Cascade County judge upholds jury’s $36.5M decision in asbestos case

A Montana judge recently upheld a Cascade County’s jury verdict of more than $30 million in damages against an insurance company that conspired with a Libby-based asbestos mining company to conceal the extent of the dangers workers faced as they mined the material that would be used in many settings from garden fertilizer to housing insulation.

Ralph V. Hutt, who worked for the W.R. Grace Company in Libby for about 18 months beginning in 1967, successfully sued Maryland Casualty Company, winning $6.5 million in compensatory damages and $30 million in punitive fines. Cascade County District Court Judge John W. Parker railed against the company for keeping the dangers hidden from scores of employees and said the insurance company’s actions were so atrocious that it could have been grounds for an even higher monetary award.

Hutt’s case is one of several that is making its way through courts and represents a different legal tact. Previously, Grace had established an asbestos recovery fund in exchange for admitting liability and providing funding for victims. Many of the people affected by the asbestos were not just former asbestos miners, but the Libby community members who had contracted respiratory diseases simply by living in close proximity to the vermiculite mine. Vermiculite is the mineral that is mined, then “popped,” or transformed into asbestos – a still legal material used in building materials because of its ability to withstand fire.

However, Hutt’s legal team challenged the insurance carrier, Maryland Casualty, which has since been bought by Zurich American Insurance Company.

During the nine-day trial, attorneys for Hutt proved that Grace and Maryland Casualty knew about the dangers of asbestos and then actively worked together to cover up the medical reports, including not disclosing to any workers the dangers that executives knew were present in Libby.

“The trial evidence overwhelmingly proved that (Maryland Casualty Company) deliberately and systematically acted to prevent workers from learning about the empirically proven health risks they faced from mining vermiculite,” Parker wrote in his decision. “Substantial credible evidence proved MCC knew of and actively urged W.R. Grace to conceal reports outlining the risk in general terms. Further, MCC knew of and worked to conceal known risks to specific individual workers who had been diagnosed with asbestos-related disease, including Ralph Hutt.”

Attorneys Allan McGarvey, Clifford Edwards, Dustin Leftridge and Jinnifer Mariman argued that a common law doctrine obliged Maryland Casualty to inform the workers of the danger, even if the company, W.R. Grace refused.

“Hutt suffered permanent, debilitating, and likely deadly health consequences that could have been avoided if MCC had not breached its duty to warn. MCC made recommendations to Grace for how to control the dust, but those recommendations did not include warning the workers about the known risks,” Parker said. “The Montana Supreme Court ruled that MCC owed Ralph V. Hutt and his co-workers a direct common-law duty in this regard.”

Hutt, who is homebound and needs constant care because of several lung conditions, will likely die because of the diseases brought about by his stint at the Libby mine. The jury awarded him $6.5 million for that care, but then ordered Maryland Casualty to pay $30 million because it had acted without regard to Hutt’s health. However, Montana law requires that judge review all punitive judgments to make sure they’re consistent with the law. District court judges have the ability to increase, decrease or amend those decisions.

But Parker did not veer from the jury’s award, ruling that more punitive damages may be justified, but since the jury settled on the amount, he was unwilling to change it.

“This systematic plan of concealment by MCC obviously valued its profit margin over protecting the health of Ralph Hutt and his co-workers,” Parker wrote. “Maryland Casualty’s conduct was profoundly reprehensible and a Cascade County jury recognized that through their award of significant punitive damages.

“This reprehensible conduct by MCC might very well justify a far greater award.”

Parker also said that insurance company’s actions presented “clear and convincing evidence proving malice.”

IN HIS 31-page ruling, Parker recounts the evidence submitted during the nine-day trial, which includes more than a decade of mounting evidence of substantial health problems that were met with repeated efforts to conceal the dangers of working around vermiculite.

As early as 1964, years before Hutt began work in Libby, Maryland Casualty Company knew about 30 workers who were diagnosed with asbestos-related diseases. In 1964, L.E. Park, an executive with the insurance company, wrote to W.E. Walker who was in charge of Grace’s “Zonolite” division (Zonolite was the brand name of the asbestos-based product).

“You appreciate that the above is highly confidential and must not get out of your own office,” Park told Walker.

The court pointed out that this was proof enough that Maryland Casualty had breached it duty to warn workers in Libby about the dangers of the mineral. But the letter also contained a plan to further insulate Grace from liability, including a scheme that would keep workers employed, but away from the more direct mining jobs. Park suggested in his letter that by moving those employees who were already showing signs of asbestos diseases to lesser hazardous environments, the employees could stabilize enough to continue their employment until they retired, which would lessen both companies’ liability.

“If we minimize their exposure to a dust level not exceeding 5 mppcf, chances are we may able to keep them on the job until they retire, thus precluding the high cost of total disability,” wrote one of Grace’s safety administrators.

In 1967, as more cases started to emerge, Maryland Casualty inspected the Libby site and found that asbestos in the air and dust in the mill “did far exceed what were considered to be allowable concentrations.” The insurance company told Grace that concentrations had “increased substantially” since 1963, and that they appeared to be on the rise.

Maryland Casualty said that if the information became publicly available, “it might appear to others that the action taken by (Grace) to correct the situation which was presented, might not to the unbiased observer, appear to have been either extremely effective or quickly performed.”

One of the workers who was specifically named as being affected was Hutt. Yet Hutt lived for decades after his employment at the Libby plant until he developed respiratory problems in 2002. Neither Grace nor Maryland Casualty had ever informed him about the risks or the concerns. Hutt also testified that he underwent two chest X-rays while working for Grace, but the company never informed him the results of those.

The correspondence between Maryland Casualty and Grace noted that problems had been detected as early as 1956 at the Libby plant, and had increased in severity.

John Larrick, an attorney from Maryland, was retained by the insurance company to help Grace address a number of growing concerns in 1969 from the State of Montana’s industrial accident board.

During the trial in Cascade County, a letter from Larrick was introduced into evidence which helped solidify that both Grace and Maryland Casualty knew about damage and still didn’t notify employees: “I would hesitate to allow in evidence the State Board reports if it is possible to keep them out of the hands of the Industrial Accident Board, and through it, the general public. It has even occurred to me that (Grace’s) inability to curb the problem at the State Board’s recommendations through the years might be alleged at least to have constituted willful and wanton conduct on its part.”

Darrell Ehrlick is the editor-in-chief of the Daily Montanan, a nonprofit newsroom. To read the article as originally published, click here.