W.R. Grace found not guilty in asbestos trial

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W.R. Grace & Co. was found not guilty in connection with asbestos contamination of Libby, Mont., ending what was called the biggest environmental-crime prosecution in U.S. history.

A federal jury in Missoula, Mont., on Friday acquitted the company and three former executives of conspiracy, violating the Clean Air Act and obstruction of justice. The verdicts, on the second day of deliberations after 11 weeks of trial, sent Grace stocks up as much as 34 percent.

Grace, a specialty-chemicals manufacturer based in Columbia, Md., mined and processed vermiculite in the town until 1990.

Prosecutors originally claimed the company and five former executives conspired for decades to expose Libby residents to asbestos-contaminated vermiculite, a mineral used in gardening and construction.

The government dropped charges against two of the men near the end of the trial, after U.S. District Judge Donald Molloy limited the evidence jurors could hear. Molloy frequently criticized the prosecution’s case outside the jury’s presence.

Grace faced more than $280 million in fines and restitution if convicted, an amount which could have complicated the company’s planned exit from bankruptcy protection this year.

Defense lawyers claimed the government’s case was factually flawed, politically motivated and tainted by misconduct. They argued that the asbestos danger in Libby was no secret to the federal government.

The company’s attorneys asked Molloy to acquit the defendants himself, rather than send the case to the jury. He said he wouldn’t release his decision on the matter until after the jury ruled.

Asbestos-related diseases, including asbestosis, a scarring of the lungs, and mesothelioma, a fatal cancer, have killed more than 200 people in the Libby area and sickened more than 1,200. Libby residents die from asbestosis at a rate 40 to 80 times normal, the government said.

During the trial, jurors saw scores of internal corporate memos and documents, and heard testimony from physicians, occupational health experts, government officials and Libby residents sickened by asbestos-related disease.

Former Little Leaguers told jurors about playing baseball on fields contaminated with vermiculite, a mineral used in insulation, potting soil and fireproofing.

Prosecutors claimed Grace knew the vermiculite ore it mined and processed in Libby contained naturally occurring asbestos that released toxic fibers into the air “at the drop of a hat,” McLean told jurors last week.

Nevertheless, the company donated its vermiculite to local schools, allowed children to play on it, lied about it to federal agencies and sold vermiculite-contaminated properties, the government alleged.

The case is U.S. v. W.R. Grace, 9:05-cr-7, U.S. District Court, District of Montana (Missoula).