Southwest Airlines 2012 Annual Report Download - page 45

complaint sought treble damages on behalf of a putative class of persons or entities in the United States who
directly paid Delta and/or AirTran such fees on domestic flights beginning December 5, 2008. After the filing of
the May 2009 complaint, various other nearly identical complaints also seeking certification as class actions were
filed in federal district courts in Atlanta, Georgia; Orlando, Florida; and Las Vegas, Nevada. All of the
cases were consolidated before a single federal district court judge in Atlanta. A Consolidated Amended
Complaint was filed in the consolidated action on February 1, 2010, which broadened the allegations to add
claims that Delta and AirTran conspired to reduce capacity on competitive routes and to raise prices in violation
of Section 1 of the Sherman Act. In addition to treble damages for the amount of first baggage fees paid to
AirTran and to Delta, the Consolidated Amended Complaint seeks injunctive relief against a broad range of
alleged anticompetitive activities, as well as attorneys’ fees. On August 2, 2010, the Court dismissed plaintiffs’
claims that AirTran and Delta had violated Section 2 of the Sherman Act; the Court let stand the claims of a
conspiracy with respect to the imposition of a first bag fee and the airlines’ capacity and pricing decisions. On
June 30, 2010, the plaintiffs filed a motion to certify a class, which AirTran and Delta have opposed. The Court
has not yet ruled on the class certification motion. The original period for fact and expert discovery was
scheduled to end on February 25, 2011, but on February 3, 2012, the Court granted plaintiffs’ motion for
supplemental discovery because Delta discovered that it had not produced certain electronic documents. The
period for supplemental discovery against AirTran ended on May 3, 2012, but discovery disputes between
plaintiffs and Delta have continued. On June 18, 2012, the parties filed a Stipulation and Order that plaintiffs
have abandoned their claim that AirTran and Delta conspired to reduce capacity. AirTran and Delta moved for
summary judgment on all of plaintiffs’ remaining claims on August 31, 2012. The plaintiffs filed motions to
compel Delta to produce additional documents and for sanctions based on alleged failures to produce electronic
data. On November 19, 2012, the Court ordered plaintiffs to appoint an expert to examine Delta’s production of
electronic data and suspended the briefing schedule for the summary judgment motion until the expert has
completed his work. It is AirTran’s understanding that the expert’s work is ongoing. AirTran denies all
allegations of wrongdoing, including those in the Consolidated Amended Complaint, and intends to defend
vigorously any and all such allegations.
The Company is from time to time subject to various legal proceedings and claims arising in the ordinary
course of business, including, but not limited to, examinations by the Internal Revenue Service.
The Company’s management does not expect that the outcome in any of its currently ongoing legal
proceedings or the outcome of any proposed adjustments presented to date by the Internal Revenue Service,
individually or collectively, will have a material adverse effect on the Company’s financial condition, results of
operations, or cash flow.
Item 4. Mine Safety Disclosures
Not applicable.
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