BNSF Libby Asbestos Case: Supreme Court Lets $8 Million Reversal Stand on Common Carrier Grounds

The Supreme Court on Monday, October 5, 2026 declined to hear the BNSF Libby asbestos case, denying the petition filed by the estates of two Libby, Montana residents who died of mesothelioma and leaving in place a Ninth Circuit decision that wiped out their combined $8 million jury verdict against BNSF Railway. The practical result is that BNSF cannot be held strictly liable under Montana law for asbestos-laden vermiculite dust that built up on its tracks and in its downtown Libby railyard, and more than 200 similar claims must now be won, if at all, on a negligence theory.

The denial, entered on the first order list of the October 2026 Term in Wells v. BNSF Railway Co., No. 26-54, closes a seven-year doctrinal fight over how far Montana's version of the common carrier exception reaches. It also lands three days after the Texas Supreme Court agreed to decide whether BNSF's insurer must keep paying to defend the remaining Libby suits, so both the liability side and the coverage side of the litigation are in motion at once.

What did the Supreme Court decide in the BNSF Libby asbestos case?

The Supreme Court decided not to decide. It denied certiorari without comment, which means the Ninth Circuit's February 24, 2026 judgment for BNSF is final and the estates of Thomas Wells and Joyce Walder recover nothing on their 2024 verdict. According to Mealey's, the petition had been distributed for the Court's September 28 "long conference," the session at which the justices clear the summer backlog of petitions before the term opens.

A cert denial carries no precedential weight and expresses no view on the merits. The legal rule now governing Libby claims against BNSF in federal court therefore comes from the Ninth Circuit's published opinion in No. 24-4802, not from the Supreme Court. That opinion binds federal district courts in Montana and the rest of the circuit; it does not bind the Montana Supreme Court, which remains the final word on Montana tort law. That distinction matters for the cases now back in state court, discussed below.

Why did the Ninth Circuit overturn the $8 million asbestos verdict against BNSF?

The Ninth Circuit held that BNSF was entitled to the common carrier exception to strict liability, and because the jury had already rejected the negligence claims, nothing was left to support the judgment. The panel, Circuit Judges Consuelo M. Callahan, Morgan B. Christen and Andrew D. Hurwitz, heard argument on October 21, 2025 and filed its opinion on February 24, 2026. Judge Christen wrote for the court; Judge Callahan joined in full and added a concurrence.

The trial had run 10 days in April 2024 before U.S. District Judge Brian Morris of the District of Montana. The jury found BNSF strictly liable for an abnormally dangerous activity and awarded $4 million in compensatory damages to each estate, but returned a verdict for BNSF on negligence and awarded no punitive damages. Judge Morris had instructed jurors that negligence could rest only on BNSF's conduct in the Libby railyard, not on the act of hauling vermiculite itself.

On appeal, the core dispute was the scope of the exception. The district court read it narrowly, treating the hauling as protected but the accumulation and handling of dust in the railyard as a separate activity outside it. The Ninth Circuit called that reading too narrow. In Judge Christen's words, "The dangerous condition here — accumulated asbestos dust — arose solely from BNSF's operation as a common carrier executing its federally mandated duty to transport vermiculite." Because the dust was a byproduct of the shipping the railroad was legally obliged to perform, the panel reasoned, it fell inside the exception.

The estates had asked the panel to certify the question to the Montana Supreme Court, arguing that it was a question of first impression under state law. The panel concluded that certification was unwarranted, reversed, and remanded with instructions to enter judgment for BNSF. A petition for rehearing en banc was denied, and the cert petition followed. Jinnifer Mariman of the Kalispell-based McGarvey Law firm, which represents the families, said after the February ruling: "We respect the Court but disagree with its decision and believe it misapplied Montana law," adding that counsel were disappointed the case was not sent to the Montana Supreme Court.

What is the common carrier exception to strict liability?

The common carrier exception is a rule, codified in Restatement (Second) of Torts § 521, that switches off strict liability for an abnormally dangerous activity when the actor carries on that activity under a public duty, including the duty of a common carrier. A railroad must accept, carry and deliver goods offered to it within the scope of its operating authority; it cannot turn away a lawful shipper because the cargo is hazardous. The logic of § 521 is that the law should not impose liability without fault on an actor that has no legal choice about whether to engage in the dangerous activity.

The exception does not immunize the carrier. It removes only the no-fault theory. A plaintiff can still recover by proving ordinary negligence, meaning that the carrier handled, stored, spilled or cleaned up the material carelessly. Montana adopted both § 519, which defines strict liability for abnormally dangerous activities, and § 521, which carves out the public-duty exception, and the vast majority of states follow the same framework.

Theory	What the plaintiff must prove	Effect of the common carrier exception	Result in Wells
Strict liability (§ 519)	Abnormally dangerous activity caused the harm; no fault needed	Bars the claim when the activity is performed under a common carrier's public duty (§ 521)	Jury found liability; Ninth Circuit reversed under § 521
Negligence	Duty, breach, causation and damages	No effect; carrier still owes ordinary care	Jury found for BNSF
Punitive damages	Actual malice or actual fraud under Montana law	Not reached once liability failed	None awarded

How the Montana Supreme Court framed the question in 2020

The Ninth Circuit was not writing on a blank slate. In March 2020 the Montana Supreme Court decided BNSF Railway Co. v. Asbestos Claims Court, an appeal from a January 2019 ruling by Judge Amy Eddy, who presides over Montana's Asbestos Claims Court. That decision did three things:

• It held that BNSF's handling of asbestos-containing vermiculite in Libby, on the facts presented, was an abnormally dangerous activity under § 519.
• It rejected BNSF's argument that the Federal Railroad Safety Act and the Hazardous Materials Transportation Act preempt the Libby claims.
• It held that § 521 protects BNSF from strict liability imposed as a result of transporting vermiculite, but that BNSF could still face strict liability for activities other than transportation, and sent the case back to sort out which conduct fell on which side of that line.

The 2020 opinion left the dividing line between "transportation" and "other activities" undefined, and that gap is what the Wells trial and appeal were about. Judge Morris drew the line so that railyard dust fell outside transportation; the Ninth Circuit drew it so that dust generated by carrying the ore fell inside. Because the Montana Supreme Court never resolved the point and the Ninth Circuit declined to ask it, the federal answer now controls in federal court while the state-court answer remains formally open.

Timeline of the Libby asbestos litigation against BNSF

Date	Event
1963 to 1990	W.R. Grace operates the vermiculite mine near Libby; BNSF ships the processed ore from its downtown railyard
June 17, 2009	EPA declares its first-ever public health emergency, covering Libby and nearby Troy
January 2019	Asbestos Claims Court (Judge Eddy) rejects BNSF's preemption and exemption defenses
March 2020	Montana Supreme Court: handling is abnormally dangerous; § 521 shields transport only
2020	Thomas Wells and Joyce Walder die of mesothelioma
2021	Estates sue BNSF in federal court
April 2024	Jury awards $4 million per estate on strict liability; negligence rejected
October 21, 2025	Ninth Circuit hears argument
February 24, 2026	Ninth Circuit reverses and orders judgment for BNSF
March 26, 2026	BNSF removes 216 state-court Libby cases to federal court
2026	Judge Morris remands the 216 cases; BNSF appeals the remand in June
October 2, 2026	Texas Supreme Court agrees to hear Zurich's duty-to-defend appeal
October 5, 2026	U.S. Supreme Court denies certiorari in No. 26-54

Can Libby asbestos victims still sue BNSF?

Yes, but on negligence rather than strict liability, and the forum fight is still live. The Ninth Circuit's holding removes the no-fault theory in federal court; it does not touch negligence claims, and the Montana Supreme Court's 2020 ruling still allows strict liability for any BNSF conduct that is not "transportation of vermiculite."

BNSF moved quickly after the February decision. It filed motions for judgment on the pleadings in the Moe wrongful-death case and in hundreds of related Libby claims, arguing that the Ninth Circuit's ruling disposes of them. In Gallegos v. BNSF Railway Co., brought by the estate of Mary Diana Moe, who lived in Libby from 1978 until her death from mesothelioma on December 22, 2022, Judge Morris denied BNSF's motion and allowed the case to proceed toward trial. Mealey's reported in August that BNSF had asked the Montana federal court for summary judgment in a Libby case or, alternatively, for certification of an interlocutory appeal, with the plaintiff answering that courts had already resolved many of the issues BNSF was trying to reopen.

On March 26, 2026, BNSF also removed 216 Libby cases (Barnes v. BNSF Railway Co., with Tracie R. Barnes as lead plaintiff) from state court. Judge Morris remanded all 216, ruling that the common carrier exception did not supply a basis for removal and that federal officer jurisdiction was lacking because BNSF hauled the vermiculite under a contract with W.R. Grace, not under a military contract. BNSF appealed the remand order in June 2026.

How many Libby asbestos cases are pending against BNSF?

More than 200. The 216 remanded cases are the largest identifiable block, and reporting since the 2024 trial has consistently described more than 200 Libby claims against the railroad waiting on the legal questions raised in Wells. Judge Eddy had warned that a BNSF win at the Ninth Circuit could prompt the railroad to move to dismiss all pending Asbestos Claims Court cases tied to its Libby operations. The cert denial makes that motion practice the next battleground.

Does the Supreme Court's denial set a nationwide precedent?

No. A denial of certiorari decides nothing about the merits and binds no court. What carries weight is the Ninth Circuit's published opinion, which federal courts across the circuit must follow and which defendants elsewhere will cite as persuasive authority on § 521. State courts, including Montana's, are free to read the exception differently, and a Montana Supreme Court ruling squarely on railyard dust would control state-law claims in Montana's own courts.

The Texas Supreme Court's Zurich v. BNSF case

The coverage fight runs in parallel. On Friday, October 2, 2026, the Texas Supreme Court granted review of Zurich American Insurance Co.'s appeal from lower-court rulings that leave the insurer funding BNSF's defense in the Libby exposure cases, which number in the hundreds. The Fort Worth court of appeals, applying Texas's eight-corners rule, had held that Zurich owed a duty to defend under the premises and operations coverage of an Owners, Landlords and Tenants policy, that Zurich had not conclusively established the completed-operations exclusion, and that the Libby suits arose out of a single occurrence.

The single-occurrence holding and the duty-to-defend holding together determine who bankrolls BNSF's defense as the remaining cases move forward. A narrowing of the plaintiffs' liability theories after Wells does not end that question, because defense costs accrue whether or not the claims ultimately succeed.

Why Libby still generates litigation

Libby, a town of about 3,000 near the Canadian border, sat beside the mine that W.R. Grace operated from 1963 until 1990, and EPA has estimated that the mine supplied more than 70 percent of all vermiculite sold in the United States between 1919 and 1990. The ore was contaminated with amphibole asbestos. When EPA declared a public health emergency in June 2009, it cited asbestos as a factor in more than 200 deaths; later reporting puts the toll at hundreds of deaths and more than 3,000 people sickened. Mesothelioma's latency, often decades, is why claims tied to exposure that ended more than 30 years ago are still being filed and tried.

What it means for plaintiffs' counsel, defendants and insurers

For plaintiffs' counsel in Libby and other carrier-exposure cases: the Wells record shows the cost of a verdict that rests on strict liability alone. Pleading and proving negligence with specificity, tied to discrete railyard conduct such as storage, spillage, cleanup and dust control, is now the only federal route against a common carrier. Counsel with state-court cases have reason to seek a Montana Supreme Court ruling on the transportation line the 2020 opinion left open, and to resist removal, as the 216-case remand shows.

For railroads, pipelines and other common carriers: the opinion gives a citable federal appellate reading of § 521 that treats byproducts of mandated carriage as part of the carriage. Expect it to be raised in toxic-exposure cases outside Montana, though state courts are not bound by it.

For insurers and defense budgets: the Texas Supreme Court's decision in the Zurich appeal will determine whether a single primary policy keeps funding BNSF's defense across hundreds of suits. A ruling on the single-occurrence point could also influence how carriers allocate long-tail asbestos defense costs in other mass torts.

For mass tort practitioners generally: Wells is another example of an appellate court wiping out a plaintiff's verdict on a pure question of law after trial, a risk that features in how the plaintiffs' bar values a Bellwether Trial result and prices settlements. A jury win on one theory and a loss on the other leaves no fallback once that theory is reversed.

FAQ

What did the Supreme Court decide in the BNSF Libby asbestos case?

It denied the estates' petition for certiorari on October 5, 2026, without comment. The Ninth Circuit's judgment for BNSF stands, and the $8 million verdict is gone.

Why did the Ninth Circuit overturn the $8 million verdict?

It held that Montana's common carrier exception, Restatement § 521, shields BNSF from strict liability for asbestos dust generated by hauling vermiculite it was legally required to carry. Because the jury had rejected negligence, no theory remained to support the judgment.

Who were Thomas Wells and Joyce Walder?

They were former Libby residents who died of mesothelioma in 2020. Their estates sued BNSF in 2021 and won $4 million each at trial in April 2024.

Can Libby asbestos victims still sue BNSF?

Yes, on negligence theories, and on strict liability for any conduct a court finds was not "transportation of vermiculite" under the Montana Supreme Court's 2020 ruling. The Moe case and 216 remanded state-court cases remain pending.

Does the cert denial create national precedent?

No. Denial of certiorari has no precedential effect; the binding rule is the Ninth Circuit's published opinion, which governs federal courts in that circuit only.

What is the Texas Supreme Court case between BNSF and Zurich?

It is an insurance coverage appeal over whether Zurich must keep defending BNSF in the Libby suits. The court granted review on October 2, 2026 after a Fort Worth appellate court found a duty to defend and treated the suits as a single occurrence.