Alcoa 2013 Annual Report Download - page 59

As previously reported, on November 30, 2010, Alumínio received service of a lawsuit that had been filed by the
public prosecutors of the State of Pará in Brazil in November 2009. The suit names the Company and the State of Pará,
which, through its Environmental Agency, had issued the operating license for the Company’s new bauxite mine in
Juruti. The suit concerns the impact of the project on the region’s water system and alleges that certain conditions of
the original installation license were not met by the Company. In the lawsuit, plaintiffs requested a preliminary
injunction suspending the operating license and ordering payment of compensation. On April 14, 2010, the court
denied plaintiffs’ request. Alumínio presented its defense in March 2011, on grounds that it was in compliance with the
terms and conditions of its operating license, which included plans to mitigate the impact of the project on the region’s
water system. In April, 2011, the State of Pará defended itself in the case asserting that the operating license contains
the necessary plans to mitigate such impact, that the State monitors the performance of Aluminio’s obligations arising
out of such license, that the licensing process is valid and legal, and that the suit is meritless. The Company’s position
is that any impact from the project had been fully repaired when the suit was filed. The Company also believes that
Jará Lake has not been affected by any project activity and any evidence of pollution from the project would be
unreliable. Following the preliminary injunction, the plaintiffs have taken no further action. The Company is not
certain whether or when the action will proceed. Given that this proceeding is in its preliminary stage and the current
uncertainty in this case, the Company is unable to reasonably predict an outcome or to estimate a range of reasonably
possible loss.
As previously reported, by an amended complaint filed April 21, 2005, Alcoa Global Fasteners, Inc. was added as a
defendant in Orange County Water District (OCWD) v. Northrop Corporation, et al., civil action 04cc00715 (Superior
Court of California, County of Orange). OCWD alleges contamination or threatened contamination of a drinking water
aquifer by Alcoa, certain of the entities that preceded Alcoa at the same locations as property owners and/or operators,
and other current and former industrial and manufacturing businesses that operated in Orange County in past decades.
OCWD seeks to recover the cost of aquifer remediation and attorney’s fees. Trial on statutory, non-jury claims
commenced on February 10, 2012, and continued through September 2012 when the case was submitted to the court
for decision. On December 11, 2012, the court issued its tentative ruling in the matter dismissing plaintiff OCWD’s
remaining statutory claims against all defendants. The court’s tentative ruling also invited further briefing on the
decision and it is subject to modification. On January 21, 2013, defendants filed a joint brief responding to ten specific
questions posed by the court’s tentative ruling. The joint brief argued that the court should make further findings of fact
and law in favor of the defendants in response to the ten questions. Alcoa Global Fasteners, Inc. also filed a separate
brief on two of the questions arguing that the court should determine that it is neither a cause of ground water
contamination nor a cause of plaintiffs’ incurred costs. 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. On February 28, 2013, the court held a hearing on its tentative
Statement of Decision finding that OCWD had not met its burden on the element of causation and, following that
hearing, on May 10, 2013, issued a supplemental tentative decision, finding that plaintiff had not met its burden of
proof. On that date, the court ordered defendants to submit a proposed statement of decision, followed by filing of
objections and counter-proposed statement of decision by the plaintiff and responses by the defendants. All filings were
completed by September 23, 2013 at which time the matter was submitted to the court for final decision. On
October 29, 2013, the court issued its final Statement of Decision (“SOD”) which resolved the statutory law liability
claims of the Phase I trial favorably to Alcoa and the other Phase I trial defendants. The plaintiff and the trial
defendants disagree on the consequences of the SOD and the Phase I trial on the remaining two tort claims of nuisance
and trespass. On December 19, 2013, the court held a Case Management Conference and approved the parties’
proposed briefing schedule regarding remaining issues. Trial defendants filed their opening motions on January 24,
2014; OCWD’s responsive brief is due March 10, 2014; and defendants’ reply brief is due by March 25, 2014.
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
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