Considering certain comments by U.S. District Court Judge Dana Christensen during a hearing last week in Missoula, the immediate future of Libby’s asbestos clinic seems less than promising.

The judge heard a number of arguments June 12 from attorneys for the nonprofit clinic, the U.S. government and BNSF Railway as the railroad seeks to collect money on a $3.1 million judgment it won against the Center for Asbestos Related Disease in 2023.

The 2023 ruling was ordered by Christensen after a seven-person jury found the clinic guilty of fraud in 337 cases where its diagnosis of asbestos-related disease was not substantiated by medical testing.

“When I saw this case on my schedule, I didn’t know if I was having a nightmare or what,” quipped Christensen, who oversaw the 12-day trial that ended in late June 2023, as the hearing opened. 

Nearly two years after the jury verdict, clinic officials are fighting for its future. The facility was closed May 7 when the Lincoln County Sheriff's Office served a writ of execution on the clinic to satisfy the judgment.

Christensen, in his closing remarks Thursday, reminded the parties that a judgment was ordered.

“I know some of my rulings will make some of you very unhappy and some happier, but there is a judgment and I won’t get in the way of that,” he said.

Lynsey Ross, an attorney for the United States, argued that the government has a substantial interest in the clinic's interests because of the federal grant money it receives.

“In a sense, we are a defendant,” Ross said.

But Christensen said he was having a hard time understanding the government’s case.

“The fraud was using the government’s money, you had plenty of time to intervene and you didn’t,” the judge said. “And now you don’t seem interested in collecting any of it.”

The government, according to court documents, is owed $4.3 million.

James Patten, the clinic's attorney, questioned Executive Director Tracy McNew about her work at the Center for Asbestos Related Disease. She said the shuttering of the clinic has prevented its staff from performing screenings on patients. 

McNew also recalled the day the clinic was closed.

“It was in the middle of the day, I had to cancel appointments, lay off some staff and we didn’t know what to tell patients about rescheduling,” she said.

Nearly two-quarters of a million dollars has already been garnished from the clinic's bank accounts. 

A letter from Glacier Bank indicated it received a Notice of Levy/garnishment from the county Sheriff’s Office in the amount of about $3.1 million. The bank wrote in a letter to the clinic it had debited its account $240,793.89.

Chad Knight, one of BNSF’s attorneys, questioned McNew about the clinic’s finances and co-mingled money. In 2011, CARD was chosen by the U.S. Agency for Toxic Substances and Disease Registry for a four-year grant for a screening program for environmental health hazards, including asbestosis, pleural thickening and pleural plaques, caused by exposure to hazardous substances at Libby’s Superfund sites. The federal grants continued with the most recent reward in September 2024. It is scheduled to run through August 2029.

The grant money is estimated to provide 80% of the clinic’s operating finances.

Following the clinic filing for bankruptcy in 2023, in eight bank accounts, the clinic had $701,333 and their property was valued at $1.1 million.

One account with Glacier Bank, listed as “Fundraiser,” has a balance of $71,751.25. On Jan. 13, 2023, $67,961.79 was transferred to the account following the dissolution of the CARD Foundation, a separate nonprofit. 

Knight shared other documentation showing other CARD properties, such as office furniture, computer servers, collectibles, three freezers, two pulmonary function testing machines and other medical equipment. There was also an accounts receivable balance of $312.339. The value of the clinic’s collectibles was listed at $93,930.

Added all up, the clinic's assets are a little less than $2.3 million.

Attorneys representing, individually, Dr. Brad Black, Karen Lee Morrissette, McNew, Michelle Boltz and Miles Miller, argued that BNSF signed a stipulation in the clinic’s bankruptcy case that federal grant money and property held in trust by the clinic “cannot be used to pay the judgment, including attorney fees, nor can federal grant money be used to pay fees and costs associated with the bankruptcy.

Jori Quinlan, who is representing the aforementioned individuals in this matter and in the wrongful death suit involving Terry Steiger, said the failure to preserve evidence would be, “devastating.”

“Getting that data is not a simple process because of HIPPA laws and that is invaluable to my clients,” she argued. 

The wrongful death and malpractice suit filed Oct. 10, 2024, in Lincoln County District Court, alleges medical malpractice, wrongful death and claims of disabling Lincoln County residents by prescribing them opioid pain killers following the misdiagnosis of health issues. 

The plaintiffs are Thomas Steiger, the personal representative of the estate of Terry L. Steiger, and Thomas J. Matilas, a Libby resident. According to the suit, Steiger, a Troy resident, was a patient of the clinic when he died in 2015. Matilas is listed as a former patient. 

The civil suit accuses Black and the clinic, including McNew, of medical malpractice. The court filing argues that the clinic knew or should have known both men didn’t satisfy diagnostic requirements for asbestos-related disease and should not have been given opioid pain medications.  

That suit is still pending.

In Knight’s final argument on Thursday, he said the government is only rewarding the clinic for its behavior.

“CARD is a serial fraudster,” Knight said. “Every false claims case involves property and [the government] motion to intervene is not well taken. The government is wrong. They own none of the property at the clinic. It is all in the name of CARD."

“CARD is trying to avoid its responsibility and I don’t understand why the government is doing this,” Knight argued.

“I don’t either, Mr. Knight,” Judge Christensen replied.

Also, Lincoln County Sheriff Darren Short on June 5 gave notice of a sheriff's sale to satisfy the judgment for BNSF, with interest and costs.  

While the date is subject to change pending an order from the court, the sheriff's sale is currently set for 10 a.m., July 2. According to Montana code, the sheriff's office has 120 days from the day it received the writ to conduct the sale. The sale will include the real property as well as office equipment, furnishings, and other machinery, fixtures and equipment.