Juno 2012 Annual Report Download - page 47

Table of Contents
Racketeer Influenced Corrupt Organizations Act (RICO) by all defendants; (2) aiding and abetting violations of RICO by the Frank Credit Card
Companies; (3) aiding and abetting commissions of mail fraud, wire fraud and bank fraud by the Frank Credit Card Companies; (4) violation of the
Electronic Communications Privacy Act by the Frank Membership Companies and the Frank Marketing Companies, and aiding and abetting violations
of such act by the Frank Credit Card Companies; (5) violations of the Connecticut Unfair Trade Practices Act by the Frank Membership Companies and
the Frank Marketing Companies, and aiding and abetting violations of such act by the Frank Credit Card Companies; (6) violation of California
Business and Professions Code section 17602 by the Frank Membership Companies and the Frank Marketing Companies; and (7) unjust enrichment
by all defendants. On January 23, 2012, the plaintiff moved to consolidate the Frank Class Action with the In re Trilegiant Corporation Inc. action. In
response, the court ordered the plaintiff to show cause as to why, among other things, the plaintiff should be afforded named plaintiff status. The
plaintiff's response to the show cause order was due February 15, 2013.
In December 2008, Interflora, Inc. (in which United Online has an indirect, two-thirds ownership interest) and Interflora British Unit (an indirect,
wholly-owned subsidiary of United Online) issued proceedings against Marks and Spencer plc in an action claiming infringement of U.K. trademark
registration number 1329840 and European Community trademark registration number 909838, both for the word "Interflora". Marks and Spencer did
not make a counterclaim. In July 2009, the High Court of Justice of England and Wales (the "High Court"), referred questions to the Court of Justice of
European Union ("CJEU") for a preliminary ruling. In September 2011, the CJEU handed down its judgment on the questions referred by the High
Court. In February 2012, the High Court scheduled the trial for April 2013. In September 2012, Interflora British Unit executed an indemnity agreement
by which Interflora British Unit agreed to indemnify Interflora, Inc. against all losses and expenses arising out of this action which Interflora, Inc. may
incur after July 10, 2012. The parties are in the process of preparing for trial. If Marks and Spencer successfully defends the action, Interflora, Inc. and
Interflora British Unit could be ordered to pay Marks and Spencer's legal fees, costs and expenses, together with interest on any amounts awarded, for
which Interflora British Unit would be solely liable under the indemnity agreement.
We have been cooperating with certain governmental authorities in connection with their respective investigations of our former post-transaction
sales practices and certain other current or former business practices:
•In 2010, FTD.com, Inc. and Classmates Online, Inc., now known as Memory Lane, Inc., received subpoenas from the Attorney General
for the State of Kansas and the Attorney General for the State of Maryland, respectively. These subpoenas were issued on behalf of a
Multistate Work Group that consists of the Attorneys General for the following states: Alabama, Alaska, Delaware, Florida, Idaho,
Illinois, Kansas, Maine, Maryland, Michigan, New Mexico, New Jersey, North Dakota, Ohio, Oregon, Pennsylvania, South Dakota,
Texas, Vermont, and Washington. The primary focus of the inquiry concerns certain post-transaction sales practices in which these
subsidiaries previously engaged with certain third-party vendors. In the second quarter of 2012, we received an offer of settlement from
the Multistate Work Group consisting of certain injunctive relief and the consideration of two areas of monetary relief: (1) restitution to
consumers and (2) a $20 million payment by these subsidiaries for the violations alleged by the Multistate Work Group and to reimburse
the Multistate Work Group for its investigation costs. We rejected the Multistate Work Group's offer but have entered into discussions
with the Multistate Work Group in an effort to reach a negotiated resolution. In the meantime, we are continuing to cooperate with the
Multistate Work Group and are providing requested information. There can be no assurances as to the terms on which the Multistate
Work Group and we may agree to settle this matter, or that any settlement of this matter may be reached. We are not able to reasonably
estimate the amount of possible loss or range of loss that may
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