Nordstrom 2005 Annual Report Download - page 18

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10
Item 3. Legal Proceedings.
COSMETICS
We were originally named as a defendant along with other department store and specialty retailers in nine separate but virtually identical class
action lawsuits filed in various Superior Courts of the State of California in May, June and July 1998 that were consolidated in Marin County Superior
Court. In May 2000, plaintiffs filed an amended complaint naming a number of manufacturers of cosmetics and fragrances and two other retailers as
additional defendants. Plaintiffs’ amended complaint alleges that the retail price of the “prestige” or “Department Store” cosmetics and fragrances
sold in department and specialty stores was collusively controlled by the retailer and manufacturer defendants in violation of the Cartwright Act and
the California Unfair Competition Act.
Plaintiffs seek treble damages and restitution in an unspecified amount, attorneys’ fees and prejudgment interest, on behalf of a class of all
California residents who purchased cosmetics and fragrances for personal use from any of the defendants during the four years prior to the filing
of the original complaints.
We entered into a settlement agreement with the plaintiffs and the other defendants on July 13, 2003. In furtherance of the settlement agreement,
the case was re-filed in the United States District Court for the Northern District of California on behalf of a class of all persons who currently reside
in the United States and who purchased “Department Store” cosmetics and fragrances from the defendants during the period May 29, 1994 through
July 16, 2003. The Court gave preliminary approval to the settlement, and a summary notice of class certification and the terms of the settlement
were disseminated to class members. On March 30, 2005, the Court entered a final judgment approving the settlement and dismissing the plaintiffs’
claims and the claims of all class members with prejudice, in their entirety. On April 29, 2005, two class members who had objected to the settlement
filed notices of appeal from the Court’s final judgment to the United States Court of Appeals for the Ninth Circuit. The objectors’ appellate brief is due
on March 24, 2006, and plaintiffs’ and defendants’ briefs are due in late April or early May, 2006. It is uncertain when the appeals will be resolved, but the
appeal process could take as much as another year or more. If the Court’s final judgment approving the settlement is affirmed on appeal, or the appeals
are dismissed, the defendants will provide class members with certain free products with an estimated retail value of $175 million and pay the plaintiffs’
attorneys’ fees, awarded by the Court, of $24 million. Our share of the cost of the settlement will not have a material adverse effect on our financial
condition, results of operations or cash flows.
OTHER
We are involved in routine claims, proceedings, and litigation arising from the normal course of our business. We do not believe any such claim,
proceeding or litigation, either alone or in aggregate, will have a material impact on our results of operations, financial position, or liquidity.
Item 4. Submission of Matters to a Vote of Security Holders.
None.