Sheppard v. CSX Transportation, Inc.

UNPUBLISHED

UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT

ALLEN SHEPPARD; EVELYN SHEPPARD, 
In the matter of Allen Sheppard
versus CSX Transportation by his
wife Evelyn Sheppard, Guardian ad
Litem,
Plaintiffs-Appellants,
and
DSM CHEMICALS NORTH AMERICA,
INCORPORATED,
Intervenor-Plaintiff,  No. 02-2411

v.
CSX TRANSPORTATION,
INCORPORATED,
Defendant-Appellee,
and
CSX RAILROAD,
Defendant.

Appeal from the United States District Court
for the District of South Carolina, at Orangeburg.
Cameron M. Currie, District Judge.
(CA-01-4312-5-22, CA-01-4313-5-22)

Argued: September 24, 2003

Decided: October 27, 2003

Before NIEMEYER, LUTTIG, and WILLIAMS, Circuit Judges.

Affirmed by unpublished per curiam opinion.
2 SHEPPARD v. CSX TRANSPORTATION
COUNSEL

ARGUED: Vernon F. Dunbar, TURNER, PADGET, GRAHAM &
LANEY, P.A., Columbia, South Carolina, for Appellants. Mark C.
Wilby, FULCHER, HAGLER, REED, HANKS & HARPER, L.L.P.,
Augusta, Georgia, for Appellee. ON BRIEF: J. Arthur Davison,
Michael N. Loebl, FULCHER, HAGLER, REED, HANKS & HAR-
PER, L.L.P., Augusta, Georgia, for Appellee.

Unpublished opinions are not binding precedent in this circuit. See
Local Rule 36(c).

OPINION

PER CURIAM:

This diversity action presents questions of state law stemming from
an industrial accident that left Appellant Allen Sheppard severely
injured and unable to work. On appeal we are confronted with two
issues of state tort law: (1) whether Appellee CSX Transportation
(CSX) owned or possessed the railcar scale house where the accident
giving rise to the injuries occurred and (2) whether, regardless of
ownership, CSX owed a duty of reasonable care to other subcontrac-
tors on the premises. The district court answered both questions in the
negative, finding that CSX did not own the property in question and
ruling that a duty did not arise between two subcontractors unless the
first subcontractor creates the hazard that injures the second. Finding
no error in the district court’s application of Georgia tort law, we
affirm its grant of summary judgment in favor of CSX.

I

On the morning of January 6, 1999, Allen Sheppard, a materials
handler for Austin Industrial, was injured when he fell approximately
eight feet into an uncovered railcar scale pit. Austin Industrial is a
management services company subcontracted to provide such ser-
 SHEPPARD v. CSX TRANSPORTATION 3
vices at an industrial site in Augusta, Georgia, jointly owned by DSM
Chemicals (DSM) and PCS Nitrogen (PCS). At one time CSX owned
the industrial site, but, by virtue of a Private Sidetrack Agreement,
CSX sold its ownership rights in the site and maintained only a lim-
ited right to inspect and maintain the railcar scales.1

Although the industrial site was owned jointly by DSM and PCS,
a CSX employee would enter the premises annually in order to per-
form maintenance on the railcar scale located in a pit on that property.
The scale pit into which Sheppard fell was located inside the railcar
scale house, and was uncovered that morning because an employee
from CSX, Grover Wasdin, was on-site to calibrate the railcar scales.
Before Wasdin inspected the scale on that morning, Austin Industrial
employees removed a piece of plywood covering the scale pit, thus
exposing an approximately two and one half foot by three and one
half foot opening. As a safety precaution, Austin Industrial employees
also opened the door to the scale house and placed an orange safety
cone in front of the entrance in order to warn passers by that the scale
had been exposed. Thus, with the door open and the orange cone
placed in the doorway, persons nearing the scale house would have
to stop to maneuver around the cone and would see that the plywood
flooring had been removed. While at the industrial site, Wasdin was
accompanied by Austin Industrial employees, and when he went into
the scale pit, he was monitored by an outside observer, Reginald "Re-
ggie" Byrnes, provided by Austin Industrial. The function of the out-
side observer was to monitor the CSX employee calibrating the scales
and to ensure that person’s safety from possible noxious gases.

January 6 was a cold morning in Augusta, and at some point either
Byrnes or Wasdin moved the cone and closed the door to the railcar
scale house to keep heat from escaping the scale house. Shortly there-
after, Sheppard opened the door to the scale house, stepped inside,
and fell head-first into the open pit. Both Byrnes and Wasdin admit
they may have closed the door but neither can remember with cer-
tainty. Wasdin, however, does deny moving the orange safety cone.
1
The Private Sidetrack Agreement was actually between CSX and
Arcadian Fertilizer. Although the record is unclear, DSM Chemicals and
PCS Nitrogen are apparently successors to Arcadian.
4 SHEPPARD v. CSX TRANSPORTATION
Other Austin Industrial employees stated that the door could not have
been closed without first moving the cone.

Sheppard filed an action in South Carolina state court alleging that
CSX, which he alleges was the owner of the railcar scale house, both
negligently created the hazard and negligently failed to warn him of
the hazard that caused his injuries. Sheppard’s wife, Evelyn, filed a
second action based on a derivative claim of loss of consortium. CSX
subsequently removed the cases to the United States District Court for
the District of South Carolina, pursuant to 28 U.S.C.A. § 1441(a)
(West 1994 & Supp. 2003), on the basis of diversity of citizenship.2
See 28 U.S.C.A. § 1332 (West 1993 & Supp. 2003). The district court
consolidated the cases, granted DSM’s motion to intervene to assert
a lien for worker’s compensation benefits paid to Sheppard and
denied CSX’s motion to transfer venue to the Southern District of
Georgia. On August 3, 2002, after the close of discovery, CSX filed
a motion for summary judgment pursuant to Federal Rule of Civil
Procedure 56. The district court, in an order dated November 6, 2002,
granted this motion, based on its finding that CSX did not own or
operate the property in question and thus owed no duty to Sheppard
under a theory of premises liability. The court also held that CSX did
not owe a duty to warn Sheppard of hazards that it did not create. The
Sheppards timely appealed, and we possess jurisdiction to hear this
case under 28 U.S.C.A. § 1291 (West 1993).

II

Because federal jurisdiction in this matter arises from the diversity
of citizenship of the parties, we apply the relevant state rule of deci-
sion. Erie R.R. Co. v. Tompkins, 304 U.S. 64 (1938). A district court,
sitting in diversity, must apply the choice of law rules of the state in
which it sits in determining which state’s law applies. Klaxon Co. v.
Stentor Elec. Mfg. Co., 313 U.S. 487, 489 (1941). Applying South
Carolina choice of law rules, the district court properly chose to apply
Georgia law because Georgia was the place where the alleged injury
occurred. See Boone v. Boone, 546 S.E.2d 191, 193 (S.C. 2001)
2
CSX is a Virginia corporation that maintains its principal place of
business in Florida, while the Sheppards are residents of South Carolina.
 SHEPPARD v. CSX TRANSPORTATION 5
(absent public policy concerns, South Carolina applies the doctrine of
lex loci delicti for torts).

The Sheppards appeal the district court’s order granting summary
judgment in favor of CSX on their claims. Summary judgment is
appropriate only "if the pleadings, depositions, answers to interroga-
tories, and admissions on file, together with the affidavits, if any,
show that there is no genuine issue as to any material fact" Fed. R.
Civ. P. 56(c); Celotex Corp. v. Catrett, 477 U.S. 317, 322-323 (1986).
In deciding whether there is a genuine issue of material fact, "the evi-
dence of the nonmoving party is to be believed and all justifiable
inferences must be drawn in its favor." American Legion Post 7 v.
City of Durham, 239 F.3d 601, 605 (4th Cir. 2001). A mere scintilla
of proof, however, will not suffice to prevent summary judgment; the
question is "not whether there is literally no evidence, but whether
there is any upon which a jury could properly proceed to find a ver-
dict for the party" resisting summary judgment. Anderson v. Liberty
Lobby, Inc., 477 U.S. 242, 251 (1986) (internal quotation marks omit-
ted). A failure to produce evidence sufficient to permit a jury to find
for the nonmovant plaintiff as to one of the elements of his cause of
action renders all other issues of fact immaterial. Celotex, 477 U.S.
at 323.

We review a district court’s grant of summary judgment de novo.
A.T. Massey Coal Co. v. Massanari, 305 F.3d 226, 236 (4th Cir.
2002). We also review a district court’s interpretation of state law de
novo. Salve Regina College v. Russell, 499 U.S. 225, 231 (1991).
Sheppard essentially makes three arguments regarding CSX’s duty to
warn him of the hazard. We address each in turn.

A. CSX’S OWNERSHIP AND CONTROL

1.

Sheppard first argues that the district court erred in finding that
CSX did not own or control the railcar scale house. A negligence
claim cannot lie unless a party can show "a duty or obligation, recog-
nized by the law, requiring the actor to conform to a certain standard
of conduct, for the protection of others against unreasonable risks."
Lau’s Corp. v. Haskins, 405 S.E.2d 474, 476 (Ga. 1991) (internal
6 SHEPPARD v. CSX TRANSPORTATION
quotation marks omitted). Sheppard claims that CSX had a duty to
warn under a theory of premises liability. See Ga. Code Ann. § 51-3-
1 (2003) (creating duty for landowners to exercise reasonable care
towards invitees). To succeed on a claim for premises liability, how-
ever, Sheppard must first show that CSX owned the property in ques-
tion.

A court attempting to determine if a party owns property should
examine whether the party has "control of the property, whether or
not [the party] has title thereto and whether or not [the party] has a
superior right to possession of property which is in the possession or
control of another." Georgia Bldg. Serv., Inc. v. Perry, 387 S.E.2d
898, 905 (Ga. Ct. App. 1989) (internal quotation marks and citations
omitted). Sheppard has failed to adduce any evidence that CSX pos-
sessed anything more than a limited right to maintain the railcar scale
itself.

The Private Sidetrack Agreement explicitly disclaims CSX’s own-
ership in the railcar scale house and only provides that CSX "shall
maintain the track scale apparatus." (J.A. at 331.) CSX employees
were not permitted to wander freely around the industrial site, and
were required at all times to follow DSM’s rules and regulations. Fur-
thermore, after the accident occurred, DSM and Austin Industrial
implemented a number of remedial safety measures.3 CSX was not
contacted regarding these measures and did not participate in their
formulation or implementation. CSX also did not play a role in creat-
ing the accident report. These facts all show that CSX did not main-
tain control or possession over the railcar scale house. CSX had a
limited right to maintain the track scale apparatus, but it did not own
or control the railcar scale house, where the accident occurred.
Because CSX did not own the railcar scale house, it did not owe a
duty to Sheppard under the doctrine of premises liability.

3
Fed. R. Evid. 407 states that evidence of subsequent remedial mea-
sures cannot be admitted to show liability, but can be admitted for "an-
other purpose, such as proving ownership, control."
 SHEPPARD v. CSX TRANSPORTATION 7
2.

Sheppard next argues that CSX operated the railcar scale house in
a joint venture with DSM Chemicals, and therefore is liable under
some joint venture theory of liability. This theory of liability appears
nowhere in the complaint and is not cognizable here. See Muth v.
United States, 1 F.3d 246, 250 (4th Cir. 1993) (holding that "issues
raised for the first time on appeal generally will not be considered").
Even if this theory were properly before us, it offers Sheppard no
relief. Assuming that CSX is not immune from tort liability as a joint
venturer with DSM as a result of DSM having paid Sheppard work-
er’s compensation benefits,4 any state law tort claim would be pre-
empted by the Federal Employer’s Liability Act (FELA), 45 U.S.C.A.
§ 51-60 (West 1986). If a joint venture did exist, Sheppard was an
employee of CSX because he engaged in the activities of the joint
venture. See Seckinger & Co. v. Foreman, 314 S.E.2d 891, 893 (Ga.
1984). If Sheppard was an employee of CSX, he would have to file
any claim for injury suffered during the course of employment under
FELA, not state tort law. See New York Cent. R.R. Co. v. Winfield,
244 U.S. 147, 153 (1917) (holding that FELA preempts state negli-
gence and worker’s compensation laws as applied to interstate rail
carriers). Therefore, any state tort claim by Sheppard based on a joint
venture theory of liability is preempted.

B. CSX’S ROLE IN CREATING THE HAZARD

Sheppard’s final argument is that CSX had a duty to warn Shep-
pard of hazards on the premises because Sheppard was a fellow sub-
contractor. Sheppard relies primarily on decisions of the Court of
Appeals of Georgia for the proposition that subcontractors owe a duty
"in prosecuting [their] work, to use ordinary care not to cause injuries
to others engaged in work on the same premises." Soucy v. Alexander,
323 S.E.2d 662, 664 (Ga. Ct. App. 1984); see also Ragsdale Heating
4
See Seckinger & Co. v. Foreman, 314 S.E.2d 891, 893 (Ga. 1984)
(holding that because one joint venturer "is liable for worker’s compen-
sation benefits for its joint venturer’s employees" then "one joint ven-
turer is immune from tort liability to its joint venturer’s employees"); but
see Ga. Code Ann. § 34-9-2(b) (2003) ("[T]his chapter shall not apply to
any common carriers by railroad").
8 SHEPPARD v. CSX TRANSPORTATION
& Air Conditioning, Inc. v. Terrell, 539 S.E.2d 199, 200 (Ga. Ct. App.
2000) (recognizing duty of subcontractors to exercise reasonable care
to avoid injury to other subcontractors), Doke v. Dover Elevator Co.,
263 S.E.2d 209, 211 (Ga. Ct. App. 1979) (same).

This line of cases, as the district court recognized, only creates a
duty of reasonable care where the actions of the subcontractor create
the hazard that causes the injury. Georgia law does not create a duty
for subcontractors to warn of hazards that they are aware of but did
not create. Cf. Adcox Serv. Co. v. Adderhold, 435 S.E.2d 262, 263
(Ga. Ct. App. 1993) (finding that independent contractors did not owe
a duty to warn others of a hazard unless they created it). Therefore,
the issue in this case is whether Sheppard presented a triable issue of
fact that Wasdin created the hazard by closing the door and removing
the cone.

Sheppard is correct that the issue of who closed the door is one of
fact. "[I]t is the duty of the court to withdraw the case from the jury
when the necessary inference is so tenuous that it rests merely upon
speculation and conjecture," however. Sylvia Development Corp. v.
Calvert County, 48 F.3d 810, 818 (4th Cir. 1995) (quoting Ford
Motor Co. v. McDavid, 259 F.2d 261, 268 (4th Cir. 1958)); accord
Moore v. Teague, 564 S.E.2d 817, 820 (Ga. Ct. App. 2002) ("[W]hen
the matter remains one of pure speculation or conjecture, or the prob-
abilities are at best evenly balanced, it becomes the duty of the court
to grant summary judgment for the defendant."). Sheppard’s only evi-
dence is that both Wasdin and Byrnes admitted that they might have
closed the door, although neither remembers. Byrnes also admits he
may have moved the cone, but Wasdin remained certain that he did
not alter the cone’s placement. Wasdin’s denial regarding the cone,
given the evidence that the cone had to be moved to close the door,
in fact makes it more likely that Byrnes closed the door. Thus, the
jury could, at most, merely speculate about whether it was Wasdin or
Byrnes who moved the cone, closed the door, and created the hazard.
Because Sheppard cannot prove that Wasdin created the hazard, he
cannot show that CSX owed a duty of reasonable care to him.5 CSX
5
Sheppard believes that a tort rule finding a duty when the subcontrac-
tor created the hazard but not when the subcontractor knew of the hazard
 SHEPPARD v. CSX TRANSPORTATION 9
cannot be found negligent if it did not owe a duty to Sheppard. The
district court was correct in awarding summary judgment on this claim.6

III

For the foregoing reasons, we affirm the judgment of the district
court.

AFFIRMED

but fails to warn others is unsound as a matter of law and economics.
This argument may or may not have merit, but is irrelevant to the task
at hand. We apply Georgia law as it has been applied by the courts of
Georgia, without questioning the law’s wisdom. See Erie R.R. Co. v.
Tompkins, 304 U.S. 64 (1938).
6
Sheppard also claims that CSX’s safety manuals created a duty of rea-
sonable care towards third parties. Although Georgia law does allow
safety manuals to serve as evidence of negligence, see Luckie v. Piggly-
Wiggly Southern, Inc., 325 S.E.2d 844, 845 (Ga. Ct. App. 1984) (cita-
tions omitted), no Georgia case has held that safety manuals, by them-
selves, create a duty of reasonable care to third parties.