Court Watch - Written by Beasley Allen on Friday, October 27, 2006 11:41 - 0 Comments

W.R. Grace Gets What It Deserves

On October 11th, the U.S. Supreme Court let stand lower court rulings that require W.R. Grace & Co. to pay a $54.5 million judgment for asbestos cleanup in a Montana mining town described by federal regulators as one of the nation’s most contaminated Superfund sites. The Environmental Protection Agency had sued Grace five years ago to recover the cleanup costs at a vermiculite mine in the town of Libby. Grace had appealed from an adverse ruling. The government is also pursuing a criminal case involving several former executives or managers of the mining company for allegedly concealing health risks at the mine. That trial will not begin until next year at the earliest.

The asbestos-laden vermiculite, laced into the mountains around Libby, was used as insulation in hundreds of thousands of U.S. homes and office buildings. The mine, which opened in 1939, was purchased by Grace in 1963. It produced about 80% of the world’s supply of the mineral at one time. Grace operated the mine until 1992, unleashing a “human and environmental tragedy” in the town. Nearly two-thirds of employees with more than 10 years of service tested positive for lung ailments, according to a company memorandum written in 1976 by one of the indicted men. The cleanup of the town continues, and some residents said the matter would wind up in court again because the ultimate cost of remediation would be much higher than the $54.5 million at issue in this case.

In its appeals, the company argued that the EPA’s efforts in Libby amounted to a long-term rehabilitation of the area rather than an emergency cleanup. Under the law, toxic polluters can be forced to repay the EPA the full cost of cleaning up hazardous substances that pose an immediate risk to the public but face more limited charges for such long-term “remediation” of the area. Grace argued that much of the agency’s work was actually remedial. Fortunately, the federal courts disagreed and ruled for the EPA. This obviously is a public health crisis that requires ongoing action. The U.S. Court of Appeals for the Ninth Circuit had stated in its ruling in December:

The situation confronting the EPA in Libby is truly extraordinary. About 12,000 residents of Libby and nearby communities face ongoing, pervasive exposure to asbestos particles being released through documented exposure pathways. We cannot escape the fact that people are sick and dying as a result of this continuing exposure.

The appeals court, based in San Francisco, had upheld the trial judge’s order requiring Grace to repay the EPA’s cost for the emergency cleanup. During its cleanup over the last several years, the EPA has used vacuum trucks and other equipment to remove vermiculate-laced soil. According to an EPA toxicologist, people in the Libby area experienced “the most severe residential exposure to a hazardous material this country has ever seen.” The criminal case involves the question of whether company officials knowingly failed to warn workers of the dangers of prolonged exposure to vermiculite. The 2005 indictments said the officials were criminally negligent.