Alcoa 2012 Annual Report Download - page 56

the Squaw Creek Mine in the 1970s. During February 2007, class allegations were dropped and the matter proceeded as
an individual claim. Alcoa filed a renewed motion to dismiss (arguing that the claims are barred by the Indiana
Workers’ Compensation Act), amended its answer to include Indiana’s Recreational Use Statute as an affirmative
defense and filed a motion for summary judgment based on the Recreational Use Statute. The court granted Alcoa’s
motion to dismiss regarding plaintiffs’ occupationally-related claims and denied the motion regarding plaintiffs’
recreationally-related claims. On January 17, 2012, the court denied all outstanding motions with no opinion issued. A
jury trial commenced on April 10, 2012 and on May 1, 2012 the jury returned a verdict in favor of defendants Alcoa
Inc. and its subsidiary. The court entered its judgment on May 14, 2012. On May 31, 2012, plaintiffs filed a notice of
appeal. Plaintiffs’ brief was filed on January 25, 2013; Alcoa’s response is due by March 29. All subsequent briefing
replies are to be completed by April 2, 2013.
Also as previously reported, in October 2006, in Barnett, et al. v. Alcoa and Alcoa Fuels, Inc., Warrick Circuit Court,
County of Warrick, Indiana; 87-C01-0601-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. Plaintiffs also filed a “second
amended complaint” in response to the court’s orders granting Alcoa’s motions to dismiss. On July 7, 2010, the court
granted the parties’ joint motions for a general continuance of trial settings. Discovery in this matter is stayed pending
the outcome of the Musgrave matter. The Company is unable to reasonably predict an outcome or to estimate a range
of reasonably possible loss because plaintiffs have merely alleged that their medical condition is attributable to
exposure to materials at the Squaw Creek Mine but no further information is available due to the discovery stay.
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
ability to fix the deadline depending on the development of negotiations. Alcoa and Ligestra agreed to a settlement in
December 2008 with respect to the Feltre site. Ligestra paid the sum of 1.08 million Euros and Alcoa committed to
clean up the site. Further postponements were granted by the Court of Rome, and the next hearing was fixed for
November 2011. The trial was then suspended under the joint request of the parties, and was to be restarted in 2012.
The parties applied for a new postponement, that was granted by the Court, and a new hearing was fixed for
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