9th Circuit Overturns $8M BNSF Libby Asbestos Verdict

The 9th US Circuit Court of Appeals on February 24, 2026 reversed an $8 million jury verdict against BNSF Railway tied to asbestos contamination at its rail yard in Libby, Montana, a town where hundreds of residents have died from asbestos-related diseases.

The April 2024 verdict had awarded $4 million each to the estates of Joyce Walder and Thomas Wells. Both developed mesothelioma after exposure to asbestos-contaminated vermiculite that passed through the BNSF rail yard.

In an opinion by Circuit Judge Morgan B. Christen, the Ninth Circuit held that BNSF is immune from strict liability as a common carrier under Montana law. The dangerous condition arose from the railroad’s federally mandated duty to transport vermiculite for W.R. Grace.

The ruling threatens more than 200 pending cases against BNSF in Montana courts. Plaintiffs’ counsel indicated the estates were evaluating further appeal.

The Libby Disaster

Libby, Montana, is the site of one of the worst environmental health disasters in American history.

For decades, W.R. Grace and Company operated a vermiculite mine outside Libby that produced an estimated 80% of the world’s vermiculite supply. The ore was contaminated with a particularly toxic form of asbestos known as Libby Amphibole. Asbestos-laden dust spread across the town, settling in baseball fields, yards, schools, and the downtown rail yard where BNSF transported the product.

The contamination was so severe that the EPA declared Libby a Public Health Emergency in 2009, the first such declaration under the federal Superfund law. The cleanup took approximately 19 years and cost roughly $600 million. The EPA investigated more than 7,600 properties and cleaned up over 2,600 homes and businesses.

More than 2,000 people in the Libby area have been diagnosed with asbestos-related diseases. CDC data shows death rates from asbestos-related conditions in Lincoln County between 1999 and 2020 were more than 10 times higher than in Montana’s most populated counties.

The People Behind the Verdict

Joyce Walder grew up in Libby and later moved to Idaho, California, and the Bahamas. She worked in schools and served in the US Air Force Reserve. She was diagnosed with mesothelioma in mid-2020 and died in October 2020 at age 66. Her sister, Judith Hemphill, serves as estate representative.

Thomas Wells worked for the US Forest Service in Libby during summers in the 1970s. He lived in a trailer near the downtown BNSF rail yard. He was diagnosed with mesothelioma at the end of 2019 and died in March 2020 at age 65.

His son, Jackson Wells, said his father “felt a connection with Libby, even though he wasn’t there for that long. So whatever he could do to help out the community was what it was about for him.”

What the Jury Found

After a two-week trial led by Jinnifer Mariman of the McGarvey Law Firm, the federal jury found BNSF strictly liable for the toxic contamination at its downtown Libby rail yard. The jury concluded that the rail yard contamination was a “substantial factor” in both deaths and that BNSF’s handling of asbestos-contaminated vermiculite was “outside its duties as a common carrier.”

The jury did not find BNSF negligent, did not find that the company had knowledge or intentional disregard of hazardous conditions, and awarded no punitive damages. The verdict was limited to compensatory damages.

BNSF’s rail yard in Libby contained approximately 18,000 tons of contaminated soil when cleanup began in 2003. The cleanup involved removing millions of pounds of asbestos-contaminated dirt and thousands of contaminated rails and crossties. That cleanup concluded in 2020.

The Appeal and Reversal

BNSF, a subsidiary of Berkshire Hathaway since 2010, argued that Montana’s common carrier exception protects it from strict liability. The railroad contended it was legally obligated to transport W.R. Grace’s products and could not be held strictly liable for contamination caused by its shipping customer.

A three-judge panel of the 9th Circuit heard oral arguments on October 21, 2025, in Portland. The panel included Judges Consuelo Callahan, Morgan Christen, and Andrew Hurwitz. Attorney Kevin Parker of McGarvey Law argued that BNSF was not simply hauling vermiculite but was “working essentially as a business partner with W.R. Grace.”

On February 24, 2026, the panel unanimously ruled for BNSF. Judge Christen’s opinion applied Montana’s common carrier exception (Restatement §521), holding that because federal law imposes a public duty on railroads to transport materials, BNSF could not be strictly liable for accumulated asbestos dust tied to that duty. The jury had already cleared BNSF of negligence, so the panel directed entry of judgment for the railroad.

What Happens Next

Plaintiffs’ counsel indicated after the February 24 ruling that the estates were evaluating further appeal, which could include en banc review by the full Ninth Circuit or a petition to the U.S. Supreme Court.

The stakes extend well beyond this single case. Montana Asbestos Claims Court Judge Amy Eddy previously noted that a reversal would open the door for BNSF to move to dismiss pending cases tied to its Libby operations. Attorneys representing Libby residents have said they are working on nearly 2,000 total cases against BNSF.

In a separate development, Libby’s asbestos-screening clinic was shuttered in May 2025 after losing a lawsuit to BNSF Railway, leaving the community with fewer resources to monitor the long-term health effects of decades of asbestos exposure.