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The U.S. Court of Appeals for the Ninth Circuit has thrown out an $8 million jury verdict against BNSF Railway Co., ruling that the railroad cannot be held strictly liable under Montana law for transporting asbestos-laced vermiculite through Libby, Montana.

In a decision issued Tuesday, a three-judge panel determined that Montana’s “common carrier exception” shields BNSF from strict liability claims tied to its shipment of vermiculite mined by W.R. Grace & Co.. The ruling reverses a 2024 trial court judgment awarding $4 million each to the estates of Thomas E. Wells and Joyce H. Walder, two former Libby residents who died in 2020 from mesothelioma.

The case marked the first community-exposure asbestos lawsuit over BNSF’s Libby operations to proceed to trial, despite hundreds of similar personal injury claims filed over the years.

Court’s Reasoning

Montana law allows strict liability for “abnormally dangerous activities.” In a 2020 decision, Montana Supreme Court held in BNSF Railway Co. v. Eddy that transporting vermiculite concentrate qualified as such an activity. However, that same ruling recognized a “common carrier exception,” barring strict liability when a company engages in an activity pursuant to a public duty as a common carrier.

Writing for the panel, U.S. Circuit Judge Morgan B. Christen concluded that BNSF’s actions fell squarely within that exception. Federal law required the railroad to transport the asbestos-containing vermiculite from the Libby mine to its local railyard and onward to destinations across the country.

The plaintiffs argued that BNSF should still face liability for allowing asbestos dust to accumulate on its tracks and in its railyard. But the panel rejected that view, finding that the dust escaped from rail cars during the required transportation process.

“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,” the court wrote, emphasizing that the release occurred in the course of shipment.

The panel also declined the estates’ request to certify a question to the Montana Supreme Court about whether the common carrier exception applied, stating that the Eddy decision already provided clear guidance.

Reaction From the Parties

Kevin P. Parker of The Lanier Law Firm, representing the estates, said the plaintiffs respectfully disagreed with the ruling and believe the court misinterpreted Montana law. He added that the legal team is consulting with clients and considering possible next steps, including further appeal.