Judge Bars NJ’s Asbestos Suit Against W.R. Grace
Yesterday, a bankruptcy judge involved in the W.R. Grace Chapter 11 case barred the state of New Jersey from going forth with an $800 million fine against W.R. Grace & Co. for allegedly lying about asbestos contamination in the state.
According to an Associated Press article, Judge Judith Fitzgerald ordered the New Jersey Department of Environmental Protection (EPA) to drop a lawsuit it filed against W.R. Grace in 2005 in an effort to collect the fines. The lawsuit stated that Grace lied to the state about asbestos hazards at a Hamilton, N.J., plant where it processed vermiculite for more than 40 years. The vermiculite came from a mine in Libby, Mont. and was found to have been contaminated with asbestos.
Upon the closure of the Hamilton plant in 1994, the company submitted a report to the New Jersey Department of Environmental Protection which stated that the vermiculite Grace processed didn’t contain harmful levels of asbestos. Because of the report, the state assumed it did not have to conduct soil contamination tests nor did it need to clean up the site. However, in 2000, the U.S. Environmental Protection Agency found high concentrations of asbestos at the Hamilton location.
“New Jersey said its moves against W.R. Grace were exempt from the Chapter 11 shield as an exercise of its police or regulatory power,” the article reports. “State regulators said they acted to protect the public health and safety from a company that allegedly filed false reports about the extent of asbestos contamination at a site in New Jersey.”
However, Judge Fitzgerald determined that NJ’s lawsuit against the company was in conflict with the shield that protects bankrupt companies from legal actions.
