National R.R. Passenger Corp. v. Pa. P.U.C.

• Decision Date: 01 May 2002
• Docket Number: No. 01-2419.,01-2419.
• Citation: 288 F.3d 519
• Parties: NATIONAL RAILROAD PASSENGER CORPORATION, v. The PENNSYLVANIA PUBLIC UTILITY COMMISSION; John M. Quain, Chairman; Robert K. Bloom, Vice Chairman; Nora Mead Brownell, Commissioner; Aaron Wilson, Jr., Commissioner; Terrence J. Fitzpatrick, Commissioner; Norfolk Southern Railway Company; CSX Transportation, Inc.; The Southeastern Pennsylvania Transportation Authority; John K. Leary, General Manager, Appellants.
• Court: U.S. Court of Appeals — Third Circuit

288 F.3d 519

NATIONAL RAILROAD PASSENGER CORPORATION, v. The PENNSYLVANIA PUBLIC UTILITY COMMISSION; John M. Quain, Chairman; Robert K. Bloom, Vice Chairman; Nora Mead Brownell, Commissioner; Aaron Wilson, Jr., Commissioner; Terrence J. Fitzpatrick, Commissioner; Norfolk Southern Railway Company; CSX Transportation, Inc.; The Southeastern Pennsylvania Transportation Authority; John K. Leary, General Manager, Appellants.

No. 01-2419.

United States Court of Appeals, Third Circuit.

Argued January 22, 2002.

Opinion Filed May 1, 2002.

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Susan D. Colwell, Elizabeth L. Januzzi (Argued), Pennsylvania Public Utility Commission, Harrisburg, PA, Attorneys for Appellants.

John L. Moore, Jr. (Argued), Piper, Marbury, Rudnick & Wolfe, Washington, DC, and Joseph Kernen, Elizabeth J. Feeney, Piper, Marbury, Rudnick & Wolfe, Philadelphia, PA, Attorneys for Appellee.

Before: NYGAARD and STAPLETON, Circuit Judges, and CAPUTO,^* District Judge.

OPINION OF THE COURT

STAPLETON, Circuit Judge.

In this appeal we consider whether the District Court properly applied the doctrine of collateral estoppel to preclude the Pennsylvania Public Utility Commission (the "PUC") from relitigating its claim to Eleventh Amendment immunity. Because we find that all requirements for application of collateral estoppel are met and no equitable considerations counsel against its application, we will affirm.

I.

This case arises out of proceedings initiated by the Southeastern Pennsylvania Transportation Authority ("SEPTA") before the PUC. SEPTA petitioned the PUC for the right to construct certain "partial high-level passenger platforms" at five passenger stations owned by National Railroad Passenger Corporation ("Amtrak"), along Amtrak's northeast corridor. Although Amtrak was not a party to the administrative adjudication, Amtrak advised the PUC that in its view the PUC had no jurisdiction over the issues raised by SEPTA because those issues were either preempted by federal law or subject to arbitration. Despite Amtrak's objection, the PUC administrative law judge adjudicated the matter and issued a recommended decision. On appeal to the full PUC, the Commissioners ordered the ALJ to reopen the proceeding and issued an order joining Amtrak as an indispensable party to the proceeding.

Prior to a scheduled pre-hearing conference on remand to the ALJ, Amtrak filed this action against the PUC and the PUC's five commissioners asserting its federal preemption claims and seeking to compel arbitration. In response, the PUC¹ filed a motion to dismiss this case asserting, among other things, that the PUC was an arm of the government of the Commonwealth of Pennsylvania and immune from suit in federal court under the Eleventh Amendment. Amtrak opposed the motion arguing that the PUC was precluded from relitigating its status under the Eleventh Amendment because Amtrak had already won a prior decision against the PUC on that issue in 1997 in National Railroad Passenger Corp. v. Commonwealth of Pennsylvania Public Utility Commission, CIV. A. No. 86-5357, 1997 WL 597963, (E.D.Pa. Sep.15, 1997).

In 1987, in the earlier suit, Amtrak secured a permanent injunction, based on the authority of 45 U.S.C. § 546b,² barring the PUC from assessing against Amtrak the cost of maintaining the Cassatt Avenue highway bridge in the Townships of Tredyffrin and Easttown, Pennsylvania. See National R.R. Passenger Corp. v. Pennsylvania Pub. Util. Comm'n, 665 F.Supp. 402 (E.D.Pa.1987). This Court affirmed. See 848 F.2d 436 (3d Cir.1988). Several years later, Amtrak moved to broaden the injunction to bar assessment of Amtrak for the repair, maintenance or replacement of any highway bridges in the Commonwealth. In response, the PUC asked the court to dissolve the injunction on the ground that it was entered in violation of its Eleventh Amendment immunity. Specifically, the PUC argued that the District Court could not base its injunction on 49 U.S.C. § 24301(1) because that provision was enacted under Congress's Article I powers and thus could not abrogate the PUC's immunity. Amtrak made three arguments in opposition to the PUC's motion. First, Amtrak contended that Eleventh Amendment immunity should not apply because it is a federal entity. Second, Amtrak argued that the PUC could not raise the shield of immunity because it is not an arm or alter ego of the state. Finally, Amtrak argued that it should be allowed to amend its complaint to include the individual commissioners because it sought only prospective injunctive relief, and these individuals were amenable to suit under Ex parte Young, 209 U.S. 123, 28 S.Ct. 441, 52 L.Ed. 714 (1908).

On September 15, 1997, the District Court issued a comprehensive memorandum opinion denying the PUC's motion to dissolve the injunction. After finding that Amtrak is not a federal entity for the purposes of the doctrine of Eleventh Amendment immunity, the District Court considered the question of whether the PUC is an arm of the Commonwealth of Pennsylvania entitled to Eleventh Amendment immunity. See National R.R. Passenger Corp., 1997 WL 597963, at *6. The court properly analyzed this issue under the three prong test of Christy v. Pennsylvania Turnpike Commission, 54 F.3d 1140 (3d Cir.1995), which requires a court to determine:

(1) whether, in the event the plaintiff prevails, the payment of the judgment would come from the state (this includes three considerations: whether the payment will come from the state's treasury, whether the agency has sufficient funds to satisfy the judgment, and whether the sovereign has immunized itself from responsibility for the agency's debts); (2) the status of the agency under state law (this includes four considerations: how state law treats the agency generally, whether the agency is separately incorporated, whether the agency can sue and be sued in its own right, and whether it is immune from state taxation); and (3) what degree of autonomy the agency enjoys.

Id. at 1144-45.

The District Court found that the first factor, the source of the funds to satisfy any judgment, "weigh[ed] heavily in support of the finding that the [PUC] is not an arm or alter ego of the Commonwealth." National R.R. Passenger Corp., 1997 WL 597963, at *8. However, it found that the second factor, the "status under the law," weighed in favor of the PUC, and the third factor, autonomy, weighed "ever so slightly in favor of the [PUC]." Id. at *10. In balancing the relative merit and weight of all three factors, the District Court concluded that because the funding factor was the most important factor and it weighed so heavily against the PUC, "the second and third factors, although weighing in favor of the [PUC], simply do not tip the scales in favor of a finding" that the PUC is an arm or alter ego of the Commonwealth. Id. Thus, the court concluded that the PUC is not protected by Pennsylvania's cloak of Eleventh Amendment immunity and declined to dissolve the injunction. The PUC did not appeal from this decision or the District Court's February 1998 denial of the PUC's renewed motion to dissolve the injunction filed under Rule 60(b).

In this case, the District Court held that the PUC was collaterally estopped to relitigate the issue of whether it was entitled to Eleventh Amendment immunity. Accordingly, it denied the PUC's motion to dismiss. The PUC timely appealed invoking this Court's jurisdiction under the collateral order doctrine. See Puerto Rico Aqueduct and Sewer Auth. v. Metcalf & Eddy, Inc., 506 U.S. 139, 113 S.Ct. 684, 121 L.Ed.2d 605 (1993).

II.

In Witkowski v. Welch, 173 F.3d 192, 198 n. 7 (3d Cir.1999), we noted that different panels of our Court have applied different standards of review where collateral estoppel is in issue. As in Witkowski, it is unnecessary for us to resolve this apparent conflict. Applying the more exacting, plenary standard, we conclude that the District Court must be affirmed.

III.

The Restatement (Second) of Judgments articulates the general rule of collateral estoppel, or in its terminology "issue preclusion," as follows: "When an issue of fact or law is actually litigated and determined by a valid and final judgment, and the determination is essential to the judgment, the determination is conclusive in a subsequent action between the parties, whether on the same or a different claim." Restatement (Second) of Judgments § 27 (1980). We have consistently applied this general rule in determining the collateral effect of federal court judgments. In Burlington Northern Railroad Co. v. Hyundai Merchant Marine, 63 F.3d 1227 (3d Cir. 1995), for example, we held that the "prerequisites for the application of issue preclusion are satisfied when: `(1) the issue sought to be precluded [is] the same as that involved in the prior action, (2) that issue [was] actually litigated; (3) it [was] determined by a final and valid judgment; and (4) the determination [was] essential to the prior judgment.'" Id. at 1231-2 (quoting from In re Graham, 973 F.2d 1089, 1097 (3d Cir.1992)); see also Hawksbill Sea Turtle v. FEMA, 126 F.3d 461, 474-75 (3d Cir.1997); Raytech Corp. v. White, 54 F.3d 187, 190 (3d Cir.1995).

This general rule is subject to a number of equitable exceptions designed to assure that the doctrine is applied in a manner that will serve the twin goals of fairness and efficient use of private and public litigation resources. The equitable factors to be considered in a particular case depend in part on (1) whether both parties to the subsequent suit were also parties to the first so that there is "mutuality of estoppel," see Blonder-Tongue Labs., Inc. v. University of Ill. Found., 402 U.S. 313, 328-29, 91 S.Ct. 1434, 28 L.Ed.2d 788 (1971) and (2) whether the estoppel is being asserted (a) "offensively" by a plaintiff seeking to estop a defendant from relitigating issues which the defendant has previously litigated and lost, or (b) "defensively...