Court Approves $43 Million Montana Asbestos Settlement

By Laura Zuckerman | September 19, 2011

A Montana judge has approved a $43 million settlement for people sickened by exposure to asbestos from a mine, with a large part of that amount to be paid by Warren Buffett’s Berkshire Hathaway, court documents show.

The settlement resolves a lawsuit filed against Montana over asbestos exposure at a W.R. Grace mine. Former miners and their families had accused the state of failing to properly oversee the mine or warn workers of dangers there.

The mine in Libby, Montana, produced vermiculite, used for home insulation, potting soil conditioner and absorbent packing material.

More than 70 percent of the vermiculite used in the country over eight decades came from Libby — and it was all contaminated by asbestos deposits in the same mine, according to the U.S. Environmental Protection Agency.

Miners originally sued W.R. Grace over their exposure to asbestos, but after the company filed for Chapter 11 bankruptcy in 2001 the workers sued the state for failing to adequately protect them, according to court documents.

About 1,400 people will receive payouts from the settlement approved Sept. 8 by Montana District Court Judge Jeffrey M. Sherlock, ending a decade-long legal battle.

The deal ends numerous cases and claims against Montana “but expressly reserves their claims against all other responsible parties,” according to the agreement.

Many of the victims of asbestos exposure from the Libby mine are now over 65, and others have since died of asbestos-related diseases such as asbestosis and cancers like mesothelioma, records show.

Because of the decades-long latency associated with asbestos-related diseases, people continue to be diagnosed decades after the mine closed, according to federal health officials.

Montana officials conducted inspections of the mine in the 1950s and later years, but despite knowing the risk to miners from asbestos dust, the state did not adequately warn workers of those dangers, the Montana Supreme Court found in 2004.

To cover the $43 million settlement, the state of Montana is using $26.8 million out of its self-insurance fund.

Montana’s insurers, National Indemnity, Berkshire’s reinsurance unit, and Montana Insurance Guaranty Association will pay $16.1 million and $100,000 respectively, according to court documents.

Warren Buffet’s Berkshire has been active in taking over asbestos obligations from insurance companies in exchange for huge up-front premiums.

Payments for victims range from $500 to nearly $61,000 each, legal records show.

In a separate order on Sept. 8, Sherlock ordered one-third — or $14.3 million — to be paid out of the $43 million to attorneys for the victims, who worked on contingency.

The W.R. Grace mine in Libby closed in 1990.

In 2008, the company agreed to set up a trust fund to pay victims’ health claims.

Attorneys for the victims and for Montana did not respond to requests for comment.

(Additional reporting by Ben Berkowitz in New York; Editing by Dave Zimmerman and Tim Dobbyn)

Topics Pollution

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