W.R. Grace Loses Appeal In Asbestos Mine Case

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By Carrie Johnson
Washington Post Staff Writer
Friday, September 21, 2007

A federal appeals court yesterday dealt a substantial blow to Columbia chemical maker W.R. Grace, reviving conspiracy and environmental charges against the company for operating an asbestos-laden mine.

Prosecutors accuse Grace of knowingly endangering residents of Libby, Mont., for nearly three decades by exposing them to asbestos fibers. Environmental studies suggest that the death rate from asbestos-related disease in the mountain-enclosed valley is more than 40 times the national average.

Last year, a federal judge threw out several charges and excluded evidence critical to the government's case after defense lawyers argued that prosecutors had waited too long to file criminal charges.

Yesterday, a three-judge panel of the U.S. Court of Appeals for the 9th Circuit reinstated many of the claims against Grace and a half-dozen former executives, a move that exposes the company to tens of millions of dollars in fines. The appeals court ruled that deputies for U.S. Attorney William W. Mercer had acted quickly to fix the statute-of-limitations problem.

The ruling allows prosecutors to present evidence and witness testimony dating to 1976, when the government contends Grace and its officials were on notice regarding the hazards of asbestos. The panel also barred Grace from arguing at trial that it had followed national emissions standards covering the release of hazardous materials.

Mercer called the ruling "an important victory for the United States." A Grace spokesman said the company was reviewing the decision. The lower court judge had imposed a gag order in the case, which drew national interest after Libby residents called attention to more than 100 deaths and scores more injuries that they say are related to asbestos fibers that permeated parks, playgrounds and the clothing of onetime Grace employees.

David M. Uhlmann, a former Justice Department official who worked on the case before joining the University of Michigan, called the appeals court decision "a complete home run for the government."



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