Barnes and Noble 2015 Annual Report Download - page 64

compel plaintiff to arbitrate his claims on an individual
basis pursuant to a contractual arbitration provision on
May , . The Company also moved to dismiss the
complaint and moved to transfer the action to New York.
The court denied the Company’s motion to compel arbitra-
tion, and the Company appealed that denial to the Ninth
Circuit Court of Appeals. The court granted the Company’s
motion to stay on November , , and the action had
been stayed pending resolution of the Company’s appeal
from the court’s denial of its motion to compel arbitration.
On August , , the Ninth Circuit Court of Appeals
affirmed the district court’s denial of the Company’s motion
to compel arbitration. On September , , the Company
filed a petition for rehearing and rehearing en banc in the
Ninth Circuit Court of Appeals. On October , , the
court denied the Company’s petition for rehearing and
rehearing en banc, and on October , , the mandate
issued returning the case to the United States District Court
for the Central District of California. The Company then
refiled its motion to dismiss the complaint and motion to
transfer the action to New York. On February , , the
court denied the Company’s motion to transfer. On June
,  the court granted-in-part the Company’s motion
to dismiss to the extent certain California unfair business
practices and false advertising claims sought restitution
or injunctive relief and denied-in-part the Company’s
motion to dismiss as to the remaining claims. The sur-
viving claims are for breach of contract, violation of the
California Consumers Legal Remedies Act, and violation of
two New York consumer protection statutes. The parties are
engaging in discovery and pursuant to the court’s schedul-
ing order dated December , , as amended on March
,  and June , . All dates for the case have been
scheduled, including the deadline for plaintiff to file for
class certification of July , , and a trial date of May ,
.
PIN Pad Litigation
As previously disclosed, the Company discovered that
PIN pads in certain of its stores had been tampered with
to allow criminal access to card data and PIN numbers
on credit and debit cards swiped through the terminals.
Following public disclosure of this matter on October ,
, the Company was served with four putative class
action complaints (three in federal district court in the
Northern District of Illinois and one in the Northern
District of California), each of which alleged on behalf of
national and other classes of customers who swiped credit
and debit cards in Barnes & Noble Retail stores common
law claims such as negligence, breach of contract and inva-
sion of privacy, as well as statutory claims such as violations
of the Fair Credit Reporting Act, state data breach notifi-
cation statutes, and state unfair and deceptive practices
statutes. The actions sought various forms of relief includ-
ing damages, injunctive or equitable relief, multiple or
punitive damages, attorneys’ fees, costs, and interest. All
four cases were transferred and/or assigned to a single
judge in the United States District Court for the Northern
District of Illinois, and a single consolidated amended
complaint was filed. The Company filed a motion to dismiss
the consolidated amended complaint in its entirety, and in
September , the Court granted the motion to dismiss
without prejudice. The Plaintiffs then filed an amended
complaint, and the Company filed a second motion to
dismiss. That motion is pending.
The Company also has received inquiries related to this
matter from the Federal Trade Commission and eight state
attorneys general, all of which have either been closed or
have not had any recent activity. The Company intends to
cooperate with them if further activity arises. In addition,
payment card companies and associations may impose
fines by reason of the tampering and federal or state
enforcement authorities may impose penalties or other
remedies against the Company.
Lina v. Barnes & Noble, Inc., and Barnes & Noble
Booksellers, Inc. et al.
On August , , a purported class action complaint was
filed against Barnes & Noble, Inc. and Barnes & Noble
Booksellers, Inc. in the Superior Court for the State of
California making the following allegations with respect to
salaried Store Managers at Barnes & Noble stores located
in California from August ,  to present: () failure
to pay wages and overtime; () failure to pay for missed
meals and/or rest breaks; () waiting time penalties; ()
failure to pay minimum wage; () failure to reimburse for
business expenses; and () failure to provide itemized
wage statements. The claims are generally derivative of
the allegation that these salaried managers were improp-
erly classified as exempt from California’s wage and hour
laws. The complaint contains no allegations concerning
the number of any such alleged violations or the amount
of recovery sought on behalf of the purported class. The
Company was served with the complaint on August , .
On July ,  the court denied plaintiff’s motion for class
certification. The court ruled that plaintiff failed to satisfy
his burden to demonstrate common issues predominated
over individual issues, that plaintiff was a sufficient class
representative, or that a class action was a superior method
to adjudicate plaintiff’s claims. Plaintiff filed a notice
62 Barnes & Noble, Inc. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS continued