Grace challenging restoration of charges

Attorneys for W.R. Grace & Co. are challenging a federal appeals court ruling that restored criminal charges of "knowing endangerment" to the government's asbestos case against the company and its top managers.

Last month, a three-judge panel of the 9th Circuit U.S. Court of Appeals reversed or revised six decisions handed down last year by U.S. District Judge Donald Molloy in Missoula.

The panel's rulings "restored the heart of the government's case: the allegation that W.R. Grace and its top corporate officials conspired to knowingly endanger Grace employees and the citizens of Libby, Montana," said David M. Uhlmann, former chief of the U.S. Justice Department's Environmental Crimes Section. But one week after the panel ruled in favor of the federal government, attorneys for Grace filed motions indicating the company will fight the decision.

Attorneys for Grace have requested more time to petition the court for a rehearing. The extension was granted, giving Grace until Nov. 5 to submit documents arguing the panel erred in its findings of fact. Grace will request a rehearing before the same three-judge panel, before the whole court, or both.

Greg Euston, a spokesman for Grace, declined to say what legal basis lawyers are using to develop their argument. He said the company's petition will speak for itself.

A 2005 indictment charged Grace and seven of its former managers, one of whom died in February, with conspiring to conceal health risks posed years ago by the company's Libby vermiculite mine, closed since 1990. Hundreds of people in Libby have fallen sick, some fatally, from exposure to asbestos in vermiculite.

Besides reviving the knowing endangerment charge, the appeals court panel reversed decisions that would have narrowed the definition of asbestos, disallowed a long list of evidence and limited the materials available to expert witnesses at trial. Grace has also petitioned the 9th Circuit for a rehearing on those decisions, and a decision is pending.

Molloy has presided over years of legal wrangling between Grace and the government as both sides prepare for a so-called "megatrial" in Missoula. The trial is expected to open in late winter or early spring.

As the initial Sept. 11, 2006, trial date approached, defense lawyers argued that prosecutors had waited too long to file criminal charges - exceeding the five-year statute of limitations governing federal criminal prosecutions. Molloy sided with Grace, saying the government had failed to allege overt criminal acts within the required time frame. In reversing Molloy's decision, the panel said the government had acted quickly to fix the statute of limitations problem by submitting a superseding indictment spelling out the overt criminal acts.

Uhlmann helped prosecutors mount their case against Grace and is now director of the Environmental Law and Policy Program at the University of Michigan. He called the Grace prosecution "one of the most significant cases ever brought under the federal environmental crimes program."

"A number of prior cases have charged knowing endangerment, and some of those have involved worker injuries or deaths," he said. "But the allegations in the Grace case stand alone in terms of the duration of the alleged misconduct and the resulting harm to the citizens of Libby, Montana."

It also is unusual for Justice Department officials to appeal decisions by the federal judge presiding over the case before trial has opened, he said.