Summary
This Fourth Circuit opinion addresses a breach-of-contract claim brought by residents and businesses against CSX Transportation following severe flooding in Lumberton, North Carolina, during Hurricanes Matthew and Florence. The plaintiffs alleged that CSX breached a Tri-Party Agreement by refusing to allow the city to close a gap in a levee system using emergency sandbags. The appellate court affirmed the district court’s grant of summary judgment, holding that a plain reading of the agreement only authorized closing a specifically constructed earthen dike, which had never been built, thus foreclosing the breach-of-contract claim.
Topics
Practice areas
Questions Presented
- Whether the plaintiffs can demonstrate that CSX breached the Tri‑Party Agreement by refusing to allow an emergency sandbag dam, and thus whether the contract claim should survive summary judgment.
Holdings
- The plaintiffs cannot show that CSX breached the TPA; therefore summary judgment is affirmed.
Key quotations
“In short, a “plain reading” of the terms of the TPA forecloses the plaintiffs’ breach of contract claim.” (at 451)
“The TPA obliges the Drainage District to place and maintain sandbags on the “slopes of said dike” to prevent erosion, as well as markers alongside “said dike” to “plainly indicate [its] location and ownership.”” (at 451)
Factual background
Severe flooding in Lumberton, N.C., resulted from Hurricanes Matthew (2016) and Florence (2018). The City of Lumberton entered into a Tri‑Party Agreement (TPA) with CSX and the Robeson County Drainage District granting the City a license to construct and maintain an earthen dike on CSX’s right‑of‑way and to close the dike only in an imminent flood emergency. The dike was never built; CSX refused the City’s requests to close the gap with an emergency sandbag dam, leading to flood damage and the plaintiffs’ breach‑of‑contract suit.
Procedural history
The district court dismissed the plaintiffs' tort claims as preempted by the Interstate Commerce Commission Termination Act and dismissed the contract claim on the ground that the plaintiffs were not intended third‑party beneficiaries of the Tri‑Party Agreement. The Fourth Circuit reversed the dismissal of the contract claim, remanded, and after discovery the district court granted summary judgment to CSX on three independent grounds, including preemption, lack of third‑party beneficiary status, and failure on the merits. The appellate court reviewed the summary‑judgment ruling de novo and affirmed.