Class Actions Brief Blog

Lecroy v. CSX Transportation, Inc., No. 2:14-cv-02128 (D.S.C. June 2, 2014) arises from a CSX train derailment at the underpass of Cypress Gardens Road in Berkley County, South Carolina, which caused a bridge to collapse. A purported class of Berkley County citizens filed a negligence and strict liability action against CSX, seeking damages for the “cost for transportation,” including costs associated with a 22-mile detour route around the collapsed bridge. The lawsuit alleges a strict liability claim under South Carolina’s Anti-Blocking Statute, S.C. Code § 57-7-240, which imposes a fine of $5.00 to $20.00 per day per person against a railroad for blocking a public roadway. (Query, however, whether the state statute is preempted by Section 10501 of the Interstate Commerce Commission Termination Act, which confers exclusive jurisdiction over the regulation of railroad transportation to the Surface Transportation Board.)

CSX removed the action to the District Court of South Carolina pursuant to the Class Action Fairness Act, which permits removal of class actions where the putative class has at least 100 proposed members, the parties are of at least minimal diversity, and the aggregate amount in controversy exceeds $5 million. The first two requirements were undisputed, but the third requirement was more problematic because the complaint does not specify the amount of damages. CSX, in removing the action, stated that it had to prove by a preponderance of the evidence that the amount in controversy exceeds the jurisdictional requirement. The District Court has not ruled on this issue, but CSX relied on Crosby v. CVS Pharmacy, Inc., 409 F. Supp. 2d 665, 668 (D.S.C. 2005) in coming to this conclusion. But see Bartnikowski v. NVR, Inc., 307 F. App’x 730, 734 (4th Cir. 2009) (applying the preponderance of the evidence standard to determine the jurisdictional amount for an unspecified damages claim upon the parties’ agreement, but recognizing that although other circuits employ a preponderance standard, it has not yet been adopted in the Fourth Circuit). To estimate damages, CSX relied on a South Carolina Department of Transportation report stating that it will take 180 days to replace the bridge and that the bridge had an average daily traffic count of 6,200 vehicles. CSX calculated the plaintiffs’ requested damages to be in excess of $13 million by multiplying the IRS mileage reimbursement rate of $0.56 by a 22-mile detour route for 180 days, which equaled $2,217.60 per class member and $13,749,120 total for a class of 6,200 members. This $13 million was enough to satisfy the $5 million removal threshold. CSX also offered an alternative justification to meeting the amount-in-controversy requirement for removal based on the South Carolina Anti-Blocking Statute fines.