Albertsons 2009 Annual Report Download - page 23

Management of the Company believes that its physical facilities and equipment are adequate for the
Company’s present needs and businesses.
ITEM 3. LEGAL PROCEEDINGS
The Company is subject to various lawsuits, claims and other legal matters that arise in the ordinary course of
conducting business, none of which, in management’s opinion, is expected to have a material adverse impact
on the Company’s financial condition, results of operations or cash flows.
In April 2000, a class action complaint was filed against Albertsons, as well as American Stores Company,
American Drug Stores, Inc., Sav-on Drug Stores, Inc. (“Sav-on Drug Stores”) and Lucky Stores, Inc. (“Lucky
Stores”), wholly-owned subsidiaries of Albertsons, in the Superior Court for the County of Los Angeles,
California (Gardner, et al. v. American Stores Company, et al.) by assistant managers seeking recovery of
overtime based on the plaintiffs’ allegation that they were improperly classified as exempt under California
law. In May 2001, the Court certified a class with respect to Sav-on Drug Stores assistant managers. A case
with very similar claims, involving the Sav-on Drug Stores assistant managers and operating managers, was
also filed in April 2000 against Sav-on Drug Stores in the Superior Court for the County of Los Angeles,
California (Rocher, Dahlin, et al. v. Sav-on Drug Stores, Inc.), and was certified as a class action in June 2001
with respect to assistant managers and operating managers. The two cases were consolidated in December
2001. New Albertsons was added as a named defendant in November 2006. Plaintiffs seek overtime wages,
meal and rest break penalties, other statutory penalties, punitive damages, interest, injunctive relief and the
attorneys’ fees and costs. The parties have entered into a memorandum of understanding regarding settlement
of this matter and are currently negotiating terms of a preliminary settlement agreement. Although this lawsuit
is subject to the uncertainties inherent in the litigation process, based on the information presently available to
the Company, management does not expect that the ultimate resolution of this lawsuit will have a material
adverse effect on the Company’s financial condition, results of operations or cash flows.
In September 2008, a class action complaint was filed against the Company, as well as International
Outsourcing Services, LLC (“IOS”), Inmar, Inc., Carolina Manufacturer’s Services, Inc., Carolina Coupon
Clearing, Inc. and Carolina Services, in the United States District Court in the Eastern District of Wisconsin.
The plaintiffs in the case are a consumer goods manufacturer, a grocery co-operative and a retailer marketing
services company who allege on behalf of a purported class that the Company and the other defendants
(i) conspired to restrict the markets for coupon processing services under the Sherman Act and (ii) were part
of an illegal enterprise to defraud the plaintiffs under the Federal Racketeer Influenced and Corrupt
Organizations Act. The plaintiffs seek monetary damages, attorneys’ fees and injunctive relief. The Company
intends to vigorously defend this lawsuit, however all proceedings have been stayed in the case pending the
result of the criminal prosecution of certain former officers of IOS. Although this lawsuit is subject to the
uncertainties inherent in the litigation process, based on the information presently available to the Company,
management does not expect that the ultimate resolution of this lawsuit will have a material adverse effect on
the Company’s financial condition, results of operations or cash flows.
In December 2008, a class action complaint was filed in the United States District Court for the Western
District of Wisconsin against the Company alleging that a 2003 transaction between the Company and C&S
Wholesale Grocers, Inc. (“C&S”) was a conspiracy to restrain trade and allocate markets. In the 2003
transaction, the Company purchased certain assets of the Fleming Corporation as part of Fleming Corporation’s
bankruptcy proceedings and sold certain of the assets of the Company to C&S which were located in New
England. The complaint alleges that the conspiracy was concealed and continued through the use of non-
compete and non-solicitation agreements and the closing down of the distribution facilities that the Company
and C&S purchased from the other. Plaintiffs are seeking monetary damages, injunctive relief and attorneys’
fees. The Company is vigorously defending this lawsuit. Although this lawsuit is subject to the uncertainties
inherent in the litigation process, based on the information presently available to the Company, management
does not expect that the ultimate resolution of this lawsuit will have a material adverse effect on the
Company’s financial condition, results of operations or cash flows.
The Company is also involved in routine legal proceedings incidental to its operations. Some of these routine
proceedings involve class allegations, many of which are ultimately dismissed. Management does not expect
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