Facing a blizzard of lawsuits, W.R. Grace & Co. declares bankruptcy
LIBBY, Mont. - This has always been a company town. For generations, men have wrestled a living from the heavily timbered and mineral-rich Cabinet Mountains. The small town's economy has boomed and busted along with industrial mills and mines.
Once a union town, it has turned conservative, and lately the wise-use movement has taken root. Environmentalists and federal officials are unpopular. Greens are sometimes called "eco-terrorists" or "green Nazis." Signs marking closed roads in the Kootenai National Forest are full of bullet holes, evidence of local sentiment about efforts to recover grizzly bears and protect roadless areas.
But in the past year, Libby's loyalties have been upended. The Environmental Protection Agency (EPA) came to town just over a year ago, after news reports linked hundreds of deaths and illnesses to asbestos from the defunct W.R. Grace & Co. vermiculite mine (HCN, 3/13/00: Libby's dark secret). Since then, the agency has uncovered one of the worst human-caused environmental disasters it has ever seen.
"The impact here is huge, off the scale in terms of epidemiological measures," says Paul Peronard, the EPA's on-scene emergency response coordinator. "There's more people sick around Libby than ever documented at Times Beach or Love Canal."
Meanwhile, W.R. Grace appears to be avoiding its responsibility for the disaster. Some say the company has spun off its assets to insulate itself from victims' lawsuits. Most recently, it has filed for bankruptcy protection, leaving 125,000 lawsuits in limbo, including 125 from sick and dying residents of Libby.
Former Grace mine union president LeRoy Thom calls the move "a betrayal."
"A raw deal"Paul Peronard is not your typical bureaucrat. He wears jeans to work and an earring, and has a tattoo of Kokopelli on his forearm. Not too long ago, he and Vietnamese-American colleague Duc Nguyen, both from the EPA Denver regional office, might have been tarred and feathered and run out of Libby. But today, they have become local heroes for tackling the nation's top-priority Superfund site.
So far, the federal government has spent $19 million on investigation, cleanup, risk and health studies. Investigators have taken some 12,000 air and soil samples and crews have removed thousands of cubic yards of asbestos-contaminated soils from the mine and mill sites. A second round of tests for airborne fibers is under way using improved sampling methods and more sensitive detection equipment.
When Grace denied the agency entry to the mine site, the EPA sued and won access. In March, the agency sued again, demanding $10 million in cleanup money.
It is now estimated that about 200 area residents have already died from asbestos-related diseases - 60 times the national rate. Several hundred more have been diagnosed. A preliminary study released early this year by the federal Agency for Toxic Substances and Disease Registry found that 30 percent of over 6,000 adults screened in Libby had lung abnormalities. Nineteen percent of these were confirmed to be asbestos related.
Dr. Brad Black, Lincoln County health officer, says it usually takes 10 to 40 years for asbestos-related diseases such as lung cancer, mesothelioma and asbestosis to appear after significant asbestos exposure. More cases are sure to appear. A second round of health screening is planned for this summer.
The effects go far beyond the mine's former employees. Of the nearly 500 patients Black has seen so far, 70 percent of them never worked at the mine or had a family member who did. It's now known that hundreds of children growing up in Libby came into contact with asbestos while playing on ball fields, playgrounds and running tracks constructed from ore or tailings from the mine.
"It's a raw deal," says Black, who believes that the number of locals harmed could reach into the thousands. Nationwide, thousands more may be at risk. EPA toxicologists are developing a "risk assessment model" to project the long-term health impacts of exposure to Grace's attic insulation and garden soil conditioners.
Grace ducks outIn Libby, at least, Grace is trying to save face. Last year, the company donated $250,000 to create a Clinic for Asbestos Related Diseases, now directed by Black. Local Grace representative Alan Stringer says the company has provided another $250,000 to the clinic for 2001 and is providing health care for victims, at least for now. Future support is uncertain, says Stringer. Medical costs can average a half a million dollars for each sick person.
But on the national level, critics say Grace has been working for more than a decade to duck its responsibility by spinning off its assets, creating subsidiaries that insulate its wealth from lawsuits. In 1995, Grace had $6.3 billion in assets. The next year, Grace sold its medical supply company, National Medical, decreasing its equity 77 percent. In 1997, Grace spun off its packaging company Cryovac to Sealed Air, decreasing equity by another 38 percent. By 1998, Grace had less than $90 million in equity.
Last year, then Senator, now Attorney General John Ashcroft tried to pass a bill through Congress that would have limited Grace's financial obligation to asbestos victims. The bill nearly passed with support from Montana's two Republican congressmen, Sen. Conrad Burns and Rep. Rick Hill. Earlier this month, the company filed for Chapter 11 bankruptcy protection, throwing victims' lawsuits into limbo.
Outraged, Libby residents asked Democratic Sen. Max Baucus to seek a congressional investigation into Grace, and to block the company's bankruptcy filings.
Victims' advocate Gayla Benefield told Baucus at a recent town meeting that if Grace goes bankrupt, "the community of Libby will end up becoming totally devastated. No man's life is worth what a bankruptcy court can offer. And that's pennies."
Baucus pledged to do everything humanly possible to make Libby whole again and bring justice to Grace.
"Since I've been in public service," he said, "I've never seen anything as outrageous as this."
Jane Fritz is a freelance writer and independent radio producer. She lives in Clark Fork, Idaho.
YOU CAN CONTACT ...
- Alan Stringer with W.R. Grace & Co., P.O. Box 695, Libby, MT 59923 (406/293-3964);
- Paul Peronard with the EPA Information Center, 501 Mineral Ave., Libby, MT 59923 (406/293-6194).