The fear of developing cancer is grounds enough to collect for workers who already have asbestosis, a separate asbestos-related ailment, and can document their health fears, a 5-member majority of the court found.
"It is incumbent upon such a complainant, however, to prove that his alleged fear is genuine and serious," Justice Ruth Bader Ginsburg wrote. Justices John Paul Stevens, Antonin Scalia, David Souter and Clarence Thomas joined Ginsburg.
Asbestosis sufferers do not necessarily go on to develop cancer.
The court sided with six retired railroad workers who won $5.8 million from Norfolk & Western Railway. The ruling was narrow, however, and turned on the language of a 1908 law protecting railroad workers from employer negligence.
The ruling was a blow to railroad giant Norfolk Southern and to big business generally. The railroad and its backers had hoped the conservative-leaning high court would use the case to curb the burgeoning asbestos-related lawsuits in state and federal courts.
Big companies are asking Congress for protection from an estimated $200 billion in asbestos liability. There are more than 600,000 asbestos-related lawsuits before courts today and many more are expected to be filed.
In a unanimous portion of the ruling, the court acknowledged the legal morass, but said it is a problem for Congress to sort out.
"Courts must, however, resist pleas of the kind Norfolk has made, essentially to reconfigure established liability rules because they do not serve to abate today's asbestos litigation crisis," the court said.
In Monday's case, the Supreme Court majority suggested that the railroad might have won its case if it had simply challenged the quality of evidence that the workers presented to show their fear of cancer.
Instead, Norfolk wanted state courts in West Virginia to rule that the workers could collect only if they could offer proof that the fear of cancer was taking a physical toll on them.
In dissent, four justices said previous court rulings do not support the finding that the workers could collect money when they suffer "some other disease, not itself causative of cancer."
The 1908 Federal Employers' Liability Act is intended to protect workers, and allowing the kind of lawsuits at issue in this case might seem on the surface to be in line with the law, Justice Anthony M. Kennedy wrote for himself, Chief Justice William H. Rehnquist and Justices Sandra Day O'Connor and Stephen Breyer.
"The realities of asbestos litigation should instruct the court otherwise," Kennedy said.
Five of the six railroad workers smoked, three of them for 30 years or more, and all are between 60 and 77 years old. Kennedy noted. They suffer from shortness of breath and other complaints, but Kennedy implied that evidence of "emotional injury" was thin.
The majority ruling threatens workers rather than helping them, the dissenters said, noting that asbestos litigation has already driven 57 companies into bankruptcy. Twenty-six of those firms went bankrupt just since Jan. 1 2000, the dissenters noted.
If these workers and others like them can collect money, there may be nothing left to compensate people who do not have asbestosis but who will develop asbestos-related cancer in the future, Kennedy wrote.
"These cancers inflict excruciating pain and distress, pain more severe than that associated with asbestosis, distress more harrowing than the fear of developing a future illness," Kennedy wrote.
The court also ruled unanimously Monday that whistle-blowers who suspect a local government is misusing federal funds can sue to help recover the money.
The case involved a psychologist who argued that a Chicago hospital misused $5 million in federal funds by overstating the success of a program to help drug-addicted pregnant women.
In other announcements, justices agreed to revisit the court's historic 1966 Miranda decision by reviewing an appeal by an Illinois drug dealer who claims police extracted a false confession by questioning him after getting an indictment.
CBS News Legal Consultant Andrew Cohen said the decision to take the case is a bit of a surprise. This will be the third time in just the past three years that the court has looked at its Miranda decision and whether or not it ought to be tweaked.
It upheld the decision in 2000 and is currently considering another case, where the issue is whether individual officers can be sued for violating the decision.
Usually, when the court reaffirms its precedent in an area of the law it does not revisit it soon.
The court will also decide whether an individual customer can sue a company for breaking anti-trust laws.
The case involves a New York man's claim that Verizon, which has a legal monopoly over phone lines but must lease them to competitors, deliberately gives shoddy service to those lines which competitors — and their customers — use.
Other big businesses have asked the court to reject the man's claim, for fear that it could touch of a multitude of individual anti-trust lawsuits.