Alcoa 2012 Annual Report Download - page 58

will be announced thereafter. Remaining in the case at this time are common law trespass and nuisance claims for a
Phase 2 trial which has not been scheduled. OCWD has asserted a total remedy cost of at least $150 million plus
attorneys’ fees; however the amount in controversy at this stage is limited to sums already expended by the OCWD,
approximately $4 million. The court has indicated that it is not likely to grant the OCWD’s request for declaratory
relief as to future sums the OCWD expends. Alcoa believes that it is not responsible for any contamination as alleged
in the complaint or that if any liability were to be established, its liability would be insignificant. While the court has
issued a tentative decision on the statutory claims, it is not possible at this time to reasonably predict the court’s final
determination as to this stage of the proceedings, nor any claims presented to a jury in the future nor the impact of
claims presented against third party defendants and it is therefore not possible to estimate a range of reasonably
possible loss for this matter. A similar matter, Orange County Water District v. Sabic, et al, civil action 30-2008-
00078246 (Superior Court of California, County of Orange) was filed against Alcoa Global Fasteners, Inc. on June 23,
2008. This matter also alleges contamination or threatened contamination of a drinking water aquifer by Alcoa and
others. A trial has been set for 2013. Alcoa believes that it is not responsible for any contamination as alleged in the
complaint or that if any liability were to be established, its liability would be insignificant. Plaintiff Orange County
Water District has made a statutory settlement demand to Alcoa and other similar demands to certain other defendants.
The demand to Alcoa is $2.5 million and is being evaluated.
St. Croix Proceedings
Josephat Henry. As previously reported, in September 1998, Hurricane Georges struck the U.S. Virgin Islands,
including the St. Croix Alumina, L.L.C. (SCA) facility on the island of St. Croix. The wind and rain associated with the
hurricane caused material at the location to be blown into neighboring residential areas. SCA undertook or arranged
various cleanup and remediation efforts. The Division of Environmental Protection (DEP) of the Department of
Planning and Natural Resources (DPNR) of the Virgin Islands Government issued a Notice of Violation that Alcoa has
contested. In February 1999, certain residents of St. Croix commenced a civil suit in the Territorial Court of the Virgin
Islands seeking compensatory and punitive damages and injunctive relief for alleged personal injuries and property
damages associated with “bauxite or red dust” from the SCA facility. The suit, which has been removed to the District
Court of the Virgin Islands (the Court), names SCA, Alcoa and Glencore Ltd. as defendants, and, in August 2000, was
accorded class action treatment. The class was defined to include persons in various defined neighborhoods who
“suffered damages and/or injuries as a result of exposure during and after Hurricane Georges to red dust and red mud
blown during Hurricane Georges.” All of the defendants have denied liability, and discovery and other pretrial
proceedings have been underway since 1999. Plaintiffs’ expert reports claim that the material blown during Hurricane
Georges consisted of bauxite and red mud, and contained crystalline silica, chromium, and other substances. The
reports further claim, among other things, that the population of the six subject neighborhoods as of the 2000 census (a
total of 3,730 people) has been exposed to toxic substances through the fault of the defendants, and hence will be able
to show entitlement to lifetime medical monitoring as well as other compensatory and punitive relief. These opinions
have been contested by the defendants’ expert reports, that state, among other things, that plaintiffs were not exposed to
the substances alleged and that in any event the level of alleged exposure does not justify lifetime medical monitoring.
Alcoa and SCA turned over this matter to their insurance carriers who have been providing a defense. Glencore Ltd. is
jointly defending the case with Alcoa and SCA and has a pending motion to dismiss. In June 2008, the Court granted
defendants’ joint motion to decertify the original class of plaintiffs, and certified a new class as to the claim of ongoing
nuisance, insofar as plaintiffs seek cleanup, abatement, or removal of the red mud currently present at the facility. (The
named plaintiffs had previously dropped their claims for medical monitoring as a consequence of the court’s rejection
of plaintiffs’ proffered expert opinion testimony). The Court expressly denied certification of a class as to any claims
for remediation or cleanup of any area outside the facility (including plaintiffs’ property). The new class could seek
only injunctive relief rather than monetary damages. Named plaintiffs, however, could continue to prosecute their
claims for personal injury, property damage, and punitive damages. In August 2009, in response to defendants’
motions, the Court dismissed the named plaintiffs’ claims for personal injury and punitive damages, and denied the
motion with respect to their property damage claims. In September 2009, the Court granted defendants’ motion for
summary judgment on the class plaintiffs’ claim for injunctive relief. In October 2009, plaintiffs appealed the Court’s
summary judgment order dismissing the claim for injunctive relief and in March 2011, the U.S. Court of Appeals for
the 3rd Circuit dismissed plaintiffs’ appeal of that order. In September 2011, the parties reached an oral agreement to
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