Court Opinion

ID: 1024425
Source: CourtListenerOpinion
Date Created: 2013-07-05 06:33:21.173151+00
Date Added: 2024-06-11T09:18:07.112314
License: Public Domain

UNPUBLISHED

                    UNITED STATES COURT OF APPEALS
                        FOR THE FOURTH CIRCUIT

                               No. 06-1986

MICHAEL B. LANIER,

                                                 Plaintiff - Appellant,

           versus

NORFOLK SOUTHERN CORPORATION; NORFOLK SOUTHERN
RAILWAY COMPANY; BENJAMIN AIKEN; MIKE FORD;
JAMES THORNTON,

                                                Defendants - Appellees.

Appeal from the United States District Court for the District of
South Carolina, at Aiken. Margaret B. Seymour, District Judge.
(1:05-cv-03476-MBS)

Argued:   September 26, 2007                 Decided:   December 5, 2007

Before MOTZ and KING, Circuit Judges, and Robert J. CONRAD, Jr.,
Chief United States District Judge for the Western District of
North Carolina, sitting by designation.

Affirmed by unpublished per curiam opinion.

ARGUED: Douglas M. Schmidt, New Orleans, Louisiana, for Appellant.
W. Howard Boyd, Jr., GALLIVAN, WHITE & BOYD, P.A., Greenville,
South Carolina, for Appellees. ON BRIEF: Daniel B. White, Ronald
G. Tate, Jr., Jennifer E. Johnsen, Thomas E. Vanderbloemen,
GALLIVAN, WHITE & BOYD, P.A., Greenville, South Carolina, for
Appellees Norfolk Southern Corporation and Norfolk Southern Railway
Company; Gray T. Culbreath, COLLINS & LACY, P.C., Columbia, South
Carolina, for Appellee Benjamin Aiken; Monteith Powell Todd,
SOWELL, GRAY, STEPP & LAFFITTE, L.L.C., Columbia, South Carolina,
for Appellee Mike Ford; J. Arthur Davison, FULCHER HAGLER, L.L.P.,
Augusta, Georgia, for Appellee James Thornton.

Unpublished opinions are not binding precedent in this circuit.

                                2
PER CURIAM:

     Michael     B.   Lanier   appeals   the   district    court’s   order

dismissing his case and asserts that the district court incorrectly

found that no duty was owed to him under South Carolina tort law.

Lanier also argues for the first time on appeal that jurisdiction

under the Class Action Fairness Act (“CAFA”) was improper. We find

that jurisdiction was proper under CAFA and affirm the district

court’s order.

                                    I.

     On January 5, 2005, three employees of Norfolk Southern

Corporation and Norfolk Southern Railway Company (collectively

referred to as “Norfolk”) took a local train to the Avondale Mills,

Inc. (“Avondale”) facility in Graniteville, South Carolina, to

deliver and pick up railroad cars.       In order to deliver and pick up

railroad cars to and from Avondale, the Norfolk employees had to

open a rail switch located on the main railroad line to a side rail

that leads directly into the Avondale facility.           While performing

these tasks, the employees realized that they could not finish

their work at Avondale without violating the 12-hour work rule

mandated by federal law.        As a result, the employees parked the

train at the Avondale facility until they could resume their work

the following morning.         Because the train was too long to fit

inside the Avondale facility, the employees placed a locomotive and

                                     3
a couple of railroad cars on the side rail in close proximity to

the main railroad.

     In the early hours of January 6, 2005, another train owned and

operated by Norfolk was traveling toward Graniteville on the main

railroad line.        This train consisted of 3 locomotives and 48

railroad cars, some of which contained chlorine.                  Because the

employees failed to realign the main switch to its proper position,

the train was diverted from the main line to the side rail

colliding with the other railroad cars left on the side rail the

night before.

     The impact of the collision caused some of the railroad cars

containing chlorine to rupture and chlorine gas to be released.

The chlorine gas damaged Avondale’s plant and prevented Avondale

from maintaining its production level.             Avondale laid off some

employees    and     eventually   decided    to     close   its    facilities

permanently. On December 8, 2005, Lanier, an employee of Avondale,

filed a class action complaint for damages against Norfolk in the

South Carolina Court of Common Pleas.              Lanier’s putative class

consisted    of    former   Avondale   employees   who   were    laid    off   or

discharged    from     their   employment    subsequent     to     the    train

derailment. Lanier contended that Norfolk’s negligence resulted in

the derailment, the release of chlorine gas, and the disruption of

Avondale’s production capacity causing employee layoffs.

                                       4
     Norfolk filed a notice of removal on December 13, 2005.

Norfolk argued that removal was proper under CAFA, 28 U.S.C.A. §

1453(b) (West 2006), among other grounds.   Norfolk asserted that

the allegations of injuries and damages in Lanier’s complaint met

the $5 million amount in controversy threshold and satisfied the

minimal diversity requirement.   Lanier moved to remand on January

11, 2006, but failed to respond to Norfolk’s argument that the

court had jurisdiction under CAFA in his motion.

     On July 5, 2006, the district court ordered that Lanier’s

motion to remand be denied and Norfolk’s motion to dismiss be

granted. The district court concluded that Lanier’s proposed class

met the jurisdictional requirements of CAFA and thus removal was

proper.   The district court thereafter concluded that Lanier’s

complaint failed to state a claim upon which relief could be

granted because Norfolk owed no legal duty to Lanier and the

putative class members.

     On July 17, 2006, Lanier filed a motion for new trial, or in

the alternative, for relief from the court’s order.   The district

court denied the motion and continued to find that Norfolk did not

owe Lanier and the purported class any duty of care.       Lanier

thereafter timely filed his notice of appeal.

                                 5
                                    II.

     As with all questions implicating subject matter jurisdiction

of federal courts, we review the denial of a motion to remand to

state court de novo.     Lontz v. Tharp, 413 F.3d 435, 439 (4th Cir.

2005).     CAFA   amended   Title   28’s   provisions   on   diversity    of

citizenship and removal for certain class action cases.               Section

1332(d) provides that

     district courts shall have original jurisdiction of any
     civil action in which the matter in controversy exceeds
     the sum or value of $5,000,000, exclusive of interest and
     costs, and is a class action in which . . . any member
     of a class of plaintiffs is a citizen of a State
     different from any defendant.

28 U.S.C.A. § 1332(d)(2)(A) (West 2006). For the district court to

have original jurisdiction over a class action under CAFA, the

proponent of removal must show minimal diversity, and it must be

clear from the face of the complaint that the amount in controversy

exceeds $5 million. See Wiggins v. North Am. Equitable Life Assur.

Co., 644 F.2d 1014, 1016-17 (4th Cir. 1981) (ordinarily determining

the jurisdictional amount from the plaintiff’s complaint but also

recognizing that “if it appears to a legal certainty that the

plaintiff cannot recover the jurisdictional amount, the case will

be dismissed for want of jurisdiction . . . . However, the legal

impossibility of recovery must be so certain as virtually to

negative   the    plaintiff’s   good   faith   in   asserting   the    claim”

(quoting McDonald v. Patton, 240 F.2d 424, 426 (4th Cir. 1957));

see also Brill v. Countrywide Home Loans, Inc., 427 F.3d 446, 448-

                                       6
49 (7th Cir. 2005) (discussing the amount in controversy under CAFA

and   explaining   that   “[t]he   question   is   not   what   damages   the

plaintiff will recover, but what amount is ‘in controversy’ between

the parties . . . . Once the proponent of jurisdiction has set out

the amount in controversy, only a ‘legal certainty’ that the

judgment will be less forecloses federal jurisdiction”).

      The district court concluded that the amount in controversy

was satisfied and minimal diversity between Lanier and Norfolk was

present.   Because Lanier’s complaint indicated that the purported

class consisted of at least 350 people seeking damages, it would

take a minimum of $15,000 per person to exceed the $5 million

amount in controversy.1       Our review of the record shows that

minimal diversity is present between the parties and there is

nothing in the record that would support a finding to a legal

certainty that the judgment would be less than $5 million.2           Thus,

      1
      Since Avondale closed the factory, the purported class could
expand to over 2,000 employees.     If that were the case, each
plaintiff would need to recover a little over $2,000 per person to
exceed the $5 million requirement. We find that Norfolk has met
its burden of showing the amount in controversy will exceed $5
million.
      2
      For the first time on appeal, Lanier argues that the local
controversy exception under 28 U.S.C.A. § 1332(d)(4) applies.
Section 1332(d)(4) states that a district court “shall decline to
exercise jurisdiction” over a class action if greater than 2/3 of
the class are from the state in which the action was filed; at
least one defendant from whom significant relief is sought is from
that same state; the principal injuries resulted from conduct
within the same state; and that no other class actions have been
filed asserting the same thing. 28 U.S.C.A. § 1332(d)(4) (West
2006). This court will generally not consider issues raised for

                                     7
we conclude that jurisdiction exists under CAFA, and the district

court correctly denied Lanier’s motion to remand.

                                    III.

     The standard of review of a Rule 12(b)(6) dismissal is de

novo.    Schatz v. Rosenberg, 943 F.2d 485, 489 (4th Cir. 1991).

This Court will construe factual allegations in the nonmoving

party’s favor and will treat them as true, id., but is “not so

bound with respect to [the complaint’s] legal conclusions.”         Dist.

28, United Mine Workers, Inc. v. Wellmore Coal Corp., 609 F.2d

1083,    1085-86   (4th   Cir.   1979).    The   plaintiff’s   “[f]actual

allegations must be enough to raise a right to relief above the

speculative level.”       Bell Atlantic Corp. v. Twombly, 127 S. Ct.

1955, 1965 (2007).    “[O]nce a claim has been stated adequately, it

may be supported by showing any set of facts consistent with the

allegations in the complaint.”       Id. at 1969.   A complaint attacked

by a Rule 12(b)(6) motion to dismiss will survive if it contains

“enough facts to state a claim to relief that is plausible on its

face.”    Id. at 1974.

the first time on appeal. Muth v. United States, 1 F.3d 246, 250
(4th Cir. 1993). “Exceptions to this general rule are made only in
very limited circumstances, such as where refusal to consider the
newly-raised issue would be plain error or would result in a
fundamental miscarriage of justice.” Id. As Lanier did not raise
this argument to the district court and provides no facts
warranting a finding of exceptional circumstances, we do not
consider this argument. Id.

                                     8
     In construing South Carolina tort law, the district court held

that Norfolk owed no duty to Lanier or the putative class members

for lost wages and thus Lanier failed to state a claim upon which

relief   could    be   granted.    Lanier    asserts,    however,     that    the

district court failed to consider the fact that Norfolk’s long-

standing supply contract with Avondale created a duty of care from

Norfolk to Avondale and thus derivatively to Avondale’s employees.

Lanier   also    contends   that   Norfolk   owed   a   duty   to    Avondale’s

employees because a factory closing creating loss for Avondale

employees was a foreseeable consequence of negligently carrying

ultrahazardous materials.

     Under South Carolina law, “[a] cause of action for negligence

requires: (1) the existence of a duty on the part of the defendant

to protect the plaintiff; (2) the failure of the defendant to

discharge the duty; (3) injury to the plaintiff resulting from the

defendant’s failure to perform.”          South Carolina State Ports Auth.

v. Booz-Allen & Hamilton, Inc., 346 S.E.2d 324, 325 (S.C. 1986).

“The key inquiry is what duty, if any, is owed by the tortfeasor to

the third party.”        Barker v. Sauls, 345 S.E.2d 244, 244 (S.C.

1986).   In order for a duty to exist, the parties must have a

relationship recognized by law.       This duty may be derived from the

tortfeasor’s contractual relationship with another.3                See id.

     3
      Lanier asserts that the long-standing supply contract between
Norfolk and Avondale creates a duty to the employees. However,
Lanier failed to allege this contractual relationship in his

                                      9
      While the employees’ job losses were arguably foreseeable,

tort law does not stretch so far as to impose liability on Norfolk

for the losses of those with whom it has no direct relationship.

Booz-Allen, 346 S.E.2d at 325 (“Foreseeability of injury, in the

absence of a duty to prevent that injury, is an insufficient basis

on which to rest liability.       Foreseeability itself does not give

rise to a duty.” (citations omitted)).           To avoid disproportionate

liability,    South    Carolina   courts     have   cut    off    recovery       for

plaintiffs who suffer economic loss, but have no direct physical

injury and no direct relationship with the defendant.                  See Hubbard

&   Felix,   The   South   Carolina   Law   of   Torts     49    (3d    ed.   2004)

(“[P]ersons    who    suffer   indirect     economic     loss    from     loss   of

employment as a result of injury to the enterprise where they work

cannot usually recover for such loss.”).4                 We hold that South

complaint. Our standard of review on a 12(b)(6) motion is to “test
the sufficiency of a complaint.” Edwards v. City of Goldsboro, 178
F.3d 231, 243 (4th Cir. 1999). As this fact was not included in
the complaint, we will not consider this argument on appeal.
      4
      See also Robins Dry Dock & Repair Co. v. Flint, 275 U.S. 303
(1927) (holding no right to recover for economic loss resulting
from defendant’s injury to a third party with whom plaintiff has
contractual business relationship); Booz-Allen, 346 S.E.2d at 324
(holding no duty was owed to pilots and longshoremen whose work
suffered as a result of a consultant’s opinion that the Charleston
port would not have as much traffic as Savannah); Edens & Avant
Inv. Props., Inc. v. Amerada Hess Corp., 456 S.E.2d 406 (S.C. Ct.
App. 1995) (holding no liability in negligence for plaintiff’s out-
of-pocket “development costs” allegedly lost as a result of
defendant’s pollution injury to property which plaintiff had option
to purchase); Willis, 314 S.E.2d at 919 (holding no liability for
the loss of eight days of work due to a train derailment).

                                      10
Carolina courts would find the nature of Lanier’s indirect economic

loss too remote for recovery in tort.         See Booz-Allen, 346 S.E.2d

at 326 (“The concept of duty in tort liability must not be extended

beyond reasonable limits.”);       Willis v. Georgia N. Ry. Co., 314

S.E.2d 919, 919 (Ga. Ct. App. 1984) (holding in a similar train

derailment   case   that   the   “damages    sought   by   appellants   have

consistently been held too remote in nature for recovery”).              We

conclude that Lanier has failed to plead enough facts to state a

claim that is plausible on its face.        Accordingly, we find that the

court properly granted Norfolk’s Rule 12(b)(6) motion to dismiss

for failure to state a claim.

                                    IV.

     For the foregoing reasons, we affirm the decision of the

district court.

                                                                  AFFIRMED

                                    11