Railroad Case Remanded to Lower Court to Determine “Other Activities”

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Supreme Court of Montana, March 11, 2020

MONTANA – The defendant BNSF Railway Company’s (BNSF) appealed the lower court’s decision arguing that the court erred in granting partial summary judgment in favor of the plaintiffs on the issues of preemption, strict liability, and non-party affirmative defenses.

As an overview, W. R. Grace acquired the assets of Zonolite Company, formerly known as Mineral Carbon and Insulating Company. W.R. Grace mined vermiculite seven miles outside of Libby, Montana. W.R. Grace’s operations produced approximately 80 percent of the world’s vermiculite ore. The ore body mined a significant amount of amphibole asbestos. After mining and processing the vermiculite, its concentrate was loaded onto BNSF’s railcars for transport through downtown Libby. In response to concerns regarding possible asbestos exposure in Libby, the EPA began investigating in 2000 and placed the site on the superfund national priorities list in 2002. A total of 22 surface soil samples collected along the railroad tracks and its railyard ranged from a trace amount to less than 1 percent fibrous amphibole asbestos by weight.

The plaintiffs Tracie Barnes, Kenneth Braaten, as personal representative of the estate of Rhonda R. Braaten, and Gerri Flores sued several defendants, including BNSF, for negligence and common law strict liability, based on decades of casting asbestos dust into the Libby community from the industrial level of activities at BNSF facilities. In their complaint, the plaintiffs described these industrial activities, including the transport of asbestos-containing vermiculite, the spillage of asbestos-containing material along BSNF’s tracks and in its railyard, and the continued disruption of the built-up spilled asbestos by BNSF’s trains and workers.

In October 2018, the parties filed cross motions for summary judgment based on the issues of preemption of the plaintiffs’ claims, BNSF’s strict liability, and the preclusion of BNSF’s defense of non-party conduct. The lower court granted the plaintiffs’ motion and ruled the following:

1. Plaintiffs’ claims were not preempted by federal law;

2. BNSF was strictly liable because its actions were abnormally dangerous;

3. BNSF could not present evidence of non-party conduct to negate causation

BNSF filed a petition for writ of supervisory control, which the court granted on April 16, 2019. Oral argument was conducted on Oct. 30, 2019. The Montana Supreme Court reviews a district court’s summary judgment ruling de novo, applying the same criteria as the district court.

BNSF argued that both the Federal Railroad Safety Act (FRSA) and the Hazardous Materials Transportation Act (HMTA) preempt the plaintiffs’ claims in this case. The court noted that the United States Supreme Court has consistently held that preemption is not easily favored. Further, where a statute contains an express preemption clause, courts do not invoke any presumption against pre-emption but instead focus on the plain wording of the clause, which necessarily contains the best evidence of Congress’ pre-emptive intent. The court was able to distinguish case law BNSF relied on and concluded that BNSF did not meet its burden to demonstrate that the FRSA and HMTA preempt plaintiffs’ claims.

BNSF also argued that the lower court erred when it ruled that BNSF is strictly liable to the plaintiffs because it engaged in an abnormally dangerous activity. BNSF argued there were genuine issues of material fact regarding its responsibility for bringing asbestos into Libby. The court noted that Restatement (Second) of Torts Section 519 defines what is abnormally dangerous in a six prong test. Furthermore, to make a determination that an activity is abnormally dangerous, all factors do not need be present, but the lower court must have considered all the factors. The court discussed every prong and ultimately concluded that BNSF’s handling of asbestos constituted an abnormally dangerous activity for which BNSF is strictly liable under Restatement (Second) of Torts, Section 519.

Furthermore, turning to BNSF’s argument that the  Restatement (Second) of Torts, Section 521 shields BNSF from strict liability, the court notes the “rules as to strict liability for abnormally dangerous activities do not apply if the activity is carried on in pursuance of a public duty imposed upon the actor as a public officer or employee or as a common carrier.” Therefore, under Section 521, an actor is not strictly liable for the activities it engages in pursuant to its duty as a public officer or employee, or a common carrier.  The court agreed with BNSF that it should adopt the Restatement (Second) of Torts, Section 521, to the extent that it provides that “the rules as to strict liability for abnormally dangerous activities do not apply if the activity is carried on in pursuance of a public duty imposed on the actor … as a common carrier.” However, the court noted that BNSF may still be found liable under a theory of ordinary negligence for the manner in which it conducted the transport of the vermiculite ore. Further, any other activity BNSF engaged in that was not undertaken pursuant to its statutory duty, but alleged to have caused injuries to the plaintiffs, is not protected from strict liability under Section 521. Therefore, the court remanded this issue to the lower court to determine what those other activities may be.

Lastly, BNSF argued that W.R. Grace is a settled party and therefore, BNSF should be able to use evidence of W.R. Grace’s conduct to the defendant against plaintiffs’ claims. The court noted that the plaintiffs and W.R. Grace have not yet settled, and that although a fund has been established to provide for those injured by W.R. Grace’s activities, the plaintiffs have not yet received a settlement from that fund. Furthermore, the court noted that BNSF may not introduce evidence of W.R. Grace’s conduct to refute causation by alleging that it was a substantial factor in causing the plaintiffs’ injuries because BNSF may only use evidence of W.R. Grace’s conduct as a nonparty for the purpose of proving W.R. Grace’s conduct was a superseding intervening cause of plaintiffs’ damages. However, the court noted that W.R. Grace’s conduct was not a superseding intervening cause with regards to BNSF’s liability in this matter. Ultimately, the court noted that BNSF may not refute causation by offering W.R. Grace’s conduct as a substantial factor or as a superseding intervening cause of the plaintiffs’ injuries.

Consequently, the court affirmed the lower court’s decision in part, reversed in part, and remanded for further proceedings.