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."
