SEATTLE — The Supreme Court on Tuesday let stand lower court rulings that require W.R. Grace & Co. to pay a $54.5-million federal bill for asbestos cleanup in a Montana mining town described by federal regulators as one of the nation's most contaminated Superfund sites.
The court rejected Grace's appeal of a decision in favor of the Environmental Protection Agency, which sued Grace five years ago to recover the cleanup costs at a vermiculite mine in the town of Libby.
The government is also pursuing a criminal case involving several former executives or managers of the mining company for allegedly concealing health risks at the mine.
That trial will not begin until next year at the earliest.
The asbestos-laden vermiculite, laced into the mountains around Libby, was used as insulation in hundreds of thousands of homes and office buildings.
The mine, which opened in 1939 and was purchased by Grace in 1963, once produced about 80% of the world's supply of the mineral.
Grace operated the mine until 1992, unleashing what the U.S. attorney for Montana, William W. Mercer, described as a "human and environmental tragedy" in the town.
Nearly two-thirds of employees with more than 10 years of service tested positive for lung ailments, according to accompany memorandum written in 1976 by one of the indicted men.
The cleanup of the town continues, and some residents said the matter would wind up in court again because the ultimate cost of remediation would be much higher than the $54.5 million at issue in the case decided Tuesday.
"It's a small step, really, but it's another step forward," Gayla Benefield, a former bartender and a leader of Grace critics in Libby, said of the court's action. She and her husband have been diagnosed with asbestosis, and her parents died from it.
In its appeals, the company argued that the EPA's efforts in Libby amounted to a long-term rehabilitation of the area, rather than an emergency cleanup.
Under the law, toxic polluters can be forced to repay the EPA the full cost of cleaning up hazardous substances that pose an immediate risk to the public but face more limited charges for such long-term "remediation" of the area.
Grace argued that much of the agency's work was indeed remedial, but the federal courts disagreed and sided with the EPA, which contented that the public health crisis required ongoing action.
"The situation confronting the EPA in Libby is truly extraordinary," the U.S. 9th Circuit Court of Appeals said in December.
About 12,000 residents of Libby and nearby communities "face ongoing, pervasive exposure to asbestos particles being released through documented exposure pathways. We cannot escape the fact that people are sick and dying as a result of this continuing exposure."
For that reason the appeals court, based in San Francisco, upheld a judge's order requiring Grace to repay the EPA's cost for the emergency cleanup.
The EPA "is committed to making polluters pay, and today's decision allows us to continue holding W.R. Grace responsible for cleanup of the contamination in Libby," said Jessica Emond, a spokeswoman for the agency.
During its cleanup over the last several years, the EPA has used vacuum trucks and other equipment to remove vermiculate-laced soil.
Grace, which filed for bankruptcy protection in 2001 under the weight of thousands of asbestos-related claims across the nation, said it has spent millionsof dollars in Libby to help residents address health issues.
An EPA toxicologist once said people in the Libby area had experienced "the most severe residential exposure to a hazardous material this country has ever seen."
The criminal case, tied up in part over legal arguments about admissible evidence, centers on the question of whether company officials knowingly failed to warn workers of the dangers of prolonged exposure to vermiculite.
The 2005 indictments said the officials were criminally negligent, a contention Grace denied. "Though court rules prohibit us from commenting on the merits of the government's charges," the company said in a statement at the time, "we look forward to setting the record straight in a court of law."
Times staff writer David Savage contributed to this report.