The United States District Court for the Southern District of Georgia has certified questions1 in this litigation by CSX Transportation, Inc. and its affiliates collectively “CSX” against the City of Garden City “City” seeking indemnification for property damage and third-party claims arising out of a collision between a passenger train and a tractor trailer operated by the City’s subcontractor during a public works project. CSX Transp., Inc. v. City of Garden City , Georgia, Civil Action No. 498CV223, slip. op. S.D. Ga. March 29, 2005 “CSX VI “. For the reasons which follow, the certified questions are declined. A history of the litigation is necessary. In 1996, the City entered into a series of agreements with CSX to utilize a railroad right-of-way to install water and sewer lines. The agreements required the City to indemnify and hold harmless CSX or its subsidiaries for all liabilities CSX incurred in connection with the project and for which CSX was not the sole cause. The agreements also required the City to maintain insurance covering the indemnity obligations the City had assumed. The City employed ARCO, Inc. “ARCO” as the general contractor for its pipeline installation project. In October 1997, a National Railroad Passenger Corporation “Amtrak” passenger train collided with a tractor trailer operated by the City’s subcontractor causing CSX to incur substantial property damage and subjecting CSX to third-party claims. CSX sought indemnification from the City in accordance with the agreements. The City refused and CSX2 brought suit alleging that it was entitled to indemnification.
The District Court granted summary judgment to the City, finding that the indemnification provisions constituted an impermissible waiver of the City’s sovereign immunity in the absence of any evidence that the City had liability insurance to cover the indemnity claim. The Eleventh Circuit vacated the entry of summary judgment and remanded the case to the District Court for its consideration of the effect of the City’s participation in the Georgia Interlocal Risk Management Agency “GIRMA”, a multi-government insurance fund. CSX Transp., Inc. v. City of Garden City , 235 F.3d 1325 11th Cir. 2000 “CSX I “. On remand, the District Court again granted summary judgment to the City, finding that the indemnification agreements were ultra vires and that OCGA § 36-33-1a did not authorize the City to waive its immunity by entering into an indemnity contract. CSX Transp., Inc. v. City of Garden City , Georgia, 196 F.Supp.2d 1228 S.D.Ga. 2002 “CSX II “.
