NetZero 2011 Annual Report Download - page 151

Table of Contents
UNITED ONLINE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
13. COMMITMENTS AND CONTINGENCIES (Continued)
counsel for the plaintiff class that resulted in the dismissal with prejudice of his appeal in January 2012. As a result, the settlement among the
parties is final.
In October 2008, Anthony Michaels filed a purported class action complaint against Classmates Online, Inc., now known as Memory
Lane, Inc., Classmates Media Corporation and United Online, Inc. in Superior Court of the State of California, County of Los Angeles, alleging
causes of action for intentional misrepresentation, negligent misrepresentation, negligence, fraudulent concealment, and for violations of
California Business and Professions Code sections 17200 and 17500 et seq. In December 2008, Xavier Vasquez filed a purported class action
complaint against Classmates Online, Inc., Classmates Media Corporation and United Online, Inc. in Superior Court of Washington, Kings
County, alleging causes of action for violation of the Washington Consumer Protection Act, violation of California's Unfair Competition Law,
violation of California's Consumer Legal Remedies Act, unjust enrichment and violation of California Civil Code section 1694, dealing with
dating services contracts. In both actions, the plaintiffs are seeking injunctive relief and damages. In April 2009, the United States District Court
of the Western District of Washington consolidated the Michaels and the Vasquez actions and designated the Michaels action as the lead case. In
March 2010, the parties entered into a comprehensive class action settlement agreement. In February 2011, the court denied final approval of
such settlement agreement. In March 2011, the parties entered into a revised settlement agreement and, in July 2011, the court issued an order
granting preliminary approval of the revised settlement agreement. The parties subsequently modified the settlement agreement in August 2011.
A hearing on plaintiffs' motion for final approval of the revised settlement agreement was held in December 2011. The parties are currently
awaiting the court's ruling on that motion.
The Company has been cooperating with certain governmental authorities in connection with their respective investigations of its former
post-transaction sales practices and certain other current or former business practices:
•
In 2010, FTD.com Inc. and Classmates Online, Inc. received subpoenas from the Attorney General for the State of Kansas and the
Attorney General for the State of Maryland, respectively. These subpoenas were issued on behalf of a Multistate Work Group that
consists of the Attorneys General for the following states: Alabama, Alaska, Delaware, Florida, Idaho, Illinois, Kansas, Maine,
Maryland, Michigan, New Mexico, New Jersey, North Dakota, Ohio, Oregon, Pennsylvania, South Dakota, Texas, Vermont, and
Washington. Based on the subpoenas, the Company believes that the primary focus of the inquiry concerns certain post-
transaction sales practices in which these subsidiaries previously engaged with certain third-party vendors.
• In 2010, Classmates Online, Inc. received a subpoena from the Attorney General for the District of Columbia regarding the
subsidiary's marketing, billing, and renewal practices, including, without limitation, its former post-transaction sales practices.
•
In July 2011, United Online, Inc. received a civil investigative demand from the Federal Trade Commission regarding certain
post-transaction sales practices in which the Company previously engaged with a certain third-party vendor.
• In July 2011, Classmates Online, Inc. received a civil investigative demand from the Attorney General for the State of
Washington regarding its marketing, refund, cancelation, and renewal practices. In 2009, Classmates Online, Inc. had received a
civil investigative demand from the
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