Alcoa 2009 Annual Report Download - page 40

same entities as were sued in the February 1999 action earlier described and have added as a defendant the current
owner of the alumina facility property. On February 12, 2010, Alcoa and SCA removed the case to the federal court for
the District of the Virgin Islands. The company is unable to reasonably predict an outcome or to estimate a range of
reasonably possible loss.
As previously reported, on September 26, 2003, EPA Region VI filed an Administrative Complaint, Compliance Order
and Notice of Opportunity for Hearing against the Wichita Falls, Texas facility of Howmet Corporation (Howmet) for
violations of hazardous waste regulations relating to shipments of used potassium hydroxide to a fertilizer
manufacturer from 1997 until 2000. The Complaint proposes a penalty of $265,128. In addition, EPA ordered Howmet
to cease sending used potassium hydroxide to fertilizer manufacturers or employing used potassium hydroxide in any
use constituting disposal and to certify compliance with hazardous waste regulations within 30 days. On October 22,
2003, EPA Region II issued an almost identical Complaint, Compliance Order and Notice of Opportunity for Hearing
against Howmet’s Dover, New Jersey facility, seeking $180,021 in penalties. Howmet filed its Answers to EPA Region
VI’s and EPA Region II’s Complaints. Howmet’s Answers denied the substance of EPA’s Complaints, requested that
no penalties be imposed and requested Hearings on both the hazardous waste allegations and the Compliance Orders.
On April 25, 2005, the administrative Court granted EPA’s motions for partial accelerated decision with respect to both
cases, finding that Howmet violated the cited regulatory provisions alleged in the Complaints and moved the case to
the penalty phase. The Court rejected Howmet’s interlocutory appeal of this decision on May 16, 2005. On
September 2, 2005, EPA and Howmet stipulated to a penalty amount of $309,091 for the consolidated matters should
the finding of liability be upheld and Howmet appealed the administrative Court’s decision to the Environmental
Appeals Board on September 28, 2005. On May 24, 2007, the Environmental Appeals Board upheld the administrative
Court’s liability finding against Howmet and assessed the parties’ stipulated penalty of $309,091. On July 23, 2007,
Howmet appealed the Environmental Appeals Board decision to the United States District Court for the District of
Columbia. On September 23, 2009, the United States District Court for the District of Columbia denied Howmet’s
appeal and ordered Howmet to pay the EPA a penalty of $309,091. Howmet appealed the United States District Court’s
decision to the United States Court of Appeals for the District of Columbia on November 23, 2009.
As previously reported, in May 2005,Alcoa World Alumina LLC (AWA) and SCA were among the defendants listed
in a lawsuit brought by the Commissioner of the Department of Planning and Natural Resources, Dean Plaskett, in his
capacity as Trustee for Natural Resources of the Territory of the United States Virgin Islands in the District Court of
the Virgin Islands, Division of St. Croix. The complaint seeks damages for alleged injuries to natural resources caused
by alleged releases from an alumina refinery facility in St. Croix that was owned by SCA from 1995 to 2002. Also
listed in the lawsuit are previous and subsequent owners of the alumina refinery and the owners of an adjacent oil
refinery. Claims are brought under CERCLA, U.S. Virgin Islands law, and common law. The plaintiff has not specified
in the complaint the amount it seeks in damages. The defendants filed motions to dismiss in 2005. In October 2007, in
an effort to resolve the liability of St. Croix Renaissance Group, L.L.L.P. (SCRG) in the lawsuit, as well as any other
CERCLA liability SCRG may have with respect to the facility, DPNR filed a new lawsuit against SCRG seeking the
recovery of response costs under CERCLA, and the plaintiff and SCRG filed a joint Agreement and Consent Decree.
The remaining defendants each filed objections to the Agreement and Consent Decree, and on October 22, 2008, the
court denied entry of the Agreement and Consent Decree. On October 31, 2008, the court ruled on the motions to
dismiss that were filed by all defendants in 2005. The court dismissed two counts from the complaint (common law
trespass and V.I. Water Pollution Control Act), but denied the motions with regard to the other six counts (CERCLA,
V.I. Oil Spill Prevention and Pollution Control Act, and common law strict liability, negligence, negligence per se and
nuisance). The court also ruled that the Virgin Islands Government was the proper plaintiff for the territorial law claims
and required re-filing of the complaint by the proper parties, which was done on November 18, 2008. The plaintiffs
subsequently moved to amend their complaint further, were granted leave by the court to do so, and filed an amended
complaint on July 30, 2009. AWA and SCA filed an answer, counterclaim and cross-claim against SCRG in response
to the amended complaint on August 17, 2009. In response to the plaintiffs’ amended complaint, the other former
owners of the alumina refinery filed answers, counterclaims, and cross-claims against SCRG and certain agencies of
the Virgin Islands Government. Each defendant except SCRG filed a partial motion for summary judgment seeking
dismissal of the CERCLA cause of action on statute of limitations grounds during July 2009. Following a four-month
discovery period, plaintiff Commissioner responded to the motions for summary judgment on December 31, 2009.
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