updated 2/22/2009 3:07:31 PM ET 2009-02-22T20:07:31

After years of delays, the people of a Montana mining town are getting their day in court to see a major chemical company face federal charges accusing it of poisoning their homes and schools with asbestos.

Opening statements are scheduled for Monday in the case of U.S. vs. W.R. Grace and Co. and five of its executives, who are charged with knowingly exposing the residents of the small town of Libby to the fibrous mineral linked to cancer.

Prosecutors have had to overcome legal challenges that went all the way to the U.S. Supreme Court.

"This trial is one of the most complex and creative criminal prosecutions in the history of environmental regulation," said Andrew King-Ries, an assistant professor at the University of Montana School of Law.

Vermiculite found in insulation
The case stems from the mining for vermiculite from Zonolite Mountain near Libby, which began around 1920 and continued until 1990. The mineral could be processed into products used for plumbing insulation, fireproofing and gardening. Zonolite brand insulation is in some 35 million homes in the United States.

The problem is that the vermiculite from the Libby mine was contaminated with naturally occurring asbestos mineral fibers, which can be inhaled and can cause mesothelioma, asbestosis and lung cancer.

Lawyers for Libby residents contend the pollution has killed some 225 people and sickened about 2,000 in the area.

U.S. District Judge Donald Molloy has placed a gag order on the parties involved, but court documents set the stage.

"The defendants in this case knew the dangers of asbestos they released into the Libby, Montana air, yet they concealed the dangers, putting local residents at risk while enriching themselves," prosecutors said in their trial brief.

Lawyers for W.R. Grace, based in Columbia, Md., deny there was any conspiracy to knowingly release asbestos, and also contend that most of the releases occurred years before an applicable law was passed in 1990.

"The government has illogically charged that the defendants conspired in 1976 to violate a statute that would not exist for another 14 years," Grace said in its trial brief.

Many outraged in Montana
The case has outraged many people in Montana, which has a long history of environmental and economic exploitation by giant corporations that extracted wealth while leaving behind their messes. Many are impatient with the delays that Grace has sought through numerous appeals.

"Folks in Libby have suffered long enough," U.S. Sen. Jon Tester, D-Mont., told The Associated Press. "It's well past time for the wheels of justice to get rolling."

Libby is a town of about 2,600 people located in a forested valley of the Cabinet Mountains, about 100 miles northwest of Missoula, Mont.

Kristine Paulsen, a Libby native who wrote a master's thesis on how townspeople are coping with the pollution, said many locals are unsure how to react to the start of a trial that is expected to last for months.

"They want to get their hopes up, but they've gotten their hopes up so many times it is hard to do anymore," Paulsen said. "The things that happened to these people are just so terrible."

Tiny particles of the ore got into homes on the clothes of miners. It was also taken to processing plants in Libby, one of which was located next to a baseball field. The mill smokestack released up to 24,000 pounds of dust a day. Asbestos-contaminated mine tailings were used to build running tracks at local junior high and high schools, and lined an elementary school skating rink.

Town declared a Superfund site
After news reports of health problems, the Environmental Protection Agency in 1999 sent an emergency team to Libby to collect information about asbestos contamination, and the town was declared a Superfund cleanup site in 2002

"There were visible flakes of vermiculite everywhere," said Dr. Charlie Weis, an EPA toxicologist, at a recent pretrial hearing.

A federal indictment unsealed in February 2005 charged Grace and its former executives with violating the federal Clean Air Act and obstructing an EPA investigation into the asbestos contamination.

The legal issue is whether W.R. Grace, which bought the mine in 1963, and its co-defendants knew of the health risks associated with the mine for years before federal regulators arrived. The government contends the company and some of its managers conspired to hide health risks from its workers.

In addition to Grace, the defendants are five retired executives. All face up to 15 years in prison and fines totaling millions of dollars. They are free on their own recognizance.

A sixth defendant, company attorney O. Mario Favorito has been severed from the case and will be tried separately because nearly all of his conduct is protected by Grace's attorney-client privilege, Molloy has ruled. A former mine manager also was indicted but has died.

Case sent back to Molloy
In 2006, Molloy made a series of rulings that disallowed some evidence and witnesses, damaging the government's case. Prosecutors appealed and the 9th U.S. Circuit Court of Appeals reversed Molloy's decisions.

Grace appealed to the U.S. Supreme Court, which last June refused to overturn the 9th Circuit and sent the case back to Molloy.

Grace and some of the executives are also charged with knowing endangerment for providing contaminated material to the community for various uses such as the running tracks. Grace is also charged with obstruction of justice for hampering EPA's assessment and cleanup efforts.

Lawyers for W.R. Grace contend the Clean Air Act's knowing endangerment provision was enacted on Nov. 15, 1990, while prosecutors are seeking to punish the company for actions dating back to 1976.

"If there is no substantive federal offense, there can be no conspiracy," Grace argues.

Copyright 2009 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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