United Airlines 2013 Annual Report Download - page 24

Table of Contents
from the United States on international flights, in violation of Section 7 of the Clayton Act. On August 9, 2010, the plaintiffs filed a motion for preliminary
injunction pursuant to Section 16 of the Clayton Act, seeking to enjoin the Merger. On September 27, 2010, the court denied the plaintiffs’ motion for a
preliminary injunction, which allowed the Merger to close. After the closing of the Merger, the plaintiffs appealed the court’s ruling to the United States Court
of Appeals for the Ninth Circuit and moved for a “hold separate” order pending the appeal, which was denied. The Ninth Circuit affirmed the District Court’s
denial of the preliminary injunction on May 23, 2011 and, on July 8, 2011, denied the plaintiffs’ motions for rehearing and for rehearing en banc. The U.S.
Supreme Court thereafter denied certiorari. On October 24, 2011, the District Court allowed the plaintiffs to amend their complaint in order to, among other
things, add a claim for damages. The Company filed a motion to dismiss the complaint with prejudice which the District Court granted on December 29,
2011. On January 16, 2014, the United States Court of Appeals for the Ninth Circuit affirmed the District Court’s dismissal of the complaint and on
January 30, 2014, the plaintiffs filed a petition for rehearing. The Company has determined that no reserve for potential liability is required and will continue
to defend itself against the claim.
Environmental Proceedings
In 2001, the California Regional Water Quality Control Board (“CRWQCB”) mandated a field study of the area surrounding Continental’s aircraft
maintenance hangar in Los Angeles. The study was completed in September 2001 and identified aircraft fuel and solvent contamination on and adjacent to this
site. In April 2005, Continental began environmental remediation of aircraft fuel contamination surrounding its aircraft maintenance hangar pursuant to a
workplan submitted to and approved by the CRWQCB and its landlord, the Los Angeles World Airports. The Company could be responsible for
environmental remediation costs primarily related to solvent contamination on and near this site. The Company accrued a reserve in an amount expected by the
Company to cover environmental remediation costs for this site.
On January 13, 2014, United received an offer of settlement from the Bay Area Air Quality Management District for three Notices of Violation (“NOVs”)
issued in 2012 and 2013 to United’s San Francisco maintenance center (the “Maintenance Center”). The NOVs relate to the frequency of filter replacement for
painting booths and associated recordkeeping at the Maintenance Center. Under the NOVs, the Company could be responsible for paying a civil penalty. The
Company is evaluating the accrual of a reserve for any settlement of the NOVs.
Other Legal Proceedings
The Company is involved in various other claims and legal actions involving passengers, customers, suppliers, employees and government agencies arising
in the ordinary course of business. Additionally, from time to time, the Company becomes aware of potential non-compliance with applicable environmental
regulations, which have either been identified by the Company (through internal compliance programs such as its environmental compliance audits) or
through notice from a governmental entity. In some instances, these matters could potentially become the subject of an administrative or judicial proceeding and
could potentially involve monetary sanctions. After considering a number of factors, including (but not limited to) the views of legal counsel, the nature of
contingencies to which the Company is subject and prior experience, management believes that the ultimate disposition of these contingencies will not
materially affect its consolidated financial position or results of operations.
 
Not applicable.
24