W.R. GRACE LIABLE FOR LIBBY, MONTANA CLEANUP COSTS
WASHINGTON, D.C. – In the largest judgment after trial in the history
of the federal Superfund law, the Justice Department and the Environmental
Protection Agency announced that the District Court of Montana has ordered
W.R. Grace & Co. to pay over $54.5 million to reimburse the federal government
for the costs of investigation and cleanup of asbestos contamination in Libby,
Montana.
In the ruling issued by Judge Donald W. Molloy of the District Court of
Montana, the court said W.R. Grace was liable for costs related to the
investigation and cleanup of asbestos contamination in Libby and ruled that
the Environmental Protection Agency’s revised method for calculating indirect,
or overhead, costs is appropriate and that those costs may be recovered from
W.R. Grace. This is the first time a federal district court has ruled on EPA’s
revised method for calculating overhead costs.
“Today’s ruling is a victory for the environment and the American taxpayers,”
said Thomas L. Sansonetti, Assistant Attorney General of the Department of
Justice Environment and Natural Resources Division. “From the very the
beginning of this case, W.R. Grace has refused to accept responsibility for
contaminating this small town in Northwest Montana with asbestos. Today’s
ruling rejects every argument made by W.R. Grace and requires them to pay for
the cleanup of the contamination that they caused.”
W.R. Grace owned and operated a vermiculite mine and vermiculite processing
facilities in Libby from 1963 to 1990. The vermiculite ore found in Libby is
contaminated with asbestos fibers. Mining and processing activities resulted
in the spread of vermiculite and the associated asbestos fibers to
numerous homes, businesses, and schools throughout the town.
Asbestos, a recognized human carcinogen, is known to cause lung cancer and
mesothelioma, a lethal tumor of the lining of the chest and abdominal
cavities. Exposure to asbestos can also cause asbestosis, a disease
characterized by fibrotic scarring of the lung.
Hundreds of people in Libby, including former mine workers, their families,
and other residents, have exhibited signs and symptoms of asbestos-related
disease. The federal Agency for Toxic Substances and Disease Registry
conducted medical testing for Libby residents in the summer of 2000, and
observed pleural abnormalities in 18% of the people who participated. ATSDR
also found that mortality in Libby from asbestosis was 40 to 80 times higher
than expected, and mortality from lung cancer was 20% to 30% higher than
expected.
The U.S. Environmental Protection Agency has been removing
asbestos-contaminated soils and vermiculite in and near Libby since May 2000.
The federal government filed suit against W.R. Grace in March 2001 to recover
its investigation and cleanup costs under the Comprehensive Environmental
Response, Compensation, and Liability Act (CERCLA), commonly known as the
“Superfund” law. In December 2002, Judge Molloy rejected W.R. Graces
challenges to EPAs actions in Libby, ruling that EPAs cleanup decisions were
reasonable.
A three-day trial on the remaining issues in the case including the adequacy
of documentation of ATSDRs Libby-related costs and the recoverability of
EPAs overhead costs was conducted in January 2003 and is the subject of
yesterdays ruling. The ruling means that W.R. Grace must pay all of the $54.5
million in costs that the EPA incurred through December 31, 2001. Costs
incurred after that date will be resolved in future proceedings if disputed by
W.R. Grace.
“Through efficient and aggressive enforcement, EPA made sure W.R. Grace was
held liable for the harm the company did to hundreds of families and homes,”
said John Peter Suarez, the Assistant Administrator for EPA’s Office of
Enforcement and Compliance Assurance. “We made sure that the responsible
party, W.R. Grace, not the taxpayer, has to pay for the clean-up of asbestos
contamination. This is a great example of smart enforcement on behalf of EPA.”
“Libby is distinctive among Superfund sites because of the high toll that the
exposure to asbestos has taken on the people in this community,” says Dr.
Henry Falk, Assistant Administrator of ATSDR. “This judgment underscores the
importance of our work with the Libby community and the efforts that our
agency has devoted to address health concerns there.”
“The millions of dollars in litigation fees that W.R. Grace has spent in this
misguided effort to escape responsibility for the Libby cleanup would have
been much better spent on cleanup or on health care for Libby residents,” said
Carol Rushin, Assistant Regional Administrator for Enforcement at the
Environmental Protection Agency.
The Libby cleanup also was the subject of an earlier lawsuit between the
federal government and W.R. Grace as a result of the companys refusal to
provide EPA with access to property that it owned or controlled near Libby.
EPA needed to conduct cleanup activities on this property and filed suit in
October 2000 alleging that W.R. Graces refusal to provide access was unlawful
and requesting the imposition of civil penalties. In March 2001, Judge Molloy
ordered W.R. Grace to provide EPA with access to its properties in Libby. In a
related settlement, W.R. Grace agreed to a civil penalty claim of $71,000 and
to spend $2.75 million to create a fund to provide additional health care for
Libby residents with asbestos-related diseases.
In April 2001, W.R. Grace filed for bankruptcy in federal court in Delaware.
Any payments on yesterdays judgment must be approved by the bankruptcy court.