United Airlines 2011 Annual Report Download - page 29

Table of Contents
given. United successfully transferred the venue of the case to the United States Federal Court for the Northern District of Illinois. On November 22, 2010,
United filed a motion to dismiss the matter which the Court granted on February 3, 2011. On April 1, 2011, the EEOC appealed the dismissal to the Seventh
Circuit Court of Appeals. The court heard oral arguments on October 20, 2011 and the parties are awaiting a decision on the appeal.
Litigation Associated with September 11, 2001 Terrorism
Families of 94 victims of the September 11, 2001, terrorist attacks filed lawsuits asserting a variety of claims against the airline industry. United and
American Airlines (the “aviation defendants”), as the two carriers whose flights were hijacked on September 11, 2001, are the central focus of the litigation,
but a variety of additional parties, including Continental, 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. World Trade
Center Properties, Inc., as lessee, also filed claims against the aviation defendants and The Port Authority of New York and New Jersey (the “Port Authority”),
the owner of the World Trade Center, for property and business interruption damages. 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
filed subrogation claims for damages as well. By statute, these matters were consolidated in the U.S. District Court for the Southern District of New York and
the aviation defendants’ exposure was capped at the limit of the liability coverage maintained by each carrier at the time of the attacks. In September 2011,
United settled the last remaining wrongful death claim in connection with this matter. In 2010, insurers for the aviation defendants reached a settlement with all
of the subrogated insurers and most of the uninsured plaintiffs with property and business interruption claims, which was approved by the court and has
been affirmed by the U.S. Court of Appeals for the Second Circuit. The U.S. District Court for the Southern District of New York dismissed a claim for
environmental cleanup damages filed by a neighboring property owner, Cedar & Washington Associates, LLC. This dismissal order has been appealed to the
U.S. Court of Appeals for the Second Circuit. In the aggregate, claims related to the events of September 11, 2001 are estimated to be well in excess of $10
billion. The Company anticipates that any liability it could ultimately face arising from the events of September 11, 2001 could be significant, but the
Company believes that it will have no financial exposure for claims arising out of the events of September 11, 2001 in light of the provisions of the Air
Transportation Safety and System Stabilization Act of 2001 limiting claimants’ recoveries to insurance proceeds, the resolution of the wrongful death and
personal injury cases by settlement, the resolution of the majority of the property damage claims and the withdrawal of all related proofs of claim from UAL
Corporation’s Chapter 11 bankruptcy proceeding.
Antitrust Litigation Related to the Merger Transaction
On June 29, 2010, forty-nine purported purchasers of airline tickets filed an antitrust lawsuit in the U.S. District Court for the Northern District of California
against Continental and UAL Corporation in connection with the Merger. The plaintiffs alleged that the Merger may substantially lessen competition or tend to
create a monopoly in the transportation of airline passengers in the United States and the transportation of airline passengers to and from the United States on
international flights, in violation of Section 7 of the Clayton Act. On August 9, 2010, the plaintiffs filed a motion for preliminary injunction pursuant to
Section 16 of the Clayton Act, seeking to enjoin the Merger. On September 27, 2010, the court denied the plaintiffs’ motion for a preliminary injunction,
which allowed the Merger to close. After the closing of the Merger, the plaintiffs appealed the court’s ruling to the United States Court of Appeals for the Ninth
Circuit and moved for a “hold separate” order pending the appeal, which was denied. The Ninth Circuit affirmed the District Court’s denial of the preliminary
injunction on May 23, 2011 and, on July 8, 2011, denied the plaintiffs’ motions for rehearing and for rehearing en banc. The U.S. Supreme Court thereafter
denied certiorari. On October 24, 2011, the District Court allowed the plaintiffs to amend their complaint in order to, among other things, add a claim for
damages. Continental and United filed a motion to dismiss the complaint with prejudice which the District Court granted on December 29, 2011. The
plaintiffs are appealing that dismissal.
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