Dow Chemical 2011 Annual Report Download - page 56

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The Dow Chemical Company and Subsidiaries
PART I, Item 3. Legal Proceedings.
LEGAL PROCEEDINGS
Asbestos-Related Matters of Union Carbide Corporation
Union Carbide Corporation (“Union Carbide”), a wholly owned subsidiary of the Company, is and has been involved in a large
number of asbestos-related suits filed primarily in state courts during the past three decades. These suits principally allege
personal injury resulting from exposure to asbestos-containing products and frequently seek both actual and punitive damages.
The alleged claims primarily relate to products that Union Carbide sold in the past, alleged exposure to asbestos-containing
products located on Union Carbide’s premises, and Union Carbide’s responsibility for asbestos suits filed against a former
Union Carbide subsidiary, Amchem Products, Inc.
It is the opinion of Dow’s management that it is reasonably possible that the cost of Union Carbide disposing of its
asbestos-related claims, including future defense costs, could have a material impact on the Company’s results of operations
and cash flows for a particular period and on the consolidated financial position of the Company.
For additional information, see Asbestos-Related Matters of Union Carbide Corporation in Management’s Discussion and
Analysis of Financial Condition and Results of Operations, and Note N to the Consolidated Financial Statements.
Environmental Matters
In a meeting on April 28, 2010, the Company received verbal and written communications from the U.S. Environmental
Protection Agency (“EPA”) notifying the Company of the EPA’s intent to seek injunctive relief and assess a civil penalty
against the Company for alleged violations of various environmental rules and regulations at the Company’s Midland,
Michigan site. The Company and the EPA entered into a proposed settlement that included a civil penalty of $2.5 million plus
certain enhancements of fugitive emission detection and repair practices, beyond existing legal requirements, at two
manufacturing units at the Midland site. The settlement was approved by court order on November 23, 2011, and the civil
penalty has been paid.
The Company received a written communication dated September 17, 2010 from the EPA, notifying the Company of the
EPA’s intent to assess a civil penalty against the Company for alleged violations of various environmental rules and regulations
at the Company’s Plaquemine, Louisiana site. The Company and the EPA have reached a settlement agreement under which the
Company will pay a civil penalty of $200,000. In addition, the Company will undertake certain supplemental environmental
projects with a total cost of approximately $100,000.
Rohm and Haas Texas Incorporated, a wholly owned subsidiary of the Company, received an Administrative Complaint
dated May 17, 2011 from the Texas Council of Environmental Quality ("TCEQ") seeking a civil penalty in an amount of
$124,405 for alleged violations of various environmental requirements regulating air emissions from operations at its Deer
Park, Texas manufacturing facility. This matter was resolved on November 2, 2011 when the TCEQ accepted payment of this
civil penalty.
The Company received an Administrative Complaint dated October 26, 2011 from the TCEQ for alleged violations of
various environmental requirements regulating air emissions from operations at its Freeport, Texas manufacturing facility. The
Company and the TCEQ have reached a tentative settlement agreement to resolve the complaint under which the Company
would pay a civil penalty of $207,000.