Filed: Apr. 30, 2015
Latest Update: Mar. 02, 2020
Summary: PUBLISHED UNITED STATES COURT OF APPEALS FOR THE FOURTH CIRCUIT No. 13-1975 CHARLES EUGENE HARRIS, Plaintiff - Appellee, v. NORFOLK SOUTHERN RAILWAY COMPANY, Defendant – Appellant, and NORFOLK SOUTHERN RAILWAY CORPORATION, Defendant, v. COBRA NATURAL RESOURCES, LLC; SPERRY RAIL, INCORPORATED, d/b/a Sperry Rail Services, Third Party Defendants. No. 13-2026 CHARLES EUGENE HARRIS, Plaintiff - Appellant, v. NORFOLK SOUTHERN RAILWAY COMPANY, Defendant – Appellee, and NORFOLK SOUTHERN RAILWAY CORPOR
Summary: PUBLISHED UNITED STATES COURT OF APPEALS FOR THE FOURTH CIRCUIT No. 13-1975 CHARLES EUGENE HARRIS, Plaintiff - Appellee, v. NORFOLK SOUTHERN RAILWAY COMPANY, Defendant – Appellant, and NORFOLK SOUTHERN RAILWAY CORPORATION, Defendant, v. COBRA NATURAL RESOURCES, LLC; SPERRY RAIL, INCORPORATED, d/b/a Sperry Rail Services, Third Party Defendants. No. 13-2026 CHARLES EUGENE HARRIS, Plaintiff - Appellant, v. NORFOLK SOUTHERN RAILWAY COMPANY, Defendant – Appellee, and NORFOLK SOUTHERN RAILWAY CORPORA..
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PUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
No. 13-1975
CHARLES EUGENE HARRIS,
Plaintiff - Appellee,
v.
NORFOLK SOUTHERN RAILWAY COMPANY,
Defendant – Appellant,
and
NORFOLK SOUTHERN RAILWAY CORPORATION,
Defendant,
v.
COBRA NATURAL RESOURCES, LLC; SPERRY RAIL, INCORPORATED,
d/b/a Sperry Rail Services,
Third Party Defendants.
No. 13-2026
CHARLES EUGENE HARRIS,
Plaintiff - Appellant,
v.
NORFOLK SOUTHERN RAILWAY COMPANY,
Defendant – Appellee,
and
NORFOLK SOUTHERN RAILWAY CORPORATION,
Defendant,
v.
COBRA NATURAL RESOURCES, LLC; SPERRY RAIL, INCORPORATED,
d/b/a Sperry Rail Services,
Third Party Defendants.
Appeals from the United States District Court for the Southern
District of West Virginia, at Charleston. Joseph R. Goodwin,
District Judge. (2:11-cv-00497)
Argued: December 10, 2014 Decided: April 30, 2015
Before TRAXLER, Chief Judge, and KEENAN and THACKER, Circuit
Judges.
Affirmed in part, reversed in part, and remanded by published
opinion. Chief Judge Traxler wrote the opinion, in which Judge
Keenan and Judge Thacker joined.
ARGUED: John Harlan Mahaney, II, HUDDLESTON BOLEN, LLP,
Huntington, West Virginia, for Appellant/Cross-Appellee. Bruce
E. Stanley, REED SMITH, LLP, Pittsburgh, Pennsylvania, for
Appellee/Cross-Appellant. ON BRIEF: T. Matthew Lockhart, David
C. Kiebler, HUDDLESTON BOLEN, LLP, Huntington, West Virginia,
for Appellant/Cross-Appellee. Colin E. Wrabley, Timothy L.
Moore, Douglas C. Allen, M. Patrick Yingling, REED SMITH LLP,
Pittsburgh, Pennsylvania; Tonya L. Hatfield, Inez, Kentucky, for
Appellee/Cross-Appellant.
2
TRAXLER, Chief Judge:
Norfolk Southern Railway Company (“Norfolk Southern”)
appeals a district court order granting summary judgment against
it on the issue of liability in a negligence action brought by
Charles Harris, who seeks compensation for injuries he suffered
as the result of a train derailment. Harris cross-appeals the
district court’s order granting summary judgment against him on
his claim for punitive damages. We affirm in part and reverse
in part, and remand for further proceedings consistent with this
opinion.
I.
On the morning of July 21, 2009, Harris was working on the
second floor of the Black Bear Preparation Plant, a seven-story
coal-loading facility (the “loadout”) in Mingo County, West
Virginia. Harris’s employer, Cobra Natural Resources (“Cobra”),
owned and operated the loadout, and Norfolk Southern owned and
operated the train and owned the track involved in this case.
On that morning, Norfolk Southern employees backed an empty
train of freight rail cars over an area of the Ben Creek Spur
railroad track, which ran underneath the loadout where Harris
was working. Unbeknownst to anyone, a section of the rail
approximately 35 feet from the loadout was heavily corroded and
contained cracks between the rail head (the ball of the rail)
and the web (the vertical part of the rail). When the rail cars
3
passed over this portion of the damaged track, a section of the
rail head separated from the web and several cars derailed. One
of the cars crashed into the loadout’s support beams,
precipitating the collapse of the loadout and causing Harris
debilitating physical and mental injuries. An investigation
into the derailment revealed that the head separation extended
over nine feet of track. The summary-judgment evidence
indicates that most of the separation occurred months or years
before and that the derailment occurred when the final piece of
webbing broke away from the rail head.
Central to this appeal are issues concerning what
obligations Norfolk Southern had to inspect the track and
maintain it, whether Norfolk Southern should have discovered the
defect and taken action prior to the accident, and proximate
cause.
Regarding the defect’s progression, cracks going all the
way through the rail had run along the length of a nine-foot
section between the rail head and the web for a lengthy period
of time before the derailment. An extreme level of corrosion
along the break of the rail confirmed that the rail had been
damaged for several years. Indeed, Norfolk Southern’s own
expert, Brett Pond, testified that of the hundreds of cracked,
broken, or corroded rails he had examined in his career, this
one was “the worst [he’d] ever seen.” J.A. 1246.
4
Norfolk Southern’s duty to inspect the rail arises from the
Federal Rail Safety Act (“FRSA”), see 49 U.S.C. § 20101, et seq.
Congress enacted the FRSA “to promote safety in every area of
railroad operations and reduce railroad-related accidents and
incidents.” 49 U.S.C. § 20101. To achieve this goal, Congress
authorized the Secretary of Transportation to “prescribe
regulations and issue orders for every area of railroad safety.”
Id. § 20103(a). Accordingly, acting through the Federal
Railroad Administration (“FRA”), the Secretary created
comprehensive track safety standards (“TSS”) that govern the
maintenance, repair, and inspection of tracks. See 49 C.F.R.
Part 213; Duluth, Winnipeg & Pac. Ry. Co. v. City of Orr,
529
F.3d 794, 796 (8th Cir. 2008).
Several parts of the TSS, as they existed on the date of
the accident, are relevant to this appeal. Section 213.1 of
Title 49 of the Code of Federal Regulations states that the TSS
prescribe[] minimum safety requirements for railroad
track that is part of the general railroad system of
transportation. The requirements prescribed in this
part apply to specific track conditions existing in
isolation. Therefore, a combination of track
conditions, none of which individually amounts to a
deviation from the requirements in this part, may
require remedial action to provide for safe operations
over that track. This part does not restrict a railroad
from adopting and enforcing additional or more
stringent requirements not inconsistent with this
part.
5
49 C.F.R. § 213.1(a) (2009). Subparts B through E of section 213
prescribe minimum requirements for “roadbed and areas
immediately adjacent to roadbed” (Subpart B), “the gage,
alinement, and surface of track, and the elevation of outer
rails and speed limitations for curved track” (Subpart C),
“ballast, crossties, track assembly fittings, and the physical
conditions of rails” (Subpart D), and “certain track appliances
and track-related devices” (Subpart E). 49 C.F.R. §§ 213.31,
.51, .101, .201 (2009).
Under the TSS, different classes of track have different
maximum speeds and different maintenance and inspection
requirements. See 49 C.F.R. §§ 213.9, .233-.369 (2009).
Section 213.233 governs inspections of Class 1-5 tracks, of
which the Ben Creek Spur is Class 2, see J.A. 2034, 2105. The
regulation requires that inspections be made “by a person
designated under [49 C.F.R.] § 213.7,” 1 but it provides very few
specific limitations concerning how inspections must be
conducted. 49 C.F.R. § 233(a). It requires that they “be made
on foot or by riding over the track in a vehicle at a speed that
allows the person making the inspection to visually inspect the
track structure for compliance with this part.” 49 C.F.R.
1
As is relevant here, § 213.7 requires the designee to have
particular levels of experience, knowledge, and ability in
certain areas. See 49 C.F.R. § 213.7 (2009).
6
§ 213.233(b). For an inspection made from a moving vehicle, the
vehicle’s speed is left to “the sole discretion of the
inspector, based on track conditions and inspection
requirements,” except that vehicles may not exceed “[five] miles
per hour when passing over track crossings and turnouts.” Id.
The regulation even allows for a single inspector in a vehicle
to simultaneously inspect two tracks 30 feet apart or for two
inspectors in a vehicle to simultaneously inspect four tracks
that are no more than 39 feet from the track over which their
vehicle is travelling, so long as certain requirements are met. 2
Because the Ben Creek Spur is Class 2, inspections are required
only weekly. See 49 C.F.R. § 233(c) 3. If an inspector
conducting a § 213.233 inspection “finds a deviation from the
2
Simultaneous inspections of multiple tracks from a moving
vehicle can be valid only if “the inspector’s visibility remains
unobstructed by any cause,” 49 C.F.R. § 213.233(b)(1), (2), a
requirement that does not apply to inspections of a single
track. Also, except for certain high density commuter railroad
lines, each main track must be “actually traversed by the
vehicle or inspected on foot at least once every two weeks, and
each siding [must be] actually traversed by the vehicle or
inspected on foot at least once every month.” 49 C.F.R.
§ 213.233(b)(3).
3
For excepted track, and track of Class 1, 2, or 3, the
main track and sidings must be inspected weekly with at least
three calendar days between inspections, while track other than
main track or sidings must be inspected monthly with at least 20
calendar days interval between inspections. See 49 C.F.R.
§ 213.233(c).
7
requirements of [the TSS], the inspector shall immediately
initiate remedial action.” 49 C.F.R. § 213.233(d).
Section 213.113(a) provides specific additional
requirements that apply when a track owner learns of the
presence of specified defects occurring in a rail, as opposed to
other parts of the track structure. In that event, a person
designated under 49 C.F.R. § 213.7 must “determine whether or
not the track may continue in use.” 49 C.F.R. § 213.113(a)
(2009). Even “[i]f he determines that the track may continue in
use, operation over the defective rail is not permitted until”
either the rail is replaced, or particular remedial action
specified in the regulation for particular defects is initiated.
Id.
Section 213.5(a) also provides more generally that a track
owner “who knows or has notice that the track does not comply
with the requirements of this part, shall” either bring the
track into compliance, cease operations over the track, or
operate the track under authority of a person designated under
§ 213.7(a) with at least one year of supervisory experience
concerning railroad track maintenance, subject to specified
conditions. 49 C.F.R. § 213.5(a) (2009) (emphasis added).
In this case, Norfolk Southern’s inspectors inspected the
Ben Creek Spur weekly in the months prior to the July 21, 2009,
accident. During that time they discovered some defects, but
8
they did not discover the rail defect that eventually caused the
derailment. Within about 100 feet from the loadout in either
direction, including where the defective rail was located, the
track area was covered with coal, dirt, and debris such that
only the head of the rail could be seen. The web of the rail,
the ties, and the ballast were not visible, even by an inspector
walking beside the track. Especially considering the extreme
level of corrosion that was present on the web of the rail in
the affected area for months or years prior to the accident,
there is no question that without this debris, the damage to the
rail would have been apparent to any inspector actually looking
at the web and the complete underside of the rail head of the
defective section of track.
Christopher Carney, who was serving Norfolk Southern as
Division Engineer at the time of the accident, testified
extensively in his deposition regarding Norfolk Southern’s
inspections. Carney testified that the inspectors inspected the
Ben Creek Spur in several ways. First, they conducted on-foot
inspections. They would also ride a geometry car, which
railroads generally use to test the track’s smoothness,
position, curvature, and alignment, as well as the crosslevel of
the two rails. See generally 49 C.F.R. Part 213, Subpart C
(governing track geometry). And they would make “high rail
inspections,” J.A. 1955, during which they traversed the rail in
9
a vehicle but alighted to make closer inspections when needed.
He testified that eight to twelve miles per hour was a good
speed for visual inspections of the Ben Creek Spur, except for
when riding over road crossings or going across turnouts, where
the maximum speed would be five miles per hour. See 49 C.F.R.
§ 233(b).
Carney testified that the coal spillage on the Ben Creek
loadout area “was no different than you would see at any of the
other loadouts on the Norfolk Southern line” for which Carney
was responsible. J.A. 2011. He stated that he was not aware of
any FRA rule prohibiting the presence of coal debris around the
track structure during inspections, and he was satisfied that he
could adequately inspect the track without having the tracks
cleared. He testified that inspectors are trained to look for
“telltale signs” of head/web separation even when snow or other
material covering the track prevents them from seeing underneath
the ball of the rail. J.A. 1969, 2030. For example, the rail’s
profile “can have a dip in it,” there can be depressions in the
coal or other material, or the rail head may “appear more
blackened.” J.A. 1969, 1971; see also J.A. 1974-75 (“[I]f you
are in a truck, you are still going to look at the profile of
the rail to see if you see any dips, any change in the profile .
. . of the rail.”). Any of these indicators might prompt an
inspector to get out of his vehicle to make a closer
10
examination, although Carney noted that these indicators are not
always present. 4
Carney noted that the corrosion that might be associated
with a head/web separation is “[o]n the web of the rail
typically” but can “also be on the bottom of the rail.” J.A.
1970. He noted that because “a head/web separation is on the
underside of the rail,” “you are not going to see [it] from
looking down,” although sometimes inspectors can see signs
indicating that a defect exists. J.A. 1970-71.
Norfolk Southern Track Supervisor Jack Stepp testified that
there would often be coal piled up on the track such that he and
Assistant Track Supervisor Ricky Lee both would need to shovel
it out just to get their vehicle down the track to conduct their
inspections. Stepp noted that the presence of coal “makes it
hard” to conduct required inspections. J.A. 1296. Lee
confirmed the problem and also testified that although Cobra
“did from time to time do a little bit of cleaning” of the
tracks, it was “not really good enough.” J.A. 1319; see also
J.A. 1326 (“[W]e couldn’t get [Cobra] to [clean the track] very
well, but they did make an attempt from time to time.”).
4
Carney also testified that if inspecting on foot, one
would look for “any lateral movement of the rail,” which “would
indicate that the ball was separated.” J.A. 1975.
11
In addition to inspecting the track visually, Norfolk
Southern contracted with Sperry Rail Services (“Sperry”) to
conduct ultrasonic internal rail defect testing. Carney
testified that Sperry’s ultrasonic search for internal defects
was actually a more effective way to search for such defects
than inspecting the track structure visually. Norfolk Southern
had Sperry test the relevant section of track in October 2006
and October 2007 and intended for Sperry to test it again in
February 2009. However, unbeknownst to Norfolk Southern at the
time, Sperry’s February 2009 testing apparently did not include
the relevant section. 5 There is no dispute that considering the
seriousness of the defect, ultrasonic testing of the relevant
area should have revealed the defect.
Following the July 2009 derailment, Harris brought this
lawsuit in state court against Norfolk Southern, alleging that
Norfolk Southern was negligent in various respects under state
law, and seeking compensatory and punitive damages. As is
relevant to the current appeal, Harris claimed that Norfolk
5
In answers to interrogatories, Norfolk Southern stated
that “it appears that Sperry” did not test the portion of the
rail that caused the derailment. J.A. 1536. However, Norfolk
Southern Track Supervisor Stepp, who was on the Sperry truck
that was conducting the 2009 testing, testified that he believed
they had traversed the rail in question. No allegation of
negligence is made by Harris against Norfolk Southern regarding
the failure of Sperry to conduct the ultrasonic testing.
12
Southern negligently failed to adequately inspect and maintain
its tracks.
Norfolk Southern removed the case to federal district court
on the basis of diversity jurisdiction, and it subsequently
asserted third-party claims against Cobra and Sperry for
indemnity. Sperry in turn asserted counterclaims against
Norfolk Southern and cross-claims against Cobra, which also
filed cross-claims against Sperry. The claims by and against
Sperry were eliminated by a partial settlement and a later
partial dismissal order. Norfolk Southern subsequently filed an
amended third-party complaint against Cobra, asserting indemnity
under two separate agreements.
Norfolk Southern also filed an answer to Harris’s
complaint. In the answer, Norfolk Southern asserted as an
affirmative defense the contention that the FRSA preempts
Harris’s claims. 6 Following discovery, Norfolk Southern and
Harris filed cross-motions for summary judgment.
On the merits of the track inspection and maintenance
claims, Harris argued that the record established as a matter of
law that because the rails on the Ben Creek Spur were constantly
covered by debris, dirt, and coal, Norfolk Southern could not
6
The district court ruled that Harris’s claims were not
preempted to the extent Harris alleged violations of federal
standards of care under 49 C.F.R. § 213.1(a), 213.5(a), and
213.233, a conclusion the parties do not contest on appeal.
13
have conducted its inspections required by § 213.233. Harris
also argued that, as a matter of law, Norfolk Southern knew or
should have known that the rail was no longer in compliance with
the TSS. Thus, Harris maintained, Norfolk Southern was legally
obligated to undertake the measures § 213.5 prescribed.
In contrast, Norfolk Southern maintained that § 213.233
created no duty to clear the debris from its tracks in order to
conduct its required inspections. It also contended that it had
no knowledge or notice of the rail defect prior to the
derailment.
The district court concluded that the record established as
a matter of law that Norfolk Southern violated its duty to
visually inspect the track structure pursuant to 49 C.F.R. §
213.233 because the area around the loadout was covered with
debris, dirt, and coal during the inspections Norfolk Southern
attempted. See Harris v. Norfolk S. Ry. Corp., 2012 WL 6209164,
at *11-13 (S.D. W. Va. Dec. 13, 2012). The court further ruled
that the record established as a matter of law that Norfolk
Southern was responsible for the injuries caused by the
defective rail because the railroad “kn[ew] or ha[d] notice” of
the rail defect, 49 C.F.R. § 213.5(a), insofar as “the evidence
. . . establishes that the broken rail had existed for some
time.” Harris,
2012 WL 6209164, at *13. Accordingly, although
the court ruled that Harris failed to even create a genuine
14
issue of fact on his other liability theories (which are not
relevant to this appeal), the court granted partial summary
judgment to Harris on the issue of whether Norfolk Southern’s
negligence caused the derailment. See id. at *13-16, 18. The
court, however, granted summary judgment against Harris on his
claim for punitive damages, noting that “[t]he only real
evidence here is that [Norfolk Southern] may have failed to
comply with federal regulations, which resulted in injuries to
the plaintiff” and “I [find] that there is insufficient evidence
to support a claim for punitive damages in this case.”
Id. at
*16.
The case then proceeded to a jury trial on the issue of
Harris’s compensatory damages. After two days of testimony, the
jury awarded Harris $2,977,383, which included $2,000,000 for
pain and suffering and loss of enjoyment of life, $795,183 for
lost earnings, $125,000 for loss of household services, and
$57,200 for medical expenses. Norfolk Southern subsequently
moved unsuccessfully for a new trial or alternatively a
remittitur, for reasons we will discuss. See Harris v. Norfolk
S. Ry., 2013 WL 896194, at *3-4 (S.D. W. Va. Mar. 8, 2013).
Norfolk Southern later resolved certain of its claims
against Cobra, and the district court subsequently entered a
final judgment resolving all claims pursuant to Federal Rule of
Civil Procedure 54(b).
15
II.
Norfolk Southern argues that the district court erred in
granting summary judgment to Harris on the issue of Norfolk
Southern’s liability for the accident. We agree. 7
“We review a district court’s decision to grant summary
judgment de novo, applying the same legal standards as the
district court, and viewing all facts and reasonable inferences
therefrom in the light most favorable to the nonmoving party.”
T–Mobile Ne. LLC v. City Council of Newport News, 674 F.3d 380,
384–85 (4th Cir. 2012) (internal quotation marks omitted).
Summary judgment is appropriate “if the movant shows that there
is no genuine dispute as to any material fact and the movant is
entitled to judgment as a matter of law.” Fed. R. Civ. P.
56(a).
A critical aspect of this appeal involves interpreting
federal regulations. We normally construe regulations using the
same rules we employ to construe statutes. See, e.g., Gilbert
v. Residential Funding LLC, 678 F.3d 271, 276 (4th Cir. 2012).
If the regulation’s language “has a plain and ordinary meaning,
courts need look no further and should apply the regulation as
it is written.”
Id. (internal quotation marks omitted). If a
7
We have appellate jurisdiction under 28 U.S.C. § 1291 in
light of the district court’s Rule 54(b) certification of final
judgment.
16
regulation is ambiguous, however, “then we look beyond the plain
language, examining regulatory intent and overall [regulatory]
construction.” Qwest Corp. v. Colorado Pub. Utils. Comm’n, 656
F.3d 1093, 1099 (10th Cir. 2011) (alteration and internal
quotation marks omitted). An agency’s interpretation of a
regulation it administers is accorded controlling deference so
long as the interpretation is not contrary to the regulation or
law that authorized the regulation. See Christopher v.
SmithKline Beecham Corp.,
132 S. Ct. 2156, 2166 (2012).
The claim at issue in this appeal is Harris’s state-law
negligence, personal-injury cause of action, which requires
Harris to prove the typical “four basic elements: duty, breach,
causation, and damages.” Hersh v. E-T Enters., Ltd. P’ship, 752
S.E.2d 336, 341 (W. Va. 2013). The FRSA’s preemption provision
does not prevent a state-law action seeking damages for personal
injury based on an allegation that the defendant “has failed to
comply with the Federal standard of care established by a
regulation or order issued by the Secretary of Transportation .
. . covering” laws, regulations, and orders related to railroad
safety. 49 U.S.C. § 20106(b)(1)(A). Before us in this appeal
are two allegations concerning violations of federal standards
of care. First is Harris’s allegation that Norfolk Southern
breached its duty to conduct visual inspections in accordance
with 49 C.F.R. § 213.233. Second is Harris’s allegation that
17
Norfolk Southern breached its duty to take the measures 49
C.F.R. § 213.5(a) requires a track owner to take when it knows
or has notice that its track is out of compliance with the TSS.
For the following reasons, we conclude that Harris has not
established Norfolk Southern’s liability as a matter of law
under either theory. More specifically, while we agree that
Harris has established that Norfolk Southern breached its duty
to properly inspect the track under the TSS, a genuine issue of
material fact exists as to whether Norfolk Southern’s breach
proximately caused the derailment and Harris’s injuries.
A.
In order to evaluate Harris’s claims that Norfolk Southern
breached the duties imposed upon it by the TSS, we must first
determine the scope of those duties. We begin with the duty
imposed by 49 C.F.R. § 213.5.
Under § 213.5, a track owner “who knows or has notice that
the track does not comply with the requirements of this part”
must either bring the track into compliance, cease operations on
the track, or operate the track under authority of a person
designated under § 213.7(a) with at least one year of
supervisory experience concerning railroad track maintenance,
subject to specified conditions. 49 C.F.R. § 213.5(a)(1)-(3).
Norfolk Southern does not dispute that the record
establishes as a matter of law that the rail had been out of
18
compliance with the TSS for months or years prior to the
derailment. However, it argues that a genuine factual issue
existed regarding whether it knew or had notice that the track
was out of compliance with the TSS, and thus, whether its duty
to address the defect under § 213.5 was ever triggered.
Resolving the issue of whether a genuine factual dispute
existed regarding whether Norfolk Southern “kn[e]w[] or ha[d]
notice” of the defective rail requires us to also determine
whether the “notice” required under § 213.5(a) is actual notice,
constructive notice, or both. In its commentary to the 1998
amendments to the TSS, the FRA states its view that that
standard holds owners liable “only for those defects about which
they know or should know.” Federal Railroad Administration,
Track Safety Standards, 63 Fed. Reg. 33,992-01, 33,995 (June 22,
1998); see id. (“With a knowledge standard attached to the track
regulations, railroads are held liable for non-compliance or
civil penalties for only those defects that they knew about or
those that are so evident the railroad is deemed to have known
about them.”); “Track and Rail and Infrastructure Integrity
Compliance Manual” (2014), at 2.1.10, viewed at
http://www.fra.dot.gov/eLib/details/L04404 (last visited Mar.
23, 2015) (providing that § 213.5 “describes the action that
must be taken by a railroad or track owner once they know or
have notice (knowledge standard) that the track is not in
19
compliance with the TSS”) (saved as ECF opinion attachment).
The commentary explains that this standard “is unique to the
track regulations” in that “other FRA regulations are based on
strict liability.” 63 Fed. Reg. at 33,995. It explains that
the “standard is founded on the notion that railroads cannot
prevent the occurrence of some defects in track structures that
are continually changing in response to the loads imposed on
them by traffic and effects of weather.” Id. The commentary
acknowledges that, for this reason, “[m]any defects may not be
detected even when the track owner exercises reasonable care.”
Id.
The commentary also explains that under the applicable
standard, railroads may be responsible for defects that FRA and
state inspectors have found and alerted the railroad to, as well
as those defects that a railroad’s own inspectors have found.
See
id. at 33,995-96. But, the commentary explains that even
when inspectors have not uncovered a problem, railroads may also
be responsible for a defect that “is of the nature that it would
have had to exist at the time of the railroad’s last inspection
(for example, defective crossties or certain breaks that are
covered with rust) and would have been detected with the
exercise of reasonable care.”
Id. at 33,996. The existence of
a defect of this type “constitutes constructive knowledge by the
railroad.”
Id.
20
Norfolk Southern maintains that § 213.5’s requirement that
a railroad address defects of which it “knows or has notice”
plainly was limited to those defects of which it has actual
knowledge, and thus that the FRA’s reading is unreasonable and
not entitled to deference. In our view, Norfolk Southern’s
position ignores the “or has notice” language in the regulation.
A railroad has constructive notice of a condition that it would
have discovered had it exercised reasonable care, and the FRA’s
interpretation appropriately reflects that. See Black’s Law
Dictionary 1062 (6th ed. 1990) (“Constructive notice is
information or knowledge of a fact imputed by law to a person
(although he may not actually have it), because he could have
discovered the fact by proper diligence, and his situation was
such as to cast upon him the duty of inquiring into it.”).
In response to the contention that it is ignoring the “or
has notice” language in the regulation, Norfolk Southern points
to a different regulation, 49 C.F.R. § 213.113, which was
amended in 2014. The regulation, as amended, provides, in
relevant part:
(a) When an owner of track learns that a rail in the
track contains any of the defects listed in the table
contained in paragraph (c) of this section, a person
designated under § 213.7 shall determine whether the
track may continue in use. If the designated person
determines that the track may continue in use,
operation over the defective rail is not permitted
until--
21
(1) The rail is replaced or repaired; or
(2) The remedial action prescribed in the table
contained in paragraph (c) of this section is
initiated.
(b) When an owner of track learns that a rail in the
track contains an indication of any of the defects
listed in the table contained in paragraph (c) of this
section, the track owner shall verify the indication.
The track owner must verify the indication within four
hours, unless the track owner has an indication of the
existence of a defect that requires remedial action A,
A2, or B identified in the table contained in
paragraph (c) of this section, in which case the track
owner must immediately verify the indication. If the
indication is verified, the track owner must--
(1) Replace or repair the rail; or
(2) Initiate the remedial action prescribed in the
table contained in paragraph (c) of this section.
49 C.F.R. § 213.113 (2014) (emphasis added).
Norfolk Southern notes that under the amended regulation a
track owner’s learning of an indication of a rail defect leads
to a further specific duty on the part of the owner to verify
the defect. Norfolk Southern suggests that § 213.113 as
amended, whose obligations are triggered based on what owners
actually learned rather than on what they should have learned,
should guide our interpretation of § 213.5 such that only the
actual discovery of an indication of a defect would trigger a
duty. But even in the context of the TSS as they were most
recently amended, the FRA’s interpretation of § 213.5 fits
comfortably. Basing liability on constructive knowledge can
serve as a deterrent to the performance of cursory or careless
22
inspections that might not even uncover indications of defects.
Cf. 49 C.F.R. § 215.13 (2009) (requiring pre-departure
inspection of freight cars but providing that performance of
such inspections does not prevent a railroad from being liable
for civil penalties for cars’ noncompliance with freight-car
safety standards).
In sum, we conclude that the FRA’s interpretation of
§ 213.5 is eminently reasonable in light of the language of the
regulation and in the context of the TSS as a whole.
Accordingly, we defer to the FRA’s construction and hold that §
213.5 obligates a track owner to address defects in its track
structure that it actually knows of or should have discovered
had it exercised reasonable care in conducting its inspections.
B.
With this clarification, we turn to Harris’s contention
that the district court properly held Norfolk Southern liable
under § 213.5 because the railroad breached its duty to inspect
the tracks as required by § 213.233 and that, had it not done
so, it would have discovered and repaired the defect.
Accordingly, we must also determine the scope of Norfolk
Southern’s duty to inspect the track under § 213.233.
Relying on the plain meaning of the regulatory language,
Harris contends that § 213.233 unambiguously requires the
inspector to actually look at every part of the track structure,
23
including all parts of the ballast, crossties, and the rails.
Since the presence of debris covering a part of the track
structure would prevent an inspector from visually inspecting
the covered part, Harris argues an inspector has not visually
inspected a track structure within the meaning of the regulation
unless all such debris has been removed.
Norfolk Southern, on the other hand, maintains that a
proper vehicle-based inspection that meets the speed and other
requirements of § 213.233(b) is all that is required, and it
insists that the regulation does not require railroads to remove
all material from the track structure that could obstruct an
inspector’s view. According to Norfolk Southern, requiring
removal of all obstructions “would be functionally unworkable or
impossible,” would be unnecessary because “inspectors are
trained to inspect track for defects even when all or a portion
of the track is visually obscured,” and “would upset the careful
regulatory balance of inspection requirements and resource
allocation reflected in FRA track inspection policy.” Brief of
Appellant at 26.
In our view, neither Harris nor Norfolk Southern has
properly described the scope of a track owner’s inspection
obligations under § 213.233. The regulation requires a track
owner to “visually inspect the track structure for compliance
with” the TSS. 49 C.F.R. § 213.233(b). The “track structure”
24
that must be inspected is defined to include the “ballast,
crossties, track assembly fittings, and the . . . rails.” 49
C.F.R. § 213.101 (2009). The regulation, however, does not
define “visual[] inspect[ion],” and we therefore give those
words their ordinary meaning. See Dickenson-Russell Coal Co.,
LLC v. Secretary of Labor, 747 F.3d 251, 258 (4th Cir. 2014).
In this context, to “inspect” means “to look carefully at or
over; view closely and critically,” and “visually” means “by
sight.” Webster’s Encyclopedic Unabridged Dictionary of the
English Language 987, 2127 (2001). Accordingly, the visual
inspection required by § 213.233(b) is a close and critical look
at the rails and other parts of the track structure for the
purpose of determining whether they are in compliance with the
FRA’s track safety standards.
While a close and critical look at the track structure is
required, we cannot accept Harris’s argument that every inch of
every track must be seen in every inspection, such that every
removable obstruction must always be removed. The language of §
213.233 does not explicitly so require, and we believe that the
TSS as a whole indicate that that was not the FRA’s intention.
We first note that § 213.233 permits visual inspections to
be done on foot or from a vehicle moving over the tracks.
Obviously, less of the track structure will be visible in a
vehicle-based inspection than in an on-foot inspection, given
25
that some parts of the structure, such as certain areas beneath
the rail head, are not visible from a moving vehicle riding
above the track. Because vehicle-based inspections are
expressly permitted, it is difficult to read § 213.233(b) as
requiring an inspector to actually view every inch of every part
of the track structure during every inspection.
Moreover, while the TSS clearly address the frequency with
which inspections must be conducted, the number of tracks that
may be inspected simultaneously, and the maximum speed for the
inspector’s vehicle when passing over track crossings and
turnouts, they are completely silent regarding most other
aspects of the inspection, including where the inspector must
focus his attention, how much time he must spend during an
inspection, and the speed he may travel over portions of the
track other than track crossings and turnouts. The FRA was no
doubt aware that in some situations it would not be feasible for
an inspector to actually view every part of the track structure
during a particular visual inspection. As Norfolk Southern
points out, that would certainly be true of railroad tracks in
city streets and roadways in which the track structure is
covered by asphalt or concrete. Additionally, in colder areas
where snow and ice might conceal portions of the track structure
for long periods, the entire track would need to be cleared for
26
every inspection. 8 Accordingly, we cannot conclude that the duty
to “visually inspect the track structure” obligates the track
owner to visually inspect each and every part of the track
structure during every inspection. 9
Instead, we conclude that the duty imposed by § 213.233(b)
is simply the duty to conduct a reasonable visual inspection in
light of all of the circumstances. See 63 Fed. Reg. at 34,011
(explaining that § 213.233(b) “require[s] an inspector to
perform an adequate inspection” (emphasis added)); cf. id. at
33,995 (using language invoking a reasonable-care standard for
the required inspections when discussing the liability standard
8
Harris argues that the record does not contain evidence of
the burden that would result to railroads from having to clear
the tracks of all concrete, snow, ice, coal, and other debris
before every inspection. We are entitled, however, to take
judicial notice of commonly known facts, such as that asphalt
and concrete cover parts of track structures in some urban
environments and that snow and other debris can cover railroad
tracks. See United States v. Lavender, 602 F.2d 639, 641 (4th
Cir. 1979). In any event, we note that Division Engineer Carney
testified that in certain areas, “the track structure is
completely covered in snow” “for periods of weeks to several
months” such that the area underneath the rail head is not
visible. J.A. 2030.
9
Harris also cites to the language in § 213.233(b) stating
that one inspector may inspect two tracks simultaneously and
that two inspectors may inspect up to four tracks simultaneously
provided that the other tracks are centered a specified distance
from the track over which the inspectors are riding and
“provided that the inspector’s visibility remains unobstructed
by any cause.” 49 C.F.R. § 213.233(b)(1), (2). This language,
however, does not apply to an inspector inspecting a single
track.
27
established by § 213.5); id. at 33,996 (same). In our view,
this reading achieves a balance that reflects the FRA’s
intentions in promulgating the regulation, namely, to establish
certain baseline, minimum requirements that require qualified
inspectors to make reasonable efforts to look for visible signs
of defects in the track structure while leaving them with the
flexibility to make prudent inspection decisions based on their
knowledge and experience.
While Norfolk Southern does not dispute that it must
exercise reasonable care when conducting the visual inspections
required by § 213.233, it contends that a vehicle-based
inspection satisfies that requirement. As we have explained,
however, § 213.233(b) requires a reasonable inspection, and the
mere fact that the regulation permits vehicle-based inspections
does not mean that such inspections always and as a matter of
law amount to reasonable visual inspections. Instead, the
reasonableness of any given inspection will depend on all the
relevant circumstances, and particular circumstances might well
make it unreasonable to conduct an inspection entirely from a
vehicle. For example, a mark or other indication on the visible
surface of the rail could indicate the possibility of a defect
underneath. An inspector, charged with knowledge of the mark,
would have to exercise his discretion and decide if this
evidence was sufficient to require him to stop and walk the rail
28
to make a closer inspection. He has a duty to exercise his
discretion reasonably.
Likewise, if an obstruction on the tracks prevents an
inspector from seeing what would otherwise be visible, then the
exercise of reasonable care might require removal of the
obstruction. If the obstruction were reasonably expected to be
of a relatively short duration, as might be expected in some
situations involving snow or ice, then a decision not to remove
the snow and ice for a better look might be reasonable when the
rail would be seen without the ice or snow during the next
inspection or a short time later. In some instances a layer of
light snow might obstruct a view of the rail, but cover a
hundred miles of track, rendering it impractical to remove all
of the snow but reasonable to leave it if one could expect it to
melt a short time later. The point is that there might be
practical, reasonable reasons to excuse a railroad from clearing
its tracks every time, everywhere an obstruction existed.
On the other hand, allowing debris covering a portion of
the track to remain undisturbed might well be unreasonable. For
example, there is evidence in this case showing that the coal
covering the tracks not only prevented Norfolk Southern from
seeing the defects in the rail, but also contributed to the
corrosion and ultimate failure of the rail, and that Norfolk
Southern was aware that the presence of coal and other debris
29
around the track could cause corrosion of the rail leading to
cracks and head/web separation. See J.A. 1558 (“[T]he presence
of the coal, . . . based on my experience, has a significant
effect on the corrosion.”); J.A. 395 (post-derailment Norfolk
Southern email stating that “the track has been buried in coal
for years and the metal could very well be corroded to little or
nothing”). If a railroad is aware that its track is embedded in
substances that cause or accelerate corrosion, relying on
vehicle-based inspections alone might not be sufficient; the
exercise of reasonable care might well require the inspector to,
at the very least, occasionally dig out portions of the embedded
track to inspect for corrosion and other defects.
In either situation, the standard by which the inspector’s
decision would be judged would be whether the decision was
reasonable in light of all the circumstances. Whatever the
circumstances are, an inspector must examine the rails as a
reasonably prudent inspector would, having due regard for the
requirements and purposes of the inspection regulation.
C.
Having defined the duties imposed on Norfolk Southern by
the TSS, we next turn to the question of whether Harris
established a breach of those duties as a matter of law. We
conclude that he did.
30
The evidence is uncontested that the rail in question in
the Ben Creek track was for months or even years so covered in
coal and other debris that the inspectors could not see the area
of the rail beneath the rail head, which otherwise would have
been visible during a walking or vehicle-based inspection. See
J.A. 2026 (Carney’s testimony that if coal debris covered the
tracks up to the rail head, then there could have been no visual
inspection of the portion of the rail that was covered).
Norfolk Southern did not clear the track of debris or at least
dig out sample areas of the debris to permit it to view sections
of the embedded track structure, and Norfolk Southern had not
conducted any ultrasonic testing on the area in question since
October 2007, more than a year-and-a-half before the July 2009
derailment. Norfolk Southern thus was largely in the dark
concerning the state of the rail, left with only the hope that
if the track had deteriorated, some indication could be visible
in the limited visible portion of the track structure.
As we have explained, a railroad need not view every piece
of the track structure during every inspection. Nonetheless,
Norfolk Southern failed for a period of months and years to
actually look at any of the embedded portion of the track,
despite its obligation to perform weekly visual inspections of
the track structure. Under these circumstances, we believe
that any reasonable jury would find that Norfolk Southern
31
breached its duty to visually inspect the track structure in
accordance with § 213.233(b), and we therefore agree with the
district court that Harris has established a breach of duty as a
matter of law.
D.
Norfolk Southern argues that even if it breached its duty
to inspect under § 213.233(b), a genuine dispute of material
fact existed regarding whether the failure to visually inspect
proximately caused the derailment and Harris’s injuries. In
this regard, Norfolk Southern contends that even inspections
that complied with § 213.233(b) may not have revealed the defect
because of its location under the rail head. Norfolk Southern
emphasizes that § 213.233(b) allows inspections to be conducted
from moving vehicles, and it submits that the record does not
establish as a matter of law that such inspections would have
uncovered signs of the defects in the track structure.
As we have already explained, under some circumstances a
vehicle-based inspection will be sufficient; in such
circumstances, the railroad would only be charged with the
knowledge of what should have been seen from the vehicle.
However, vehicle-based inspections do not always and
automatically satisfy a railroad’s obligation to visually
inspect the track structure. Accordingly, the question is not
whether the defect would have been discovered through a properly
32
conducted vehicle-based inspection, but whether the evidence
establishes as a matter of law that a reasonable visual
inspection of the track would have revealed the defect.
Although the issue is a close one, we ultimately agree with
Norfolk Southern that there are genuine issues of fact
precluding summary judgment on the question of proximate cause.
There is no dispute that the cracks in the defective
section of track had existed for an extended period of time
before the derailment and that there was extensive corrosion on
the track. Indeed, even Norfolk Southern’s own expert described
the damage to the rail as “the worst” he had ever seen. J.A.
1246. Nonetheless, the evidence is not so one-sided that we can
say as a matter of law a reasonable visual inspection would have
revealed the defect.
For example, Chris Bagnall, Harris’s metallurgy expert,
testified in his deposition that the degree of corrosion and
crack formation on the broken piece of rail indicated that
damage requiring remediation would have been present and could
have been detected in 2009 by ultrasonic testing or by walking
down the track and digging out areas of the coal debris to
permit inspection. Bagnall, however, did not testify that signs
of the defect appeared consistently across the length of the
embedded track such that they would necessarily be discovered by
an inspector digging out sample areas of debris, or that signs
33
of the defect would have been located far enough down the web of
the rail that an inspector would necessarily have been able to
see them even had the track been clear of debris. See J.A. 3800
(Bagnall’s testimony that an inspector would not be expected “to
see damage on the top of the rail” and that it would be
difficult to see the cracking or corrosion because “it’s
underneath the head of the rail”). And while Harris also
submitted a report from expert Alan Blackwell opining that
Norfolk Southern would have discovered the defect had it
“perform[ed] proper track inspections that included either
visual detection or sounding the rail with a ball-peen hammer in
the area if the track was embedded with dirt, coal and ballast,”
J.A. 958, that report was unsworn. Nonetheless, even if we
considered Blackwell’s report, Norfolk Southern’s competing
evidence raises sufficient questions about these expert
conclusions to preclude summary judgment.
Because of the complications posed by the location of the
defect under the rail head, we conclude that a jury could
reasonably find that Harris has not proven that Norfolk Southern
would have discovered the defect even had it not breached its
duty to conduct proper visual inspections. Accordingly, the
question of whether Norfolk Southern’s breach of its duty to
conduct the inspections required by § 213.233(b) proximately
caused the derailment and Harris’s injuries was one for a jury
34
to decide. 10 We therefore conclude that the district court erred
in granting partial summary judgment to Harris on this issue of
Norfolk Southern’s liability for the derailment.
III.
In his cross-appeal, Harris argues that the district court
erred in granting summary judgment against him on his claim for
punitive damages.
Of course, in considering Norfolk Southern’s entitlement to
summary judgment, we must view the record in the light most
favorable to Harris. See T–Mobile Ne. LLC, 674 F.3d at 385.
“In a diversity action, . . . the propriety of an award of
punitive damages for the conduct in question, and the factors
the jury may consider in determining their amount, are questions
of state law.” Browning-Ferris Indus. of Vt., Inc. v. Kelco
Disposal, Inc.,
492 U.S. 257, 278 (1989).
Although punitive damages under West Virginia law were
originally “awarded only to deter malicious and mean-spirited
conduct,” the standard “has grown to include . . . extremely
negligent conduct that is likely to cause serious harm.” TXO
Prod. Corp. v. Alliance Res. Corp., 419 S.E.2d 870, 887 (W. Va.
10
Indeed, in light of our determination that a genuine
factual dispute existed regarding whether reasonable inspections
would have uncovered the defect, we also conclude that a jury
issue existed regarding whether Norfolk had constructive notice
of the defect and a duty to address it under § 213.5.
35
1992), aff’d, 509 U.S. 443 (1993). As the standard exists
today, punitive damages may be awarded where a plaintiff shows
“gross fraud, malice, oppression, or wanton, willful, or
reckless conduct or criminal indifference to civil obligations
affecting the rights of others.” Crawford v. Snyder,
719 S.E.2d
774, 783 (W. Va. 2011) (internal quotation marks omitted). In
our view, the record does not give rise to any reasonable
inference that this standard was met.
Harris argues that “the undisputed evidence shows that,
prior to the July 2009 derailment here, [Norfolk Southern] had
known for years that compliant visual inspections of the track
where the derailment occurred were not being conducted because
the track was almost completely covered with coal, dirt, and
other debris” and that “[t]he broken rail had developed over a
period of years before July 2009 as a result of this gross
neglect.” Brief of Plaintiff-Appellee-Cross-Appellant, at 60-
61. But even Harris recognizes that Norfolk Southern was hardly
indifferent to the existence of rail defects of the type at
issue here. In fact, Harris concedes (1) that Norfolk Southern
contracted with Sperry to conduct ultrasonic internal rail
defect testing at the Ben Creek Spur in 2009, (2) that had the
damaged nine-foot section actually been tested, the defect would
have been revealed, and (3) that it was only because Norfolk
Southern inaccurately mapped the GPS coordinates of the Spur
36
that the nine-foot section was not tested. 11 See Brief of
Plaintiff-Appellee-Cross-Appellant, at 10. There is no dispute
that Sperry tested the rail at issue in October 2006 and October
2007 and discovered no defect in either of those years. And
there is no evidence that Norfolk Southern realized that Sperry
had omitted the section during its 2009 testing. Even if Harris
is correct that Norfolk Southern’s erroneous mapping was the
cause of the omission, 12 that is simply not the sort of extreme
negligence bordering on recklessness that could serve as the
basis for an award of punitive damages. We therefore hold that
the district court properly granted summary judgment on Harris’s
punitive damages claim.
IV.
In sum, for the foregoing reasons, we affirm the grant of
Norfolk Southern’s motion for summary judgment on Harris’s
punitive damages claim and reverse the grant of summary judgment
to Harris on the issue of Norfolk Southern’s liability for the
11
In fact, former Division Engineer Carney testified that
he was satisfied that Norfolk Southern could adequately inspect
the rail ultrasonically and actually do a more thorough
inspection than it could do visually.
12
Carney testified that even if Sperry did not test the
nine-foot section in 2009, he did not believe that omission was
due to inaccuracy of the track chart.
37
accident and remand to the district court for further
proceedings.
AFFIRMED IN PART,
REVERSED IN PART,
AND REMANDED
38
