"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."
sam.howe.verhovek@ latimes.com
Times staff writer David Savage contributed to this report.
