Big Lots 2009 Annual Report Download - page 187

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BIG LOTS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
Note 10 — Commitments, Contingencies and Legal Proceedings (Continued)
In February 2008, three alleged class action complaints were filed against us by a California resident (the
“Caron matters”). The first was filed in the Superior Court of California, Orange County. This action is
similar in nature to the Seals matter, which enabled us to successfully coordinate this matter with the Seals
matter in the Superior Court of California, Los Angeles County. The second and third matters, filed in the
United States District Court, Central District of California, and the Superior Court of California, Riverside
County, respectively, allege that we violated certain California wage and hour laws for missed meal and rest
periods and other wage and hour claims. The plaintiffs seek to recover, on their own behalf and on behalf of a
California statewide class consisting of all other individuals who are similarly situated, damages resulting from
improper wage statements, missed rest breaks, missed meal periods, non-payment of wages at termination,
reimbursement of expenses, loss of unused vacation time, and attorneys’ fees and costs. We believed these two
matters overlapped and we successfully consolidated the two cases before the United States District Court,
Central District of California. We believe the remaining allegations also overlap some portion of the claims
released through the class action settlement in the Espinosa matter (for further discussion of the Espinosa matter
see note 10 to our consolidated financial statements contained in our 2008 Form 10-K). On August 25, 2009, the
Court denied plaintiffs’ class certification motion, without prejudice. We cannot make a determination as to the
probability of a loss contingency resulting from the Caron matters or the estimated range of possible loss, if any.
We intend to vigorously defend ourselves against the allegations levied in these lawsuits; however, the ultimate
resolution of these matters could have a material adverse effect on our financial condition, results of operations,
and liquidity.
In 1998, an action was filed against us in the District Court, 224th Judicial District, in Bexar County, Texas
(“State Court”) by a plaintiff claiming she was injured when she fell in one of our stores (“Rivera matter”).
The Rivera matter was removed to the United States District Court for the Western District of Texas (“Federal
Court”) and the claim was fully litigated. Ultimately, the Federal Court granted summary judgment in our
favor in January 2000. The plaintiff re-filed the same complaint in April 2000 in the State Court and then
obtained a default judgment against us on June 20, 2000 in the amount of approximately $1.5 million plus
post-judgment interest, which brings the total claim against us to approximately $3.4 million. No effort was
made to collect on this judgment by the plaintiff until February 2009, when we were served with a writ of
execution of judgment. We have filed a petition for a bill of review with the State Court. Since that time, the
Federal Court issued an order reflecting that the January 2000 order was a summary judgment with prejudice
in our favor. Notwithstanding the Federal Court’s order, the State Court rendered a summary judgment decision
in the plaintiff’s favor. We have appealed the State Court’s decision and asked the Federal Court to issue an
injunction against the State Court’s proceedings. We cannot make a determination as to the probability of a
loss contingency resulting from the Rivera matter; however, we currently believe that the Rivera matter will be
resolved without a material adverse effect on our financial condition, results of operations, or liquidity.
We are involved in other legal actions and claims, including various additional employment-related matters,
arising in the ordinary course of business. We currently believe that such actions and claims, both individually
and in the aggregate, will be resolved without a material adverse effect on our financial condition, results of
operations, or liquidity. However, litigation involves an element of uncertainty. Future developments could cause
these actions or claims to have a material adverse effect on our financial condition, results of operations, and
liquidity.
For a discussion of discontinued operations, including KB Toys matters, see note 11 to our accompanying
consolidated financial statements.
We are self-insured for certain losses relating to property, general liability, workers’ compensation, and
employee medical and dental benefit claims, a portion of which is paid by employees, and we have purchased
stop-loss coverage in order to limit significant exposure in these areas. Accrued insurance liabilities are
actuarially determined based on claims filed and estimates of claims incurred but not reported.