Redbox 2014 Annual Report Download - page 103

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Legal Matters
In October 2009, an Illinois resident, Laurie Piechur, individually and on behalf of all others similarly situated, filed a putative
class action complaint against our Redbox subsidiary in the Circuit Court for the Twentieth Judicial Circuit, St. Clair County,
Illinois. The plaintiff alleged that, among other things, Redbox charges consumers illegal and excessive late fees in violation of
the Illinois Consumer Fraud and Deceptive Business Practices Act, and that Redbox's rental terms violate the Illinois Rental
Purchase Agreement Act or the Illinois Automatic Contract Renewal Act and the plaintiff is seeking monetary damages and
other relief. In November 2009, Redbox removed the case to the U.S. District Court for the Southern District of Illinois. In
February 2010, the District Court remanded the case to the Circuit Court for the Twentieth Judicial Circuit, St. Clair County,
Illinois. In May 2010, the court denied Redbox's motion to dismiss the plaintiff's complaint. In November 2011, the plaintiff
moved for class certification, and Redbox moved for summary judgment. The court denied Redbox's motion for summary
judgment in February 2012. The plaintiff filed an amended complaint on April 19, 2012, and an amended motion for class
certification on June 5, 2012. The court denied Redbox's motion to dismiss the amended complaint. The amended class
certification motion was briefed and argued. At the hearing on plaintiff's amended motion for class certification, the plaintiff
dismissed all claims but two and is pursuing only her claims under the Illinois Rental Purchase Agreement Act and the Illinois
Automatic Contract Renewal Act. On May 21, 2013, the court denied plaintiff's amended class action motion. On January 29,
2014, the Illinois Supreme Court denied plaintiff’s petition for leave to appeal the trial court’s denial of class certification.
Redbox has moved to dismiss all remaining claims on mootness grounds, and the Court granted Redbox’s motion on December
11, 2014. The plaintiffs appealed on January 7, 2015. We believe that the claims against us are without merit and intend to
defend ourselves vigorously in this matter. Currently, no accrual has been established as it was not possible to estimate the
possible loss or range of loss because this matter had not advanced to a stage where we could make any such estimate.
In March 2011, a California resident, Blake Boesky, individually and on behalf of all others similarly situated, filed a putative
class action complaint against our Redbox subsidiary in the U.S. District Court for the Northern District of Illinois. The plaintiff
alleges that Redbox retains personally identifiable information of consumers for a time period in excess of that allowed under
the Video Privacy Protection Act, 18 U.S.C. §§ 2710, et seq. A substantially similar complaint was filed in the same court in
March 2011 by an Illinois resident, Kevin Sterk. Since the filing of the complaint, Blake Boesky has been replaced by a
different named plaintiff, Jiah Chung, and an amended complaint has been filed alleging disclosures of personally identifiable
information, in addition to plaintiffs' claims of retention of such information. Plaintiffs are seeking statutory damages,
injunctive relief, attorneys' fees, costs of suit, and interest. The court has consolidated the cases. The court denied Redbox's
motion to dismiss the plaintiffs' claims upon interlocutory appeal. The U.S. Court of Appeals for the Seventh Circuit reversed
the district court's denial of Redbox's motion to dismiss plaintiff's claims involving retention of information, holding that the
plaintiffs could not maintain a suit for damages under this theory. On April 25, 2012, the plaintiffs amended their complaint to
add claims under the Stored Communications Act, 18 U.S.C. § 2707, and for breach of contract. On May 9, 2012, Redbox
moved to dismiss the amended complaint. On July 23, 2012, the court dismissed the added retention claims, except to the extent
that plaintiffs seek injunctive, non-monetary relief. On August 16, 2013, the court granted summary judgment in Redbox's favor
on all remaining claims, and entered a final judgment for Redbox. On September 16, 2013, plaintiff filed a notice of appeal. On
October 23, 2014, the U.S. Court of Appeals for the Seventh Circuit affirmed the district court’s judgment in Redbox’s favor.
Other Contingencies
During the year ended December 31, 2013, we resolved a previously disclosed loss contingency related to a supply agreement
and recorded a benefit of $11.4 million in the direct operating line item in our Consolidated Statements of Comprehensive
Income.
Note 18: Guarantor Subsidiaries
Certain of our wholly-owned subsidiaries have, jointly and severally, fully and unconditionally guaranteed the Senior Notes due
2019 and 2021. Pursuant to SEC regulations, we have presented in columnar format the condensed consolidating financial
information for Outerwall Inc., the guarantor subsidiaries on a combined basis, and all non-guarantor subsidiaries on a
combined basis in the following tables: