Federal prosecutors scored a victory yesterday in their case against chemicals and materials giant W.R. Grace when a three-judge panel of the U.S. Court of Appeals for the 9th Circuit in San Francisco reinstated a conspiracy charge against Grace and six of its former executives. Prosecutors had claimed that the defendants were part of a conspiracy to knowingly endanger workers and residents of Libby, Montana by exposing them to dangerous asbestos fibers. Grace mined and processed the asbestos-containing mineral vermiculite near Libby for nearly three decades, from 1963 to 1990. Over 1200 people who lived and worked near Libby have developed asbestos-related diseases such as asbestosis and malignant mesothlioma. Asbestos injury claims forced Grace into bankruptcy in 2001. This ruling overturns an earlier decision by U.S. District Court Judge Donald S. Molloy who last year threw out the conspiracy charge on the ground that prosecutors waited too long to file it, and ruled to limit evidence critical to the prosecution's case. In addition to reinstating the conspiracy charge, the Appeals Court ruling will allow prosecutors to present evidence dating back to 1976 when it contends Grace was on notice as to the dangers of asbestos. If convicted, Grace faces millions of dollars in fines and each of the former executives up to 15 years in prison.