A bankruptcy judge has ‘left the door open’ for residents of Libby, Montana who have been affected by the asbestos-related problems the town suffers. That open door might allow residents to sue the State of Montana.

Libby is the town where W.R. Grace mined asbestos-contaminated vermiculite for many years. Many residents of the town—even those who didn’t work at the mine, or live with anyone who did—have developed asbestos-related diseases as a result of W.R. Grace’s mining activities. Libby, Montana has been an EPA Superfund site for almost a decade, and the EPA has been cleaning up the town for almost as long.

W.R. Grace’s has been a defendant in a large number of lawsuits (an estimated 150,000 have been dismissed or settled, with an estimated 120,000 remaining), and filed for bankruptcy in 2001, over a decade after the closure of the contaminated vermiculite mine in 1990.

Civil cases relating to the vermiculite mine in Libby were stopped at the time the company declared bankruptcy. The company has in the past been indicted on criminal charges relating to its activities in Libby. W.R. Grace also recently agreed to pay $250 million to the federal government as reimbursement for past and future clean-up activities in the Montana town.

Judge Judith Fitzgerald, who is the presiding judge in W.R. Grace’s Chapter 11 bankruptcy proceedings, has rejected an injunction that would have barred lawsuits against the state of Montana.

This means that residents of Libby may be able to file lawsuits against Montana, and argue that the state did not do enough to protect residents from asbestos exposure. Among the allegations against Montana are that the state was negligent in failing to warn both mine workers and Libby residents that the contamination in the vermiculite mine was potentially dangerous.

The ruling was signed last week and filed on Monday March 31 with the US Bankruptcy Court. In the ruling, Judge Fitzgerald said that W.R. Grace’s bankruptcy proceedings would not be threatened by lawsuits against the state of Montana that related to the state’s alleged failure to monitor W.R. Grace’s mining activities.

Judge Fitzgerald first made the ruling in 2007, but made the decision to stay the ruling after W.R. Grace and the state of Montana made a request for reconsideration. The ruling made on Monday denies the motion to reconsider the decision.

To date, more than 1,200 residents or former mine workers have died or claimed injury as a result of living near or working in the W.R. Grace vermiculite mines operating in Libby.

This entry was posted on Tuesday, April 15th, 2008 at 9:31 am and is filed under Asbestos Litigation, Montana. You can follow any responses to this entry through the RSS feed. Responses are currently closed, but you trackback from your own site.