Public Storage 2003 Annual Report Download - page 118

PUBLIC STORAGE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2003
F-39
resources for the entity to support its activities. This statement is applicable at the beginning of the Companys
quarter ended March 31, 2004. We do not believe that adoption of this accounting standard will have an impact
on our financial statements.
16. Commitments and Contingencies
Legal proceedings
Serrao v. Public Storage, Inc. (filed April 2003) (Superior Court  Orange County)
The plaintiff in this case filed a suit against the Company on behalf of a putative class of renters who
rented self-storage units from the Company. Plaintiff alleges that the Company misrepresented the size of its
storage units, has brought claims under California statutory and common law relating to consumer protection,
fraud, unfair competition, and negligent misrepresentation, and is seeking monetary damages, restitution, and
declaratory and injunctive relief.
The claim in this case is substantially similar to those in Henriquez v. Public Storage, Inc., which was
disclosed in prior reports. In January 2003, the plaintiff caused the Henriquez action to be dismissed. Based
upon the uncertainty inherent in any putative class action, the Company cannot presently determine the potential
damages, if any, or the ultimate outcome of this litigation. On November 3, 2003, the court granted the
Companys motion to strike the plaintiffs nationwide class allegations and to limit any putative class to
California residents only. The Company is vigorously contesting the claims upon which this lawsuit is based
including class certification efforts.
Salaam, et al v. Public Storage, Inc. (filed February 2000) (Superior Court  Los Angeles County)
The plaintiffs in this case are suing the Company on behalf of a putative class of California resident
property managers who claim that they were not compensated for all the hours they worked. The named
plaintiffs have indicated that their claims total less than $20,000 in aggregate. On December 1, 2003, the
California Court of Appeals affirmed the Supreme Courts 2002 denial of plaintiffs motion for class
certification. The maximum potential liability cannot be estimated, but can only be increased if claims are
permitted to be brought on behalf of others under the California Unfair Business Practices Act. The affirmation
of denial of class certification does not address the claim under the California Unfair Business Practices Act.
The Company is continuing to vigorously contest the claims in this case and intends to resist any
expansion beyond the named plaintiffs, including by opposing claims on behalf of others under the California
Unfair Business Practices Act. The Company cannot presently determine the potential damages, if any, or the
ultimate outcome of this litigation.
Gustavson et al. v. Public Storage, Inc. (filed June 2003) (Superior Court-Los Angeles County)
In November 2002, a shareholder of the Company made a demand on the Board of Directors that
challenged the fairness of the Companys acquisition of PS Insurance Company, Ltd. (PSIC) and demanded
that the Board recover the profits earned by PSIC from November 1995 through December 2001 and that the
entire purchase price paid by the Company for PSIC in excess of PSICs net assets be returned to the Company.
The contract to acquire PSIC was approved by the independent directors of the Company in March
2001, and the transaction was closed in December 2001. PSIC was formerly owned by B. Wayne Hughes,
currently the Chairman of the Board (and in 2001 also the Chief Executive Officer) of the Company, B. Wayne
Hughes, Jr., currently a director (and in 2001 also an officer) of the Company and Tamara H. Gustavson, who in
2001 was an officer of the Company. In exchange for the Hughes familys shares in PSIC, the Company issued