Alcoa 2012 Annual Report Download - page 127

preliminary injunction with trial, certified a plaintiff class, bifurcated and stayed the plaintiffs’ breach of fiduciary duty
claims, struck the plaintiffs’ jury demand, but indicated it would use an advisory jury, and set a trial date of
September 17, 2008. In August 2008, the court set a new trial date of March 24, 2009 and, subsequently, the trial date
was moved to September 22, 2009. In June 2009, the court indicated that it would not use an advisory jury at trial. Trial
in the matter was held over eight days commencing September 22, 2009 and ending on October 1, 2009 in federal court
in Knoxville, TN before the Honorable Thomas Phillips, U.S. District Court Judge. At the conclusion of evidence, the
court set a post-hearing briefing schedule for submission of proposed findings of fact and conclusions of law by the
parties and for replies to the same. Post trial briefing was submitted on December 4, 2009.
On March 9, 2011, the court issued a judgment order dismissing plaintiffs’ lawsuit in its entirety with prejudice for the
reasons stated in its Findings of Fact and Conclusions of Law. On March 23, 2011, plaintiffs filed a motion for
clarification and/or amendment of the judgment order, which seeks, among other things, a declaration that plaintiffs’
retiree benefits are vested subject to an annual cap and an injunction preventing Alcoa, prior to 2017, from modifying
the plan design to which plaintiffs are subject or changing the premiums and deductibles that plaintiffs must pay. Also
on March 23, 2011, plaintiffs filed a motion for award of attorney’s fees and expenses. Alcoa filed its opposition to
both motions on April 11, 2011. On June 11, 2012, the court issued its memorandum and order denying plaintiffs’
motion for clarification and/or amendment to the original judgment order. On July 6, 2012, plaintiffs filed a notice of
appeal of the court’s March 9, 2011 judgment. On July 12, 2012, the trial court stayed Alcoa’s motion for assessment
of costs pending resolution of plaintiffs’ appeal. The appeal is docketed in the United States Court of Appeals for the
Sixth Circuit as case number 12-5801. On July 26, 2012, the appellate court issued a briefing schedule requiring
briefing to be complete by the end of October 2012. On August 29, 2012, the trial court dismissed plaintiffs’ motion for
attorneys’ fees without prejudice to refiling the motion following the resolution of the appeal at the Sixth Circuit Court
of Appeals. Briefing on the appeal is complete and oral argument is scheduled for March 6, 2013.
On April 23, 2004, St. Croix Renaissance Group, L.L.L.P. (SCRG), Brownfield Recovery Corp., and Energy Answers
Corporation of Puerto Rico (collectively referred to as “Plaintiffs”) filed a suit against St. Croix Alumina L.L.C. and
Alcoa World Alumina, LLC (collectively referred to as “Alcoa”) in the Territorial Court of the Virgin Islands, Division of
St. Croix for claims related to the sale of Alcoa’s former St. Croix alumina refinery to Plaintiffs. Alcoa thereafter removed
the case to federal court and after a several year period of discovery and motion practice, a jury trial on the matter took
place in St. Croix from January 11, 2011 to January 20, 2011. The jury returned a verdict in favor of Plaintiffs and
awarded damages as described: on a claim of breaches of warranty, the jury awarded $13; on the same claim, the jury
awarded punitive damages in the amount of $6; and on a negligence claim for property damage, the jury awarded $10.
Plaintiffs filed a motion seeking pre-judgment interest on the jury award. On February 17, 2011, Alcoa filed post-trial
motions seeking judgment notwithstanding the verdict or, in the alternative, a new trial. On May 31, 2011, the court
granted Alcoa’s motion for judgment regarding Plaintiffs’ $10 negligence award and denied the remainder of Alcoa’s
motions. Additionally, the court awarded Plaintiffs pre-judgment interest of $2 on the breach of warranty award. As a
result of the court’s post-trial decisions, Alcoa recorded a charge of $20 in 2011 (see Note D). On June 14, 2011, Alcoa
filed a notice of appeal with the U.S. Court of Appeals for the Third Circuit regarding Alcoa’s denied post-trial motions.
On June 22, 2011, SCRG filed a notice of cross appeal with the Third Circuit Court related to certain pre-trial decisions of
the court and of the court’s post-trial ruling on the negligence claim. The Third Circuit Court referred this matter to
mediation as is its standard practice in appeals. Following mediation and further, separate settlement discussions, the
parties executed an agreement dated September 30, 2011 resolving the matter in its entirety, and subsequently jointly
petitioned (i) the District Court to release Alcoa from the jury verdict and (ii) the Third Circuit Court of Appeals to
dismiss the matter. On March 13, 2012, the District Court entered an order discharging Alcoa from the jury verdict and,
on March 14, 2012, the Third Circuit Court of Appeals dismissed the matter. This matter is now fully resolved.
Before 2002, Alcoa purchased power in Italy in the regulated energy market and received a drawback of a portion of
the price of power under a special tariff in an amount calculated in accordance with a published resolution of the Italian
Energy Authority, Energy Authority Resolution n. 204/1999 (“204/1999”). In 2001, the Energy Authority published
another resolution, which clarified that the drawback would be calculated in the same manner, and in the same amount,
in either the regulated or unregulated market. At the beginning of 2002, Alcoa left the regulated energy market to
purchase energy in the unregulated market. Subsequently, in 2004, the Energy Authority introduced regulation no.
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