A bankruptcy judge°¯s refusal to shield the state of Montana from asbestos lawsuits is good news for hundreds of victims still awaiting compensation for illnesses linked to the defunct W.R. Grace vermiculite mine at Libby, a Kalispell attorney said Tuesday.

Judge Judith Fitzgerald, who is presiding over Grace°¯s Chapter 11 bankruptcy proceedings, last week denied a bid for an injunction barring lawsuits against the state by people who claim they were harmed by asbestos exposure from the Libby mine that operated for decades and closed in 1990.

°°Grace has tried every conceivable roadblock to stop the Libby claimants from compensation for their medical expenses,°± Kalispell attorney Jon Heberling said. °°Libby is the thorn in the big toe of the giant and the giant has reacted badly. We won this issue after two appeals.°±

Heberling, of the McGarvey, Heberling, Sullivan & McGarvey Law Offices, has 674 clients with asbestos disease °ª 93 of whom have died waiting for compensation from Grace.

Lawsuits of the deceased still go forward, he said.

Civil lawsuits against the Maryland-based corporate giant were halted in 2001 when Grace filed for bankruptcy.

While Grace can appeal the judge°¯s most recent ruling about the state of Montana°¯s responsibility, Heberling said claimants are on °°much stronger ground°± than they were several years ago when Grace got an injunction after the Montana Supreme Court ruled that state inspectors had a duty to warn and protect Libby mine workers and residents.

Heberling said recent decisions in the 3rd U.S. Circuit Court of Appeals that covers the bankruptcy court in Delaware and the 2nd U.S. Circuit Court of Appeals in New York that relate to Grace°¯s bankruptcy estate stand to strengthen the claimants°¯ cases.

MEANWHILE, civil litigation remains at a standstill as the bankruptcy proceedings linger and a criminal case against Grace works its way through the courts.

A 2005 indictment charged Grace and seven of its former managers, one of whom died in February 2007, with conspiring to conceal health risks posed years ago by the company°¯s Libby mine, closed since 1990.

A trial was scheduled to begin in September 2006, but was postponed after the prosecution appealed rulings by U.S. District Judge Donald Molloy.

Molloy first tossed out the °°knowing endangerment°± portion of the conspiracy charge on the grounds the statute of limitations had expired. The 9th U.S. Circuit Court of Appeals reversed the lower court°¯s pretrial ruling and Grace is petitioning the U.S. Supreme Court to hear an appeal.

Molloy also ruled to exclude government asbestos sampling and analysis as evidence and the government°¯s proposed expert testimony. The 9th Circuit Court also reversed that ruling, with a three-judge panel noting in the appellate decision that the U.S. District Court had exceeded its authority. The 9th Circuit has since granted a rehearing on that appeal.

Both issues have to be returned to U.S. District Court before the criminal trial can proceed, Heberling said.

Grace has categorically denied any criminal wrongdoing and company officials say the company intends to vigorously defend itself at trial.

To date, Grace has spent $90 million on the criminal case, Heberling said. Of that amount, an estimated $10 million to $15 million has been spent to secure expert witnesses.