Lawyers Profit as Oct. 31 U.S. Asbestos Claim Deadline Nears

September 12, 2008

A court settlement described as “absurd and disturbing” would give Canadians owning homes contaminated with asbestos-containing Zonolite insulation virtually nothing, while their lawyers would get millions from W.R. Grace.

In the United States, where as many as 35 million homes and business are contaminated with the cancer-causing product, few people know that the federal bankruptcy court has set a deadline of Oct. 31 to file a claim, or lose the right to ever do so.

In Washington state, Darrell Scott, the lawyer who in 2000 filed the nation’s first Zonolite insulation suit on behalf more than 100,000 homeowners, has asked the court to allow his suit to go forward.

The insulation came from vermiculite ore mined at Zonolite Mountain near Libby, Mont., and was processed at scores of Grace plants throughout North America into nickel-size pieces of tan-and-gold-tinted fluff.

Repeated tests by the U.S. Environmental Protection Agency, researchers for the Centers for Disease Control and Prevention and Grace’s own scientists have shown that the slightest disruption of Zonolite in walls or ceilings releases significant amounts of asbestos. Those asbestos fibers have killed hundreds and sickened thousands in and around Libby and many of Grace’s processing plants.

Efforts by Scott and scores of other lawyers suing on behalf of those harmed by Zonolite exposure were derailed in April 2001 when Grace filed for Chapter 11 bankruptcy protection. Grace’s president then, Paul Norris, said the 150-year-old company had no choice because more than 325,000 asbestos personal-injury claims had been brought against it, and more plaintiffs were waiting to file.

The Canadian action is the first major movement since the bankruptcy.

In Ontario, the Canadian version of a bankruptcy court — the Companies’ Creditors Arrangement Act — is proposing that Grace pay $6.5 million (Canadian) to settle all present and future claims by Canadian homeowners.

Grace admits no wrongdoing.

Of the money, half would be paid to the Canadian lawyers who put the deal together. A lawyer in Delaware would get $360,000 (Canadian) for filing the papers with the bankruptcy court.

Health Canada estimates that as many as 400,000 Canadian homes may be insulated with Zonolite, and if they all apply for the Grace settlement, they could end up with $8.125 each. If only a few apply, the settlement states that depending on the proof they offer, they could get either nothing, $300 or $600.

Typically, the cost of asbestos-contamination removals from attics and walls in the U.S. ranges from $11,000 to well over $40,000.

Nevertheless, the settlement makes it clear that Grace would not be asked to pay more, and, there is no mention that the lawyers would kick in anything.

“The lawyers are making a fortune, and those with a real need to remove this poison from their homes get nothing. How can something so outrageous be allowed to happen?” asked Raven Thundersky. The parents and three sisters of the 43-year-old woman died from cancer and asbestosis from exposure to Zonolite in the family’s government-built home on a remote First Nations reservation at Poplar River, Manitoba.

“The settlement is a bit absurd and disturbing and a significant disappointment,” said Thundersky’s lawyer, Keith Ferbers. “It’s really not set in stone yet, but clearly the case didn’t go the way it should have.”

Scott, a Spokane lawyer, said he is “gravely concerned about my Canadian Zonolite clients.”

Asked about the large lawyers’ fees, Scott would say only: “The first obligation must always be to fairly compensate the client and this (settlement) does not appear to offer any meaningful relief.”

Ferbers and lawyers on this side of the border say a controversial decision by U.S. Bankruptcy Judge Judith Fitzgerald, that the asbestos in insulation is not really that dangerous, greatly harmed the chances of all Grace litigants, including survivors of those whose deaths were attributed to Zonolite.

When Scott filed the first suit against Grace for Washington homeowners nine years ago, it asked that Grace be forced to notify homeowners in Washington and elsewhere of the hazard of exposure to the insulation. It didn’t happen.

“People still don’t know,” he said. “There are probably 120,00 to 140,000 homeowners in Washington alone with Zonolite in their homes, and most don’t know it.”

He’s concerned that the court-approved Oct. 31 deadline will pass unknown to millions.

Reminding Fitzgerald of the class action filed in 2000, he asked the judge to allow him to file on behalf of tens of thousands of Washington homeowners who own or occupy property containing the Zonolite insulation. Fitzgerald has yet to rule on his motion.

“It’s the only hope that people here living with this danger have. It’s up to the judge now,” said Scott, who was appointed by U.S. bankruptcy trustees to co-chair the Official Asbestos Property Damage Committee.

Four years ago, responding to requests from its own scientists and to occupational health activists, the EPA promised to issue an emergency declaration about the Libby asbestos and to warn homeowners everywhere of the risk of asbestosis, mesothelioma and lung cancer from exposure to Zonolite. It never happened.


Information from: Seattle Post-Intelligencer,

Was this article valuable?

Here are more articles you may enjoy.