Montana Mine Workers Advance Asbestos Suit Against Insurer

(CN) — The Montana Supreme Court ruled Wednesday that a workers’ compensation insurer is liable for damage claims from people who worked at the W.R. Grace vermiculite plant in Libby, Montana.

Vermiculite is a silicate mineral that occurs naturally in asbestos-laden rock on Vermiculite Mountain near Libby. Thousands of W.R. Grace workers and their families since the 1960s have been injured or have died from lung disease related to working at or living near the W.R. Grace vermiculite mine, which closed in the 1990s.

A former mill stands empty in the town of Libby, where hundreds of people have died from asbestos diseases related to the former W.R. Grace plant that processed vermiculite insulation there. (David Reese photo)

Maryland Casualty Company provided Grace with workers’ compensation insurance coverage from 1963 to 1973. According to this week’s Supreme Court decision, in 1964 workers at Zonolite Co. began to show symptoms of lung disease. That August, Libby doctor Woodrow Nelson wrote to Grace advising that Grace workers were developing adverse lung conditions associated with workplace asbestos exposure. The raw vermiculite mined and processed by Grace contained amphibole asbestos, a dangerous substance when breathed after being released into the air by Grace’s mining and processing operations, the Supreme Court ruling said.

Plaintiff Ralph V. Hutt and hundreds of other Grace workers asserted they were irreparably injured by repeated workplace exposure to airborne asbestos while employed at Grace’s Zonolite Division.

In 2017, a Montana Asbestos Claims Court judge found Maryland Casualty is liable to Hutt for damages arising out of his workplace-related asbestos injury. The insurer appealed, and the Montana Supreme Court unanimously ruled that the company is liable.

Hutt and other claimants allege that Maryland Casualty negligently contributed to their development of fatal asbestos-related diseases by failing to warn them of the risk posed by workplace exposure to asbestos. This was a risk known to Maryland Casualty, the justices wrote, as the company had done extensive work in writing safety protocols for workers and had developed health-monitoring programs for specific Grace employees.

In its appeal, Maryland Casualty asserted it did not owe Grace workers a legal duty to warn of the risks that airborne asbestos posed because that duty fell to the employer — W.R. Grace — and not the workers compensation insurer. But the high court ruled that based on Maryland Casualty’s affirmative assumption of employee-specific medical monitoring and Grace’s reliance on the insurer to perform certain safety functions and protocols, Maryland Casualty did owe Grace workers a legal duty to warn, independent of its contract with Grace.

Hutt’s case will now return to the Montana Asbestos Court for trials on worker claims to determine whether Maryland Casualty breached a duty to warn workers and if so, whether that breach caused workers — many of whom have since died — to suffer injury and damages.

With several hundred asbestos-injury cases pending in Montana trial courts, the Legislature in 2017 set up the state’s Asbestos Claims Court. Flathead County District Court Judge Amy Eddy is the presiding judge.

Other W.R. Grace asbestos lawsuits, where asbestos exposure has been documented in people but has not yet caused a high level of injury, have been moved onto a deferred docket, which will allow claimants to pursue damages cases in the future.

Wednesday’s ruling is the second from the Montana Supreme Court in the last two weeks regarding W.R. Grace asbestos litigation.

On March 11, the court ruled that Burlington Northern-Santa Fe Railroad was subject to strict liability because the railroad’s actions in handling the asbestos at the W.R. Grace facility constituted an “abnormally dangerous activity – but is protected from strict liability because its actions stemmed from its legal public duty.

The high court also ruled plaintiff claims against BNSF for asbestos-related injuries are not pre-empted by the Federal Railroad Safety Act or the Hazardous Materials Transportation Act. The justices said the railroad may not refute the cause of asbestos injuries by offering Grace’s conduct as a superseding cause of the plaintiffs’ injuries.

Asbestos injury cases against BNSF will now continue in the Montana Asbestos Claims Court.

“This provides us with clarity moving forward,” Montana asbestos attorney Ben Snipes said in an interview. “These rulings are very critical in pointing us forward. They give us a beacon of direction.”

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