No Duty Without the Dike: Fourth Circuit Re-Affirms Plain-Language Contract Enforcement in Infrastructure-License Agreements

1. Introduction

Jimmy Edwards v. CSX Transportation, Inc., No. 23-1909 (4th Cir. Aug. 12, 2025) marks the second appellate chapter in mass-flood litigation arising out of Hurricanes Matthew (2016) and Florence (2018) in Lumberton, North Carolina. Residents and small businesses situated in the low-lying southern and western quarters of Lumberton allege that a “gap” in the City’s levee— created by CSX’s rail right-of-way paralleling the Lumber River—funneled floodwaters into their neighborhoods. When CSX initially refused municipal requests to close the gap with temporary sandbag barriers, the resulting inundation produced substantial property damage and spawned a hybrid tort-and-contract class action.

In Edwards I (983 F.3d 112 (4th Cir. 2020)) the Fourth Circuit held that (1) federal pre-emption under the Interstate Commerce Commission Termination Act (“ICCTA”) barred the tort claims, but (2) a narrow breach-of-contract claim based on a 1960s “Tri-Party Agreement” (“TPA”) between the City, Robeson County Drainage District No. 1, and CSX’s predecessor could proceed because plaintiffs plausibly qualified as third-party beneficiaries.

On remand, the district court granted summary judgment to CSX on three alternative grounds, including a merits ruling that no breach occurred. The present decision affirms solely on the merits ground: the TPA obligated CSX to allow closure only of “said dike”—the specific earthen dike authorized by the contract—yet the City never built such a dike. Consequently, CSX’s refusal to permit an ad-hoc sandbag dam did not violate any contractual duty. The Court’s opinion, authored by Judge Pamela Harris and joined by Judges Wynn and Quattlebaum, crystallizes a straightforward but important contract principle: where parties condition performance on the construction of a specified structure, failure to construct that structure nullifies the other side’s reciprocal duty. The decision therefore provides fresh appellate guidance on “conditional infrastructure licenses” and strengthens fidelity to unambiguous contract text.

2. Summary of the Judgment

  • The Fourth Circuit affirmed summary judgment for CSX.
  • The Court addressed only the contract merits, bypassing alternative holdings on ICCTA pre-emption and third-party beneficiary status.
  • Key holding: Paragraph 8 of the TPA obligated CSX to allow the City to close the levee gap only by closing “said dike,” i.e., the expressly-described 6-foot earthen dike with 10-foot top width and 3:1 side slopes. Because no such dike was ever erected, CSX owed no duty to authorize alternative closures such as sandbag dams, and thus could not be in breach.
  • The Court declined to adopt the district court’s “condition precedent/contract never became effective” rationale but reached the same result via plain-meaning interpretation: CSX’s contractual duty is limited in scope to the constructed dike.
  • The opinion underscores that courts will not rewrite contracts or impose liabilities the parties did not bargain for, citing longstanding North Carolina authority.

3. Analysis

A. Precedents Cited and Their Influence

The panel’s reasoning is anchored in a constellation of prior rulings:

  1. Edwards v. CSX Transp., Inc. (“Edwards I”), 983 F.3d 112 (4th Cir. 2020)
    Provided procedural history and set the stage by salvaging the contract claim from wholesale dismissal. Though Edwards I dealt mostly with pre-emption and third-party beneficiary questions, it framed the contractual argument that now fails on the merits.
  2. Cox v. Funk, 255 S.E.2d 600 (N.C. Ct. App. 1979)
    Quoted by the district court for the condition-precedent doctrine. While the panel did not adopt the doctrine as decisive, it implicitly recognised Cox’s conceptual validity in conditional performance analysis.
  3. Woods v. Nationwide Mut. Ins. Co., 246 S.E.2d 773 (N.C. 1978)
    Reaffirmed the principle that courts enforce contracts “as written,” without implying unseen obligations. This bedrock rule supplied the doctrinal spine of the Fourth Circuit’s reasoning.
  4. Sanders v. Wilkerson, 204 S.E.2d 17 (N.C. 1974)
    Defined a licence as authority “to do certain specified acts upon the lands of the licensor.” The Court cited Sanders to emphasize that the TPA grants only narrow authority—to build and, if necessary, close the dike, nothing more.
  5. Federal procedural standards
    Standard summary-judgment cases—Celotex Corp. v. Catrett, 477 U.S. 317 (1986) and Fourth Circuit precedent in Carter v. Fleming, 879 F.3d 132 (4th Cir. 2018) and Corder v. Antero Res. Corp., 57 F.4th 384 (4th Cir. 2023)—frame the de novo review and contract-interpretation methodology.

Collectively, these authorities reinforced the panel’s textualist approach and limited its analytic lens to the words of the TPA rather than extra-contractual equities.

B. The Court’s Legal Reasoning

  1. Contract Text Controls
    The TPA meticulously describes a specific 6-foot earthen dike, supplies schematics, and repeatedly references “said dike.” Under North Carolina law, clear language is dispositive. CSX’s obligations are therefore tethered exclusively to that defined structure.
  2. Scope of the License
    The TPA is, in essence, a conditional licence on railroad property. Licences confer only the rights enumerated; any act outside the licence is an encroachment on the licensor’s property rights. Closing the gap by sandbagging tracks was never within the licence’s enumerated acts.
  3. Duty Trigger—Construction of the Dike
    Although the panel did not expressly adopt the “condition precedent” label, it functionally treated the dike’s construction as a prerequisite to CSX’s duty to allow closure. Absent that prerequisite, the contractual trigger was never pulled.
  4. No Implied Substitute Performance
    Plaintiffs urged a pragmatic reading—any barrier that performs the dike’s job should qualify. The panel rejected this as impermissible re-writing, citing Woods. Contract specificity signals a deliberate allocation of risk and responsibility; courts will not retrofit new duties because circumstances (e.g., extreme weather) reveal practical gaps.
  5. Alternative Grounds Unnecessary
    Because interpretation resolved the dispute, the Court expressly declined to weigh in on (a) ICCTA pre-emption of the contract claim and (b) plaintiffs’ third-party beneficiary status post-discovery—preserving analytical narrowness and leaving those questions untouched for future cases.

C. Likely Impact of the Decision

  1. Infrastructure-Licence Drafting: Public entities frequently need easements or licences from railroads and other utilities for levees, pipelines, fiber, or drainage works. Edwards II (appellate) underscores that specificity is double-edged; where a municipality bargains narrowly, failure to implement the bargained-for construction defangs future enforcement rights. Drafters will be incentivised to include fallback or substitute-method clauses.
  2. Climate-Adaptation Litigation: As climate events intensify, local governments may seek emergency access to private infrastructure. This decision signals that courts will not confer emergency rights extraneous to contract language, potentially pressuring policymakers to negotiate broader, more flexible agreements ex ante.
  3. Railroad Pre-emption Strategy: Although the Court sidestepped ICCTA issues, the litigation trajectory (complete pre-emption of tort claims plus contractual defeat) offers railroads a template for defending floodgate-closure demands: enforce textual limits and raise federal pre-emption in parallel.
  4. Third-Party Beneficiary Doctrine: The panel’s avoidance of that ground leaves the doctrinal question open, but the result dampens practical utility—would-be third-party claimants must still locate actionable covenants within the four corners of the contract.
  5. Judicial Economy: The Court’s choice to affirm on the narrowest ground foreshadows a jurisprudential trend: where textual interpretation suffices, federal appellate courts may resist addressing broader pre-emption or standing issues.

4. Complex Concepts Simplified

  • Third-Party Beneficiary: Someone who is not a signatory to the contract but whom the parties intended to benefit directly. Such an individual may sue to enforce the contract if that intent is manifest. Here, plaintiffs claim the levee gap clause was meant to protect them.
  • Condition Precedent: A contractual event that must occur before a party’s duty to perform arises. Think of it as a “gate” that unlocks obligations. The district court treated construction of the earthen dike as the gate.
  • License vs. Easement: A licence is mere permission to do specific acts on another’s land and is typically revocable or limited; an easement is a property right that runs with the land. The TPA granted only a licence, signalling limited rights.
  • ICCTA Pre-emption: A federal statute giving the Surface Transportation Board exclusive authority over rail operations, thereby pre-empting many state-law regulations or tort suits that would “manage” or “govern” rail activity.
  • Plain-Meaning Rule: When contract language is clear, courts will enforce it as written without inferring further obligations or considering extrinsic evidence.

5. Conclusion

The Fourth Circuit’s decision in Jimmy Edwards v. CSX Transportation, Inc. delivers a concise yet consequential affirmation of contract orthodoxy: a party cannot be forced to comply with obligations it never assumed, and courts must refrain from adding terms that parties omitted. By holding that CSX’s duty to allow gap closure was contingent upon construction of the very dike it licensed—something the City never built—the Court protects the integrity of negotiated allocations of risk and responsibility, even against compelling public-policy narratives arising from natural disasters. For practitioners, the message resonates beyond railroad flood cases: draft precisely, perform conditions, and do not rely on judicial rewrites when crisis strikes.