Big Suits: USA v. W.R. Grace

It was called the biggest criminal environmental prosecution in U.S. history. But on May 8, a jury acquitted W.R. Grace & Co. and three executives on charges that they had knowingly contaminated residents of Libby, Montana, with asbestos and then had conspired to cover it up.

The February 2005 indictment charged the company, which operated a vermiculite mine in Libby from 1963 to 1990, and seven former Grace executives with conspiracy to violate the Clean Air Act by knowingly endangering Libby residents and conspiracy to defraud the U.S. government. Grace, represented by Kirkland & Ellis's David Bernick [see 'Litigator in the Spotlight,' page 31], was also charged with endangerment and obstruction of justice. Two of the seven executives were also charged with endangerment. (One other defendant passed away in 2007 and another, in-house lawyer O. Mario Favorito, will be tried separately in September.) The individuals faced between five and 15 years in jail. The company stood to lose $280 million, which would have significantly set back its plans to emerge from Chapter 11 bankruptcy later this year.

The 11-week-long trial began in February in Missoula, Montana. In late April the prosecutors dismissed charges against two executives. Moreover, after the defense claimed that prosecutors had withheld documents and allowed a key witness to lie on the stand, the judge instructed the jury to be skeptical of the witness's testimony.

FOR PLAINTIFF UNITED STATES OF AMERICA

U.S. Attorney's Office for the District of Montana: Assistant U.S. attorney Kris McLean.

The U.S. Department of Justice: At the environment and natural resources division--environmental crimes section: trial attorney Kevin Cassidy.

FOR DEFENDANT W.R. GRACE & CO. (COLUMBIA, MARYLAND)

In-House: General counsel, vice president, and secretary Mark Shelnitz and senior litigation counsel Jay Hughes, Jr.

Kirkland & Ellis: Ellen Ahern, David Bernick, Barbara Harding, Alexander Karan, Walter Lancaster, Christopher Landau, Scott McMillin, Brian Stansbury, Laurence Urgenson, and asso ciates Samuel Blatnick, Heather Bloom, Kyle Cutts, Peter Farrell, James Golden, Patrick King, Rebecca Koch, Lauren Kozak, Karen Lee, Tyler Mace, Derek Muller, Michael Shumsky, and Shani Moore Weatherby. (Lancaster, Cutts, Kozak, and Weatherby are in Los Angeles; Ahern, Bernick, Karan, McMillin, Blatnick, Golden, and Muller are in Chicago; the rest are in Washington, D.C.) Grace is a longtime client of the firm.

Garlington, Lohn & Robinson: Kathleen DeSoto. (She is in Missoula, Montana.) DeSoto was local counsel.

FOR DEFENDANT ROBERT BETTACHI

Weil, Gotshal & Manges: Vernon Broderick, Thomas Frongillo, Caitlin Halligan, David Hird, and counsel Patrick O'Toole. (Broderick and Halligan are in New York; Hird is in Washington, D.C.; and the rest are in Boston.) The firm represented a former executive.

Goetz, Gallik & Baldwin: Brian Gallik. (He is in Bozeman, Montana.) Gallik was local counsel.

FOR DEFENDANT HENRY ESCHENBACH

Mayer Brown: David Krakoff, James Parkinson, Gary Winters, and associate Lauren Randell. (All are in Washington, D.C.) The firm represented Grace's former director of health and safety.

Gough, Shanahan, Johnson & Waterman: Ronald Waterman. (He is in Helena, Montana.) Waterman was local counsel.

FOR DEFENDANT WILLIAM MCCAIG

Roe Cassidy Coates & Price: William Coates. (He is in Greenville, South Carolina.) Coates was cocounsel to a former manager of mine operations.

Sowell Gray Stepp & Laffitte: Elizabeth Gray and asso ciate Tina Cundari. (They are in Columbia, South Carolina.) Gray was cocounsel.

Law Office of Palmer Hoovestal: Palmer Hoovestal. (He is in Helena, Montana.) Hoovestal was local counsel.

FOR DEFENDANT ROBERT WALSH

Bradley Arant Boult Cummings: Daniel Golden, David Roth, Stephen Spivack, and Kyle Hankey. (Golden and Spivack are in Washington, D.C.; the rest are in Birmingham.) Spivack represented Grace's former division president.

Browning, Kaleczyc, Berry & Hoven: Catherine Laughner. (She is in Bozeman, Montana.) Laughner was local counsel.

FOR DEFENDANT JACK WOLTER

O'Melveny & Myers: Carolyn Kubota, Jeremy Maltby, counsel Robert Swerdlow, and associates Lisa Chen and Justin Ford. (All are in Los Angeles.) Kubota represented a former vice president.

Milodragovich, Dale, Steinbrenner & Nygren: associate W. Adam Duerk. (He is in Missoula, Montana.) Duerk was local counsel.

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