Center for Asbestos Related Disease officials, aided by the federal government, are fighting back against railroad giant BNSF Railway’s effort to seize its assets and shutter operations.

The Lincoln County Sheriff’s Office on May 7 served a writ of execution on the Center for Asbestos Related Disease, Inc. for $3.1 million to satisfy a judgment against the organization. The judgment stems from a lawsuit won in 2023 by Texas-based BNSF, owned by billionaire Warren Buffett, that accused the clinic of filing hundreds of fraudulent claims over several years.

The railway brought the lawsuit on behalf of the United States government, which provides specialized Medicare services to victims of the asbestos plague.

A writ of execution is a court order directing a sheriff to seize and sell property to satisfy a judgment.

But in a May 9 filing in Lincoln County District Court, Billings-based Assistant U.S. Attorneys Mark Smith and Lynsey Ross sought to quash the court’s writ on the clinic.

In the motion, the attorneys wrote that their office contacted BNSF attorney Cole Anderson and requested the company withdraw the application. But the company declined and objected to the motion.

"In 2023, a Montana jury found that the CARD clinic had submitted false asbestos claims costing taxpayers millions of dollars. The judge determined the amount of damages to be repaid, and the process for recovery is set by law," said BNSF spokesperson Kendall Sloan.

According to a declaration by clinic Executive Director Tracy McNew filed with the motion to quash, she reported that all of the organization's employees were compelled to vacate the clinic May 7 following the seizure. The Sheriff's Office replaced all of the locks.

Following a May 8 request, certain organization employees were allowed to enter the clinic to access the facility's accounting program. McNew said deputies monitored the employees' activities and once they were done using the accounting program, they left the office and haven't returned.

In a related motion, clinic attorney James E. Patten is seeking a hearing on the organization’s claim of exemption of property seized under execution of judgment. It also served notice that the property seized or frozen is held in trust for the United States.

In the federal government’s brief to have the writ quashed, attorneys argue BNSF lacks the authority to seize the clinic and the district court didn’t have jurisdiction to adjudicate federal matters.

Federal attorneys argued the writ of execution should be squashed and the Sheriff’s Office should release the property.

The government’s argument has to do with the fact that most of the clinic’s deposit account is made up of federal grant money.

Sen. Mike Cuffe, R-Eureka, called the clinic's closure upsetting.

"I am stunned and very disappointed at the closure of the CARD Clinic," Cuffe said. "It has helped so many in the community, as well as being the center for understanding this particular asbestosis problem."

A $3 million grant from the Centers for Disease Control and Prevention was awarded to the clinic for asbestos health screening last fall. McNew said it was effective from Sept. 1 through August 2029. A Montana Public Radio story earlier this month indicated the $3 million grant accounted for 80% of the clinic’s budget.

In a declaration by Theodore Larson, a lead epidemiologist with the Agency for Toxic Substances and Disease Registry, part of the U.S. Department of Health and Human Services, he confirmed the CARD Clinic is the only grant recipient conducting screening and providing public information and education programs for Libby and Troy.

Federal attorneys said BNSF did not seek permission to act on behalf of the U.S. government and did not provide the Lincoln County District Court with any authority for the rail company to act. Further, according to the court filing, BNSF neglected to inform the court that the United States has claimed an interest in all or substantially all of the clinic’s property and that the bulk, if not all, of its bank account is comprised of federal grant money.

Attorneys also argued that the False Claims Act gave BNSF limited authority to bring a civil action. Because the United States didn’t intervene, BNSF only had the right to file a suit.

Another argument by the federal attorneys is because of the United States’ interest in the clinic’s property, Lincoln County District Court doesn’t have jurisdiction over the clinic.

“All grant moneys in those accounts remain property of the federal government unless and until they are expended in accordance with the terms of the grant,” said the attorneys.

In September 2024, the clinic lost an appeal to a jury’s $6 million judgment in June 2023. Federal jurors ruled that the clinic made or presented false claims 337 times, including 91 violations after November 2015.

The clinic filed for Chapter 11 bankruptcy in August 2023, allowing it to continue operations. But the United States intervened in the bankruptcy proceeding and determined that the judgment should not be paid, so the bankruptcy was settled and dismissed in spring 2024.

Gold miners discovered vermiculite in Libby in 1881. In the 1920s, the Zonolite Company formed and began mining the vermiculite. In 1963, W.R. Grace bought the Zonolite mining operations. The mine closed in 1990. In 2002, the Environmental Protection Agency placed the site on the Superfund program’s National Priorities List and cleanup work continues to this day.

Fibers from the asbestos tied to vermiculite mining that began in the 1920s can embed in lung tissue and cause fatal lung disease. No one knows how many people in the region have died from the effects of asbestosis, mesothelioma or other cancers linked to exposure to asbestos-containing vermiculite mined, processed and shipped from Lincoln County and Libby.

BNSF’s involvement relates to asbestos-contaminated vermiculite in the rail yard that a 2024 federal jury said was a considerable factor in the negligent deaths of former Libby residents Thomas Wells and Joyce Walder. Both Wells and Walder lived near the railyard and were both diagnosed with mesothelioma and died in 2020.

Hundreds of people died and more than 3,000 were sickened from asbestos exposure in the Libby area, according to researchers and health officials. BNSF faces accusations of negligence and wrongful death for failing to control clouds of contaminated dust that used to swirl from the rail yard and settle across Libby’s neighborhoods.

The vermiculite was shipped by rail from Libby for use as insulation in homes and businesses across the U.S.