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Appeals court rules against Grace

| December 6, 2005 11:00 PM

The Ninth U.S. Circuit Court of Appeals in San Francisco ruled last week that W.R. Grace must pay $54.5 million for asbestos cleanup in Libby as well as future costs.

The case dates back to a lawsuit filed by the EPA against Grace in March 2001 to recover cleanup costs in the Libby area. After a three-day trial in Missoula, U.S. District Court Judge Donald Malloy issued an order awarding the EPA $54.53 million in the reimbursement requested, including $11.32 million in indirect costs, and that Grace would be responsible for future cleanup costs.

Grace attorneys argued that EPA was overstepping its authority under the Comprehensive Environmental Response, Compensation and Liability Act, which is the Superfund law. They contended that the EPA erred in calling the cleanup a removal action rather than a remideal action under CERCLA.

And the company argued that removal actions were limited to a $2 million cap over 12 months. Grace attorneys also argued errors were made in calculating the EPA's indirect costs.

The court ruling said: "The situation confronting the EPA in Libby is truly extraordinary. This cleanup site is not a remote, abandoned mine, Rather, the population of Libby and nearby communities, which the EPA estimates at about 12,000, faces ongoing, pervasive exposure to asbestos particles being released through documented exposure pathways. We cannot escape the fact that people are sick and dying as a result of this continuing exposure. Confronted with this information, the EPA determined on the basis of its professional judgment, and in accord with its administrative interpretation of the scope of removal actions, that the situation warranted an immediate, aggressive response to abate the public health threat."

The actual amount awarded by the U.S. District Court, and upheld by the court of appeals, was $54,527,081.11.

During a public meeting in Libby in October, Jim Christiansen, the EPA's onsite coordinator at Libby, said total cleanup costs to date had amounted to over $140 million.

In recent years, the EPA budget for the Libby asbestos contamination cleanup has been between $17 million and $20 million. The federal agency estimates the cleanup will continue for another 5-7 years.