Coca Cola 2008 Annual Report Download - page 26

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(iv) the fact that the foregoing conditions would lead to diminished earnings. The plaintiff, purportedly on
behalf of the Company, seeks damages in an unspecified amount, extraordinary equitable and/or injunctive
relief, restitution and disgorgement of profits, reimbursement for costs and disbursements of the action, and
such other and further relief as the Court deems just and proper. The Company’s motion to dismiss the
complaint and the plaintiff’s response were filed and fully briefed. The Court heard oral argument on the
Company’s motion to dismiss on June 6, 2006. Following the hearing, the Court took the matter under
advisement and the parties are awaiting a ruling. There were no material developments in this case during 2008.
The Company intends to vigorously defend its interests in this matter.
CCE Shareholders Litigation
In February 2006, the International Brotherhood of Teamsters, a purported shareholder of CCE, filed a
derivative suit (International Brotherhood of Teamsters v. The Coca-Cola Company, et al.) in the Delaware Court
of Chancery for New Castle County naming the Company and current and former CCE board members,
including certain current and former Company officers who serve or served on CCE’s board, as defendants. The
plaintiff alleged that the Company breached fiduciary duties owed to CCE shareholders based upon alleged
control of CCE by the Company. The complaint also alleged that the Company had actual control over CCE and
that the Company abused its control by maximizing its own financial condition at the expense of CCE’s financial
condition. Subsequently, two lawsuits virtually identical to Teamsters were filed in the same court: Lang v. The
Coca-Cola Company, et al., filed March 30, 2006, and Gordon v. The Coca-Cola Company, et al., filed April 10,
2006. On April 6, 2006, the Company moved to dismiss Teamsters or, in the alternative, for a stay of discovery.
On May 19, 2006, the Chancery Court entered an order consolidating Teamsters, Lang and Gordon under the
caption In re Coca-Cola Enterprises, Inc. Shareholders Litigation and requiring the plaintiffs to file an amended
consolidated complaint in the consolidated action as soon as practicable.
On September 29, 2006, plaintiffs filed their Consolidated Amended Shareholders’ Derivative Complaint
(the ‘‘Amended Complaint’’). The Amended Complaint omits certain former Company officers from the group
of individual defendants and defines the ‘‘relevant time period’’ for purposes of the claims as October 15, 2003,
through the date of the filing. The original complaint did not identify any specific dates. The Amended
Complaint also includes additional allegations about the conduct of the Company and certain of its executive
officers, including new allegations about the Company’s purported control over CCE and allegations of
improper conduct in connection with the establishment of a warehouse delivery system to supply Powerade to a
major customer. On December 7, 2006, the Company filed its motion to dismiss the Amended Complaint and
accompanying brief. The plaintiffs’ reply brief was filed on January 22, 2007. On October 17, 2007, the Chancery
Court dismissed plaintiffs’ Amended Complaint. The plaintiffs appealed the Chancery Court’s decision to the
Delaware Supreme Court. On June 20, 2008, the Delaware Supreme Court affirmed the Chancery Court’s
decision, thereby concluding the case.
American Canyon Matter
The Company received notices of violations from local environmental authorities alleging that certain
violations of the United States Clean Water Act (the ‘‘CWA’’) and applicable local law occurred at the
Company’s production plant in American Canyon, California. That plant treats and discharges wastewater under
permit authority issued under the CWA and local law. The alleged violations related to handling of wastewater
discharge and required regulatory reporting. The Company cooperated with the local environmental authorities
and reached a negotiated settlement under which it did not admit to any wrongdoing or fault but agreed to pay
restitution and civil penalties. The settlement amount was not material to the Company’s business or financial
condition.
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