Railroad company wins appeal in Montana asbestos death case

(CN) — The Ninth Circuit on Tuesday reversed an order holding a railroad company liable for exposing Montanans to cancer-causing asbestos dust. 

“We agree that the District Court interpreted the scope of the common carrier exception too narrowly,” wrote U.S. Circuit Judge Morgan Christen, a Barack Obama appointee, on behalf of a three-judge panel. 

The estates of Thomas Wells and Joyce Walder sued BNSF Railway and its corporate predecessors in 2021, accusing the companies of storing asbestos-contaminated vermiculite in a large rail yard in Libby, Montana, and failing to contain the dust.  Wells and Walder developed mesothelioma — a lung cancer caused by exposure to asbestos — and died within months after receiving their diagnosis.

The W.R. Grace & Co. mine, around seven miles outside of Libby, extracted vermiculite from 1963 to 1990 and processed raw vermiculite ore, exposing residents to asbestos. Vermiculite is a mineral that was once commonly used for fireproof roofing, insulation and wallpaper. Decades of widespread asbestos contamination from the vermiculite mine caused the U.S. Environmental Protection Agency to declare its first-ever public health emergency during a 2009 Superfund cleanup. 

After a 10-day trial in 2024, a jury awarded each estate $4 million in compensatory damages for their strict liability claims and rejected their negligence claims. 

BNSF appealed the lower court’s denial of its motion for judgment as a matter of law on the strict liability claims, and the Ninth Circuit found in the railroad company’s favor. 

BNSF argued it was subject to the “common carrier” liability exception, which shields railroads from strict liability for “abnormally dangerous activities” — like transporting hazardous material — if they are being carried out as part of a public duty. The Ninth Circuit agreed. 

“Unlike private shippers, common carriers ‘cannot discriminate against customers or refuse to accept commodities that may be dangerous for transport,’” Christen wrote.

Federal law includes delivery, storage and handling within the definition of “transportation.” 

The estates argued the asbestos dust that fell from the contaminated vermiculite and accumulated in the BNSF railyard constituted an abnormally dangerous condition that the railroad should be held liable for, but the appeals court disagreed. 

“The fact that the dust accumulated gradually along the railroad tracks and in BNSF’s railyard, rather than spilling abruptly, does not alter our analysis because the gradual spillage still occurred during BNSF’s shipment of vermiculite,” Christen said. 

The estate’s theory of liability was premised on the railroad’s failure to prevent a toxic dust buildup, which the Ninth Circuit noted assumes the risk of harm would have been avoided had BNSF cleaned up its railyard. The theory “effectively treats plaintiffs’ strict liability claims as negligence claims,” Christen wrote.

“To be sure, the Montana Supreme Court has explained that the common carrier exception would not have shielded BNSF from a negligence claim, but the jury expressly rejected plaintiffs’ negligence theory and found that BNSF ‘exercise[d] reasonable care in its handling of asbestos,’” Christen wrote.

The appeals court also declined to ask the Montana Supreme Court whether the state’s common carrier exception for strict liability encompasses the railroad’s failure to maintain its railyard. 

Jinnifer Mariman, attorney for the estates, said she respects the court but believes it misapplied Montana law. 

“We are disappointed the court did not send this case of first impression in Montana to the Montana Supreme Court for it to decide,” Mariman said. “We are talking with our clients and evaluating our options for an appeal.”

BNSF declined to comment.

The panel also included U.S. Circuit Judge Consuelo Callahan, a George W. Bush appointee, and U.S. Circuit Judge Andrew Hurwitz, a Barack Obama appointee.