Grace loses appeal over mine cleanup

HELENA – A federal appeals court has upheld an order requiring W.R. Grace & Co. to pay the government $54.5 million for asbestos cleanup in the Montana mining town of Libby.

The 9th U.S. Circuit Court of Appeals on Thursday agreed with a lower court’s ruling that the company, which filed for bankruptcy in 2001, must pay the Environmental Protection Agency the full $54.5 million for asbestos cleanup in Libby, along with any future costs.

“The situation confronting the EPA in Libby is truly extraordinary,” the appeals court wrote in its opinion.

“We cannot escape the fact that people are sick and dying as a result of this continuing exposure.”

Grace attorneys had argued that the EPA was overstepping its authority.

Jim Christensen with the EPA’s regional office in Denver called the ruling “good news,” but said staff members needed more time to examine it.

The case stretches back to a lawsuit the EPA filed against Grace in March 2001 to recover cleanup costs in the Libby area, in Montana’s northwest corner.

The EPA, which has declared the area a Superfund site, first arrived in Libby in November 1999, when news reports linked asbestos contamination from a vermiculite mine to the deaths of nearly 200 people and illnesses in hundreds more.

Grace shut down the mine in 1990, and the company has since sold some of the mine properties to KDC.

The mine, which Grace bought in 1963, once supplied more than 80 percent of the world’s vermiculite, which is used in fireproofing, insulation and as a garden supply product.

A separate trial is ongoing involving accusations the company concealed health hazards caused by the vermiculite.

In its appeal of the cleanup costs, Grace attorneys said U.S. District Judge Donald Molloy of Missoula erred in ordering Grace to pay.

They also argued it was wrong to make them liable for future EPA expenses in areas of Libby covered by the lawsuit.

The company said the EPA should have followed a different, slower and possibly less expensive action.

It had also sought a different type of declaration for the area, which would have capped its liability and the length of time it would have been liable.

But the appeals court agreed with Molloy, who found that the EPA had considered its options for Libby and was within its discretion in the response it chose.

“Although we diverge from the District Court’s reasoning in some respects, we reach the same ultimate conclusion: The EPA’s cleanup in Libby was a removal action that was exempt from the temporal and monetary cap,” the court wrote.