America Online 2009 Annual Report Download - page 34

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New York State law and are entitled to minimum wages. In 2001, four of the named plaintiffs in the Hallissey case filed a related lawsuit alleging retaliation
as a result of filing the FLSA suit in Williams, et al. v. America Online, Inc., et al. A related case was filed by several of the Hallissey plaintiffs in the U.S.
District Court for the Southern District of New York alleging violations of the retaliation provisions of the FLSA. Also in 2001, two related class actions were
filed in state courts in New Jersey (Superior Court of New Jersey, Bergen County Law Division) and Ohio (Court of Common Pleas, Montgomery County,
Ohio), alleging violations of the FLSA and/or the respective state laws. These cases were removed to federal court and subsequently transferred to the U.S.
District Court for the Southern District of New York for consolidated pretrial proceedings with Hallissey.
On January 17, 2002, AOL Community Leader volunteers filed a class action lawsuit in the U.S. District Court for the Southern District of New York,
Hallissey et al. v. AOL Time Warner, Inc., et al., against AOL LLC alleging ERISA violations and an entitlement to pension, welfare and/or other employee
benefits subject to ERISA. In March 2003, plaintiffs filed and served a second amended complaint, adding as defendants the AOL Time Warner
Administrative Committee and the AOL Administrative Committee.
The parties to all of the Community Leader-related lawsuits have agreed to settle the lawsuits on terms that are not material to the Company. The court
granted preliminary approval of the settlement on February 2, 2010.
On August 1, 2005, Thomas Dreiling, a shareholder of Infospace Inc., filed a derivative suit in the U.S. District Court for the Western District of
Washington against AOL LLC and Infospace Inc. as nominal defendant. The complaint, brought in the name of Infospace, asserts violations of Section 16(b)
of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). The plaintiff alleges that certain AOL LLC executives and the founder of
Infospace, Naveen Jain, entered into an agreement to manipulate Infospace's stock price through the exercise of warrants that AOL LLC received in
connection with a commercial agreement with Infospace. The complaint seeks disgorgement of profits, interest and attorneys' fees. On January 3, 2008, the
court granted AOL LLC's motion and dismissed the complaint with prejudice. Plaintiff filed a notice of appeal with the U.S. Court of Appeals for the Ninth
Circuit, and the oral argument occurred on May 7, 2009. On August 19, 2009, the Ninth Circuit issued its opinion affirming the District Court's opinion on all
issues. The petitioners' September 2, 2009 motion for rehearing en banc before the Ninth Circuit was denied on October 13, 2009. The time period for
petitioners to seek certiorari before the U.S. Supreme Court has expired, so the Company expects no further activity in this matter.
On September 22, 2006, Salvadore Ramkissoon and two unnamed plaintiffs filed a putative class action against AOL LLC in the U.S. District Court for
the Northern District of California based on AOL LLC's public posting of AOL LLC member search queries in late July 2006. Among other things, the
complaint alleges violations of the Electronic Communications Privacy Act and California statutes relating to privacy, data protection and false advertising.
The complaint seeks class certification and damages, as well as injunctive relief that would oblige AOL LLC to alter its search query retention practices. In
February 2007, the District Court dismissed the action without prejudice. The plaintiffs then appealed this decision to the Ninth Circuit. On January 16, 2009,
the Ninth Circuit held that AOL LLC's Terms of Service violated California public policy as to any California plaintiffs in the putative class, as it did not
allow for them to fully exercise their rights. The Ninth Circuit reversed and remanded to the District Court for further proceedings. On April 24, 2009, AOL
LLC filed a motion to implement the Ninth Circuit's mandate. AOL LLC filed its answer on June 29, 2009. On July 6, 2009, the District Court found that the
plaintiffs' claims for unjust enrichment and public disclosure of private facts were subject to the forum selection clause in the Terms of Service and thus could
not be pursued in that court. On October 27, 2009, plaintiffs filed a motion for class certification and two additional named individuals filed a motion to
intervene as plaintiffs in the matter. Also on October 27, AOL filed its reply brief with regards to its 12(c) Motion for Judgment on the Pleadings. On
February 2, 2010, the Court issued an Order granting AOL's motion to implement the mandate of the Ninth Circuit. In its Order, the court dismissed named
plaintiff Ramkissoon, as he is not a California resident. In addition, the court dismissed the remaining claim under the Electronic Communications Privacy
Act, as well as the claims for unjust enrichment and public disclosure of private facts. The Court also dismissed without prejudice both the plaintiffs' motion
for class certification as well as AOL's 12(c) motion. Subsequent to the court's order, AOL filed a modified 12(c) motion on February 24, 2010. The Company
intends to defend against this lawsuit vigorously.
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