Mining company W.R. Grace has seen plenty of activity in its bankruptcy proceedings over the last week, as a New Jersey environmental agency has been barred from filing a lawsuit against the company.

Last week, presiding bankruptcy Judge Judith Fitzgerald ruled that the company’s bankruptcy proceedings would not be affected if residents of Libby, Montana, were allowed to file lawsuits against the state of Montana.

This week, Judge Fitzgerald has ordered the New Jersey Department of Environmental Protection to drop a lawsuit it had filed against W.R. Grace in 2005, and has effectively barred the agency from imposing fines on the company for alleged wrongdoing relating to asbestos contamination.

The New Jersey Department of Environmental Protection filed the lawsuit in an attempt to collect $800 million in fines that it imposed on the company for allegedly lying about asbestos contamination in New Jersey.

The lawsuit filed by the NJDEP claims that the W.R. Grace company lied about the dangers of asbestos for more than forty years, in connection to a vermiculite-processing plant in Hamilton, New Jersey. The vermiculite was mined at the Libby, Montana mine that was contaminated with asbestos.

W.R. Grace closed down the Libby, Montana vermiculite mine in 1990, but the Hamilton, New Jersey processing plant remained open until 1994.

When the Hamilton plant was closed, the W.R. Grace company submitted an environmental report to the NJDEP, saying that the vermiculite the company had mined did not contain harmful levels of asbestos. As a result, the state decided that the site did not need to be cleaned up.

It is now almost common knowledge, however, that the vermiculite mine was in fact contaminated with asbestos. In 200, the Environmental Protection Agency tested the Hamilton site and found high asbestos concentrations.

W.R. Grace filed for Chapter 11 bankruptcy on April 2, 2001, thus protecting the company from lawsuits. To date, an estimated 250,000 lawsuits have been settled or dismissed against the company, and there are an estimated 120,000 lawsuits still remaining.

Judge Judith Fitzgerald, in banning the NJDEP from continuing with its $800 million lawsuit, said that the state’s suit had been blocked by the legal action protection provided by Chapter 11 bankruptcy. However, the state of New Jersey had claimed that the lawsuit should be exempt from Chapter 11 protection because they acted to protect public health and safety, and as an exercise of the state’s regulatory power.

This entry was posted on Tuesday, April 15th, 2008 at 5:28 pm and is filed under Asbestos Exposure, Asbestos Litigation, Montana. You can follow any responses to this entry through the RSS 2.0 feed. Responses are currently closed, but you can trackback from your own site.