Nordstrom 1999 Annual Report Download - page 49

47NORDSTROM, INC. AND SUBSIDIARIES
Note 15: Contingent Liabilities
Because the cosmetics and Nine West lawsuits described
below are still in their preliminary stages, the Company is
not in a position at this time to quantify the amount or
range of any possible losses related to those claims. The
Company intends to vigorously defend itself in those
cases.While no assurance can be given as to the ultimate
outcomes of these lawsuits, based on preliminary investi-
gations, management currently believes that resolving
these matters will not have a material adverse effect on
the Company’s financial position.
Cosmetics. The Company is a defendant along with other
department stores in nine separate but virtually identical
lawsuits filed in various Superior Courts of the State of
California in May, June and July 1998 that have now been
consolidated in Marin County state court. The plaintiffs
seek to represent a class of all California residents who
purchased cosmetics and fragrances for personal use from
any of the defendants during the period May 1994
through May 1998. Plaintiffs’ consolidated complaint
alleges that the Company and other department stores
agreed to charge identical prices for cosmetics and fra-
grances, not to discount such prices, and to urge manufac-
turers to refuse to sell to retailers who sell cosmetics and
fragrances at discount prices, resulting in artificially inflat-
ed retail prices paid by the class in violation of California
state law.The plaintiffs seek treble damages in an unspeci-
fied amount, attorneys’ fees and prejudgment interest.
Defendants, including the Company, have answered the
consolidated complaint denying the allegations. Discovery
has commenced and defendants are nearing completion
of the initial phase of producing documents and respond-
ing to plaintiffs’ other discovery requests. Plaintiffs have
not yet moved for class certification.
Nine West. The Company was named as a defendant in a
number of substantially identical lawsuits filed in federal
district courts in New York and elsewhere beginning in
January and February 1999. In addition to Nine West, a
leading manufacturer and retailer of men’s, women’s and
children’s non-athletic footwear and accessories, which
has subsequently been acquired by Jones Apparel, other
defendants include various department store and special-
ty retailers. The lawsuits have now been consolidated in
federal district court in New York and purport to be
brought on behalf of a class of persons who purchased
Nine West footwear from the defendants during the peri-
od January 1988 to mid-February 1999. Plaintiffs’ con-
solidated complaint alleges that the retailer defendants
agreed with Nine West and with each other on the mini-
mum prices to be charged for Nine West shoes. The
plaintiffs seek treble damages in an unspecified amount,
attorneys’ fees and prejudgment interest. Defendants
moved to dismiss the consolidated complaint, and the
court denied the motion on January 7, 2000.The Court
had stayed discovery pending its decision on the motion
to dismiss, and defendants have now begun the process of
producing documents and responding to plaintiffs’ other
discovery requests. Plaintiffs have not yet moved for class
certification.
Vacation Policy.The Company has reached a settlement in
its previously described lawsuit relating to its vacation
policy. The settlement is subject to the execution of a
definitive settlement agreement and court approval. A
final approval hearing has been set for April 28, 2000.
Saipan. The Company has reached a settlement in its
previously described lawsuits relating to its sourcing of
clothing products from independent garment manufac-
turers in Saipan (Commonwealth of Northern Mariana
Islands). The settlement is subject to court approval. No
hearing has been set to date.
Other. The Company is also subject to other ordinary
routine litigation incidental to its business and with
respect to which no material liability is expected.