Alcoa 2010 Annual Report Download - page 39

ENGINEERED PRODUCTS AND SOLUTIONS
See the table and related text in the Engineered Products and Solutions Facilities section on pages 12-14 of this
report.
CORPORATE
See the table and related text in the Corporate Facilities section on pages 14-15 of this report.
Item 3. Legal Proceedings.
In the ordinary course of its business, Alcoa is involved in a number of lawsuits and claims, both actual and potential,
including some that it has asserted against others. While the amounts claimed may be substantial, the ultimate liability
cannot now be determined because of the considerable uncertainties that exist. It is possible that results of operations or
liquidity in a particular period could be materially affected by certain contingencies. Management believes, however,
that the disposition of matters that are pending or asserted will not have a material adverse effect on the financial
position of the company.
Environmental Matters
Alcoa is involved in proceedings under the Comprehensive Environmental Response, Compensation and Liability Act,
also known as Superfund (CERCLA) or analogous state provisions regarding the usage, disposal, storage or treatment
of hazardous substances at a number of sites in the U.S. The company has committed to participate, or is engaged in
negotiations with federal or state authorities relative to its alleged liability for participation, in clean-up efforts at
several such sites. The most significant of these matters, including the remediation of the Grasse River in Massena,
NY, are discussed in the Environmental Matters section of Note N to the Consolidated Financial Statements under the
caption “Environmental Matters” on pages 112-115.
As previously reported, representatives of various U.S. federal and state agencies and a Native American tribe, acting
in their capacities as trustees for natural resources (Trustees), have asserted that Alcoa and Reynolds Metals Company
(Reynolds) may be liable for loss or damage to such resources under federal and state law based on Alcoa’s and
Reynolds’ operations at their Massena, New York and St. Lawrence, New York facilities. While formal proceedings
have not been instituted, the company has continued to actively investigate these claims. Pursuant to an agreement
entered into with the Trustees in 1991, Alcoa and Reynolds had been working cooperatively with General Motors
Corporation, which is facing similar claims by the Trustees, to assess potential injuries to natural resources in the
region. With the bankruptcy of General Motors in 2009, Motors Liquidation Company (MLC) took over General
Motors’ liability in this matter. In September 2009, MLC notified Alcoa and the Trustees that it would no longer
participate in the cooperative process. Alcoa and the Trustees agreed to continue to work together cooperatively
without MLC to resolve Alcoa’s and Reynolds’ natural resources damages liability in this matter. In January 2011, the
Trustees, representing the United States, the State of New York and the Mohawk tribe, and Alcoa reached an
agreement in principle to resolve the natural resource damage claims. The agreement is subject to final approval of the
respective parties and will be subject to a federal court approved consent decree, including public notice and comment.
Final entry of a settlement consent decree is not expected until the 2011 second quarter or later. Any upward
adjustment in the remediation reserve would be taken upon the finalization of the settlement agreement, which at this
time is not anticipated to be material.
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. Various cleanup and remediation efforts were
undertaken by or on behalf of SCA. A Notice of Violation was issued by the Division of Environmental Protection
(DEP), of the Department of Planning and Natural Resources (DPNR) of the Virgin Islands Government, and has been
contested by Alcoa. A civil suit was commenced in the Territorial Court of the Virgin Islands by certain residents of St.
Croix in February 1999 seeking compensatory and punitive damages and injunctive relief for alleged personal injuries
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