In 1998, the Federal Emergency Management Agency (FEMA) performed reassessment of flood elevation maps in an area of South Carolina near the Congaree River. Columbia Venture (Plaintiff/Appellant) owned a large parcel of property in the area. Dewberry was hired as an independent contractor to assist FEMA's remapping effort by providing engineering services. In this role, Dewberry provided the hydraulic model used to designate a large section of Plaintiff's property as part of a floodway.

The designation of Columbia Venture's property as part of the floodway substantially diminished the property's value. After unsuccessfully appealing FEMA's floodway determination, Columbia Venture brought suit against Dewberry in the U.S. District Court for South Carolina alleging state law claims. Columbia Venture alleged professional malpractice, civil conspiracy, injurious falsehood, as well as a violation of the South Carolina Unfair Trade Practices Act, contending that the hydraulic model created by Dewberry was inaccurate. Dewberry filed a Motion to Dismiss Plaintiff's Complaint on various grounds including arguing that the Complaint was time-barred by the statute of limitations, and the claims were preempted by Federal Law. The District Court granted Dewberry's motion.

The Fourth Circuit first noted that federal preemption of state law is a constitutional question. Therefore, under constitutional avoidance principles, a preemption decision should be avoided if a case can be disposed of on other grounds. Dewberry argued that Plaintiff failed to state a claim with regard to some of its Counts, but only the limitations argument could dispose of the entire Complaint without addressing potential preemption.

Therefore, the Court looked at the statute of limitations argument prior to addressing preemption. The Fourth Circuit noted that South Carolina has a three year statute of limitations which under the discovery rule begins to run when: "The facts and circumstances of an injury would put a person of common knowledge and experience on notice that some right of his has been invaded or that some claim against another party might exist." Wiggins v. Edwards, 442 S.E.2d 169-170 (S.C. 1994). FEMA adopted the final floodway determination in 2001, and Plaintiff did not file its Complaint until 2006. However, Columbia Venture was not aware of its potential cause of action against Dewberry until April 2005, when FEMA disclosed its reliance on Dewberry's hydraulic model. The Court held that viewing the facts most favorable to the Plaintiff; the Complaint was not time-barred under the discovery rule.

Dewberry argued, and the Fourth Circuit agreed, that the Plaintiff's Complaint was barred by obstacle preemption. Obstacle preemption is defined as when "state law stands as an obstacle to the accomplishment and execution of the full purposes and objectives of Congress." Freightliner Corp. v. Myrick, 514 U.S. 280, 287 (1995). This occurs when state law interferes with Federal Law and/or the methods by which a Federal Statute is designed to reach its goals. It is well-regarded that obstacle preemption can occur not only when a state enacts law but also in the administration of justice in state tort claims.

The initial presumption is always that Congress does not intend to preempt state law with its Federal Statutes. The Court noted, however, that FEMA is responsible for administering flood plain maps under the NFIA. Further, FEMA is authorized to hire private contractors to carry out its studies and investigations, and an extensive administrative remedy and appeal process is provided for landowners by statute.

The Court held that the state law causes of action against independent contractors hired by FEMA would undermine the primary purpose of the law to strike a balance between protecting property owners' rights to appeal flood elevation determinations, and the Government interest in minimizing costs in doing this work. Further, allowing such affected property owners to bring state law tort claims would undermine the limited appeal process created by statute, and generally cause the costs to FEMA to go up when using independent contractors as the contractors would pass along the cost of the risk of litigation and/or dispute resolution via higher bids. Therefore, the Fourth Circuit held that allowing Columbia Venture's state tort law claims to go forward would present an obstacle to the Federal Statute and, therefore, preempted thereby.