Railroad says Superfund town's health clinic submitted false medical claims

A major railroad company is trying to convince a federal jury that a Montana clinic submitted hundreds of asbestos claims for people who weren’t sick and bilked taxpayer funds

A major U.S. railroad found liable for spreading hazardous asbestos that killed hundreds of people in a Montana town is trying to convince a federal jury that a local clinic submitted hundreds of asbestos claims for people who weren’t sick, earning them lifetime government benefits and bilking taxpayer funds.

The case focuses on the Center For Asbestos Related Disease in Libby, Montana, and the health clinic's high-profile doctor, Brad Black, who has been at the forefront of efforts to help residents of the town, which came to national prominence when it was declared a deadly Superfund site in 2000.

Since 2003, Black and the CARD clinic have certified more than 3,400 people, primarily from the Libby area, with asbestos-related diseases.

BNSF Railway — controlled by billionaire Warren Buffet’s Berkshire Hathaway conglomerate — has alleged during a trial taking place in Missoula that more than half the certifications were based on false medical submissions from CARD. The railway shipped asbestos-tainted vermiculite through Libby.

Closing arguments in the case were scheduled for Wednesday.

CARD and its attorneys deny the claims, arguing the clinic made its diagnoses in line with requirements of the 2009 Affordable Care Act, which included special provisions for the Libby victims.

Asbestos-related diseases can range from a thickening of a person’s lung cavity, hampering breathing, to deadly cancer. Under the health law, victims of asbestos exposure in the Libby area are eligible for taxpayer-funded services including Medicare, housekeeping, travel to medical appointments, and disability benefits for those who can’t work.

Former U.S. Sen. Max Baucus, of Montana, authored the Libby provision in the health law. He said in depositions with attorneys that the clinic's practice of diagnosing some patients without waiting for secondary confirmation, such as X-ray results, was legitimate.

However, Judge Christiansen barred Baucus's statements from being introduced, saying it was the court's role to decide whether the law had been followed.

BNSF sued the clinic in 2019 under the False Claims Act, which allows private parties to sue on the government’s behalf. It was kept sealed under a court order for two years until the U.S. attorney’s office of Montana declined prosecute the fraud claims. Officials have not given a reason.

The outcome could have major implications for the clinic, which could face penalties of $5,000 or more for each instance of fraud that is verified. A victory by BNSF also could help it fend off lawsuits from Libby residents seeking damages for the railway's mishandling asbestos-tainted vermiculite from a nearby mine.

At least 400 people have been killed by asbestos-related disease in the Libby area, according to health officials. Because of the long latency period for those diseases, symptoms can take decades to develop.

The tainted vermiculite came from a mine owned by the Maryland-based chemical company W.R. Grace. It polluted the Libby area over decades, including at a BNSF railway yard in the heart of the town of about 3,000 people.

Cleanup work began in 2000 after media reports of widespread health problems led to Libby's designation as a federal Superfund program contaminated site. In 2009, the EPA declared a public health emergency for the town.

Scientists say exposure to even a minuscule amount of asbestos can cause lung problems. Vermiculite from Libby was used as construction material in town, and it was shipped across the country as insulating material used in millions of homes.

A 2020 Montana Supreme Court ruling said BNSF should be held liable for its role in the contamination, but didn't specify how.

Other lawsuits against companies and officials over the contamination in Libby have resulted in large settlements for victims.

More than 2,000 Montana residents reached settlements with the state totaling $68 million in 2011 and 2017 for failing to warn them about the dangers of asbestos exposure. In February 2022, a jury awarded an Oregon man $36.5 million in a lawsuit against W.R. Grace’s workers’ compensation insurer from 1963-1973 because the company did not warn workers of those dangers.