Court OKs $43 million settlement for asbestos victims

The District Court in Helena has approved a $43 million settlement with the state for 1,128 people sickened by asbestos exposure linked to the former W.R. Grace & Co. vermiculite mine at Libby.

The long-awaited settlement was negotiated by the McGarvey, Heberling, Sullivan & McGarvey law firm in Kalispell and the Lewis, Slovak, Kovacich & Marr law firm in Great Falls.

While the settlement finally paves the way for some of the sickest people with asbestos disease to receive compensation to offset their ongoing medical care, the amount victims will receive is far less than $43 million.

A 33 percent attorney fee for the law firms will be subtracted from the gross settlement, along with a pro rata portion of costs advanced by the law firms, and Medicare and other liens that may be owing, according to information sent by the McGarvey firm to its clients and obtained independently by the Daily Inter Lake.

Any probate costs and fees would be subtracted as well, and there is a $500,000 hold back for adjustments based on medical records not delivered earlier, for any clerical errors and to pay costs of the trust administration.

The state and its insurance company have 30 days to put the $27 million balance for victims, plus the $16 million for attorney fees and other subtracted costs, into a court-approved qualified settlement trust fund.

Asbestos victims who have had part of their medical treatment paid by Medicare likely will have to pay a Medicare lien out of their settlement, according to a letter sent Wednesday to clients by Kalispell attorney Jon Heberling.

The law firms recently enlisted the help of Montana Sens. Max Baucus and Jon Tester to see if Medicare liens can be processed in groups, using an average cost, rather than examining each lien and each item of treatment. Grouping the liens would speed up the process.

Heberling cited three key factors that brought about the settlement.

First, the Herb Orr et al versus state of Montana lawsuit filed in 2001 set the stage. It involved seven miners and one wife of a miner, all with asbestos disease. The state filed a motion to dismiss the case, claiming that the state had no duty to workers or their families under the Industrial Hygiene Act. The District Court in Helena ruled in favor of the state and dismissed the case, but the McGarvey law firm appealed the decision to the Montana Supreme Court and ultimately the high court ruled in the victims’ favor in December 2004.

A second factor was the U.S. Bankruptcy Court injunction. In 2005 lawyers for the state and W.R. Grace petitioned the court for an injunction stopping all proceedings against the state of Montana. The Bankruptcy Court granted the injunction, and the case went through two levels of appeal. What eventually culminated was a memorandum of understanding entered in 2009 and the District Court approval of the $43 million settlement on Sept. 8.

A third impetus for the settlement, Heberling said, was Dr. Alan Whitehouse’s general expert report.

“We believe that a factor in the state’s willingness to settle was that we had assembled so much medical proof that the state was unlikely to win by calling doctors to dispute the findings of the doctors at the Center for Asbestos Related Disease (CARD) clinic in Libby,” he wrote to clients.

Whitehouse is a pulmonary specialist who treated Libby asbestos victims for years and documented the unique nature of Libby asbestos exposure.

Features editor Lynnette Hintze may be reached at 758-4421 or by email at lhintze@dailyinterlake.com.