U.S. Seeks to Delay Grace Asbestos Trial

Federal prosecutors plan to appeal a series of rulings that they say will undermine their upcoming conspiracy case against Columbia chemical maker W.R. Grace & Co, according to court papers.

William W. Mercer, the U.S. attorney in Montana, is seeking a delay in the Sept. 11 trial, citing a government appeal of three rulings by U.S. District Judge Donald W. Molloy that significantly hamper the prosecutors' criminal case. The Grace dispute is one of the biggest environmental health cases ever prosecuted by the Justice Department.

Grace is accused of violating the Clean Air Act and knowingly poisoning former workers and other residents of a Montana mining town with deadly asbestos fibers. Grace purchased the Libby, Mont., mine in the 1960s and closed it three decades later.

Activists maintain that the asbestos fibers scattered across the town from the mine site to playgrounds and the high school running track. In recent years, hundreds of residents have complained of lung abnormalities and other health problems, including fast-growing cancers.

Last month, the judge dismissed part of the conspiracy count against Grace, ruling that the statute of limitations had expired on one of the key issues. He allowed other parts of the case to move ahead.

Two other rulings this month essentially barred the government from using what prosecutors called "critical evidence," including asbestos samples and scientific analysis they had gathered.

The decisions have "the practical effect" of excluding what prosecutors view as proof that Grace and seven former officials released asbestos, engaged in a conspiracy to defraud the government and obstructed a probe by the Environmental Protection Agency, government lawyers wrote in a motion filed late Wednesday.

Prosecutors called their request for a trial delay "a last resort," born of court decisions that "permeate all aspects of the case." They are seeking intermediate review by the U.S. Court of Appeals for the 9th Circuit before the trial can proceed.

Grace, which filed for bankruptcy protection five years ago in part because of asbestos liabilities unrelated to the Libby mine, continues to grapple with "significant unpredictable costs to resolve litigation and legacy issues," chief executive Fred E. Festa told investors in a news release last month. Grace has denied wrongdoing in the Montana case.

Prosecutors and a Grace spokesman did not return calls for comment yesterday. The judge has cautioned both sides not to make public comments in advance of the trial, which has stirred strong emotions and media interest in Montana and throughout the nation.