments 6,226 $ 779,037 $ 688,951
Less amounts representing interest (3,451)
Present value of net minimum lease payments $ 2,775
(1) Excludes taxes, insurance and other costs payable directly by us. These costs vary from year to year and are incurred in the ordinary course
of business.
16. COMMITMENTS AND CONTINGENCIES
(A) Litigation
On April 2, 2008, Mr. John Fowler filed a putative class action lawsuit against CarMax Auto Superstores California, LLC and
CarMax Auto Superstores West Coast, Inc. in the Superior Court of California, County of Los Angeles. Subsequently, two other
lawsuits, Leena Areso et al. v. CarMax Auto Superstores California, LLC and Justin Weaver v. CarMax Auto Superstores California,
LLC, were consolidated as part of the Fowler case. The allegations in the consolidated case involved: (1) failure to provide meal
and rest breaks or compensation in lieu thereof; (2) failure to pay wages of terminated or resigned employees related to meal and
rest breaks and overtime; (3) failure to pay overtime; (4) failure to comply with itemized employee wage statement provisions;
(5) unfair competition; and (6) California’s Labor Code Private Attorney General Act. The putative class consisted of sales
consultants, sales managers, and other hourly employees who worked for the company in California from April 2, 2004, to the
present. On May 12, 2009, the court dismissed all of the class claims with respect to the sales manager putative class. On June
16, 2009, the court dismissed all claims related to the failure to comply with the itemized employee wage statement provisions. The
court also granted CarMax’s motion for summary adjudication with regard to CarMax’s alleged failure to pay overtime to the sales
consultant putative class.
The claims currently remaining in the lawsuit regarding the sales consultant putative class are: (1) failure to provide meal and rest
breaks or compensation in lieu thereof; (2) failure to pay wages of terminated or resigned employees related to meal and rest
breaks; (3) unfair competition; and (4) California’s Labor Code Private Attorney General Act. On November 21, 2011, the court
granted CarMax’s motion to compel the plaintiffs’ remaining claims into arbitration on an individual basis. The plaintiffs appealed
the court’s ruling and on March 26, 2013, the California Court of Appeal reversed the trial court’s order granting CarMax’s motion
to compel arbitration. On October 8, 2013, CarMax filed a petition for a writ of certiorari seeking review in the United States
Supreme Court. On February 24, 2014, the United States Supreme Court granted CarMax’s petition for certiorari, vacated the
California Court of Appeal decision and remanded the case to the California Court of Appeal for further
consideration. The California Court of Appeal determined that the plaintiffs’ Labor Code Private Attorney General Act claim is
not subject to arbitration, but the remaining claims are subject to arbitration on an individual basis. CarMax appealed this decision
with respect to the Private Attorney General Act claim on March 9, 2015 by filing a petition for review with the California Supreme
Court. On April 22, 2015, the California Supreme Court denied the petition for review. On August 20, 2015, CarMax filed a
petition for a writ of certiorari seeking review in the United States Supreme Court, which was denied. On March 30, 2016, the
remaining claims asserted by Fowler were settled for an immaterial amount. The non-Private Attorney General Act claims asserted
by Areso are subject to arbitration. Areso’s Private Attorney General Act claim is stayed in the California state court, pending
arbitration. Once the stay is removed, the Private Attorney General Act claim, now asserted solely by Areso, may proceed in the
California state court. The Areso lawsuit seeks compensatory and special damages, wages, interest, civil and statutory penalties,
restitution, injunctive relief and the recovery of attorneys’ fees. We are unable to make a reasonable estimate of the amount or
range of loss that could result from an unfavorable outcome in this matter.
On October 15, 2015, CarMax Superstores California, LLC, and CarMax Auto Superstores West Coast, Inc. were served with a
complaint filed on behalf of Mr. Craig Weiss in the Superior Court of California, County of Placer, asserting Private Attorney