Petsmart 2011 Annual Report Download - page 79

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PetSmart, Inc. and Subsidiaries
Notes to the Consolidated Financial Statements — (Continued)
Product Purchase Commitments
As of January 29, 2012, we had various commitments to purchase product from certain vendors that are not
material to our total inventory purchases.
Litigation and Settlements
In January 2011, we were named as a defendant in Pedroza v. PetSmart, Inc., et al., a lawsuit originally
filed in California Superior Court for the County of San Bernardino. The case has been removed to the U.S. Dis-
trict Court for the Central District of California. The complaint alleges, purportedly on behalf of current and
former exempt store management in California, that we improperly classified our store management as exempt
pursuant to the California Labor Code, and as a result failed to: (i) pay or provide to such managers proper wag-
es, overtime compensation, or rest or meal periods, (ii) maintain and provide accurate wage-related statements
and records, and (iii) reimburse certain business expenses, in each case as is required by the California Labor
Code. The lawsuit seeks compensatory damages, statutory penalties and other relief, including liquidated dam-
ages, attorneys’ fees, costs and injunctive relief. This case is still in its early stages and, accordingly, we are not
yet able to reasonably estimate the monetary exposure associated with the lawsuit. We believe, however, that the
lawsuit is without merit and that the case should not be certified as a class or collective action, and we are vigo-
rously defending these claims. For these reasons, we have not accrued any liability.
Additionally, in October 2011, we were named as a defendant in Acosta v. PetSmart, Inc., et. al., a lawsuit
originally filed in California Superior Court for the County of Los Angeles. The Acosta complaint raises sub-
stantially similar allegations to those raised in the Pedroza case, but the allegations in Acosta are limited to store
Operations Managers only. Like Pedroza, the Acosta lawsuit seeks compensatory damages, statutory penalties,
and other relief, including liquidated damages, attorneys’ fees, and costs. This case is just entering the early
stages of discovery and, accordingly, we are not yet able to reasonably estimate the monetary exposure asso-
ciated with the lawsuit. As with Pedroza, we do not believe the allegations in Acosta have merit, we do not
believe that the case should be certified as a class or collective action, and we are vigorously defending these
claims. For these reasons, we have not accrued any liability.
We are involved in the defense of various other legal proceedings that we do not believe are material to our
consolidated financial statements.
F-27