Court: W.R. Grace insurer is fair game for asbestos-related lawsuits

| April 7, 2020 9:13 AM

A March 25 ruling by the Montana Supreme Court allows more than 800 former employees of W.R. Grace’s Zonolite Division in Libby to continue asbestos-related personal injury claims against Maryland Casualty Company.

Maryland Casualty provided workers’ compensation coverage to W. R. Grace from 1963-1973.

Justice Ingrid Gustafson, concurring with the unanimous majority opinion, wrote that Maryland Casualty participated in W. R. Grace’s concealment of “known asbestos risk and worker injuries from workers” at operations near Libby. Gustafson wrote that Maryland’s actions “caused increased or prolonged exposure to asbestos, thereby increasing the risk of harm to workers beyond the pre-existing risk created by Grace.”

W.R. Grace acquired the Zonolite Company in 1963 and continued Zonolite’s vermiculite mining and processing until ceasing Libby operations in 1990. Asbestos-laden dust and vermiculite used in various applications in the region created a hazard that has afflicted many current and former residents with asbestos-related disease.

Gustafson and fellow justices on the Montana Supreme Court concluded that Maryland Casualty can be held liable for damages tied to asbestos-related disease.

In 2017, the Montana Asbestos Court had reached a similar conclusion and Maryland Casualty appealed that ruling to the Montana Supreme Court. The plaintiff in the case against Maryland Casualty was Ralph Hutt.

Hutt was employed by W. R. Grace for about 18 months in 1968-69. He worked at the mountainside mill and operated equipment at the mine site near the waste dump, court records show.

He alleged that his workplace exposure during his employment with W. R. Grace led to incurable asbestos-related lung disease.

The Supreme Court ruling sends the case back to the Asbestos Court for trials on worker claims to determine whether Maryland Casualty breached the duty owed to the workers and, if so, whether that breach caused them to suffer injury and resulting damages.

Allan McGarvey, a lawyer with the Kalispell firm of McGarvey, Heberling, Sullivan and Lacey, argued the case before the Montana Supreme Court on behalf of Hutt.

“We are gratified to see that the Court unanimously recognized that Maryland Casualty Company owed a duty to warn,” McGarvey said in an April 3 email.

“Moreover, the majority opinion further recognizes that ‘MCC was not merely negligent in its failure to act; rather, in strategically recognizing the latency period for asbestosis to develop, MCC engaged in affirmative actions to conceal the asbestos exposure risk and worker injuries to avoid liability, effectively increasing the risk of additional harm to Mill workers from further asbestos exposure.’”

Maryland Casualty’s attorney had argued that the company had no common law duty to warn workers of the asbestos-related hazards because W. R. Grace was the entity putting workers in harm’s way. Yet the high court found that Maryland Casualty had a duty to Hutt and other W.R Grace workers to use reasonable care under the circumstances “to protect them from the known risk of exposure to airborne asbestos in the workplace.”

Justice Gustafson observed that Maryland Casualty’s goal “was to avoid having to pay occupational disease claims.” The ruling noted “there is no indication that Grace or [Maryland Casualty] ever informed the workers that the dust contained asbestos, asbestos was dangerous, and workers were suffering lung ailments because of it.”

Edward Longosz, an attorney based in Washington D.C. who represented Maryland Casualty before the Montana Supreme Court, could not be reached.

Separately, the Montana Supreme Court unanimously ruled March 11 that federal law does not shield the BNSF Railway from potential liability for its alleged role in contributing to asbestos contamination in Libby.

Asbestos fibers can embed in lung tissue and cause fatal lung diseases, including asbestosis and mesothelioma and other cancers.

In 1999, EPA responded to citizen and media concerns about exposure to asbestos from the vermiculite mine. Local activists and a series of stories in The Seattle Post-Intelligencer stirred agencies into action. EPA placed the Libby site on the federal Superfund program’s National Priorities List in October 2002.

McGarvey, Heberling, Sullivan and Lacey has nearly 1,300 plaintiffs with claims against BNSF and more than 2,000 asbestos-related plaintiffs total, according to the firm.