Snapple 2008 Annual Report Download - page 126

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Snapple Distributor Litigation
In 2004, one of the Company’s subsidiaries, Snapple Beverage Corp., and several affiliated entities of Snapple
Beverage Corp., including Snapple Distributors Inc., were sued in United States District Court, Southern District of
New York, by 57 area route distributors for alleged price discrimination, breach of contract, retaliation, tortious
interference and breach of the implied duty of good faith and fair dealings arising out of their respective area route
distributor agreements. Each plaintiff sought damages in excess of $225 million. The plaintiffs initially filed the
case as a class action but withdrew their class certification motion. They proceeded as individual plaintiffs but the
cases were consolidated for discovery and procedural purposes. On September 14, 2007, the court granted the
Company’s motion for summary judgment, dismissing the plaintiffs’ federal claims of price discrimination and
dismissing, without prejudice, the plaintiffs’ remaining claims under state law. The plaintiffs filed an appeal of the
decision and both parties have filed appellate briefs and are awaiting the court’s decision. Also, the plaintiffs may
decide to re-file the state law claims in state court. The Company believes it has meritorious defenses with respect to
the appeal and will defend itself vigorously. However, there is no assurance that the outcome of the appeal, or any
trial, if claims are refiled, will be in the Company’s favor.
Snapple Litigation — Labeling Claims
Holk and Weiner
In 2007, Snapple Beverage Corp. was sued by Stacy Holk in New Jersey Superior Court, Monmouth County.
The Holk case was filed as a class action. Subsequent to filing, the Holk case was removed to the United States
District Court, District of New Jersey. Holk alleges that Snapple’s labeling of certain of its drinks is misleading
and/or deceptive and seeks unspecified damages on behalf of the class, including enjoining Snapple from various
labeling practices, disgorging profits, reimbursing of monies paid for product and treble damages. Snapple filed a
motion to dismiss the Holk case on a variety of grounds. On June 12, 2008, the district court granted Snapple’s
Motion to Dismiss and the Holk case was dismissed. The plaintiff has filed an appeal of the order dismissing the
case and both parties have filed appellate briefs and are awaiting the court’s decision.
In 2007 the attorneys in the Holk case filed a new action in New York on behalf of plaintiff, Evan Weiner, with
substantially the same allegations and seeking the same damages as in the Holk case. The Company has filed a
motion to dismiss the Weiner case on a variety of grounds. The Weiner case is currently stayed pending the outcome
of the Holk case.
The Company believes it has meritorious defenses to the claims asserted in the Holk and Weiner cases and will
defend itself vigorously. However, there is no assurance that the outcome of either case will be favorable to the
Company.
Ivey
In May 2008, a class action lawsuit was filed in the Superior Court for the State of California, County of Los
Angeles, by Ray Ivey against Snapple Beverage Corp. and other affiliates. The plaintiff alleged that Snapple’s
labeling of its lemonade juice drink violates California’s Unfair Competition Law and Consumer Legal Remedies
Act and constitutes fraud under California statutes. The case has been settled. DPS paid a nominal amount and the
plaintiff dismissed his action with prejudice to refiling.
Nicolas Steele v. Seven Up/RC Bottling Company Inc.
Robert Jones v. Seven Up/RC Bottling Company of Southern California, Inc.
California Wage Audit
In 2007, one of the Company’s subsidiaries, Seven Up/RC Bottling Company Inc., was sued by Nicolas Steele,
and in a separate action by Robert Jones, in each case in Superior Court in the State of California (Orange County),
alleging that its subsidiary failed to provide meal and rest periods and itemized wage statements in accordance with
102
DR PEPPER SNAPPLE GROUP, INC.
NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)