D - Giddings
& Lewis, Inc./City of West Allis Lawsuit
In July 1999, a
jury decided against Wisconsin Electric and awarded the plaintiffs $4.5
million in compensatory damages and $100 million in punitive damages
in a lawsuit alleging that Wisconsin Electric had placed contaminated
wastes at two sites in the city of West Allis, Wisconsin. Wisconsin
Electric is preparing to file an appeal of the case. In December 1999,
in order to stop the post-judgment accrual of interest at 12% per annum
during the pendency of the appeal, Wisconsin Electric tendered a contested
liability payment of $110 million to the Milwaukee County Clerk of Circuit
Court representing the amount of the verdict and accrued interest. In
further post-trial proceedings, the plaintiffs filed a motion for sanctions
based upon representations made by Wisconsin Electric during trial.
The hearing on this matter occurred in February 2000. The matter was
briefed by the parties and the oral arguments are scheduled in April
2000. In the opinion of management, based in part on the advice of legal
counsel, the jury verdict was not supported by the evidence or the law
and the unprecedented award of punitive damages of this magnitude was
unwarranted and should therefore be reversed or substantially reduced
on appeal. As such, Wisconsin Electric has not established a reserve
for potential damages from this suit.
