Plaintiffs’ Exhibits | W. R. Grace
On the road to higher profits, W.R. Grace has made quite a name for itself in the field of environmental pollution. The John Travolta movie A Civil Action made the company’s pollution of the groundwater in Woburn, Massachusetts famous. In more recent years, W.R. Grace has made headlines for polluting the small town of Libby, Montana with asbestos dust from the company’s nearby mining operations and for causing the cancers and deaths of many of the town’s residents. But there have been many more victims of Grace’s financial success outside the town of Libby. Grace used asbestos in products it marketed and sold throughout the country, thus exposing thousands of workers to its hazardous asbestos products without warning them of the danger. Sadly, Grace’s policy of putting profits before people have led to terrible asbestos diseases, including mesothelioma, in numerous people.
W.R. Grace merged with the Zonolite Company in 1963.
W.R. Grace began its operations back in 1854 as a supplier of South American fertilizer and grew over the next century into a giant corporation specializing in chemicals and packaging and a variety of other products. In 1963, W.R. Grace entered into a merger with the Zonolite Company, a company that had already been in business manufacturing a line of asbestos containing “Mono-Kote” construction products and operating what was considered the world’s largest vermiculite mine in Libby, Montana. The merger between the two companies created the Zonolite Division at W.R. Grace. As part of the corporate merger, the two companies became one entity and all of the assets and liabilities of Zonolite were absorbed by W.R. Grace. After the merger, Grace continued Zonolite’s business without interruption or reform.
The vermiculite ore deposits in the Libby mine contained veins of tremolite asbestos that were “open cut” mined. Tremolite asbestos is one of the most deadly forms of the mineral and its needle-like particles, once inhaled, are trapped in the lungs forever. Open-cut mining is another term for strip mining, by which minerals are taken from the earth by digging an open pit or quarry rather than by tunneling under the earth. W.R. Grace allowed asbestos dust from its open-air strip mining operations to be spread throughout the town of Libby over decades, creating a health catastrophe. Workers, their families, and residents who had never even worked at the mine breathed the asbestos-laden air in Libby on a daily basis. By some estimates, hundreds have died and a thousand are sick due to asbestos poisoning in a town of only 12,000 people. Today, the EPA has designated Libby and the surrounding areas as a Superfund site.
The asbestos problem at the Libby mine was known for decades.
When Zonolite merged with W.R. Grace in 1963, it was no secret to the companies that workers at the Libby mine suffered an extreme health risk from their exposure to asbestos at the mine. The Montana State Board of Health repeatedly surveyed the Zonolite operations in Libby and repeatedly found a danger to workers. The first inspection was in 1941, and a dust problem was identified at that time. Over the years, the dust at Libby was tested for asbestos content, with results showing asbestos concentrations as high as 75 percent. Yet for decades, the entirely predictable tragedy was allowed to unfold.
A 1955 Zonolite memo admitted to the “danger of exposing our employees to asbestos dust,” [WRG171] yet the company took no action to prevent this danger. In 1956, the State Board of Health inspected the Libby open pit mine and found that “the asbestos dust in the dust in the air is of considerable toxicity,” with “dust vibrates almost continuously off the rafters which have become loaded and are continually loaded with dust generating from many sources.” [WRG8] Some two and a half years later, a follow-up study found no significant improvement. In July of 1959, x-rays of employees proved an unusually high incidence of disease: of 130 worker x-rays, 48 revealed abnormalities, including one showing lung cancer. In 1960, one of the company’s own internal memoranda acknowledged that “asbestos dust in the air is of considerable toxicity” and that “a high incidence of [lung] disease” existed as a result. [WRG19] Yet, when the Board of Health returned in 1962, it found a substantial increase in dust levels. In 1963, the Montana Board of Health again found “little, if any, improvement.” [WRG24]
Nothing changed after the Grace-Zonolite merger. In 1964, a local doctor in Libby wrote to the President of W.R. Grace’s Zonolite Division, to warn him of the consensus of local medical opinion. The Libby doctors had found a significant increase in the appearance of chronic respiratory disease among Zonolite employees who had a history of working around dust in the mine. In January 1965, an internal Grace memo recounted the history of “Dust at Libby,” identified asbestos as the culprit, and discussed in detail specific employees who had become disabled from asbestos-associated diseases. But the company’s concern was not with its workers. Rather, Grace’s stated goal was “to protect ourselves” from having to pay compensation claims to the very employees it was killing by slow death. [WRG35]
In 1965 and 1966, the Montana State Board of Health kept after the company, repeatedly warning Grace of studies proving a link between asbestos and mesothelioma, among other cancers and disease. In January1968, the federal government joined Montana’s decades-long effort, and the U.S. Department of Health and Welfare wrote to Grace to protest the hazard posed by the high levels of asbestos found in air samples at Libby.
But in 1968, Grace wasn’t focused on a strategy for reducing the dangerous dust levels at its Libby mine. Instead, Grace was busy working on a scheme to avoid paying compensation to the employees it knew were already sick. The plan was outlined in a confidential memo on “Dust controls.” The memo explained that employees were being x-rayed to create a possible “position to fight” if workers compensation claims arose. [WRG40] Grace was worried in particular about 32 employees with known lung contamination, but Grace management calculated that they could reassign the folks who already had lung problems to “keep them on the job until they retire, thus precluding the high cost of total disability.” [WRG40]
W.R. Grace knew that the Libby, Montana residents were at risk as well.
The United States Environmental Protection Agency has determined that Grace was aware not just of the risks to its workers, but also of the threat posed by the mine to the health of Libby’s residents. According to the E.P.A., it wasn’t just that Grace failed to prevent the escape of asbestos dust from the mine; Grace actively spread the dangerous substance throughout the Libby community. Grace allowed its workers to leave the mine site in clothing covered in asbestos dust, thereby exposing workers’ families to the dust inside their own homes. Grace freely offered its mining debris to local residents for use in their personal gardens. And Grace even distributed its asbestos-laden materials to Libby schools for use as running tracks and an outdoor skating rink for the local children. The E.P.A. charges that Grace violated federal law by concealing the company’s knowledge regarding asbestos at Libby and by obstructing a federal study of health conditions at the Libby mine in the 1980s.
In the face of everything the company knew about the hazards of asbestos, Grace continued to operate the mine until 1990. And even after closing the mine, Grace then sold its asbestos-contaminated properties to local buyers without disclosing the contamination. On February 7, 2005, the E.P.A. announced that “a federal grand jury in the District of Montana has indicted W.R. Grace and seven current and former Grace executives for knowingly endangering residents of Libby, Montana, and concealing information about the health effects of its asbestos mining operations.” After much legal wrangling on the part of the company, trial is scheduled to begin in March 2009.
Grace knew it needed to remove asbestos from its Mono-Kote fireproofing.
Unfortunately, Grace’s profiteering didn’t stop at the Libby city limits. For decades, Grace made asbestos products and sold them nationwide without health warnings. One of the worst was the “Mono-Kote” line of spray-on fireproofing, which was known to Grace to be particularly dangerous.
In June of 1969, a Grace executive attended a New York University symposium at which the leading medical experts in the field discussed the health hazards of asbestos-containing products. The symposium speakers included Dr. Irving Selikoff, whose research proving the asbestos-mesothelioma link had been brought to Grace’s attention years earlier. The Grace manager in attendance became alarmed when one speaker described the use of spray-on fireproofing as “caus[ing] the greatest amount of potential hazard because the asbestos fibers were able to be airborne and thereby contaminate a large area.” [WRG201] When describing what he had heard to other executives at Grace, the manager expressed his surprise that no one at the meeting was defending asbestos, and conveyed his fear that spray-on fireproofing sales might become dampened once these facts became known around the country.
Thus in 1969, a handful of Grace officials discussed the need to remove asbestos from Grace’s line of Mono-Kote spray-on fireproofing. Although the company had considered making an asbestos-free product in 1960 and again in 1965, Grace decided to do nothing until, in 1969, Grace executives became convinced that “more and more people are conscious of the harmful effect of asbestos.” [WRG48] The “Confidential Zonolite Plan for 1970” confirmed that “[a]sbestos fiber is a health hazard during the application of Mono-Kote.” [WRG327] Still, when Thomas Egan, the Zonolite National Sales Manager, wrote to his Grace colleagues about removing asbestos from Mono-Kote, he described the two prime reasons for such a move to be: first, to avoid a criminal indictment; and second, to make money off of an asbestos-free substitute. As an aside, Egan noted almost as an afterthought: “also, we have an ethical obligation.” [WRG50]
Egan appeared to have resolved any nagging ethical concerns just six months later, though, when he told a Mono-Kote salesman to “Stay unscrupulous, unethical, mean and selling Mono-Kote.” [WRG52]
After years of foot-dragging, Grace still failed to completely remove the asbestos from Mono-Kote.
After years of delays, Grace did not actually get around to introducing an allegedly asbestos-free version of Mono-Kote until May of 1971. Still, Grace continued to add chrysotile asbestos to its Mono-Kote 3 product for as long as it possibly could. A December 1971 memo explained that asbestos was banned in many places but recommended that sales of Mono-Kote 3 be continued wherever possible. In August 1972, Grace announced to the Mono-Kote distributor that, “We will continue to make and sell MK-3 (asbestos-containing) until we no longer can.” [WRG235] After the E.P.A. had set a long-awaited asbestos ban date of July 4, 1973, Grace told its distributors to ship Mono-Kote 3 for use before that date and cautioned that Grace would refuse to accept any Mono-Kote 3 on return or credit.
Twenty years later, as late as 1994, Grace was still in the business of selling its fourth and fifth versions of Mono-Kote with the promise that these products were asbestos free. After the E.P.A. asbestos-ban date of July 4, 1973, Grace had finally removed the chrysotile asbestos from the previous Mono-Kote 3 formula. And yet, a series of in-house lab testing confirmed that the company’s allegedly “asbestos-free” Mono-Kotes 4 & 5 contained asbestos from the tremolite asbestos veins present in the Libby vermiculite ore—tremolite, one of the deadliest forms of asbestos. See Protecting the Product: A special report. Company’s Silence Countered Safety Fears About Asbestos.
W.R. Grace filed for bankruptcy in 2001.
Grace filed for bankruptcy in 2001. In late 2008, the company agreed to pay up to $140 million over time toward a fund for those injured by Grace’s asbestos-containing insulation products. Grace’s first payment to the trust for asbestos victims was $30 million. Three years later, the company will pay an additional $30 million to the trust, and over the following ten years, Grace will make as many as ten more annual payments of $8 million if conditions of the agreement are fulfilled. The payments are guaranteed by over half of Grace’s stock. The agreement is intended to allow Grace to leave bankruptcy without the cloud of further asbestos-related lawsuits against it.
What does all this mean for me?
Though W.R. Grace has filed for bankruptcy, it is still possible for mesothelioma claimants to receive bankruptcy funds from the trust. The asbestos attorneys at Baron and Budd have decades of experience dealing with asbestos bankruptcies, and because of this have developed a sterling reputation with many of the trusts, including W.R. Grace.
While our asbestos attorneys know that no amount of money could ever fully compensate for a family member’s passing from mesothelioma, the additional funds can help cover medical costs or provide for family members. But most importantly, keep in mind that this money was set aside specifically for mesothelioma claimants and is waiting for you to claim it. Our asbestos attorneys stand ready to help you navigate asbestos bankruptcies and get you the most of your claim.
