Jury Acquits W.R. Grace and Former Execs in Landmark Criminal Asbestos Case

In the latest blow to federal prosecutors trying a high-profile criminal case, a jury in Missoula, Mont., has acquitted chemical products company W.R. Grace & Co. and three former executives on all charges in a landmark criminal environmental case. All had been accused of knowingly contaminating a small Missouri mining town with asbestos.

The acquittal today, after less than two days of deliberations, followed a stinging rebuke from U.S. District Judge Donald Molloy. He told jurors they should view with "great skepticism" the testimony of the prosecution's star witness, former Grace executive Robert Locke, because he had failed to disclose a close relationship with prosecutors and government investigators, reports the New York Times.

The judge also described as an “inexcusable dereliction of duty” the government's failure to turn over to the defense, on a timely basis, exculpatory material describing that close relationship, the newspaper notes.

The company was acquitted of charges of conspiracy, violating the Clean Air Act and obstruction of justice, reports Bloomberg.

Near the end of the case prosecutors dismissed charges against two of the five individual defendants originally on trial, after Molloy limited the evidence that the jury could hear against them, the news agency recounts. Another defendant died in 2007, and a former general counsel for the company, O. Mario Favorito, is to be tried separately.

At least 200 people in the mining town of Libby, which has a population of 2,600, have died of asbestos-related diseases, and hundreds more are ill. And there's no doubt that the asbestos came from a Grace-owned vermiculite mining operation there between 1963 and 1990, the Times reports. However, the criminal case revolved on what company officials knew about the dangers posed by the asbestos and whether they made appropriate efforts to keep workers and residents safe.

By the end of the trial of the landmark prosecution—which was said by observers to be the biggest criminal environmental case ever tried—the prosecution's credibility, as well as the defendants' credibility, was in question.

“The legacy of what happened in Libby doesn’t go away, but the notion that the defendants engaged in criminal conduct was not grounded in fact—it was very politically motivated,” said attorney David Bernick outside court, Bloomberg reports. The Kirkland & Ellis partner is lead counsel for W.R. Grace.

Some residents of Libby had a different perspective.

If W.R. Grace had "spent half the money they spent on their lobbyists and attorneys and politicians fighting this, they could have set up a real nice clinic and paid us and gone home with a lot of money in their pocket,” Bob Dedrick told the Missoulian after the verdict. "I guess the people here in Libby will end up taking up what they get.”

Related coverage:

ABAJournal.com: "W.R. Grace, 5 Ex-Execs on Trial in Landmark Asbestos Prosecution"

ABAJournal.com: "Special Prosecutor to Investigate Government Lawyers in Sen. Stevens Case"

ABAJournal.com: "Federal Judge Sanctions US $600K for Secretly Taping Defense Lawyer"