Costco 2012 Annual Report Download - page 72

proceedings. On September 25, 2012, the district court certified a class of women in the United States
denied promotion to warehouse general manager or assistant general manager since January 3, 2002.
Currently the class is believed to be approximately 1,250 people. Costco has sought permission to file
an interlocutory appeal to the Ninth Circuit.
Numerous putative class actions have been brought around the United States against motor fuel
retailers, including the Company, alleging that they have been overcharging consumers 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. The Company 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. Tex.); 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., 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 April 12, 2009, the
Company agreed to settle the actions in which it is named as a defendant. Under the settlement, which
is subject to final approval by the court, the Company agreed, to the extent allowed by law, to install
over five years from the effective date of the settlement temperature-correcting dispensers in the
States of Alabama, Arizona, California, Florida, Georgia, Kentucky, Nevada, New Mexico, North
Carolina, South Carolina, Tennessee, Texas, Utah, and Virginia. Other than payments to class
representatives, the settlement does not provide for cash payments to class members. On
September 22, 2011, the court preliminarily approved a revised settlement, which did not materially
alter the terms. On April 24, 2012, the court granted final approval of the revised settlement. A class
member who objected has filed a notice of appeal from the order approving the settlement. Plaintiffs
have moved for an award of $10 million in attorneys’ fees, as well as an award of costs and payments
to class representatives. The Company has opposed the motion.
On October 4, 2006, the Company received a grand jury subpoena from the United States Attorney’s
Office for the Central District of California, seeking records relating to the Company’s receipt and
handling of hazardous merchandise returned by Costco members and other records. The Company
has entered into a tolling agreement with the United States Attorney’s Office.
The Environmental Protection Agency (EPA) issued an Information Request to the Company, dated
November 1, 2007, regarding warehouses in the states of Arizona, California, Hawaii, and Nevada and
relating to compliance with regulations concerning air-conditioning and refrigeration equipment. On
March 4, 2009, the Company was advised by the Department of Justice that the Department was
prepared to allege that the Company has committed at least nineteen violations of the leak-repair
requirements of 40 C.F.R. § 82.156(i) and at least seventy-four violations of the recordkeeping
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