A federal jury acquitted chemical products company W.R. Grace and three of its former executives on May 8 of charges that they knowingly distributed asbestos at a former vermiculite mine in Libby, Mont. More than 200 local people have died there, and several more were sickened, from the contamination.
The trial, which lasted about three months, was a test case for federal prosecutors, who argued that the executives secretly knew since the 1970s that the exposure to asbestos from the mine was dangerous. W.R. Grace closed the mine in 1990.
The prosecutors faced numerous obstacles, not least that U.S. District Judge Donald Molloy beat up their star witness, Robert H. Locke, a former W.R. Grace executive who testified about the alleged cover up. The judge stopped short of accusing the government of prosecutorial misconduct but told jurors that prosecutors had performed an “inexcusable dereliction of duty” by not sharing exculpatory evidence sooner.
David Krakoff, co-leader of the white-collar defense practice in the Washington office of Mayer Brown, represented Harry Eschenbach, the former director of health and safety for the company’s industrial chemicals group. He talked to The National Law Journal about how the case turned in W.R. Grace’s favor.
NLJ: This case is one of many in recent months that have involved allegations of prosecutorial misconduct. Why are we seeing this issue come up more often in the government’s cases?
DK: Defense attorneys are really aggressively pushing discovery issues and, in a variety of cases, have been able to get their nose under the tent just enough so that federal judges are starting to see some of the practices that the Justice Department has engaged in over the last decade or so. A number of judges are starting to see that federal prosecutors either do not understand their Brady obligations or are applying tactical considerations to their decisions on whether or not to disclose information that is favorable to the defense. The prosecutor’s job is not to win at all costs — and that’s what we saw in this case and in a number of cases across the country. And I think that judges are just starting to see that there’s a lot of power that has been put in the hands of prosecutors and it has not been exercised properly in a number of cases.
NLJ: Take us to the start of this trial. The government’s case already had some challenges. What did you see as the most significant ones?
DK: It was an unusual case in many, many respects. It covered a time period from 1976 until the present. The government’s theory was that there were violations of the Clean Air Act because the company had left piles of vermiculite, which were contaminated with asbestos, in the town. And so the government’s theory was that anytime someone would unwittingly kick a pile or disturb a pile of vermiculate, that would cause an emission that would satisfy the Clean Air Act.
The government’s fundamental theory in this case was that Grace and the executives knew that the vermiculite was dangerous…and they kept that secret from the government. The fact of the matter is that the EPA [Environmental Protection Agency] and numerous governmental agencies, both state and federal, knew all about the dangers of exposure of vermiculite contaminated with asbestos in Libby going back to the 1970s.
The defendants were charged with conspiracy and then three counts of knowing endangerment under the Clean Air Act. The knowing endangerment provision in the Clean Air Act did not become effective until Nov. 15, 1990. So the government had to prove that once that law — the knowing endangerment law — went into effect, that each defendant who was part of the conspiracy actually reaffirmed his agreement to violate the Clean Air Act.
NLJ: At what point, or points, did this trial turn in your favor?
DK: Things turned in degrees throughout the trial. The government’s first witness was the on-scene coordinator for the cleanup. Even during his testimony, the government’s hollow theories were exposed. The next witness was an expert witness, also from the EPA. And even at that early stage — this is in the first week of the trial — he was exposed as really being such an advocate for the government. We were able to expose that some of the testing that they did really distorted the facts.
And then I think certainly when the government’s star witness, Bob Locke, took the stand, I think that was clearly a turning point. He brought a lawsuit against the company and he had joined the government’s team. His bias was significantly exposed during the trial and, as the judge said a number of times, he was exposed as someone who had not told the truth. He did not tell the truth about his special relationship with the government. He really was in the pocket of the government.
But what he did not disclose is [that] he believed he was not going to be prosecuted. It ultimately came out that in 2006, a couple years later — still prior to trial — he was offered immunity by the government. What he didn’t tell the jury is that the prosecutors had encouraged him to reject the immunity, which was a way to clearly communicate to Mr. Locke that he was not going to be prosecuted. This was not provided to the defense but ultimately [was] exposed on cross-examination.
One final turning point was when we started the defense case. The first witness was the head of the business unit called the construction products division. And he put down the rules in 1977, and the rules were: We will comply with the law, we will protect our workers and we will deal faithfully with the government. And those rules were followed. And the government didn’t see fit to put that witness on the stand. He didn’t support their theory — their theory being that the company had hidden the dangers of asbestos exposure from the government.
NLJ: The discovery issues surrounding Mr. Locke’s testimony were the primary reasons for your prosecutorial misconduct claims, right?
DK: It was primarily as to this witness and the failure to provide discovery as required under the federal rules of criminal procedure — the failure to provide information that is favorable and material to the defense and the failure to provide information that is relevant to impeachment of government witnesses.
And in addition, as to Locke there was another element to our motion, and that was that Locke did not disclose, or the government did not bring out through Locke, that he had met with prosecutors 23 times and that he had a four-year relationship with the government in which they communicated by e-mail repeatedly. That e-mail traffic, once we finally got it during the trial, showed how substantial his bias was. For instance, he sent an article to the agent about coyotes being shot in Cambridge, Mass., where the headquarters of the W.R. Grace business had been, saying…that he thought there were other coyotes in Cambridge that ought to be shot — meaning some of the defendants. He did legal research for them. He tried to encourage other former employees to testify. There was just a substantial back and forth with the government, and it showed he had joined their team.
NLJ: But the judge ultimately concluded there was no prosecutorial misconduct.
DK: It’s a very, very substantial burden. The court allowed this case to go to the jury for the jury to decide on the merits whether or not the company and the individuals were guilty of these offenses. He was very disturbed with the government’s misconduct. But I think he tried to fashion a solution by directing the jury. He directed that they could not consider any testimony by Bob Locke against Bob Bettacchi [one of the defendants]. He advised the jury that they should be highly skeptical of the testimony of Mr. Locke against any of the other defendants. He went on to say the prosecutors had violated the federal rules of criminal procedure and their obligations as prosecutors and that it was an inexcusable dereliction of their obligations as prosecutors.
NLJ: Many experts predict that the government, under the Obama administration, will be pursuing more cases involving allegations of environmental crimes, despite the outcome of this case. How do you think the government might proceed in the future?
DK: There’s no doubt they’ll bring additional environmental crimes cases. They’re not going to slow down. But I would hope that the government would carefully consider in its future cases its legal theories, which I think were extreme in this case. I would hope that the government, the Department of Justice, would really scrutinize its obligations in the discovery rules. There were significant errors in this case, and I would hope that they would apply a much more reasoned and balanced view of what’s Brady material, which they did not do in this case. I hope that they learned some lessons from this case.
Amanda Bronstad can be reached at [email protected].
