Lawyers for W.R. Grace & Co. are challenging a high court's decision that restored criminal charges of "knowing endangerment" to the case against the worldwide chemical manufacturer and its top managers.

Last month, the 9th Circuit U.S. Court of Appeals reversed or revised six decisions handed down last year by a federal judge in Missoula. The judge's actions dealt a substantial blow to the government's case and gutted its theory of knowing endangerment, which lies at the core of allegations that top executives intentionally concealed the dangers associated with asbestos-contaminated vermiculite mined near Libby.

But one week after the appellate court ruled in favor of the federal government, lawyers for W.R. Grace filed motions indicating the corporation will fight the decision, which Montana U.S. Attorney Bill Mercer hailed as "an important victory for the United States." Lawyers for Grace have requested additional time to petition the court for a rehearing. The extension was granted, giving Grace until Nov. 5 to submit documents arguing that the three-judge panel erred in its findings of fact. Grace will request either a rehearing before the same three-judge panel, or before the whole court, or both.

Greg Euston, a national spokesman for Grace, declined to comment for this story, and would not say what legal basis lawyers are using to develop their argument. Euston said the company's petition will speak for itself.

According to a 49-page indictment unveiled in February 2005, Grace and six one-time executives concealed the dangers of asbestos-contaminated vermiculite mined near Libby and conspired "knowingly to release asbestos, a hazardous air pollutant, into the ambient air."

The decisions that brought the sweeping prosecution to a standstill were handed down last year by Chief U.S. District Court Judge Donald Molloy and derailed the government's plans to bring charges of "knowing endangerment," a violation of the federal Clean Air Act that carries a possible 15-year prison term on each of the three counts.

Last month, the 9th U.S. Circuit Court of Appeals overruled or modified Molloy's decisions, writing that one ruling "eliminated from trial evidence of releases of 95 percent of the contaminants in the Libby vermiculite."

In addition to reviving the charges of "knowing endangerment," the panel of senior judges also reversed decisions that would have narrowed the definition of asbestos, disallowed a long list of evidence and limited the materials available to expert witnesses at trial.

Molloy has presided over years of legal wrangling between W.R. Grace and the federal government as both sides prepare for a so-called "mega-trial" in Missoula.

The trial is expected to open in late winter or early spring of next year.

Molloy also has presided over civil cases involving W.R. Grace, including a notable 2003 lawsuit in which he ordered the company to pay the U.S. Environmental Protection Agency $54.5 million to cover costs of asbestos cleanup in Libby.

But last year, as the initial Sept. 11, 2006, trial date approached, defense lawyers argued that prosecutors had waited too long to file criminal charges - exceeding the five-year statute of limitations governing federal criminal prosecutions.

Molloy ruled in favor of Grace, saying the government had not alleged any overt criminal acts within the required time frame.

In reversing Molloy's decision, the 9th Circuit ruled that the government had acted quickly to fix the statute-of-limitations problem by submitting a superseding indictment spelling out the overt criminal acts.

Among Molloy's other disputed rulings reversed by the 9th Circuit in July was an order banning certain witnesses from testifying at trial, and another that prohibited the government's use of numerous documents, including three critical environmental health studies spelling out the hazards of asbestos.

Grace has also petitioned the 9th Circuit for a rehearing on those decisions, and a decision is pending.

One federal study at issue concluded that more than 1,200 people in Libby and surrounding areas showed signs of lung abnormalities tied to asbestos diseases from the mine. The problems appeared not only in miners who had worked at the site, but Libby residents who came into contact with fibers in the course of their daily lives.

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