Alcoa 2010 Annual Report Download - page 43

money damages on behalf of all class members. In May 2007, the court authorized a class action suit to include only
people who suffered property damage or personal injury damages caused by the emission of PAHs from the smelter. In
September 2007, the plaintiff filed his claim against the original defendants, which the court had authorized in May.
Alcoa has filed its Statement of Defense and plaintiff has filed an Answer to that Statement. Alcoa also filed a Motion
for Particulars with respect to certain paragraphs of plaintiff’s Answer and a Motion to Strike with respect to certain
paragraphs of plaintiff’s Answer. In late 2010, the Court denied these motions. At this stage of the proceeding, the
company is unable to reasonably predict an outcome or to estimate a range of reasonably possible loss.
As previously reported, in January 2006, in Musgrave v. Alcoa, et al, Warrick Circuit Court, County of Warrick,
Indiana; 87-C01-0601-CT-0006, Alcoa Inc. and a subsidiary were sued by an individual, on behalf of himself and all
persons similarly situated, claiming harm from alleged exposure to waste that had been disposed in designated pits at
the Squaw Creek Mine in the 1970s. During February 2007, class allegations were dropped and the matter now
proceeds as an individual claim. On April 8, 2010, the court set trial for April 11, 2011. Alcoa has filed a renewed
motion to dismiss (arguing that the claims are barred by the Indiana Workers’ Compensation Act) and a motion
seeking to continue the trial date from April 11, 2011 to August 11, 2011.
Also as previously reported, in October 2006, in Barnett, et al. v. Alcoa and Alcoa Fuels, Inc., Warrick Circuit Court,
County of Warrick, Indiana; 87C01-0601-PL-499, forty-one plaintiffs sued Alcoa Inc. and a subsidiary, asserting
claims similar to the Musgrave matter, discussed above. In November 2007, Alcoa Inc. and its subsidiary filed motions
to dismiss both the Musgrave and Barnett cases. In October 2008, the Warrick County Circuit Court granted Alcoa’s
motions to dismiss, dismissing all claims arising out of alleged occupational exposure to wastes at the Squaw Creek
Mine, but in November 2008, the trial court clarified its ruling, indicating that the order does not dispose of plaintiffs’
personal injury claims based upon alleged “recreational” or non-occupational exposure. The parties have each
requested that the court certify an interlocutory appeal from the court’s rulings and the court indicated that it will grant
the parties’ request. Plaintiffs also filed a “second amended complaint” in response to the court’s orders granting
Alcoa’s motions to dismiss. The trial court is likely to stay any further proceedings regarding the second amended
complaint while the parties pursue an interlocutory appeal to the Indiana Court of Appeals. On July 7, 2010, the court
granted the parties’ joint motions for a general continuance of trial settings. Discovery in these cases is ongoing. The
company is unable to reasonably predict an outcome or to estimate a range of reasonably possible loss.
As previously reported, in 1996, Alcoa acquired the Fusina, Italy smelter and rolling operations and the Portovesme, Italy
smelter (both of which are owned by Alcoa’s subsidiary, Alcoa Trasformazioni S.r.l.) from Alumix, an entity owned by
the Italian Government. Alcoa also acquired the extrusion plants located in Feltre and Bolzano, Italy. At the time of the
acquisition, Alumix indemnified Alcoa for pre-existing environmental contamination at the sites. In 2004, the Italian
Ministry of Environment (MOE) issued orders to Alcoa Trasformazioni S.r.l. and Alumix for the development of a
clean-up plan related to soil contamination in excess of allowable limits under legislative decree and to institute
emergency actions and pay natural resource damages. On April 5, 2006, Alcoa Trasformazioni S.r.l.’s Fusina site was also
sued by the MOE and Minister of Public Works (MOPW) in the Civil Court of Venice for an alleged liability for
environmental damages, in parallel with the orders already issued by the MOE. Alcoa Trasformazioni S.r.l. appealed the
orders, defended the civil case for environmental damages (which is still pending) and filed suit against Alumix, as
discussed below. Similar issues also existed with respect to the Bolzano and Feltre plants, based on orders issued by local
authorities in 2006. All the orders have been challenged in front of the Administrative Regional Courts, and all trials are
still pending. However, in Bolzano the Municipality of Bolzano withdrew the order, and the Regional Administrative
Tribunal of Veneto suspended the order in Feltre. Most, if not all, of the underlying activities occurred during the
ownership of Alumix, the governmental entity that sold the Italian plants to Alcoa.
As noted above, in response to the 2006 civil suit by the MOE and MOPW, Alcoa Trasformazioni S.r.l. filed suit
against Alumix claiming indemnification under the original acquisition agreement, but brought that suit in the Court of
Rome due to jurisdictional rules. The Court of Rome has appointed an expert to assess the causes of the pollution. In
June 2008, the parties (Alcoa and now Ligestra S.r.l. (Ligestra), the successor to Alumix) signed a preliminary
agreement by which they have committed to pursue a settlement and asked for a suspension of the technical assessment
during the negotiations. The Court of Rome accepted the request, and postponed the technical assessment, reserving its
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