HR Block 2013 Annual Report Download - page 92

H&R Block 2013 Form 10-K 85
We believe we have meritorious defenses to this case and intend to defend the case vigorously, however we do not
currently believe this case is material.
A series of putative class action lawsuits were filed against us in various federal courts beginning on November 17,
2011 concerning the RAL and RAC products. The plaintiffs generally allege we engaged in unfair, deceptive or
fraudulent acts in violation of various state consumer protection laws by facilitating RALs that were accompanied by
allegedly inaccurate TILA disclosures, and by offering RACs without any TILA disclosures. Certain plaintiffs also
allege violation of disclosure requirements of various state statutes expressly governing RALs and provisions of those
statutes prohibiting tax preparers from charging or retaining certain fees. Collectively, the plaintiffs seek to represent
clients who purchased RAL or RAC products in up to forty-two states and the District of Columbia during timeframes
ranging from 2007 to the present. The plaintiffs seek equitable relief, disgorgement of profits, compensatory and
statutory damages, restitution, civil penalties, attorneys' fees and costs. These cases were consolidated by the Judicial
Panel on Multidistrict Litigation into a single proceeding in the United States District Court for the Northern District
of Illinois for coordinated pretrial proceedings, styled IN RE: H&R Block Refund Anticipation Loan Litigation (MDL
No. 2373). We filed a motion to compel arbitration, which remains pending. We have not concluded that a loss related
to this matter is probable, nor have we accrued a loss contingency related to this matter. We believe we have meritorious
defenses to the claims in these cases and intend to defend the cases vigorously, but there can be no assurances as to the
outcome of these cases or their impact on our consolidated financial position, results of operations and cash flows.
COMPLIANCE FEE LITIGATION – On April 16, 2012 and April 19, 2012, putative class action lawsuits were
filed against us in Missouri state and federal courts, respectively, concerning a compliance fee charged to retail tax
clients in the 2011 and 2012 tax seasons. These cases are styled Manuel H. Lopez III v. H&R Block, Inc., et al., in the
Circuit Court of Jackson County, Missouri (Case # 1216CV12290), and Ronald Perras v. H&R Block, Inc., et al., in
the United States District Court for the Western District of Missouri (Case No. 4:12-cv-00450-DGK). Taken together,
the plaintiffs seek to represent all retail tax clients nationwide who were charged the compliance fee, and assert claims
of violation of state consumer laws, money had and received, and unjust enrichment. We are seeking to compel arbitration
of certain claims. We have not concluded that a loss related to these lawsuits is probable, nor have we accrued a liability
related to either of these lawsuits. We believe we have meritorious defenses to the claims in these cases and intend to
defend the cases vigorously, but there can be no assurances as to the outcome of these cases or their impact on our
consolidated financial position, results of operations and cash flows.
FORM 8863 LITIGATION - A series of putative class action lawsuits were filed against us in various federal courts
and one state court beginning on March 13, 2013 (including, by way of example, Danielle Pooley v. H&R Block, Inc.,
No. 1:13-cv-01549-JBS-KMW (D.N.J. Mar. 13, 2013); Arthur Green and Amy Hamilton v. H&R Block, Inc., et al.,
No. 4:13-cv-11206 (E.D. Mich. Mar. 19, 2013); Juan Ortega v. H&R Block, Inc., et al., No. 2:13-cv-02023-MMM-RZ
(C.D. Cal. Mar. 20, 2013); and Nikki R. Nevill v. H&R Block, Inc., et al., No. 1316-CV07264 (Jackson Cnty., Mo. Cir.
Ct. Mar. 21, 2013)). Taken together, the plaintiffs in these actions purport to represent clients nationwide who filed
Form 8863 during tax season 2013 through an H&R Block office or using H&R Block at Home® online tax services
or tax preparation software, and allege breach of contract, negligence and violation of state consumer laws in connection
with transmission of the form. The plaintiffs seek damages, pre-judgment interest, attorneys' fees and costs. We have
not concluded that a loss related to these lawsuits is probable, nor have we accrued a liability related to these lawsuits.
We believe we have meritorious defenses to the claims in these cases and intend to defend the cases vigorously, but
there can be no assurances as to the outcome of these cases or their impact on our consolidated financial position, results
of operations and cash flows.
EXPRESS IRA LITIGATION – On January 2, 2008, the Mississippi Attorney General in the Chancery Court of
Hinds County, Mississippi First Judicial District (Case No. G 2008 6 S 2) filed a lawsuit regarding our former Express
IRA product that is styled Jim Hood, Attorney for the State of Mississippi v. H&R Block, Inc., H&R Block Financial
Advisors, Inc., et al. The complaint alleges fraudulent business practices, deceptive acts and practices, common law
fraud and breach of fiduciary duty with respect to the sale of the product in Mississippi and seeks equitable relief,
disgorgement of profits, damages and restitution, civil penalties and punitive damages. We believe we have meritorious
defenses to the claims in this case and intend to defend the case vigorously, but there can be no assurances as to its
outcome or its impact on our consolidated financial position, results of operations and cash flows.