[PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR TH E ELEV ENTH C IRCUIT
FILED
________________________ U.S. COURT OF APPEALS
ELEVENTH CIRCUIT
January 12, 2004
No. 02-12261
THOMAS K. KAHN
________________________ CLERK
D. C. Docket No. 98-00223-CV-4-BAE
CSX TRA NSP ORT ATIO N, IN C.,
NAT ION AL R AILR OAD PAS SEN GER COR POR ATIO N,
Plaintiffs-Cross-
Defen dants-A ppellants ,
versus
THE CITY OF G ARD EN C ITY,
Defendant-Third-P arty
Plaintiff- Appe llee,
versus
ARC O IN C.,
Third- Party D efendan t-
Cross- Claiman t-App ellee.
________________________
Appeal from the United States District Court
for the S outhern District o f Geor gia
_________________________
(January 12, 2004)
Before AN DERS ON, BIR CH and B ARKE TT, Circuit Judges.
BIRC H, Circ uit Judg e:
This court certified to the Supreme Court of Georgia two questions of
Georgia law that we found determinative of a case pending in this court and for
which there app eared to b e no con trolling p receden t. CSX Transp., Inc. v. City of
Garde n City, 325 F.3d 1236, 1249 (11th Cir. 2003). The Georgia Supreme Court
answered both certified questions, and, based on its answers, we AFFIRM in part
and RE MA ND in part.
The G eorgia S uprem e Cour t set out the facts as fo llows:
In 1996 Garden City entered into a series of agreements with CSX
Transportation Inc. and its affiliates to utilize a railroad right-of-way
to install w ater and s ewer lin es. The a greeme nts requ ired Ga rden C ity
to indem nify and hold ha rmless C SX o r its subsid iaries for a ll
liabilities CSX suffered in connection with the project and for which
CSX was not the sole cause. The agreements also required Garden
City to m aintain ins urance c overing the indem nity oblig ations the City
had assumed. In October 1997 a passenger train collided with a
tractor traile r operate d by G arden C ity's subco ntractor c ausing C SX to
incur su bstantial p roperty d amage a nd sub jecting CSX to third-pa rty
claims. CSX sought indemnification from Garden City in accordance
with the agreem ents. Ga rden C ity refused and CS X bro ught su it
alleging that it was entitled to indemnification. The district court
granted summary judgment to the City, finding that the
indemnification provision constituted an impermissible waiver of the
City's sov ereign im munity in the absen ce of any evidenc e that the C ity
had liability insuran ce to cov er the ind emnity cla im. The Eleven th
Circuit reversed and remanded to the trial court for its consideration
of the effect of the City's participation in the Georgia Interlocal Risk
Mana gemen t Agen cy (GIR MA ), a multi-g overnm ent insur ance fun d.
2
On remand, the district court again granted summary judgment to the
City, finding that the indemnification agreements were ultra vires and
that O.C .G.A. § 36-33 -1(a) did not auth orize the C ity to waiv e its
immun ity by enter ing into a n indem nity contr act.
CSX Transp ., Inc. v. C ity of Ga rden C ity, 588 S .E.2d 6 88, 688 -89 (G a. 2003 ).
CSX again appealed the district court's ruling to us, whereupon we certified the
follow ing two question s to the G eorgia S uprem e Cour t:
1. MAY A GEORGIA MUNICIPALITY CONTRACTUALLY
INDEMNIFY A PRIVATE PARTY FOR ANY AND ALL LOSS,
DAMAGE, AND LIABILITY ARISING IN CONNECTION WITH A
PUBLIC WORKS PROJECT INVOLVING THE PRIVATE
PARTY'S LAND?
2. IF NOT, IS THERE ANY LOSS, DAMAGE, OR LIABILITY
ARISING IN CONNECTION WITH A PUBLIC WORKS PROJECT
INVOLVING A PRIVATE PARTY'S LAND FOR WHICH A
GEORGIA MUNICIPALITY MAY CONTRACTUALLY
INDEMNIFY THE PRIVATE PARTY?
CSX Transp., 325 F .3d at 12 49.
The Georgia Supreme Court answered both certified questions in the
negative . CSX Transp., 588 S.E.2d at 689. Relying on the plain language of
O.C.G.A. § 36-33-1(a), 1 the court concluded that “sovereign immunity may be
1
O.C.G.A. § 36-33-1(a) provides that
there is no waiver of the sovereign immunity of municipal corporations of the state
and such municipal corporations shall be immune from liability for damages. A
municipal corporation shall not waive its immunity by the purchase of liability
insurance, . . . unless the policy of insurance issued covers an occurrence for which
the defense of sovereign immunity is available, and then only to the extent of the
limits of such insurance policy.
O.C.G.A. § 36-33-1(a).
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waived only by an act of the legislature” and, therefore, “the indemnification
agreement between the City and CSX is void as an ultra vires contract.” Id. at 690.
The court also “decline[d] CSX's invitation to find that municipalities have an
implied authority to do what is expressly reserved to the legislature.” Id. Thus,
according to the Georgia Supreme Court, Georgia municipalities may never waive
their sovereign immunity by, for exam ple, contracting to indemnify third parties,
without (1) express legislative authority or (2) satisfying the requirements of § 36-
33-1(a ). See id.
Finding the indemnity contract between the City and CSX to be void for lack
of legislativ e author ity, how ever, did not end the Geo rgia Su preme C ourt's analysis
because, under § 36-33-1(a), a municipality's sovereign immunity still may be
waived “by the purchase of liability insurance if the 'policy of insurance issued
covers an occurrence for which the defense of sovereign immunity is available, and
then on ly to the ex tent of the limits of su ch insur ance po licy.'” 2 Id. (quoting
O.C.G .A. § 36 -33-1( a)). Consequently, while the indemnification agreement
betwee n the City and CS X wa s correctly determin ed by the district cou rt to be vo id
as ultra vires, we again must remand this case to the district court for consideration
of whether, pursuant to O.C.G.A. § 36-33-1(a), Garden City waived its sovereign
2
The Georgia Supreme Court stated that the City's “purchase of a GIRMA coverage
agreement . . . constitutes the purchase of liability insurance.” CSX Transp., 588 S.E.2d at 690.
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immunity as to CSX's cause of action by purchasing GIRMA insurance. On
remand, the district court on remand must scrutinize the GIRMA policy and
consider “if the facts behind CSX's cause of action against the City fall within the
scope o f covera ge prov ided by th e GIR MA policy an d sover eign imm unity w ould
otherwise apply to that cause of action” to determine whether the City's sovereign
immunity was “waived to the extent of such liability coverage.” Id. The decision
of the United States District Court is therefore AFFIRMED in part and
REMAN DED in part for further proceedings consistent with this opinion.
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