Montana asbestos clinic seeks to reverse $6M in fines, penalties over false claims
BILLINGS, Mont. — A health center in a Montana town contaminated with deadly asbestos will ask a federal appeals court Wednesday to order nearly $6 million in fines and penalties after a jury had determined this hundreds of false claims filed on behalf of patients.
The jury’s verdict came last year in a lawsuit filed by Texas-based BNSF Railway, which was found separately liable for pollution in Libby, Montana, that has sickened and killed thousands of people. Asbestos-contaminated vermiculite was mined from a nearby mountain and transported by rail through the town of 3,000 for decades.
After BNSF questioned the validity of more than 2,000 cases of asbestos-related diseases found by the clinic, a grand jury last year found that 337 of those cases were based on false claims, leading to patients eligible for Medicare and other benefits they should not have received.
Asbestos-related diseases can range from a thickening of a person’s lung cavity that can obstruct breathing to deadly cancer. Exposure to even a tiny amount of asbestos can cause lung problems, scientists say. Symptoms can take decades to develop.
BNSF alleged that the clinic filed claims based on patient x-rays that should have been confirmed by a health care provider’s diagnosis but were not. Clinic representatives argued that they acted in good faith and followed guidance from federal officials who said an x-ray alone was sufficient to diagnose asbestos-related disease.
Judge Dana Christensen ordered the clinic to pay $5.8 million in fines and restitution. BNSF was to get 25 percent of the money because it filed the lawsuit on behalf of the government. Federal prosecutors previously declined to intervene in the false claims case, and no criminal charges have been filed against the clinic.
Clinic attorney Tim Bechtold said in court papers that the judge overseeing the trial gave improper instructions to the seven-person jury, effectively sealing the verdict. BNSF attorneys urged the 9th U.S. Court of Appeals to uphold last year’s ruling.
Oral arguments for both sides were scheduled for 9 a.m. local time on Wednesday in Portland, Oregon.
The verdict prompted clinic officials to file for bankruptcy, but the bankruptcy case was later dismissed at the request of government attorneys. They said the U.S. Department of Health and Human Services was the clinic’s primary source of funding but also its largest creditor, and that taxpayers would foot any costs associated with the bankruptcy.
According to court documents, the clinic has certified more than 3,400 people with asbestos-related diseases and received more than $20 million in federal funding.
Under a provision in the federal health care law of 2009, victims of asbestos exposure in the Libby area are eligible for taxpayer-funded services, including Medicare, home help, transportation to medical appointments and disability benefits for people who are unable to work.
The Libby area was declared a Superfund site twenty years ago after media reports of miners and their families becoming ill and dying from dangerous asbestos dust from vermiculite mined by WR Grace & Co.
BNSF itself is a defendant in hundreds of asbestos-related lawsuits. In April, a federal jury found that the railroad contributed to the deaths of two people who were exposed to asbestos decades ago from contaminated mining material shipped through Libby.
The jury awarded each of the defendants’ estates $4 million in damages. two claimantswho died in 2020. The jury found that asbestos-contaminated vermiculite that leaked into the Libby railroad yard in the center of town was a significant factor in the plaintiffs’ illnesses and deaths.