Costco 2007 Annual Report Download - page 75

seeks compensatory damages, restitution, injunctive relief, attorneys’ fees and costs, prejudgment
interest, and punitive damages. The Court denied the Company’s motion to dismiss the complaint in
which the Company had asked that the challenged practice, while it was still in effect, was
appropriately disclosed to Executive Members. On August 31, 2007, the Court certified a nationwide
class in respect of the breach of contract claim and a California class for the remaining claims.
In Evans, et ano., v. Costco Wholesale Corp., No. BC351869 (commenced in the Superior Court for
the County of Los Angeles and removed to the United States District Court for the Central District of
California), and Dupler v. Costco Wholesale Corp., Index No. 06-007555 (commenced in the Supreme
Court of Nassau County, New York and removed to the United States District Court for the Eastern
District of New York), it is asserted that the Company violated various provisions of California and New
York common law and statutes in connection with a membership renewal practice. Under that practice,
members who pay their renewal fees late generally have their twelve-month membership renewal
periods commence at the time of the prior year’s expiration rather than the time of the late payment.
Plaintiffs in these two actions seek compensatory damages, restitution, disgorgement, preliminary and
permanent injunctive and declaratory relief, attorneys’ fees and costs, prejudgment interest and, in
Evans, punitive damages. Briefing is ongoing concerning plaintiff’s motion for class certification in
Dupler.
Numerous putative class actions have been brought around the United States against motor fuel
retailers, including Costco, alleging that they have been overcharging drivers by selling gasoline or
diesel that is warmer than 60 degrees without adjusting the volume sold to compensate for heat-related
expansion or disclosing the effect of such expansion on the energy equivalent received by the
consumer. Costco is named in the following actions: Raphael Sagalyn, et al. v. Chevron USA, Inc., et
al., Case No. 07-430 (D. Md.); Phyllis Lerner, et al. v. Costco Wholesale Corporation, et al., Case
No. 07-1216 (C.D. Cal.); Linda A. Williams, et al. v. BP Corporation North America, Inc., et al., Case
No. 07-179 (M.D. Ala.); James Graham, et al. v. Chevron USA, Inc., et al., Civil Action No. 07-193
(E.D. Va.); Betty A. Delgado, et al. v. Allsups, Convenience Stores, Inc., et al., Case No. 07-202
(D.N.M.); Gary Kohut, et al. v. Chevron USA, Inc., et al., Case No. 07-285 (D. Nev.); Mark Rushing, et
al. v. Alon USA, Inc., et al., Case No. 06-7621 (N.D. Cal.); James Vanderbilt, et al. v. BP Corporation
North America, Inc., et al., Case No. 06-1052 (W.D. Mo.); Zachary Wilson, et al. v. Ampride, Inc., et al.,
Case No. 06-2582 (D. Kan.); Diane Foster, et al. v. BP North America Petroleum, Inc., et al., Case
No. 07-02059 (W.D. Tenn.); Mara Redstone, et al. v. Chevron USA, Inc., et al., Case No. 07-20751
(S.D. Fla.); Fred Aguirre, et al. v. BP West Coast Products LLC, et al., Case No. 07-1534 (N.D. Cal.);
J.C. Wash, et al. v. Chevron USA, Inc., et al.; Case No. 4:07cv37 (E.D. Mo.); Jonathan Charles Conlin,
et al. v. Chevron USA, Inc., et al.; Case No. 07 0317 (M.D. Tenn.); William Barker, et al. v. Chevron
USA, Inc., et al.; Case No. 07-cv-00293 (D.N.M.); Melissa J. Couch, et al. v. BP Products North
America, Inc., et al., Case No. 07cv291 (E.D. Tx.);S. Garrett Cook, Jr., et al. v. Hess Corporation, et
al., Case No. 07cv750 (M.D. Ala.); Jeff Jenkins, et al. v. Amoco Oil Company, et al., Case
No. 07-cv-00661 (D. Utah); and Mark Wyatt, et al. v. B. P. America Corp. dba Atlantic Richfield
Company, et al., Case No. 07-1754 (S.D. Cal.). On June 18, 2007, the Judicial Panel on Multidistrict
Litigation assigned the action, entitled In re Motor Fuel Temperature Sales Practices Litigation, MDL
Docket No 1840, to Judge Kathryn Vratil in the United States District Court for the District of Kansas.
On August 28, 2007, Judge Vratil held an initial scheduling conference in this proceeding. At that time,
she ordered plaintiffs to file a consolidated complaint in these actions on October 19, 2007, and set a
briefing schedule on challenges to this consolidated complaint that calls for a hearing January 11,
2008.
Mimi Serna, Timothy Herrock, et al. v. Costco Wholesale Corp., Case No. 2:07-CV-1491-AHM (JWJx).
This is a consumer class action filed in March 2007 in the United States District Court for the Central
District of California alleging willful violations of the 15 U.S.C. § 1681c(g) of the Fair Credit Reporting
Act (FCRA). Section 1681c(g), enacted December 4, 2003, provides that “no person that accepts credit
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