Judge's Ruling Gives W.R. Grace a Break: Attic Insulation Found Not a Risk to Homeowners

Judge's Ruling Gives W.R. Grace a Break: Attic Insulation Found Not a Risk to Homeowners

By Andrew Schneider, Baltimore Sun

22 December 22 2006

A federal bankruptcy judge has ruled that attic and wall insulation manufactured by W.R. Grace and Co. and installed in millions of homes and businesses does not pose "unreasonable risk of harm" even though it is contaminated with a highly toxic form of asbestos.

U.S. Bankruptcy Judge Judith Fitzgerald wrote that the ruling may "prove fatal" to property damage claims against Columbia-based Grace.

The company filed for bankruptcy in April 2001, citing hundreds of thousands of pending claims related to asbestos. Asbestos claimants have been battling the company over the makeup of a trust that would compensate those who have suffered damage and allow Grace to leave bankruptcy.

In her opinion, handed down last week in Delaware, Fitzgerald wrote that "the evidence established that the risk of exposure from [Zonolite Attic Insulation] in the home is less than that of dying in a bicycle accident."

Fitzgerald is expected to meet in February with lawyers representing the company and property owners to discuss the ramifications of the opinion. Government officials have estimated that Zonolite has been installed in 15 million to 35 million homes and businesses.

Greg Euston, a Grace spokesman, said the company "is still reviewing the decision and its implications."

Two lawyers familiar with the separate criminal case pending against Grace and seven current and former executives said they do not believe Fitzgerald's decision will affect that case. Grace and the executives are charged with knowingly endangering residents of Libby, Mont., where Grace mined asbestos-contaminated vermiculite that was used to manufacture Zonolite, and concealing information about the health affects of its mining operations.

The trial, which was to begin in September, has been postponed until next year.

The Environmental Protection Agency has already spent more than $180 million cleaning Zonolite from houses, businesses and property in Libby. Grace is responsible for reimbursing the government for that cleanup, EPA spokeswoman Jennifer Wood said.

Allan McGarvey, an attorney representing hundreds of people who have filed personal injury claims against Grace, said yesterday he did not believe the ruling would affect those cases.

"Judge Fitzgerald's opinion merely concludes that there was insufficient evidence that typical homeowners would more likely than not face exposures which would cause disease," he said. "In contrast, the Libby claimants have proven their exposures by the fact that they are all diagnosed with asbestos disease."

Grace and the claimants agreed that the shiny, featherweight insulation contains - and could release - asbestos fibers when disturbed. The key question before Fitzgerald was whether the presence of the contaminated Zonolite in homes and businesses presents an "unreasonable risk."

Lawyers representing property owners argued that the fact that asbestos could be released was enough to support a finding of unreasonable risk. They presented studies by Grace itself, the EPA, the Canadian military and others which showed that high levels of asbestos were released with minor disruption of the insulation in the attic by activities such as moving boxes and sweeping.

Grace countered that harm could not be proved unless the level of fibers released was high. Grace supported its contention that its insulation posed no risk by, in part, using correspondence from government officials including former EPA Administrator Christie Todd Whitman.

Some physicians who have studied or treated hundreds of patients sickened by the naturally occurring asbestos in vermiculite mined at Libby criticized the judge's opinion.

"What in the world was that judge thinking? Studies by the government and Grace itself show that with the most minor disruption, asbestos fibers fly all over the place," said Dr. Alan Whitehouse, a lung and occupational medicine specialist who has been diagnosing asbestos disease in Libby since the 1980s.

Ed Westbrook, the lead special counsel appointed by the court to represent the property owners, said they are planning to appeal.

But he said he doesn't believe the opinion damages the property claims "because once you show the existence of a toxic dust above background levels you've succeeded in showing the property is contaminated."

The first class action suit filed against Grace contending property damage from Zonolite was filed in Washington state in August 2000. It asked the courts to order Grace to take out advertisements warning property owners of the possible danger of Zonolite, and to force Grace to pay for Zonolite to be removed when homeowners remodel or do anything else to their homes that disturbs the insulation.

"That hasn't changed," Westbrook said.

Tests have shown that even installing a light fixture or ceiling fan through an attic floor insulated with Zonolite can generate dangerous levels of airborne asbestos, EPA investigators have said.

"Even if the door to the attic is never opened, we've found this insulation in the walls and coming through the light fixtures, and that contamination can last for years and years. We know it," said Dr. Aubrey Miller, an EPA senior medical officer and toxicologist.