Hess and Walsh v. Port Auth. Trans-Hudson Corp., 93120

CourtUnited States Supreme Court
Writing for the CourtGINSBURG
PartiesAlbert HESS and Charles F. Walsh, Petitioners v. PORT AUTHORITYCORPORATION
Docket Number931197,93120
Decision Date14 November 1994

513 U.S. 30
115 S.Ct. 394
130 L.Ed.2d 245
Albert HESS and Charles F. Walsh, Petitioners

v.

PORT AUTHORITY TRANS-HUDSON CORPORATION.

No. 93-1197.
Supreme Court of the United States
Argued Oct. 3, 1994.
Decided Nov. 14, 1994.
Syllabus *

Petitioners, two railroad workers, were injured in unrelated incidents while employed by respondent bistate railway, the Port Authority Trans-Hudson Corporation (PATH). PATH is a wholly owned subsidiary of the Port Authority of New York and New Jersey, an entity created when Congress, pursuant to the Constitution's Interstate Compact Clause, consented to a compact between the Authority's parent States. Petitioners filed separate personal injury actions under the Federal Employers' Liability Act (FELA). The District Court dismissed the suits under Third Circuit precedent, Port Authority Police Benevolent Assn., Inc. v. Port Authority of New York and New Jersey, 819 F.2d 413 (CA3) (Port Authority PBA), which declared PATH a state agency entitled to Eleventh Amendment immunity from suit in federal court. The Third Circuit consolidated the cases and summarily affirmed. That court's assessment of PATH's immunity conflicts with the Second Circuit's decision in Feeney v. Port Authority Trans-Hudson Corporation, 873 F.2d 628.

Held: PATH is not entitled to Eleventh Amendment immunity from suit in federal court. Pp. ____.

(a) The Court presumes that an entity created pursuant to the Compact Clause does not qualify for Eleventh Amendment immunity unless there is good reason to believe that the States structured the entity to arm it with the States' own immunity, and that Congress concurred in that purpose. Lake Country Estates, Inc. v. Tahoe Regional Planning Agency, 440 U.S. 391, 401, 99 S.Ct. 1171, 1177, 59 L.Ed.2d 401. The Port Authority emphasizes that certain indicators of immunity are present in this case, particularly, provisions in the interstate compact and its implementing legislation establishing state control over Authority commissioners, acts, powers, and responsibilities, and state-court decisions typing the Authority as an agency of its parent States. Other indicators, however, point away from immunity, particularly the States' lack of financial responsibility for the Authority. Pp. ____.

(b) When indicators of immunity point in different directions, the Court is guided primarily by the Eleventh Amendment's twin reasons for being: the States' dignity and their financial solvency. Neither is implicated here. First, there is no genuine threat to the dignity of New York or New Jersey in allowing petitioners to pursue FELA claims against PATH in federal court. The Port Authority is a discrete entity created by compact among three sovereigns, the two States and the federal government. Federal courts are not alien to such an entity, for they are ordained by one of its founders. Nor is it disrespectful to one State to call upon the entity to answer complaints in federal court, for the States agreed to the power sharing, coordination, and unified action that typify Compact Clause creations. Second, most federal Courts of Appeals have identified the "state treasury" criterion—whether a judgment against the entity must be satisfied out of a State's treasury—as the most important consideration in determining whether a state-created entity qualifies for Eleventh Amendment immunity. The Port Authority, however, is financially self-sufficient: it generates its own revenues and pays its own debts. Where, as here, the States are neither legally nor practically obligated to pay the entity's debts, the Eleventh Amendment's core concern is not implicated. Pp. ____.

(c) The conflict between the Second and Third Circuits no longer concerns the correct legal theory, for the Third Circuit, as shown in two post-Port Authority PBA decisions, now accepts the prevailing "state treasury" view. A narrow intercircuit split persists only because the Circuits differ on whether the Port Authority's debts are those of its parent States. In resolving that issue, the Port Authority PBA court relied primarily on a compact provision calling for modest state contributions, capped at $100,000 annually from each State, unless Port Authority revenues were "adequate to meet all expenditures," but the court drew from that provision far more than its text warrants. P. ____.

8 F.3d 811 (CA3 1993), reversed and remanded.

GINSBURG, J., delivered the opinion of the Court, in which STEVENS, KENNEDY, SOUTER, and BREYER, JJ., joined. STEVENS, J., filed a concurring opinion. O'CONNOR, J., filed a dissenting opinion, in which REHNQUIST, C.J., and SCALIA and THOMAS, JJ., joined.

Lawrence A. Katz, for petitioners.

Hugh H. Welsh, for respondent.

Justice GINSBURG delivered the opinion of the Court.

These paired cases arise out of work-related accidents in which a locomotive engineer and a train conductor, employees of a bistate railway authorized by interstate compact, sustained personal injuries. The courts below—the United States District Court for the District of New Jersey, and the United States Court of Appeals for the Third Circuit—rejected both complaints on the ground that the Eleventh Amendment sheltered the respondent railway from suit in federal court. We granted certiorari to resolve an intercircuit conflict on this issue. 510 U.S. ----, 114 S.Ct. 1292, 127 L.Ed.2d 646 (1994). Concluding that the respondent bistate railway, the Port Authority Trans-Hudson Corporation (PATH), is not cloaked with the Eleventh Amendment immunity that a State enjoys, we reverse the judgment of the Third Circuit.

I
A.

Petitioners Albert Hess and Charles F. Walsh, both railroad workers, were injured in unrelated incidents in the course of their employment by PATH. PATH, a wholly owned subsidiary of the Port Authority of New York and New Jersey, operates a commuter railroad connecting New York City to northern New Jersey. In separate personal injury actions commenced in the United States District Court for the District of New Jersey, petitioners sought to recover damages for PATH's alleged negligence; both claimed a right to compensation under the federal law governing injuries to railroad workers, the Federal Employers' Liability Act (FELA), 35 Stat. 65, as amended, 45 U.S.C. § 51 et seq.1 Hess and Walsh filed their complaints within the 3-year time limit set by the FELA, see 35 Stat. 66, as amended, 45 U.S.C. § 56, but neither petitioner met the 1-year limit specified in the States' statutory consent to sue the Port Authority. See N.J.Stat.Ann. §§ 32:1-157, 32:1-163 (West 1990); N.Y.Unconsol.Laws §§ 7101, 7107 (McKinney 1979).

PATH moved to dismiss each action, asserting (1) PATH's qualification as a state agency entitled to the Eleventh Amendment immunity from suit in federal court enjoyed by New York and New Jersey,2 and (2) petitioners' failure to commence court proceedings within the 1-year limit prescribed by New York and New Jersey. Third Circuit precedent concerning the Port Authority supported PATH's plea. In Port Authority Police Benevolent Assn., Inc. v. Port Authority of New York and New Jersey, 819 F.2d 413 (CA3) (Port Authority PBA), cert. denied, 484 U.S. 953, 108 S.Ct. 344, 98 L.Ed.2d 370 (1987), the Court of Appeals for the Third Circuit held that the Port Authority is "an agency of the state and is thus entitled to Eleventh Amendment immunity." 819 F.2d, at 418. In reaching this decision, the Court of Appeals acknowledged that "[g]iven the solvency and size of the [Port Authority's] General Reserve Fund, it is unlikely that the Authority would have to go to the state to get payment for any liabilities issued against it." Id., at 416.3 But the Third Circuit considered "crystal clear" the intentions of New York and New Jersey: "if the Authority is ever in need of financial support, the states will be there to provide it." Ibid.

In line with Port Authority PBA, the District Court held in the Hess and Walsh actions that PATH enjoys Eleventh Amendment immunity, and could be sued in federal court only within the 1-year time frame New York and New Jersey allowed. See Walsh v. Port Authority Trans-Hudson Corp., 813 F.Supp. 1095, 1096-1097 (NJ 1993); Hess v. Port Authority Trans-Hudson Corp., 809 F.Supp. 1172, 1178-1182 (NJ 1992). Accordingly, both actions were dismissed.

The District Court in Hess noted an anomaly: Had Hess sued in a New Jersey or New York state court the FELA's 3-year limitation period, not the States' 1-year prescription, would have applied. See id., at 1183-1185, and n. 16. This followed from our reaffirmation in Hilton v. South Carolina Public Railways Comm'n, 502 U.S. 197, 112 S.Ct. 560, 116 L.Ed.2d 560 (1991), that the entire federal scheme of railroad regulation—including all FELA terms—applies to all railroads, even those wholly owned by one State. Time-bar rejection by a federal court of a federal statutory claim that federal prescription would have rendered timely, had the case been brought in state court, becomes comprehensible, the District Court explained, once it is recognized that " 'the Eleventh Amendment does not apply in state courts.' " Hess, 809 F.Supp., at 1183-1184 (quoting Hilton, supra, 502 U.S., at 205, 112 S.Ct., at 562-63; see 809 F.Supp., at 1185, n. 16.

Consolidating Hess and Walsh on appeal, the Third Circuit summarily affirmed the District Court's judgments. 8 F.3d 811 (1993) (table).

B

The Port Authority, whose Eleventh Amendment immunity is at issue in these cases, was created in 1921, when Congress, pursuant to the Constitution's Interstate Compact Clause,4 consented to a compact between the Authority's parent States. 42 Stat. 174. Through the bistate compact, New York and New Jersey sought to achieve "a better co-ordination of the terminal, transportation and other facilities of commerce in, about and through the port of New York." N.J.Stat.Ann. § 32:1-1 (West 1990); N.Y.Unconsol.Laws § 6401 (McKinney 1979). The compact grants...

To continue reading

Request your trial
650 practice notes
  • Hunter v. Supreme Court of New Jersey, Civ. No. 96-848 (WGB).
    • United States
    • United States District Courts. 3th Circuit. United States District Courts. 3th Circuit. District of New Jersey
    • August 27, 1996
    ...of the State's purse as the most salient factor in Eleventh Amendment determinations." Hess v. Port Authority Trans-Hudson Corp., 513 U.S. 30, 48, 115 S.Ct. 394, 404, 130 L.Ed.2d 245 In Johnson, the Court held that the Administrative Office of the Courts was entitled to Eleventh Amendment i......
  • Hutto v. S.C. Ret. Sys., No. 13–1523.
    • United States
    • United States Courts of Appeals. United States Court of Appeals (4th Circuit)
    • December 5, 2014
    ...is ‘No’—both legally and practically—then the Eleventh Amendment's core concern is not implicated.” Hess v. Port Auth. Trans–Hudson Corp., 513 U.S. 30, 51, 115 S.Ct. 394, 130 L.Ed.2d 245 (1994) (emphasis added). In light of Wehle's interpretation of Article X, Section 16, the answer to that......
  • Seminole Tribe Florida v. Florida, 9412
    • United States
    • United States Supreme Court
    • March 27, 1996
    ...court judgments that must be paid out of a State's treasury," Hess v. Port Authority Trans-Hudson Corporation, 513 U.S. ----, ----, 115 S.Ct. 394, 404, 130 L.Ed.2d 245 (1994); it also serves to avoid "the indignity of subjecting a State to the coercive process of judicial tribunals at the i......
  • Cosme-Perez v. Municipality of Juana Diaz, Civil No. 07-1942 (DRD).
    • United States
    • United States District Courts. 1st Circuit. District of Puerto Rico
    • September 30, 2008
    ...Eleventh Amendment'" (citations omitted). Sanchez-Lopez, 247 F.Supp.2d at 42, citing Hess v. Port Authority Page 238 Trans-Hudson Corp., 513 U.S. 30, 47, 115 S.Ct. 394, 130 L.Ed.2d 245 (1994) ("cities and counties do not enjoy Eleventh Amendment immunity"). See also Fresenius Medical Care C......
  • Request a trial to view additional results
646 cases
  • Hunter v. Supreme Court of New Jersey, Civ. No. 96-848 (WGB).
    • United States
    • United States District Courts. 3th Circuit. United States District Courts. 3th Circuit. District of New Jersey
    • August 27, 1996
    ...of the State's purse as the most salient factor in Eleventh Amendment determinations." Hess v. Port Authority Trans-Hudson Corp., 513 U.S. 30, 48, 115 S.Ct. 394, 404, 130 L.Ed.2d 245 In Johnson, the Court held that the Administrative Office of the Courts was entitled to Eleventh Amendment i......
  • Hutto v. S.C. Ret. Sys., No. 13–1523.
    • United States
    • United States Courts of Appeals. United States Court of Appeals (4th Circuit)
    • December 5, 2014
    ...is ‘No’—both legally and practically—then the Eleventh Amendment's core concern is not implicated.” Hess v. Port Auth. Trans–Hudson Corp., 513 U.S. 30, 51, 115 S.Ct. 394, 130 L.Ed.2d 245 (1994) (emphasis added). In light of Wehle's interpretation of Article X, Section 16, the answer to that......
  • Seminole Tribe Florida v. Florida, 9412
    • United States
    • United States Supreme Court
    • March 27, 1996
    ...court judgments that must be paid out of a State's treasury," Hess v. Port Authority Trans-Hudson Corporation, 513 U.S. ----, ----, 115 S.Ct. 394, 404, 130 L.Ed.2d 245 (1994); it also serves to avoid "the indignity of subjecting a State to the coercive process of judicial tribunals at the i......
  • Cosme-Perez v. Municipality of Juana Diaz, Civil No. 07-1942 (DRD).
    • United States
    • United States District Courts. 1st Circuit. District of Puerto Rico
    • September 30, 2008
    ...Eleventh Amendment'" (citations omitted). Sanchez-Lopez, 247 F.Supp.2d at 42, citing Hess v. Port Authority Page 238 Trans-Hudson Corp., 513 U.S. 30, 47, 115 S.Ct. 394, 130 L.Ed.2d 245 (1994) ("cities and counties do not enjoy Eleventh Amendment immunity"). See also Fresenius Medical Care C......
  • Request a trial to view additional results

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT