Alcoa 2013 Annual Report Download - page 135

On March 9, 2011, the court issued a judgment order dismissing plaintiffs’ lawsuit in its entirety with prejudice for the
reasons stated in its Findings of Fact and Conclusions of Law. On March 23, 2011, plaintiffs filed a motion for
clarification and/or amendment of the judgment order, which sought, among other things, a declaration that plaintiffs’
retiree benefits are vested subject to an annual cap and an injunction preventing Alcoa, prior to 2017, from modifying
the plan design to which plaintiffs are subject or changing the premiums and deductibles that plaintiffs must pay. Also
on March 23, 2011, plaintiffs filed a motion for award of attorneys’ fees and expenses. On June 11, 2012, the court
issued its memorandum and order denying plaintiffs’ motion for clarification and/or amendment to the original
judgment order. On July 6, 2012, plaintiffs filed a notice of appeal of the court’s March 9, 2011 judgment. On July 12,
2012, the trial court stayed Alcoa’s motion for assessment of costs pending resolution of plaintiffs’ appeal. The appeal
was docketed in the United States Court of Appeals for the Sixth Circuit as case number 12-5801. On August 29, 2012,
the trial court dismissed plaintiffs’ motion for attorneys’ fees without prejudice to refiling the motion following the
resolution of the appeal at the Sixth Circuit Court of Appeals. On May 9, 2013, the Sixth Circuit Court of Appeals
issued an opinion affirming the trial court’s denial of plaintiffs’ claims for lifetime, uncapped retiree healthcare
benefits. Plaintiffs filed a petition for rehearing on May 22, 2013 to which Alcoa filed a response on June 7,
2013. On September 12, 2013, the Sixth Circuit Court of Appeals denied plaintiffs’ petition for rehearing. The trial
court is now considering Alcoa’s request for an award of costs, which had been stayed pending resolution of the
appeal, and the plaintiffs’ request for attorneys’ fees, which had been dismissed without prejudice to refiling following
resolution of the appeal. On December 17, 2013 the United States Supreme Court docketed the plaintiffs’ petition for
writ of certiorari to the Sixth Circuit Court of Appeals as Charles Curtis, et al., Individually and on Behalf of All
Others Similarly Situated, Petitioners v. Alcoa Inc., et al., Docket No.13-728. Alcoa’s opposition to this petition was
filed on January 16, 2014 and Petitioners filed their reply on January 29, 2014.
On April 23, 2004, St. Croix Renaissance Group, L.L.L.P. (SCRG), Brownfield Recovery Corp., and Energy Answers
Corporation of Puerto Rico (collectively referred to as “Plaintiffs”) filed a suit against St. Croix Alumina L.L.C. and
Alcoa World Alumina, LLC (collectively referred to as “Alcoa”) in the Territorial Court of the Virgin Islands, Division
of St. Croix for claims related to the sale of Alcoa’s former St. Croix alumina refinery to Plaintiffs. Alcoa thereafter
removed the case to federal court and after a several year period of discovery and motion practice, a jury trial on the
matter took place in St. Croix from January 11, 2011 to January 20, 2011. The jury returned a verdict in favor of
Plaintiffs and awarded damages as described: on a claim of breaches of warranty, the jury awarded $13; on the same
claim, the jury awarded punitive damages in the amount of $6; and on a negligence claim for property damage, the jury
awarded $10. Plaintiffs filed a motion seeking pre-judgment interest on the jury award. On February 17, 2011, Alcoa
filed post-trial motions seeking judgment notwithstanding the verdict or, in the alternative, a new trial. On
May 31, 2011, the court granted Alcoa’s motion for judgment regarding Plaintiffs’ $10 negligence award and denied
the remainder of Alcoa’s motions. Additionally, the court awarded Plaintiffs pre-judgment interest of $2 on the breach
of warranty award. As a result of the court’s post-trial decisions, Alcoa recorded a charge of $20 in 2011 (see Note D).
On June 14, 2011, Alcoa filed a notice of appeal with the U.S. Court of Appeals for the Third Circuit regarding Alcoa’s
denied post-trial motions. On June 22, 2011, SCRG filed a notice of cross appeal with the Third Circuit Court related to
certain pre-trial decisions of the court and of the court’s post-trial ruling on the negligence claim. The Third Circuit
Court referred this matter to mediation as is its standard practice in appeals. Following mediation and further, separate
settlement discussions, the parties executed an agreement dated September 30, 2011 resolving the matter in its entirety,
and subsequently jointly petitioned (i) the District Court to release Alcoa from the jury verdict and (ii) the Third Circuit
Court of Appeals to dismiss the matter. On March 13, 2012, the District Court entered an order discharging Alcoa from
the jury verdict and, on March 14, 2012, the Third Circuit Court of Appeals dismissed the matter. This matter is now
fully resolved.
Before 2002, Alcoa purchased power in Italy in the regulated energy market and received a drawback of a portion of
the price of power under a special tariff in an amount calculated in accordance with a published resolution of the Italian
Energy Authority, Energy Authority Resolution n. 204/1999 (“204/1999”). In 2001, the Energy Authority published
another resolution, which clarified that the drawback would be calculated in the same manner, and in the same amount,
in either the regulated or unregulated market. At the beginning of 2002, Alcoa left the regulated energy market to
purchase energy in the unregulated market. Subsequently, in 2004, the Energy Authority introduced regulation no.
148/2004 which set forth a different method for calculating the special tariff that would result in a different drawback
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