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Item 3. Legal Proceedings

2024-03-07 compared with 2023-03-09 · 40 added, 37 removed, 159 unchanged (33% of the section changed)

13 unchanged sentences

Some are on appeal following dismissal or summary judgment rulings or a trial verdict in favor of either the defendants or the plaintiffs.

NL believes these actions are without merit, and intends to continue to deny all allegations of wrongdoing and liability and to defend against all actions vigorously.

NL believes it has substantial defenses to these actions and NL intends to continue to deny all allegations of wrongdoing and liability and to defend against all actions vigorously.

We do not believe it is probable we have incurred any liability with respect to pending lead pigment litigation cases to which NL is a party, and with respect to all such lead pigment litigation cases to which NL is a party, we believe liability to NL that may result, if any, in this regard cannot be reasonably estimated, because:

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For financial reporting purposes, using a discount rate of 1.9% per annum, we discounted the aggregate $101.7 million settlement to the estimated net present value of $96.3 million.

NL made the initial $25.0 million payment in September 2019 and the first, second and third annual installment payments of $12.0 million each in September 2020,

2021 and 2022.

NL made the initial $25.0 million payment in September 2019 and the first, second, third and fourth annual installment payments of $12.0 million each in September 2020, 2021, 2022 and 2023.

We recognized an aggregate accretion expense of $1.1 million, $.9 million and $.7 million in 2021, 2022 and 2023, respectively.

In November 2018, NL was served with two complaints filed by county governments in Pennsylvania.

Each county alleges that NL and several other defendants created a public nuisance by selling and promoting lead-containing paints and pigments in the counties.

The plaintiffs seek abatement and declaratory relief.

NL believes these lawsuits are inconsistent with Pennsylvania law and without merit, and NL intends to defend itself vigorously.

In February 2022, the Pennsylvania Commonwealth Court entered orders staying all proceedings in the trial courts, and granting defendants’ request for an interlocutory appeal of earlier trial court rulings allowing the cases to proceed.

The stay will remain in place until defendants’ appeals are resolved.

In January 2024, NL was served with a third-party complaint in a matter titled Arrioena Beal v.

Hattie Mitchell, et al.

(Circuit Court of Milwaukee County, Wisconsin, Case No.

The plaintiff in this case sued her former landlords and several former manufacturers of lead paint for injuries allegedly attributable to lead paint, but did not sue NL.

Several of the former lead paint manufacturer defendants later filed a third-party complaint against NL, seeking contribution for any damages they may ultimately have to pay to the plaintiff.

NL believes it has substantial defenses to these claims under Wisconsin law and intends to defend itself vigorously.

New cases may continue to be filed against NL.

3 unchanged sentences

Environmental Matters and Litigation

Certain properties and facilities used in our former operations (primarily NL’s former operations), including divested primary and secondary lead smelters and former mining locations, are the subject of civil litigation, administrative proceedings or investigations arising under federal and state environmental laws and common law.

proceedings or investigations arising under federal and state environmental laws and common law.

Additionally, in connection with past operating practices, we are currently involved as a defendant, potentially responsible party (PRP) or both, pursuant to the Comprehensive Environmental Response, Compensation and Liability Act, as amended by the Superfund Amendments and Reauthorization Act (CERCLA), and similar state laws in various governmental and private actions associated with waste disposal sites, mining locations, and facilities that we or our predecessors and NL or its predecessors, subsidiaries or their predecessors currently or previously owned, operated or used, certain of which are on the United States Environmental Protection Agency’s (EPA) Superfund National Priorities List or similar state lists.

1 unchanged sentence

Certain of these proceedings involve claims for substantial amounts.

Although we may be jointly and severally liable for these costs, in most cases they are only one of a number of PRPs who may also be jointly and severally liable, and among whom costs may be shared or allocated.

In addition, we are occasionally named as a party in a number of personal injury lawsuits filed in various jurisdictions alleging claims related to environmental conditions alleged to have resulted from its operations.

Although we may be jointly and severally liable for these costs, in most cases NL is only one of a number of PRPs who may also be jointly and severally liable, and among whom costs may be shared or allocated.

Obligations associated with environmental remediation and related matters are difficult to assess and estimate for numerous reasons including the:

15 unchanged sentences

We recognize recoveries of costs from other parties, if any, as assets when their receipt is deemed probable.

At December 31, 2021 and 2022 we had not recognized any material receivables for recoveries.

At December 31, 2022 and December 31, 2023 we had not recognized any material receivables for recoveries.

We do not know and cannot estimate the exact time frame over which we will make payments for our accrued environmental and related costs.

1 unchanged sentence

which in turn depends on factors outside of our control.

At each balance sheet date, we estimate the amount of the accrued environmental and related costs which we expect to pay within the next twelve months, and we classify this estimate as a current liability.

At each balance sheet date, we estimate the amount of the accrued environmental and related costs which we expect to pay within the next

twelve months, and we classify this estimate as a current liability.

We classify the remaining accrued environmental costs as a noncurrent liability.

32 unchanged sentences

In June 2022, NL received a letter from the NJDEP informing NL that remediation of contaminated sites upriver of the former Sayreville site had progressed to the point that it was now appropriate for NL to resume investigating the sediments adjacent to the Sayreville site.

NL informed the NJDEP by letter that it would resume that investigation.

NL has been diligently conducting that investigation in compliance with

NJDEP regulations.

The lawsuit remains pending.

NL continues to deny liability and will defend vigorously against all claims.

In June 2011, NL was served in ASARCO LLC v.

In 2011, NL was served in ASARCO LLC v.

NL Industries, Inc., et al.

(United States District Court, Western District of Missouri, Case No.

4:11-cv-00138-DGK).

The plaintiff brought this CERCLA contribution action against several defendants to recover a portion of the amount it paid in settlement with the U.S.

Government during its Chapter 11 bankruptcy in relation to the Tar Creek site, the Cherokee County Superfund Site in southeast Kansas, the Oronogo-Duenweg Lead Mining Belt Superfund Site in Jasper County, Missouri and the Newton County Mine Tailing Site in Newton County, Missouri.

NL has denied liability and will defend vigorously against all of the claims.

In the second quarter of 2012, NL filed a motion to stay the case.

In the first quarter of 2013, NL’s motion was granted and the court entered an indefinite stay, which remains in place.

In September 2011, NL was served in ASARCO LLC v.

4:11-cv-00138-DGK) and ASARCO LLC v.

NL Industries, Inc., et al.

1 unchanged sentence

4:11-cv-00864).

The plaintiff brought this CERCLA contribution action against several defendants to recover a portion of the amount it paid in settlement with the U.S.

Government during its Chapter 11 bankruptcy in relation to the Southeast Missouri Mining District.

NL has denied liability and will defend vigorously against all of the claims.

In May 2015, the trial court on its own motion entered an indefinite stay of the litigation, which remains in place.

Both cases are CERCLA contribution actions brought against several defendants to recover a portion of the amount the plaintiff paid in settlement with the U.S.

Government during its Chapter 11 bankruptcy.

The court in each case entered indefinite stays of the litigation in 2013 and 2015, which remain in place.

In July 2012, NL was served in EPEC Polymers, Inc., v.

6 unchanged sentences

In March 2014, EPA issued a UAO to NL and approximately 27 other PRPs for performance of the Remedial Design at the site.

EPA contends that NL is liable as the alleged successor to the Doehler Die Casting Company, and therefore

responsible for any potential contamination at the site resulting from Doehler’s ownership/operation of a warehouse and a die casting plant it owned 90 years ago.

EPA contends that NL is liable as the alleged successor to the Doehler Die Casting Company, and therefore responsible for any potential contamination at the site resulting from Doehler’s ownership/operation of a warehouse and a die casting plant it owned 90 years ago.

In April 2019, EPA issued a second UAO to NL and approximately 27 other PRPs for performance of certain work related to the Remedial Design at the site.

NL believes that it has no liability at the site.

NL is currently in discussions with EPA regarding a de minimis settlement and is otherwise taking actions necessary to respond to the UAO.

If these discussions are unsuccessful, NL will continue to deny liability and will defend vigorously against all of the claims.

NL has been in discussions with EPA regarding a de minimis settlement and is otherwise taking actions necessary to respond to the UAO.

If these discussions are ultimately unsuccessful, NL will continue to deny liability and will defend vigorously against all of the claims.

In January 2020, NL was sued in Atlantic Richfield, Co.

2 unchanged sentences

This is a CERCLA cost recovery action brought by a past owner and operator of certain mining properties located in Rico, Colorado.

NL has denied liability and will defend vigorously against all claims.

In 2023, the trial court granted partial summary judgment for NL and the plaintiff appealed that decision to the Court of Appeals for the Tenth Circuit.

NL continues to deny liability and will defend vigorously against all claims.

In December 2020, NL and several other defendants were sued in California Department of Toxic Substances v.

3 unchanged sentences

In October 2022, the trial court issued an order finding that NL and the other defendants are not liable under CERCLA for lead contamination in residential neighborhoods surrounding, but at a distance from, the former secondary lead smelter.

The case will continue with regard to the former smelter property and an adjacent industrial area.

In August 2023, the trial court issued orders finding that NL and several other defendants are jointly liable for contamination on areas where operations were previously conducted, but are not liable for contamination outside those former operating areas.

Neither the amount of damages owed, nor any party’s allocated share of such damages, has yet been determined.

NL has denied liability and will continue to defend vigorously against all claims.

In December 2023, NL and several other defendants were sued in Sunset Commercial, LLC v.

Stauffer Management Co., et al.

(United States District Court for the District of Nevada, Case 2:23-cv-02081).

The complaint asserts claims under CERCLA as well as claims for private nuisance, negligence, trespass, and strict liability.

The plaintiff asserts that hazardous substances located on its property are attributable to a large industrial facility in the area.

The plaintiff alleges NL is liable for once holding a lease on the industrial property and for its past partial ownership of another company.

NL intends to deny liability and will defend vigorously against all claims.

Other Litigation

18 unchanged sentences

In certain cases, we have insurance coverage for these items, although we do not expect additional material insurance coverage for environmental matters.

We currently believe that the disposition of all of these various other claims and disputes (including asbestos related claims), individually or in the aggregate, should

not have a material adverse effect on our consolidated financial position, results of operations or liquidity beyond the accruals already provided.

We currently believe that the disposition of all of these various other claims and disputes (including asbestos related claims), individually or in the aggregate, should not have a material adverse effect on our consolidated financial position, results of operations or liquidity beyond the accruals already provided.

Insurance Coverage Claims – NL

8 unchanged sentences

(Supreme Court of the State of New York, County of New York, Index No.

The plaintiff, a former insurance carrier of NL, is seeking a declaratory judgment of its obligations to NL under insurance policies issued to NL by the plaintiff with respect to certain lead pigment lawsuits.

The plaintiff, a former insurance carrier of NL, is seeking a declaratory judgment of its obligations to NL under insurance policies issued

to NL by the plaintiff with respect to certain lead pigment lawsuits.

Other insurers have been added as parties to the case and have also sought a declaratory judgment regarding their obligations under certain insurance policies.

1 unchanged sentence

In December 2020, the trial court denied the insurers’ motion for summary judgment, finding that the arguments raised by the insurers did not bar NL from coverage under the relevant policies.

We continue to believe the insurers’ claims are without merit and NL intends to defend its rights and prosecute its claims in this action vigorously.

We intend to defend NL’s rights and prosecute NL’s claims in this action vigorously.

NL has settled insurance coverage claims concerning environmental claims with certain of its principal former insurance carriers.

3 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 3. Legal Proceedings