Crucial 2011 Annual Report Download - page 66

Contingencies
We have accrued a liability and charged operations for the estimated costs of adjudication or settlement of various asserted and unasserted
claims existing as of the balance sheet date, including those described below. We are currently a party to other legal actions arising from the
normal course of business, none of which is expected to have a material adverse effect on our business, results of operations or financial condition.
In the normal course of business, we are a party to a variety of agreements pursuant to which we may be obligated to indemnify the other
party. It is not possible to predict the maximum potential amount of future payments under these types of agreements due to the conditional nature
of our obligations and the unique facts and circumstances involved in each particular agreement. Historically, our payments under these types of
agreements have not had a material adverse effect on our business, results of operations or financial condition.
We are involved in the following antitrust, patent and securities matters.
Antitrust Matters
On May 5, 2004, Rambus, Inc. ("Rambus") filed a complaint in the Superior Court of the State of California (San Francisco County) against
us and other DRAM suppliers alleging that the defendants harmed Rambus by engaging in concerted and unlawful efforts affecting Rambus
DRAM ("RDRAM") by eliminating competition and stifling innovation in the market for computer memory technology and computer memory
chips. Rambus' complaint alleges various causes of action under California state law including, among other things, a conspiracy to restrict output
and fix prices, a conspiracy to monopolize, intentional interference with prospective economic advantage, and unfair competition. Rambus is
seeking a judgment for damages of approximately $3.9 billion, joint and several liability, trebling of damages awarded, punitive damages, a
permanent injunction enjoining the defendants from the conduct alleged in the complaint, interest, and attorneys' fees and costs. Trial began on
June 20, 2011, and the case went to the jury on September 21, 2011. At the time of this filing, a jury verdict is pending. We cannot predict when a
verdict will be reached or when a formal judgment would be entered by the Court subsequent to a verdict. In the event of an adverse judgment,
we would anticipate filing appropriate post-judgment motions and appeals. We may be required to post a bond or other security to stay
enforcement of an adverse judgment pending appeal. Depending on the amount required, we cannot assure you we would be able to obtain
sufficient security to pursue an appeal. We are unable to predict the outcome of this lawsuit and therefore cannot determine the likelihood of loss
nor estimate a range of possible loss. Accordingly, we have not provided an accrual for an adverse judgment in the September 1, 2011, financial
statements. However, we have accrued a liability and charged operations for estimated costs to successfully defend the matter. An adverse
judgment may have a material impact on our business, results of operations and financial condition, including liquidity.
At least sixty-eight purported class action price-fixing lawsuits have been filed against us and other DRAM suppliers in various federal and
state courts in the United States and in Puerto Rico on behalf of indirect purchasers alleging price-fixing in violation of federal and state antitrust
laws, violations of state unfair competition law, and/or unjust enrichment relating to the sale and pricing of DRAM products during the period
from April 1999 through at least June 2002. The complaints seek joint and several damages, trebled, in addition to restitution, costs and attorneys'
fees. A number of these cases have been removed to federal court and transferred to the U.S. District Court for the Northern District of California
for consolidated pre-trial proceedings. In July, 2006, the Attorneys General for approximately forty U.S. states and territories filed suit in the U.S.
District Court for the Northern District of California. The complaints allege, among other things, violations of the Sherman Act, Cartwright Act,
and certain other states' consumer protection and antitrust laws and seek joint and several damages, trebled, as well as injunctive and other relief.
On October 3, 2008, the California Attorney General filed a similar lawsuit in California Superior Court, purportedly on behalf of local California
government entities, alleging, among other things, violations of the Cartwright Act and state unfair competition law. On June 23, 2010, we
executed a settlement agreement resolving these purported class-action indirect purchaser cases and the pending cases of the Attorneys General
relating to alleged DRAM price-fixing in the United States. Subject to certain conditions, including final court approval of the class settlements,
we agreed to pay a total of approximately $67 million in three equal installments over a two-year period.
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