Alcoa 2014 Annual Report Download - page 63

neighborhood. He alleges that defendants, as the present and past owners and operators of an aluminum smelter in Baie
Comeau, have negligently allowed the emission of certain contaminants from the smelter, specifically Polycyclic
Aromatic Hydrocarbons or “PAHs,” that have been deposited on the lands and houses of the St. Georges neighborhood
and its environs causing damage to the property of the putative class and causing health concerns for those who inhabit
that neighborhood. Plaintiff originally moved to certify a class action, sought to compel additional remediation to be
conducted by the defendants beyond that already undertaken by them voluntarily, sought an injunction against further
emissions in excess of a limit to be determined by the court in consultation with an independent expert, and sought
money damages on behalf of all class members. In May 2007, the court authorized a class action suit to include only
people who suffered property damage or personal injury damages caused by the emission of PAHs from the smelter. In
September 2007, plaintiffs filed the claim against the original defendants, which the court had authorized in May.
Alcoa has filed its Statement of Defense and plaintiffs filed an Answer to that Statement. Alcoa also filed a Motion for
Particulars with respect to certain paragraphs of plaintiffs’ Answer and a Motion to Strike with respect to certain
paragraphs of plaintiffs’ Answer. In late 2010, the Court denied these motions. The Soderberg smelting process that
plaintiffs allege to be the source of emissions of concern have ceased operations and are being dismantled. No further
formal court proceedings or discovery has occurred, while technical advisors nominated by agreement of the parties
confer on potential health impacts of prior emissions. This protocol has been agreed to by the parties who have also
advised the court regarding the process. The plaintiffs have not quantified the damages sought. Without such amount
and given the various damages alleged, at this stage of the proceeding the Company is unable to reasonably predict an
outcome or to estimate a range of reasonably possible loss.
As previously reported, in October 2006, in Barnett, et al. v. Alcoa and Alcoa Fuels, Inc., Warrick Circuit Court,
County of Warrick, Indiana; 87-C01-0601-PL-499, forty-one plaintiffs sued Alcoa Inc. and a subsidiary, asserting
claims similar to those asserted in Musgrave v. Alcoa, et al., Warrick Circuit Court, County of Warrick, Indiana;
87-C01-0601-CT-006. In November 2007, Alcoa Inc. and its subsidiary filed a motion to dismiss the Barnett cases. In
October 2008, the Warrick County Circuit Court granted Alcoa’s motions to dismiss, dismissing all claims arising out
of alleged occupational exposure to wastes at the Squaw Creek Mine, but in November 2008, the trial court clarified its
ruling, indicating that the order does not dispose of plaintiffs’ personal injury claims based upon alleged “recreational”
or non-occupational exposure. Plaintiffs also filed a “second amended complaint” in response to the court’s orders
granting Alcoa’s motion to dismiss. On July 7, 2010, the court granted the parties’ joint motions for a general
continuance of trial settings. Discovery in this matter remains stayed . The Company is unable to reasonably predict an
outcome or to estimate a range of reasonably possible loss because plaintiffs have merely alleged that their medical
condition is attributable to exposure to materials at the Squaw Creek Mine but no further information is available due
to the discovery stay.
As previously reported, in 1996, Alcoa acquired the Fusina, Italy smelter and rolling operations and the Portovesme,
Italy smelter (both of which are owned by Alcoa’s subsidiary, Alcoa Trasformazioni S.r.l.) from Alumix, an entity
owned by the Italian Government. Alcoa also acquired the extrusion plants located in Feltre and Bolzano, Italy. At the
time of the acquisition, Alumix indemnified Alcoa for pre-existing environmental contamination at the sites. In 2004,
the Italian Ministry of Environment (MOE) issued orders to Alcoa Trasformazioni S.r.l. and Alumix for the
development of a clean-up plan related to soil contamination in excess of allowable limits under legislative decree and
to institute emergency actions and pay natural resource damages. On April 5, 2006, Alcoa Trasformazioni S.r.l.’s
Fusina site was also sued by the MOE and Minister of Public Works (MOPW) in the Civil Court of Venice for an
alleged liability for environmental damages, in parallel with the orders already issued by the MOE. Alcoa
Trasformazioni S.r.l. appealed the orders, defended the civil case for environmental damages and filed suit against
Alumix, as discussed below. Similar issues also existed with respect to the Bolzano and Feltre plants, based on orders
issued by local authorities in 2006. Most, if not all, of the underlying activities occurred during the ownership of
Alumix, the governmental entity that sold the Italian plants to Alcoa.
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