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Railroad Defendant Granted “Common Carrier” Exemption on Appeal

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Court: United States Court of Appeals for the Ninth Circuit

Plaintiffs — the estates of deceased former residents of Libby, Montana — allege that their decedents developed mesothelioma from asbestos exposure.

The decedents lived in Libby during years when BNSF Railway transported asbestos-containing vermiculite mineral from a vermiculite mine to its railyard in Libby for further transport.

The daily activities of the decedents as area locals regularly exposed them to the railyards’ asbestos-containing materials. BNSF transported the vermiculite on behalf of W.R. Grace under a requirement of federal law. W.R. Grace declared bankruptcy in 2001 and placed its assets into an asbestos bankruptcy trust. From then on, litigation accumulated against BNSF.

A jury trial, the first of its kind, took place in the District of Montana, after which the jury found for the plaintiffs on strict liability claims against BNSF, but not on negligence or punitive damages claims. BNSF appealed.

In a recent case, also against BNSF for Libby, Montana asbestos exposure, the Montana Supreme Court adopted § 521 of the Restatement (Second) of Torts, the “common carrier exception.” This exception bars strict liability for abnormally dangerous activities if said activities were undertaken as a public duty imposed on the party as a common carrier. BNSF Ry. Co. v. Eddy, 459 P.3d 857 (Mont. 2020).

The Ninth Circuit reversed, finding error when the district court interpreted the common carrier exception too narrowly. The district court had ruled that BNSF was not eligible for the common carrier exception, because BNSF did not act under a public duty in its maintenance of its railyard (from which the asbestos exposure at issue resulted). The Ninth Circuit found the common carrier exception to apply in the instant case because the dangerous condition at issue. The railyard’s accumulated asbestos arose solely out of BNSF’s operation as a common carrier, carrying out its federally required duty to transport vermiculite.

In a concurring opinion, Judge Callahan joined the majority opinion in full and wrote separately to stress that the Interstate Commerce Commission Termination Act also by itself bars the plaintiffs’ strict liability claims.

A copy of the decision is attached.