Cricket Wireless 2010 Annual Report Download - page 50

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The parties entered into a stipulation of settlement of the class action dated February 18, 2010. The court held a
fairness hearing regarding the settlement on October 4, 2010, and granted final approval and issued a final judgment
on October 14, 2010. The settlement provided for, among other things, dismissal of the lawsuits with prejudice,
releases in favor of the defendants, and payment to the class of $13.75 million, which would include an award of
attorneys’ fees to class plaintiffs’ counsel. The entire settlement amount was previously paid into an escrow account
by our insurance carriers pursuant to the terms of the stipulation of settlement.
Department of Justice Inquiry
On January 7, 2009, we received a letter from the Civil Division of the United States Department of Justice, or
the DOJ. In its letter, the DOJ alleges that between approximately 2002 and 2006, we failed to comply with certain
federal postal regulations that required us to update customer mailing addresses in exchange for receiving certain
bulk mailing rate discounts. As a result, the DOJ has asserted that we violated the False Claims Act, or the FCA, and
are therefore liable for damages. On November 18, 2009, the DOJ presented us with a calculation that single
damages in this matter were $2.7 million for the period from June 2003 through June 2006, which amount may be
trebled under the FCA. The FCA also provides for statutory penalties, which the DOJ has previously asserted could
total up to $11,000 per mailing. The DOJ had also previously asserted as an alternative theory of liability that we are
liable on a basis of unjust enrichment for estimated single damages. We are currently in discussions with the DOJ to
settle this matter.
Other Litigation, Claims and Disputes
In addition to the matters described above, we are often involved in certain other matters which generally arise
in the ordinary course of business and seek monetary damages and other relief. Based upon information currently
available to us, none of these other matters is expected to have a material adverse effect on our business, financial
condition or results of operations.
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