DuPont 2009 Annual Report Download - page 90

E. I. du Pont de Nemours and Company
Notes to the Consolidated Financial Statements (continued)
(Dollars in millions, except per share)
In two other cases pending in Florida, plaintiffs allege damage to shrimping operations. These cases had been decided
in DuPont’s favor, but in September 2007, the judge granted plaintiffs’ motion for new trial thus reinstating the cases.
Previously, these plaintiffs had been awarded unspecified attorneys’ fees as sanctions for alleged discovery abuses by
DuPont. In June 2009, the Judge issued an order striking DuPont’s pleadings and entering a default judgment against
the company as to liability and causation. DuPont will appeal the order after the trial on damages which is expected to
occur in the first quarter of 2010.
In January 2009, a case was filed in Florida state court claiming that plaintiff’s exposure to Benlate allegedly
contaminated with atrazine caused plaintiff’s kidney and brain cancer. The case has been removed to federal court.
The company does not believe that Benlate caused the damages alleged in each of these cases and denies the
allegations of fraud and misconduct. The company continues to defend itself in ongoing matters. As of December 31,
2009, the company has incurred costs and expenses of approximately $2,000 associated with these matters, but does
not expect additional significant costs or expenses associated with the remaining 13 cases. The company has
recovered approximately $275 of its costs and expenses through insurance and does not expect additional insurance
recoveries, if any, to be significant. At December 31, 2009, the company has accruals of $0.1 related to Benlate.
Spelter, West Virginia
In September 2006, a West Virginia state court certified a class action against DuPont that seeks relief including the
provision of remediation services and property value diminution damages for 7,000 residential properties in the vicinity
of a closed zinc smelter in Spelter, West Virginia. The action also seeks medical monitoring for an undetermined
number of residents in the class area. The smelter was owned and operated by at least three companies between 1910
and 2001, including DuPont between 1928 and 1950. DuPont performed remedial measures at the request of the EPA
in the late 1990s and in 2001 repurchased the site to facilitate and complete the remediation. The fall 2007 trial was
conducted in four phases: liability, medical monitoring, property and punitive damages. The jury found against DuPont
in all four phases awarding $55.5 for property remediation and $196.2 in punitive damages. In post trial motions, the
court adopted the plaintiffs’ forty-year medical monitoring plan estimated by plaintiffs to cost $130 and granted
plaintiffs’ attorneys legal fees of $127 plus $8 in expenses based on and included in the total jury award. In June 2008,
DuPont filed its petitions for appeal with the West Virginia Supreme Court seeking review of a number of issues
associated with the trial court’s decisions before, during and after the trial. On September 25, 2008, the Court decided
to accept the case and consider the parties’ appeal on the merits. The oral argument was heard on April 7, 2009. A
decision is anticipated in due course during the Court’s term beginning January 2010 through June 2010. Effective with
DuPont posting a bond, the execution of judgment against the company is stayed pending final disposition of DuPont’s
appeal to the West Virginia Supreme Court of Appeals. As of December 31, 2009, the company had recorded accruals
of $55, although given the uncertainties inherent in litigation, there can be no assurance as to the final outcome.
General
The company is subject to various lawsuits and claims arising out of the normal course of its business. These lawsuits
and claims include actions based on alleged exposures to products, intellectual property and environmental matters
and contract and antitrust claims. Management has noted a nationwide trend in purported class actions against
chemical manufacturers generally seeking relief such as medical monitoring, property damages, off-site remediation
and punitive damages arising from alleged environmental torts without claiming present personal injuries. Such cases
may allege contamination from unregulated substances or remediated sites. The company also has noted a trend in
public and private nuisance suits being filed on behalf of states, counties, cities and utilities alleging harm to the general
public. Although it is not possible to predict the outcome of these various lawsuits and claims, management does not
anticipate they will have a materially adverse effect on the company’s consolidated financial position or liquidity.
However, the ultimate liabilities may be significant to results of operations in the period recognized. The company
accrues for contingencies when the information available indicates that it is probable that a liability has been incurred
and the amount of the liability can be reasonably estimated.
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