United Airlines 2007 Annual Report Download - page 27

agreement to cooperate with the plaintiffs' factual investigation. The settlement agreement is subject to review and approval by the Federal Court.
Penalties for violating competition laws can be severe, involving both criminal and civil liability. We are cooperating with the grand jury investigations
while carrying out our own internal review of our pricing practices, and are not in a position to predict the potential financial impact of this litigation at this time.
However, a finding that we violated either U.S. antitrust laws or the competition laws of some other jurisdiction could have a material adverse impact on our
results of operations or financial condition.
Litigation Associated with September 11 Terrorism
Families of 94 victims of the September 11 terrorist attacks filed lawsuits asserting a variety of claims against the airline industry. United and American
Airlines, as the two carriers whose flights were hijacked, are the central focus of the litigation, but a variety of additional parties have been sued on a number of
legal theories ranging from collective responsibility for airport screening and security systems that allegedly failed to prevent the attacks to faulty design and
construction of the World Trade Center towers. In excess of 97% of the families of the deceased victims received awards from the September 11 th Victims
Compensation Fund of 2001, which was established by the federal government, and consequently are now barred from making further claims against the airlines.
World Trade Center Properties, Inc., as lessee, has filed claims against the aviation defendants and The Port Authority of New York and New Jersey, the owner
of the World Trade Center. The Port Authority has also filed cross-claims against the aviation defendants in both the wrongful death litigation and for property
damage sustained in the attacks. The insurers of various tenants at the World Trade Center have filed subrogation claims for damages as well. In the aggregate,
September 11th claims are estimated to be well in excess of $10 billion. By statute, these matters were consolidated in the U.S. District Court for the Southern
District of New York, and airline exposure was capped at the limit of the liability coverage maintained by each carrier at the time of the attacks. In the personal
injury and wrongful death matters, settlement discussions continue and the parties have reached settlement agreements for the majority of the remaining claims.
The Company anticipates that any liability it may face arising from the events of September 11, 2001 could be significant, but by statute will be limited to the
amount of its insurance coverage.
Environmental Proceedings
In accordance with an order issued by the California Regional Water Quality Control Board in June 1999, United, along with most of the other tenants of
SFO, has been investigating potential environmental contamination at the airport (geographically including United's SFO maintenance center) and conducting
monitoring and/or remediation when needed. United's projected costs associated with this order were significantly reduced in 2006; therefore, the Company does
not consider this to be a material proceeding.
Other Legal Proceedings
UAL and United are involved in various other claims and legal actions involving passengers, customers, suppliers, employees and government agencies
arising in the ordinary course of business. Additionally, from time to time, the Company becomes aware of potential non-compliance with applicable
environmental regulations, which have either been identified by the Company (through internal compliance programs such as its environmental compliance
audits) or through notice from a governmental entity. In some instances, these matters could potentially become the subject of an administrative or judicial
proceeding and could potentially involve monetary sanctions. After considering a number of factors, including (but not limited to) the views of legal counsel, the
nature of contingencies to which the Company is subject and prior experience, management believes that the ultimate disposition of these contingencies will not
materially affect its consolidated financial position or results of operations.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
None.
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Source: UNITED AIR LINES INC, 10-K, February 29, 2008