HP 2011 Annual Report Download - page 153

HEWLETT-PACKARD COMPANY AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
Note 18: Litigation and Contingencies (Continued)
Court but has been temporarily stayed based on the pending Steavens consolidated matter. The
George case was pending in the U.S. District Court for the Southern District of New York and
had been consolidated for pretrial purposes with the Cunningham and Steavens cases. On
September 9, 2011, the court granted a request by the plaintiffs’ counsel in the George matter to
amend the plaintiffs’ complaint and sever the case from the Steavens consolidated matter. The
plaintiff thereafter filed his first amended complaint on October 21, 2011. On November 23,
2011, the court transferred the George matter back to the U.S. District Court for the Central
District of California.
•Blake, et al. v. Hewlett-Packard Company is a purported collective action filed on February 17,
2011 in the U.S. District Court for the Southern District of Texas claiming that a class of
information technology and help desk support personnel were misclassified as exempt
employees. No substantive rulings have been made in the case.
In addition to the above matters, on May 24, 2011, a purported collective action captioned Fenn,
et al. v. Hewlett-Packard Company was filed in the United States District Court for the District of Idaho.
The suit alleges that customer service representatives working in HP’s U.S. call centers are not paid for
time spent on start-up and shut-down tasks (such as booting up and shutting down their computers) in
violation of the Fair Labor Standards Act. On December 12, 2011, the court denied plaintiff’s motion
for conditional class certification.
India Directorate of Revenue Intelligence Proceedings. As described below, Hewlett-Packard India
Sales Private Ltd (‘‘HPI’’), a subsidiary of HP, and certain current and former HP employees have
received show cause notices from the India Directorate of Revenue Intelligence (the ‘‘DRI’’) alleging
underpayment of certain customs duties:
• On April 30 and May 10, 2010, the DRI issued show cause notices to HPI, seven current HP
employees and one former HP employee alleging that HP has underpaid customs duties while
importing products and spare parts into India and seeking to recover an aggregate of
approximately $370 million, plus penalties. On June 2, 2010, the DRI issued an additional show
cause notice to HPI and three current HPI employees alleging that HP failed to pay customs
duties on the appropriate value of recovery CDs containing Microsoft operating systems and
seeking to recover approximately $5.3 million, plus penalties. HP has deposited a total of
approximately $16.7 million with the DRI and agreed to post a provisional bond in exchange for
the DRI’s agreement not to seize HP products and spare parts and not to interrupt the
transaction of business by HP in India.
• On June 17, 2010, the DRI issued show cause notices to HPI and two current HPI employees
regarding non-inclusion of the value of software contained in the products imported from third
party original design manufacturers. The total amount of the alleged unpaid customs duties
relating to such software, including the interest proposed to be demanded under these notices, is
approximately $130,000, which amount HPI has deposited with the DRI. The DRI is also
seeking to impose penalties.
• On October 1, 2010, in connection with an existing DRI investigation commenced against SAP
AG, the DRI issued a show cause notice to HPI alleging underpayment of customs duties
related to the importation of certain SAP software. The amount of the alleged duty differential
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