CSX Transportation, Inc. v. General Mills, Inc.
2017 U.S. App. LEXIS 1617
11th Cir.2017Background
- CSX and General Mills entered a 1989 Sidetrack Agreement allowing General Mills to perform switching on a spur track; the agreement contained a switching-specific indemnity clause and a general clause barring liability for losses arising from CSX’s sole negligence.
- In 2005 General Mills employees were switching railcars; Burchfield was injured when a railcar rolled and struck him. Burchfield sued CSX in federal court under diversity jurisdiction.
- After a retrial a jury found CSX solely at fault and awarded Burchfield (later settled for $16 million). CSX then sued General Mills for contractual indemnification under the Sidetrack Agreement.
- General Mills moved to dismiss, arguing collateral estoppel from the prior federal diversity judgment barred CSX’s indemnity claim because that judgment established CSX’s sole fault; the district court granted dismissal applying a federal collateral-estoppel rule.
- CSX argued the district court should have applied Georgia’s collateral-estoppel rule (as adopted into federal common law) which requires identity of parties/privies; CSX preserved the argument on appeal.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether federal common law applies state or federal collateral-estoppel rules to determine preclusive effect of an earlier federal diversity judgment | CSX: federal common law should borrow Georgia collateral-estoppel rules (so identity/privity required) | General Mills: federal common law applies a federal collateral-estoppel rule (no strict identity/privity requirement) | Federal common law borrows the state rule (Palmer & Cay governs; earlier Eleventh Circuit precedent controls) |
| Whether collateral estoppel bars CSX’s indemnity claim because Burchfield and General Mills were in privity | General Mills: Burchfield and General Mills were in privity, so estoppel applies and indemnity is barred | CSX: no privity; Burchfield’s interests differed so estoppel does not apply | Court declined to decide; remanded to district court to resolve privity as a factual matter |
| Whether the Sidetrack Agreement requires indemnification assuming CSX was solely at fault | CSX: agreement requires indemnity even if CSX found solely negligent | General Mills: contractual language and estoppel bar indemnity | Court declined to decide on contract interpretation pending resolution of privity on remand |
Key Cases Cited
- Semtek Int’l Inc. v. Lockheed Martin Corp., 531 U.S. 497 (2001) (federal common law generally adopts state law to determine claim-preclusive effect of federal diversity judgments)
- Parklane Hosiery Co. v. Shore, 439 U.S. 322 (1979) (supreme court articulates offensive and defensive nonparty issue-preclusion principles under federal law)
- Palmer & Cay, Inc. v. Marsh & McLennan Cos., 404 F.3d 1297 (11th Cir. 2005) (held federal common law borrows state collateral-estoppel rule for federal diversity judgments)
- Tampa Bay Water v. HDR Eng., 731 F.3d 1171 (11th Cir. 2013) (applied a federal collateral-estoppel rule to the preclusive effect of a federal diversity judgment)
- CSX Transp., Inc. v. Brotherhood of Maint. of Way Emps., 327 F.3d 1309 (11th Cir. 2003) (stated federal preclusion principles apply to prior federal decisions; treated as dicta for diversity-question issue in this opinion)