Seven years ago last week, W.R. Grace & Co. filed for bankruptcy protection against 112,000 lawsuits filed on behalf of people who had been sickened or killed because of exposure to asbestos in vermiculite mined, manufactured or sold by the company.
Today, after weeks of sometimes heated negotiation with a panel of lawyers allegedly representing the interest of the dead, dying and sick, Grace announced that it would it will settle “all present and future asbestos-related personal injury claims.”
Grace said that it will create an irrevocable trust and set aside at least $2.9 billion to pay the settlements and the company is doing it because “we want to get on with business,” I was told by William Corcoran, Grace’s vice president of public & regulatory affairs.
How the money will be doled out has not been announced, thus, it is uncertain how much each of the 120,000 case already filed — and the unknown, but undoubtedly large surge of new cases that will flood the courts — will finally receive.
The money will go to those who filed suit on behalf of the thousands of people sickened in and near Libby, Mont., and the survivors of those who died because of the harm from the vermiculite mine Grace operated there on Zonolite Mountain. The tiny Northwest Montana town is was six miles downwind of the mountain and court records estimate that 5,000 pounds of asbestos fibers coated the town each day.
Over the nine years since this newspaper first reported on what was happening to the people of Libby, the pain has somewhat dulled for those living in what the EPA labeled “the nation’s worst environmental disaster.” But Dr. Brad Black, who runs the asbestos clinic in town, says he’s still diagnosing 15 new cases of mesothelioma, asbestosis or lung cancer each month.
Every Memorial Day, there are more freshly painted, white wooden crosses to be hammered into the soft ground at the edge of the Libby’s cemetery. On each of the hundreds of crosses is the carefully lettered name of a miner, or a spouse or a sibling or a child, each killed by the tremolite asbestos fibers that tainted the ore pulled from that mountain for 80 years.
The almost $3 billion will cover the suits brought on behalf of these people and others whose sickness and deaths can be linked to the Libby ore, Corcoran explained to me this afternoon.
Two lawyers on the negotiating team confirmed that they saw it the same way as Corcoran. And, they said, they believe that the agreement will apply to those injured who lived near or worked at the 100 or more plants throughout North American that turned the vermiculite ore from Libby into lawn product, packaging material and attic and wall insulation.
What the $3 billion doesn’t cover are those people who sued or will sue because of injury from exposure to the very toxic tremolite fibers that the government says is released whenever Grace’s Zonolite insulation is even gently disturbed. The EPA estimated that between 15 million and 35 million homes and businesses still contain the potentially lethal insulation in their walls and attics. Millions more structures in Canada also contain Zonolite.
One whose attempt to sue Grace was stalled is Raven ThunderSky. The Canadian Indian Affairs department built her family’s home in Poplar River, Manitoba in the 1960s and insulated it with Zonolite from Libby ore. ThunderSky’s two sisters and both her parents have died of cancer and asbestosis, but her efforts to sue Grace were blocked because of the bankruptcy.
Corcoran insist that those who sue because they were harmed by Zonolite Attic Insulation will “not be ignored,” but the money will come from other funds.
People I contacted in Libby this afternoon told me that they didn’t have enough information to decide whether or not, as one man put it, “we’re going to get shafted again by Grace.”
Of the four people I interviewed, three said they were sure that Grace would cut off the health plan it has been funding for asbestos victims in Libby since 2000.
“They don’t pay a lot of the medical bills to start with but they’ll cut it off immediately. Just watch,” said Black, whose clinic cares for 2,200 patients with asbestos related diseases.
“That’s not going to happen,” said Corcoran. “We’re going to keep the medical plan in operation because it’s the right thing to do and it helps a lot of people in Libby.”
Last month, the Justice Department announced that Grace had agreed to pay a record-setting $250 million to reimburse the federal government for the costs of the investigation and cleanup of asbestos contamination in Libby.
But the company’s legal challenges are far from over.
In February 2005, Grace and seven of its current or former executives were indicted on federal charges that they knowingly put their workers and the public in danger through exposure to vermiculite ore contaminated with asbestos from the company’s mine.
Bill Mercer, the U.S. Attorney for Montana, announced the 10-count indictment, alleging conspiracy, knowing endangerment, obstruction of justice and wire fraud.
“A human and environmental tragedy has occurred,” he said. “This prosecution seeks to hold Grace and its executives responsible.”
The trial has been postponed repeatedly. One of the accused and two key witnesses have died during the wait.
Grace is now waiting to see if the U.S. Supreme Court will hear its appeal to the actions of lower courts. Few expect the high court to do so, but even so, December is the earliest that the criminal trial might begin.
Grace, with 6,500 employees and operations in more than 40 countries, did well during the bankruptcy period with annual sales of more that $3.1 billion for its industrial chemicals and food packaging, the company said in a statement.