BNSF Railway Co. engaged in “pervasive” discovery misconduct that severely prejudiced a worker trying to prove his illness was caused by exposure to toxic fumes in a railyard, a Minnesota appeals court ruled.

The April 22 decision in the Federal Employers’ Liability Act case upheld sanctions against BNSF that included an order striking its defenses on causation and liability on claims brought by Scott Kowalewski, who ultimately won a $15.3 million jury verdict against the railway.

The ruling by the Minnesota Court of Appeals also upheld an award of $1.1 million in attorneys’ fees and $89,649 in costs to Kowalewski,...