A high-stakes legal stalemate has created new health and liability risks for remodelers and infill builders who depend on teardowns to acquire lots.
Lawsuits filed against W.R. Grace & Co. have asked that the company provide various financial remedies for removal of a discontinued asbestos-contaminated insulation product called Zonolite. The insulating material was used for many years as a residential attic insulation. By EPA estimates, as many as 30 million homes contain the material.
Columbia, Md.-based W.R. Grace, faced with huge potential losses, filed for bankruptcy protection in April 2002. Since then, the case has stalled. Private industry is hoping the EPA will step in and foot the bill for cleanup and mitigation. But the EPA has its own concerns about footing a multibillion-dollar liability.
Meanwhile, as civil attorneys and corporate hired guns dodge and parry, you and your clients are operating in a hazardous environment without a safety net.
So far, warnings about Zonolite have been relatively muted. According to two-time Pulitzer Prize-winning journalist Andrew Schneider of the St. Louis Post-Dispatch, the EPA was about to go public with a national warning about the material when the White House intervened and quieted the alarm. Instead, the EPA ultimately released a best practices document online, suggesting that vermiculite insulation should not be disturbed by contractors or homeowners.
Darrell Scott, an attorney with the law firm Lukins and Annis in Spokane, Wash., says the EPA has been "tailing behind our firm's civil actions." Scott insists that the real force behind the stalled litigation has been the banks, which are nervous about their huge potential losses if the companies they underwrite have to pay for the asbestos removal. "The banks are throwing nuclear bombs into the bankruptcy proceedings," he says. "Their interest is in sabotaging the bankruptcy and leaving the federal government to pick up the cost."
In addition, says Scott, federal legislators have made repeated attempts to create legislation that would allow companies to pay a small amount into an asbestos mitigation pool and gain immunity from asbestos liability. So far, that idea hasn't passed muster.
What does it cost to remove the material from a home? Estimates vary widely. The EPA puts the cost at $35,000 per average home (with a 1,000-square-foot attic). But Scott says private firms, which aren't required to meet federal union and wage restrictions, can do the same job for about $9,000. Either way, that's well above the means of many homeowners. And even if you purchase a property intending to tear it down, you may be saddled with the extra cost of mitigation.
"The reality on the ground is that contractors often unexpectedly run into this material," Scott adds. "And most homeowners are unaware that this is the most friable asbestos ever created. By that I mean it's not bonded. Those fibers take the form of dust. If you disturb it, you will exceed the federal fiber-per-cc limit within a half-hour period. By definition, you'll have violated federal law."
Scott says his most recent lawsuit asks W.R. Grace to provide a notification program for contractors. He also hopes to obtain "a substantial portion of W.R. Grace's considerable assets" for use in the removal of Zonolite. Until a science trial (where the scientific evidence is weighed) happens, however, it's unlikely any money will be available to homeowners or builders. W.R. Grace spokesperson Bill Corcoran says a science trial has been scheduled and will probably take place next month.
In the meantime, Scott urges contractors to include a clause in their contracts specifically protecting them in case they encounter Zonolite on the job.
"The homeowner and the contractor are really left holding the bag," Scott says. "And unless you know about the risk, you can't do anything to protect yourself."
