United Airlines 2012 Annual Report Download - page 29

Table of Contents
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. The Company has determined that no reserve for potential liability is required and will continue to defend itself against
the claim.
Environmental Proceedings
In 2001, the California Regional Water Quality Control Board (“CRWQCB”) mandated a field study of the area surrounding Continental’s aircraft
maintenance hangar in Los Angeles. The study was completed in September 2001 and identified aircraft fuel and solvent contamination on and adjacent to this
site. In April 2005, Continental began environmental remediation of aircraft fuel contamination surrounding its aircraft maintenance hangar pursuant to a
workplan submitted to and approved by the CRWQCB and its landlord, the Los Angeles World Airports. Additionally, Continental could be responsible for
environmental remediation costs primarily related to solvent contamination on and near this site. Continental accrued a reserve in an amount expected by the
Company to cover environmental remediation costs for this site.
Other Legal Proceedings
The Company is 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.
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Not applicable.
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