Costco 2012 Annual Report Download - page 73

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requirements of 40 C.F.R. § 82.166(k), (m) at warehouses in these states. The Company has
responded to these allegations, is engaged in communications with the Department about these and
additional allegations, and has entered into tolling agreements. Substantial penalties may be levied for
violations of the Clean Air Act. The Company is cooperating with this inquiry.
On October 7, 2009, the District Attorneys for San Diego, San Joaquin and Solano Counties filed a
complaint, People of the State of California v. Costco Wholesale Corp., et al, No. 37-2009-00099912
(Superior Court for the County of San Diego), alleging on information and belief that the Company has
violated and continues to violate provisions of the California Health and Safety Code and the Business
and Professions Code through the use of certain spill clean-up materials at its gasoline stations. Relief
sought includes, among other things, requests for preliminary and permanent injunctive relief, civil
penalties, costs and attorneys’ fees.
The Company has received notices from most states stating that they have appointed an agent to
conduct an examination of the books and records of the Company to determine whether it has
complied with state unclaimed property laws. In addition to seeking the turnover of unclaimed property
subject to escheat laws, the states may seek interest, penalties, costs of examinations, and other relief.
The State of Washington conducted such an examination on its own behalf and on February 4, 2011
issued an assessment of $3.3 million. The Company filed suit on March 4, 2011, to contest the
assessment. In July 2012, summary judgment on liability was granted in favor of the State; damages
will be determined at trial.
The Company does not believe that any pending claim, proceeding or litigation, either alone or in the
aggregate, will have a material adverse effect on the Company’s financial position; however, it is
possible that an unfavorable outcome of some or all of the matters, however unlikely, could result in a
charge that might be material to the results of an individual fiscal quarter.
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