Pizza Hut 2009 Annual Report Download - page 204

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On October 2, 2009, a putative class action, styled Domonique Hines v. KFC U.S. Properties, Inc., was filed in California
state court on behalf of all California hourly employees alleging various California Labor Code violations, including rest
and meal break violations, overtime violations, wage statement violations and waiting time penalties. Plaintiff is a current
non-managerial KFC restaurant employee represented by the same counsel that filed the Archila action described above.
KFC filed an answer on October 28, 2009, in which it denied plaintiff’s claims and allegations. KFC removed the action
to the United States District Court for the Southern District of California on October 29, 2009. KFC filed a motion to
transfer the action to the Central District of California due to the overlapping nature of the claims in this action and the
Archila action. Plaintiff filed a motion to remand the action to state court. Both motions have been fully briefed and are
under submission with the District Court. The case is in its early stages, and no discovery has yet commenced. No trial
date has been set.
KFC denies liability and intends to vigorously defend against all claims in this lawsuit. However, in view of the inherent
uncertainties of litigation, the outcome of this case cannot be predicted at this time. Likewise, the amount of any potential
loss cannot be reasonably estimated.
On December 17, 2002, Taco Bell was named as the defendant in a class action lawsuit filed in the United States District
Court for the Northern District of California styled Moeller, et al. v. Taco Bell Corp. On August 4, 2003, plaintiffs filed
an amended complaint that alleges, among other things, that Taco Bell has discriminated against the class of people who
use wheelchairs or scooters for mobility by failing to make its approximately 220 company-owned restaurants in
California accessible to the class. Plaintiffs contend that queue rails and other architectural and structural elements of the
Taco Bell restaurants relating to the path of travel and use of the facilities by persons with mobility-related disabilities do
not comply with the U.S. Americans with Disabilities Act (the “ADA”), the Unruh Civil Rights Act (the “Unruh Act”),
and the California Disabled Persons Act (the “CDPA”). Plaintiffs have requested: (a) an injunction from the District
Court ordering Taco Bell to comply with the ADA and its implementing regulations; (b) that the District Court declare
Taco Bell in violation of the ADA, the Unruh Act, and the CDPA; and (c) monetary relief under the Unruh Act or CDPA.
Plaintiffs, on behalf of the class, are seeking the minimum statutory damages per offense of either $4,000 under the Unruh
Act or $1,000 under the CDPA for each aggrieved member of the class. Plaintiffs contend that there may be in excess of
100,000 individuals in the class.
On February 23, 2004, the District Court granted plaintiffs’ motion for class certification. The class includes claims for
injunctive relief and minimum statutory damages.
Pursuant to the parties’ agreement, on or about August 31, 2004, the District Court ordered that the trial of this action be
bifurcated so that stage one will resolve plaintiffs’ claims for equitable relief and stage two will resolve plaintiffs’ claims
for damages. The parties are currently proceeding with the equitable relief stage of this action.
On May 17, 2007, a hearing was held on plaintiffs’ Motion for Partial Summary Judgment seeking judicial declaration
that Taco Bell was in violation of accessibility laws as to three specific issues: indoor seating, queue rails and door
opening force. On August 8, 2007, the court granted plaintiffs’ motion in part with regard to dining room seating. In
addition, the court granted plaintiffs’ motion in part with regard to door opening force at some restaurants (but not all) and
denied the motion with regard to queue lines.
The parties participated in mediation on March 25, 2008, and again on March 26, 2009, without reaching resolution. On
December 16, 2009, the court denied Taco Bell’s motion for summary judgment on the ADA claims and ordered plaintiff
to file a definitive list of remaining issues after which Taco Bell may renew its motion for summary judgment on those
issues.
Taco Bell has denied liability and intends to vigorously defend against all claims in this lawsuit. Taco Bell has taken
certain steps to address potential architectural and structural compliance issues at the restaurants in accordance with
applicable state and federal disability access laws. The costs associated with addressing these issues have not
significantly impacted our results of operations. It is not possible at this time to reasonably estimate the probability or
amount of liability for monetary damages on a class wide basis to Taco Bell.
Form 10-K