The U.S. Supreme Court Monday refused to hear an appeal by W.R. Grace & Co. in a case that involves criminal charges brought by the government against the company and six of its executives for Clean Air Act violations in the release of asbestos from a vermiculite mine in Libby, Montana.

W.R. Grace & Co. operated the Libby Mine until from 1963 to 1990. Its vermiculite was used as attic insulation, as an ingredient in masonry fill, and as an addictive in potting soils and fertilizers. However, it was determined the vermiculite deposits at the Libby Mine were contaminated with amphibole asbestos or tremolite.

At the time, W.R. Grace reportedly allowed mine employees to take the vermiculite concentrate home and allowed vermiculite materials to be used in Libby schools as a surface for running tracks, and as the foundation of an outdoor skating rink. The company also allegedly allowed various production plants and properties to be sold or leased for commercial operations and homes, as well as for use by youth sports organizations, without disclosing the nature or extent of the asbestos contamination.

When criminal charges were filed by the U.S. Department of Justice in 2005, the environmental crimes division claimed that 1,200 resident of Libby have been identified as having asbestos related pleural abnormalities as a result of having been exposed to tremolite asbestos produced by W.R. Grace at the Libby Mine.  Pleural fibrosis can result in impaired functioning of the lungs, and in more severe cases, disability and death.

The charges also claimed that over 20 cases of mesothelioma (an aggressive and fatal form of cancer) had been identified in a town of only 8,000 people. The defendants were charged with knowingly combining, conspiring and agreeing among themselves and others to release asbestos into the air, defrauding the U.S. government and agencies responsible for administering laws to protect public health and safety, and conspiring to conceal and misrepresent the hazardous nature of the tremolite asbestos contaminated vermiculite, thereby enriching defendants and others.

Grace spokesman Greg Euston told the Associated Press that the company was disappointed with the high court's ruling. We take this seriously. When Judge Molloy sets a trial date, we will be prepared to defend ourselves.

 In August 2003, Judge Donald W. Molloy of the District Court of Montana had ordered W.R. Grace & Co. to pay over $54.5 million to reimburse the government for the costs of the investigation and cleanup of asbestos contamination. A federal grand jury had also issued an indictment against W.R. Grace in 2005. A federal judge had narrowed the scope of the case in 2006.

In April 2001, W.R. Grace filed for bankruptcy in a federal court in Delaware.

In its appeal to the Supreme Court, W.R. Grace had argued that a Ninth Circuit Court of Appeals ruling had wrongly broadened the criminal reach of the Clean Air Laws. The U.S. Solicitor General urged denial of the appeal, arguing that the case has yet to go to trial.

The Supreme Court also rejected a separate appeal by W.R. Grace executives who could face prison sentences of up to 15 years each if found guilty. The cases rejected by the high court are W.R. Grace & Co. v. United States, and Henry A. Eschenbach v. United States. Eschenbach is a defendant in the criminal case.

The company could be ordered by a court to pay restitution to its victims.

At the time of the criminal indictment, EPA official Thomas Skinner said it was intended to send a clear message that we will pursue corporations and senior managers who knowingly disregard environmental laws and jeopardize the health and welfare of the workers and the public.

Thus far, Grace has spent more than $10 million on medical care and prescription drugs for those suffering from asbestos-related illnesses.  Montana's Department of Environmental Quality is now seeking comment on a proposed settlement agreement that would give the agency more than $5 million for costs related to the cleanup of asbestos contamination in Libby.

The agreement is separate from the recent settlement of claims by the federal government in which W.R. Grace will reimburse the federal government for $250 million for past and future cleanup of Libby schools, homes and businesses.