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ATLANTIC RICHFIELD CO. v. ALCAN ALUMINUM HOLDINGS

August 31, 1998

ATLANTIC RICHFIELD COMPANY and ARCO ALUMINUM, INC., Plaintiffs, against ALCAN ALUMINUM HOLDINGS LIMITED and ALCAN ALUMINUM CORP., Defendants.


The opinion of the court was delivered by: STANTON

MEMORANDUM and ORDER

 The issue is whether there is a justiciable case or controversy.

 So far as relevant here, this is an action for a declaratory judgment granting plaintiffs ("ARCO") the right under section 7.3 of their Restructuring Agreement with the defendants ("Alcan") to change ARCO's production mix in a way which would increase its use of the hot mill capacity at the parties' Logan, Kentucky plant, thus reducing the amount of hot mill hours available to Alcan.

 Plaintiffs' trial brief on that issue stated (May 22, 1998 Pretrial Memo p. 7):

 
While ARCO Aluminum's management has not yet decided whether to shift the company's product mix away from can sheet, it wants to assure its ability to do so if economic analysis shows that it would be the most profitable course.

 On the first day of the bench trial, ARCO's Vice President for Finance, Planning and Control accepted that as a fair statement of the present situation (tr. 105). He testified (tr. 105-07):

 
THE COURT: Mr. Hayden, I have a question or two for you if I may, after which I will allow counsel to ask any further questions stimulated by mine.
 
There is a statement in the brief recently filed on Arco's behalf which I am going to read to you and then ask you if it's an accurate statement of the state of affairs at present: "While Arco Aluminum's management has not yet decided whether to shift the company's product mix away from can sheet, it wants to assure its ability to do so if economic analysis shows that it would be the most profitable course."
 
Is that a fair statement of the present situation?
 
THE WITNESS: Yes, it is.
 
THE COURT: What economic studies would be required in order to allow that decision to be made?
 
* * *
 
THE WITNESS: I think the discussions that we had, preliminary discussions with the companies that we were talking about, we need to continue to see if we could do those in the volume and the length of contract, and also that the pricing, which we saw was obtainable on the smaller quantities, whether we could obtain that pricing for larger quantities, and, also, we would have to make some capital expansions in certain areas in the preheat and melt and cast to significantly take advantage of this full opportunity. So we would ...

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