Hartley v. CSX Transportation, Inc.

187 F.3d 422, 1999 WL 569556
CourtCourt of Appeals for the Fourth Circuit
DecidedAugust 4, 1999
DocketNos. 98-2742, 99-1210
StatusPublished
Cited by16 cases

This text of 187 F.3d 422 (Hartley v. CSX Transportation, Inc.) is published on Counsel Stack Legal Research, covering Court of Appeals for the Fourth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Hartley v. CSX Transportation, Inc., 187 F.3d 422, 1999 WL 569556 (4th Cir. 1999).

Opinion

Reversed and remanded by published opinion. Chief Judge WILKINSON wrote the opinion, in which Judge NIEMEYER and Judge KING joined.

OPINION

WILKINSON, Chief Judge:

A South Carolina citizen filed a tort action in South Carolina state court against a Virginia railroad corporation and two South Carolina government entities. The railroad removed the case to federal court on diversity grounds, claiming that the government defendants were fraudulently joined. The district court denied plaintiffs motion to remand the case to state court. Because there is at least some possibility that plaintiff will recover against the government defendants, we reverse.

I.

Lidy J. Hartley is a South Carolina citizen whose automobile collided with a train at an Allendale, South Carolina railroad crossing in July 1997. She filed suit in the Allendale County Court of Common Pleas against CSX Transportation, Inc. (CSX), the South Carolina Department of Trans[424]*424portation (SCDOT), and the Town of Al-lendale, South Carolina (Town). Hartley alleged, among other things, that the SCDOT was negligent in maintaining an unsafe crossing, in failing to inspect the crossing adequately, and in failing to maintain proper markings on the roadway near the crossing. She also alleged that the Town was negligent in maintaining its property and in failing to warn the public of the obstructed view at the crossing.

CSX removed the case to the United States District Court for tl~e District of South Carolina on the basis of diversity of citizenship. With the government defendants joined, there is incomplete diversity between plaintiff and defendants, and federal jurisdiction will not attach. On the other hand, if the government defendants are dismissed, then diversity jurisdiction will lie. CSX contended thatthe SCDOT and the Town were sham defendants that Hartley had named solely for the purpose of defeating diversity.

Hartley filed a motion to remand the case to state court on the ground that the district court lacked subject matter jurisdiction. The district court denied the motion, holding that South Carolina's public duty rule precluded Hartley's claims against the SCDOT and the Town. Hart-ley then filed this interlocutory appeal.

II.

CSX argues that diversity jurisdiction exists because the SCDOT and the Town are not proper defendants in this action. The district court agreed, holding that the government defendants were fraudulently joined because they could not be liable as a matter of law under the public duty rule. That rule provides that "public officials are generally not liable to individuals for their negligence in discharging public duties because the duty is owed to the public at large rather than to anyone individually." Wells v. City of Lynchburg, 331 S.C. 296, 501 S.E.2d 746, 751-52 (1998).

We disagree with the district court. To show fraudulent joinder, the removing party must demonstrate either "outright fraud in the plaintiff's pleading of jurisdictional facts" or that "there is no possibility that the plaintiff would be able to establish a cause of action against the in-state defendant in stat~ court." Marshall v. Manville Sales Corp., 6 F.3d 229, 232 (4th Cir.1993) (internal quotation marks omitted): CSX does not allege any bad faith in pleading, so the only inquiry is whether Hartley has any possibility of recovery.

The party alleging fraudulent join-der bears a heavy burden-it must show that the plaintiff cannot establish a claim even after resolving all issues of law and fact in the plaintiffs favor. Id. at 232-33. This standard is even more favorable to the plaintiff than the standard for ruling on a motion to dismiss under Fed.R.Civ.P. 12(b)(6). See, e.g., Batoff v. State Farm Ins. Co., 977 F.2d 848, 852 (3d Cir.1992) (inquiry into validity of complaint is more searching under Rule 12(b)(6) than when party claims fraudulent joinder).

CSX cannot meet this burden. The public duty rule does not preclude all possibility of recovery here. South Carolina law prescribes a six-part test for determining whether the public duty rule applies. Wells, 501 S.E.2d at 752. This test requires the court to ascertain the purposes of the statute; whether the statute imposes a duty on a specific public officer; the class protected by the statute; the membership of the plaintiff in that class; the public officer's state of mind concerning the likelihood of harm to members of the class if he fails in his duty; and the nature of the officer's authority. Id.

No South Carolina case has squarely held that the public duty rule forecloses Hartley's claims. Further, it is unclear whether a state court would apply the rule to her claims because the six-part test requires a judgment call at every turn. The presence or absence of each element often depends on several variables and [425]*425may require factual investigation. See, e.g., Bellamy v. Brown, 305 S.C. 291, 408 S.E.2d 219, 221 (1991) (public duty rule inquiry requires “applying this test to the facts of [the] case” (emphasis added)); Jensen v. Anderson County Dep’t of Soc. Servs., 304 S.C. 195, 403 S.E.2d 615, 617-19 (1991) (endorsing lower court’s findings that, inter alia, considered report received by social worker and social worker’s personal observations in determining foreseeability of harm). These judgment calls may go either way. Thus, we cannot say with certainty that a South Carolina state court would find Hartley’s claims barred by the rule.

In fact, the district court’s own characterization of this case indicates its uncertainty as to the possibility of recovery. The district court described its application of the public duty rule in these circumstances as “a novel issue” and noted that “other courts may have a differing opinion of this matter.” Because all legal uncertainties are to be resolved in the plaintiffs favor in determining whether fraudulent joinder exists, a truly “novel” issue such as this cannot be the basis for finding fraudulent joinder. The very fact that courts may differ in their resolutions of this issue shows there is a possibility of recovery.

Further, courts should “resolve all doubts about the propriety of removal in favor of retained state court jurisdiction.” Marshall, 6 F.3d at 232. The district court in this case was sufficiently doubtful about the propriety of removal that it certified this interlocutory appeal. The district court instead should have resolved its doubts in favor of remanding the case to state court.

CSX contends that even if the application of the public duty rule presents an arguable question, Hartley still cannot hope to recover against the public defendants in court. We cannot say, however, that Hartley has no chance of establishing the facts necessary to support her tort claims.

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187 F.3d 422, 1999 WL 569556, Counsel Stack Legal Research, https://law.counselstack.com/opinion/hartley-v-csx-transportation-inc-ca4-1999.