9 .	Legal Proceedings

We are a defendant in certain possible class-action lawsuits in which the plaintiffs are current and former California-based drivers who allege claims for unpaid wages, failure to provide meal and rest periods, and other items. In the lead class-action, the United States District Court for the Central District of California issued an Order in late

July 2018

granting in part and denying in part Plaintiffs’ motion for partial summary judgment. In early

August 2018

the Court issued an Order decertifying the class and granting in part and denying in part our motion for partial summary judgment on certain claims. Plaintiffs requested the United States Court of Appeals for the Ninth Circuit to review the Court’s decertification Order and to stay the

September 2018

trial of the named plaintiffs’ individual claims. In

September 2018,

we reached an agreement to resolve all pending claims for a class settlement payment of

$15

million, subject to Court approval. The Court’s preliminary settlement approval hearing is scheduled for late

October 2018.

The overlapping claims in the other lawsuits remain stayed pending final approval of the settlement in the lead class-action case.

January 2017,

we exercised our right to utilize the arbitration process to review the division of revenue collected beginning

May 1, 2016,

as well as to clarify other issues, under our Joint Service Agreement with BNSF Railway Company (BNSF). BNSF requested the same, and the arbitration process is on-going. On

October 5, 2018,

we received the arbitrators’ Interim Award. The details of the Interim Award are confidential and require the parties to submit additional information requested by the arbitrators over the next several months to decide certain unresolved matters. For the determined components of the Interim Award, we recorded an

$18.3

million pre-tax charge in the

third

quarter

2018,

related to certain charges claimed by BNSF for specific services requested for customers from

April 2014

through

May 2018.

The other financial implications from the Interim Award will

not

be fully determined until the arbitrators issue additional award(s) following their review of each party’s requested additional submissions. At this time, we are unable to reasonably predict the final outcome of the arbitration, and, as such,

further gain or loss contingency can be determined or recorded. If decided adversely, this matter could result in a liability material to our financial condition or results of operations. BNSF provides a significant amount of rail transportation services to our JBI business segment. Normal commercial business activity between the parties, including load tendering, load tracing, billing and payments, is expected to continue on a timely basis.

We are involved in certain other claims and pending litigation arising from the normal conduct of business. Based on present knowledge of the facts and, in certain cases, opinions of outside counsel, we believe the resolution of these claims and pending litigation will

not

have a material adverse effect on our financial condition, results of operations or liquidity.