Pizza Hut 2009 Annual Report Download - page 205

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On March 14, 2007, a lawsuit styled Boskovich Farms, Inc. v. Taco Bell Corp. and Does 1 through 100 was filed in the
Superior Court of the State of California, Orange County. Boskovich Farms, a supplier of produce to Taco Bell, alleges in
its complaint, among other things, that it suffered damage to its reputation and business as a result of publications and/or
statements it claims were made by Taco Bell in connection with Taco Bell’s reporting of results of certain tests conducted
during investigations on green onions used at Taco Bell restaurants. The parties participated in mediation on April 10,
2008, without reaching resolution. The arbitration panel heard the parties’ cross motions for summary judgment on
August 12, 2009. On August 14, 2009, the arbitration panel issued an opinion granting Taco Bell’s motion for summary
judgment and dismissing all of Boskovich’s claims with prejudice. On September 23, 2009, Boskovich filed a motion to
vacate the arbitration award. On January 6, 2010 the court heard oral arguments on Boskovich’s motion to vacate and
took the matter under submission. Taco Bell denies liability and intends to vigorously defend against all claims in any
arbitration and the 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 July 9, 2009, a putative class action styled Mark Smith v. Pizza Hut, Inc. was filed in the United States District Court
for the District of Colorado. The complaint alleges that Pizza Hut did not properly reimburse its delivery drivers for
various automobile costs, uniforms costs, and other job-related expenses and seeks to represent a class of delivery drivers
nationwide under the Fair Labor Standards Act (FLSA) and Colorado state law. On September 15, 2009, a putative class
action styled Sue Blackwood and Scott Lewis v. Pizza Hut of America, Inc. was filed in the United States District Court
for the District of Kansas. Because the Blackwood complaint brought essentially the same claims and purported to
represent the same class as the Smith case, Blackwood’s attorneys voluntarily dismissed the lawsuit in December 2009.
Pizza Hut denies liability and intends to vigorously defend against all claims in these lawsuits. However, in view of the
inherent uncertainties of litigation, the outcome of these cases cannot be predicted at this time. Likewise, the amount of
any potential loss cannot be reasonably estimated.
Form 10-K