Commentary

Bingo!

Luminant attorney’s words hard not to recall in light of sale

With the announcement last Wednesday that Alcoa has signed off on a proposed agreement to sell Rockdale Operations land to the Lower Colorado River Authority (LCRA), it’s hard not to recall some words spoken just over two years ago in 20th District Court.

The Alcoa-Luminant lawsuit was illuminating in a number of ways, not the least of which were some blunt and direct assessments of the decision-making processes at the highest corporate levels.

Most of them were provided by attorney Barry Barnett, representing Luminant.

First, he cross-examined Alcoa executive John Thuestad, regarded as the man who “pulled the trigger” on the company’s decision to close the Rockdale smelter.

The basis of Alcoa’s decision, and its ensuing lawsuit against Luminant, was its assertion that by spring, 2008, Luminant’s Sandow 4 had become an unreliable source of power for the Rockdale smelter, forcing Alcoa to pay as much as $2,000 to $4,000 per kilowatt hour on the open market

Barnett got Thuestad to admit there were never actually any power interruptions to Alcoa in spring, 2008, and that the aluminum company never actually paid the often-quoted prices of $2,000 to $4,000.

Then, in his closing argument, Barnett addressed Alcoa’s assertions that a re-start of its idled Rockdale smelter remained possible if power supply and market conditions improved. Alcoa attorneys had argued a successful conclusion to their lawsuit against Luminant was a key factor in the re-start scenario.

Barnett was having none of it.

“The fact is, I’m sorry to say,” he said. “This smelter is permanently closed. Alcoa can’t get any benefit out of it (declaring the smelter permanently shut down) until 2013.”

• The proposed Alcoa-LCRA agreement won’t be finalized— assuming something major doesn’t prevent it—for another six months to one year.

• That time period falls entirely within the year of 2013.

• Target closing date for the agreement is Jan. 1, 2014. That’s also the target date for Alcoa to declare the Rockdale smelter permanently closed.

It’s hard not to believe Barnett nailed it.

The jury certainly believed him. They not only found for Luminant in the suit, they assessed Alcoa a $10-millon damages payment Luminant hadn’t even sought.—M.B.


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2012-08-23 digital edition



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