Record $250 Million Settlement Over Asbestos is Announced

W.R. Grace, a global chemical company that filed for bankruptcy protection in 2001 because of asbestos poisoning claims, has agreed to pay the federal government $250 million, a sum the Department of Justice says is the highest in the history of the Superfund program. DOJ and the EPA announced the settlement Tuesday, saying the money would be used to reimburse the government for the costs of the investigation and cleanup of asbestos contamination around its mining operations in Libby, Mont., a small community in the northwestern part of the state.

DOJ said EPA has been removing asbestos-contaminated soils and other materials in and near Libby since May 2000. The federal government filed suit against the company in March 2001 to recover its investigation and cleanup costs under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA), commonly known as the "Superfund" law. The lawsuit also named Kootenai Development Corporation--a Grace subsidiary--as a defendant due to its ownership of three contaminated properties in Libby.

In 2003, the federal district court in Montana awarded EPA more than $54 million for cleanup costs incurred by EPA through Dec. 31, 2001. That award has not been paid due to Grace's bankruptcy. Yesterday's settlement resolves the 2003 judgment as well as continuing costs EPA has incurred since Dec. 31, 2001 and will incur in the future in the cleanup/remediation of contaminated schools, homes, and businesses in Libby. EPA will place the settlement proceeds into a special account within the Superfund that will be used for those purposes, DOJ said.

Grace, headquartered in Columbia, Md., owned and operated a vermiculite mine and vermiculite processing facilities in and near Libby from 1963 to 1990. The vermiculite ore was contaminated with asbestos. Vermiculite and asbestos have been found in various locations in and around Libby. Asbestos, a recognized human carcinogen, is known to cause lung cancer and mesothelioma, a lethal tumor of the lining of the chest and abdominal cavities. Exposure to asbestos can also cause asbestosis, a disease characterized by scarring of the lung. A copy of the settlement agreement is available on the Justice Department Web site at http://www.usdoj.gov/enrd/Consent_Decrees.html.

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