Toxic material has been found all over town - in homes, under a school playground, and even on the old Little League ballfields.
The toxic material is asbestos. A recent study showed as many as 3 in 10 people in this community already show signs of lung disease and more than 200 have died.
"I've never seen this kind of impact, this many people sick," said Paul Peronard, who is with the Environmental Protection Agency. "And there's really no question about the cause of the illness."
Asbestos is contained in a mineral ore called vermiculite that was mined by the W.R. Grace Co. in Libby for decades until 1990.
If the health problems were confined just to this remote town in western Montana, people elsewhere might pay little attention. But some of the dangerous vermiculite mined here could be in your attic.
For decades, tons of the contaminated ore were shipped along rail lines across the country, and used as home insulation.
"The estimates I've seen anywhere from 800,000 to 15 million homes across the country have this insulation in there," Peronard said.
It's loose insulation, poured in cracks and crevices, and it was sold nationwide until the late 1980s.
As soon as the insulation is disturbed, asbestos fibers become airborne. The tiny fibers, shaped like needles, are easily inhaled into the lungs. And what happens is that the fibers actually get down into the lungs where they damage tissue and produce scarring.
Edward Harashe, a 65-year-old St. Louis plumber, used it in the 1950s to insulate his attic. He was exposed for just two days. Thirty years later, his doctor told him he had a rare lung cancer associated with asbestos.
In 1991, Harashe sued W. R. Grace and won a jury verdict of $2.5 million dollars. He died less than two years later.
W. R. Grace says, in a statement to 48 Hours, the insulation contains only "miniscule" amounts of asbestos and it "was safe when it was sold and is safe in place today."
Lawyer Jan Schlichtmann has a different view: "Perhaps today a child is playing in this material or somebody is remodeling their home, totally unaware that the material they're stirring up could ruin their life.
Schlichtmann sued W. R. Grace on behalf of homeowners around the country and it's not his first encounter with the company.
His earlier case is documented in the 1998 movie "A Civil Action" in which Schlichtman was portrayed by John Travolta. In that case, back in the 1980s, Schlichtmann established in court that W. R. Grace had dumped toxic chemicals in the town of Woburn, Mass., which he said led to the deaths of several children from leukemia.
He won a settlement for his clients, but the case bankrupted him and left him beaten down by Grace's army of corporate lawyers.
He said he has seen the company not learning from its mistakes and he sees again in Libby, how Grace's mistakes can destroy people's lives.
"Libby is really a warning that exposure to this material can cause serious injury, " he said.
Schlichtmann wants W. R. Grace to pay the cost of removing the asbestos-tained insulation from homes nationwide, about $5,000 per home. "They can do it, they should do it," he said. "The question hanging over them is will they do it - and when will they do it?"
Time may be running out for some people like Gayla Benefield. She's recently been diagnosed with lung problem as has her husband, David, her sister Eva and more than a dozen other members of her family."
"There are so many more," she said. "They're finding more and more every day."
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