Asbestos Evidentiary Ruling Goes Against Grace

By Carrie Johnson
Washington Post Staff Writer
Friday, July 13, 2007

Federal prosecutors won a narrow victory yesterday in their pursuit of W.R. Grace on criminal charges that the Columbia company spread dangerous asbestos fibers throughout a mining town.

An appeals court panel ruled that the U.S. attorney in Montana might be allowed to call several witnesses and use studies that a lower-court judge had barred from a pending trial over Grace's actions in Libby, Mont.

U.S. District Judge Donald W. Molloy had rejected the government's bid to present as many as nine witnesses and three critical environmental health studies at the trial, citing deadlines the prosecution had missed in the sprawling case.

But a three-judge panel of the U.S. Court of Appeals for the 9th Circuit concluded yesterday that Molloy exceeded his authority. The appeals court said that Molloy must find that the government lapse was "willful and motivated by a desire to obtain a tactical advantage" to bar the witnesses from testifying.

"We are sympathetic to the district court's attempts to manage this large and complex criminal trial," the appeals court wrote. The panel said the trial judge could yet find a basis to "justify excluding or limiting testimony or documents -- either as a sanction or as an evidentiary matter."

At the time of the February 2005 indictment, federal officials billed the case as one of the most significant environmental crimes in decades. Authorities indicted Grace and seven current and former officials on conspiracy, obstruction and other charges, accusing them of knowingly spreading disease-causing asbestos for two generations in the small, northwestern Montana town.

One federal study at issue in the case concluded that more than 1,200 people in Libby and surrounding areas showed signs of lung problems tied to asbestos diseases from the mine owned by Grace. The bulk of the problems appeared in people who had not worked at the site but had come into contact with fibers in the course of their daily lives.

William W. Mercer, the U.S. attorney in Montana, said the appeals court ruling moved the government "one step closer to the ultimate goal of trying . . . W.R. Grace and the individual defendants with a full complement of evidence."

Greg Euston, an outside spokesman for Grace, said the company was continuing to review the complicated opinion.

The appeals court is still considering an even more significant appeal by prosecutors. Last month, government lawyers implored a separate three-judge panel to reinstate Clean Air Act charges that claim Grace and its executives knowingly endangered Libby residents by continuing to operate the mine after scientific studies raised questions about the impact on workers there. Defense lawyers say much of the evidence is barred by the statute of limitations.

Grace bought the Montana mine in the early 1960s and operated it until the early 1990s. Earlier this year, one of the defendants in the criminal case, former mine manager Alan R. Stringer, died, as did anti-asbestos advocate Les Skramstad, one of the first to win a civil court judgment against Grace for its activities in Libby.

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