SEPTA v. Pennsylvania Public Utility Com'n, Civ. No. 92-0112

• Decision Date: 29 June 1993
• Docket Number: Civ. No. 92-0112,92-1029 and 92-3793.
• Parties: SOUTHEASTERN PENNSYLVANIA TRANSPORTATION AUTHORITY v. PENNSYLVANIA PUBLIC UTILITY COMMISSION and Township of Lower Merion. SOUTHEASTERN PENNSYLVANIA TRANSPORTATION AUTHORITY v. PENNSYLVANIA PUBLIC UTILITY COMMISSION and Township of Upper Gwynedd. SOUTHEASTERN PENNSYLVANIA TRANSPORTATION AUTHORITY v. PENNSYLVANIA PUBLIC UTILITY COMMISSION.
• Court: U.S. District Court — Eastern District of Pennsylvania

826 F. Supp. 1506

SOUTHEASTERN PENNSYLVANIA TRANSPORTATION AUTHORITY v. PENNSYLVANIA PUBLIC UTILITY COMMISSION and Township of Lower Merion.

SOUTHEASTERN PENNSYLVANIA TRANSPORTATION AUTHORITY v. PENNSYLVANIA PUBLIC UTILITY COMMISSION and Township of Upper Gwynedd.

SOUTHEASTERN PENNSYLVANIA TRANSPORTATION AUTHORITY v. PENNSYLVANIA PUBLIC UTILITY COMMISSION.

Civ. Nos. 92-0112, 92-1029 and 92-3793.

United States District Court, E.D. Pennsylvania.

June 29, 1993.

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David P. Bruton, Alfred W. Putnam, Jr., Drinker, Biddle & Reath, Philadelphia, PA, for Southeastern Pennsylvania Transp. Authority.

Gilbert P. High, Jr., Thomas D. Rees, Lori K. Comer, High, Swartz, Roberts & Seidel, Norristown, PA, for Lower Merion.

David A. Salapa, Lemoyne, PA, Susan D. Colwell, Harrisburg, PA, for Pennsylvania Public Utility Com'n.

Robert J. Kerns, Carol A. Sweeney, Landis, Kerns & Associates, Lansdale, PA, for Upper Gwynedd.

OPINION

LOUIS H. POLLAK, District Judge.

Before me in these consolidated cases are cross-motions for summary judgment filed, on the one hand, by plaintiff Southeastern Pennsylvania Transportation Authority ("SEPTA"), and, on the other hand, by defendant Pennsylvania Public Utility Commission ("the PUC"), defendant Township of Lower Merion ("Lower Merion"), and defendant Township of Upper Gwynedd ("Upper Gwynedd"). For the reasons that follow, summary judgment will be granted in favor of SEPTA and the PUC will be permanently enjoined from assessing against SEPTA any costs for construction, design, maintenance, inspection or repair of the four subject highway bridges.

I. Factual and Procedural Background

The background of these consolidated cases has been set out in some detail in a previous opinion denying defendants' motions to dismiss for lack of subject-matter jurisdiction and for failure to state a claim. See Southeastern Pa. Transp. Auth. v. Pennsylvania Pub. Util. Comm'n, 802 F.Supp. 1273 (E.D.Pa.1992). Therefore, I only briefly rehearse those facts here and encourage the interested reader to consult my prior opinion.

In 1991 and 1992, the PUC issued three separate orders requiring that SEPTA make payments toward the upkeep of four highway-bridge structures passing over railway lines owned and operated by SEPTA.¹ In each case, the PUC determined that SEPTA, as the operator of the railway line running under the bridge, benefitted from a separated railway-highway crossing and should therefore share bridge-maintenance costs with the localities that owned the roads and also benefitted from a separated crossing.² SEPTA argued unsuccessfully to the PUC that this assignment of costs to SEPTA violated a pair of federally-conferred tax exemptions: 45 U.S.C. § 581(c)(5) (1988) and 45 U.S.C. § 546b (1988).

The history of these tax-exemption statutes is fairly straightforward. In 1981, Congress required that the financially-troubled Consolidated Rail Corporation ("Conrail") — established by federal law to provide national rail transportation — transfer its commuter rail operations to local commuter authorities. To assist these local authorities with handling the provision of commuter service, Congress created the Amtrak Commuter Services Corporation ("Amtrak Commuter"), as a wholly-owned subsidiary of the National Railroad Passenger Corporation ("Amtrak"), and afforded the local authorities a choice between contracting with Amtrak Commuter for provision of commuter rail service formerly handled by Conrail or operating commuter rail service directly. SEPTA decided to operate its own local commuter rail service and, on January 1, 1983, assumed from Conrail the operation of thirteen commuter rail lines.

On September 10, 1982, Congress enacted 45 U.S.C. § 546b, exempting Amtrak — which, like Conrail, was struggling financially — and its newly-created subsidiary Amtrak Commuter "from any taxes or other fees imposed by any State, political subdivision of a State, or a local taxation authority which are levied ... from and after October 1, 1981...." 96 Stat. 852 (1982), codified at 45 U.S.C. § 546b. In exempting Amtrak from state taxation, Congress reasoned that local jurisdictions benefitting from Amtrak's rail service have an obligation to contribute to its continued existence through tax relief. Then, in 1988, Congress enacted 45 U.S.C. § 581(c)(5), providing that:

Notwithstanding any other provision of law, any commuter authority that could have contracted with Amtrak Commuter for the provision of commuter service but which elected to operate directly its own commuter service as of January 1, 1983, shall be exempt from the payment of any taxes or other fees to the same extent as Amtrak is exempt.

45 U.S.C. 581(c)(5) (1988).

Relying on two Pennsylvania Commonwealth Court opinions,³ the PUC determined, in three separate orders, that § 581(c)(5) did not exempt SEPTA from assessments for bridge maintenance because such assessments were not "taxes or other fees" within the meaning of the federal exemption. Subsequently, SEPTA appealed each PUC decision to the Pennsylvania Commonwealth Court, and then apparently applied for, and was granted, a stay of each state proceeding after filing each of three separate complaints with this court. In these federal complaints, consolidated on August 19, 1992, SEPTA argues that the imposition upon SEPTA of bridge-maintenance costs violates the federal tax-exemption statutes; SEPTA seeks a declaration to that effect and a permanent injunction against assessment of such costs by the PUC with respect to the four bridges. In its complaints, and again in its motions for summary judgment, SEPTA relies heavily on National R.R. Passenger Corp. v. Pennsylvania Pub. Util. Comm'n, 848 F.2d 436 (3d Cir.1988) (Amtrak I), cert. denied, 488 U.S. 893, 109 S.Ct. 231, 102 L.Ed.2d 220 (1988), in which the Third Circuit held that the immunity afforded Amtrak in § 546b precluded the PUC from assessing Amtrak for costs incurred in the reconstruction and future maintenance of a bridge overhanging Amtrak-owned railway tracks. On SEPTA's view, because the PUC cannot assign bridge-maintenance costs to Amtrak without running afoul of § 546b, and because, pursuant to § 581(c)(5), SEPTA, as a local commuter authority, is entitled to relief from "taxes or other fees to the same extent as" Amtrak, it follows that SEPTA cannot be required by the PUC to contribute to improvements on a highway bridge passing over its railway lines.

In a September 29, 1992 opinion, I rejected defendants' arguments that the Tax Injunction Act, 28 U.S.C. § 1341 (1988), or the Eleventh Amendment deprived this court of subject-matter jurisdiction over these consolidated cases, or that SEPTA had failed to state a legally sufficient claim. In doing so, and specifically in response to an argument that no "taxes or other fees" had been imposed upon SEPTA within the meaning of § 581(c)(5), I decided that, under Amtrak I, the costs in question in these consolidated cases are, as a matter of law, "taxes" under § 581(c)(5). Buoyed by this portion of my September 29 opinion, SEPTA, on January 8, 1993, moved for summary judgment, arguing that these cases had, in effect, already been resolved because they could not be distinguished from Amtrak I. At about the same time, the three defendants — the PUC, Lower Merion, and Upper Gwynedd — also moved for summary judgment, presenting a number of reasons why judgment should be entered against SEPTA.⁴ Thereafter, all parties responded to the opposing motions for summary judgment. Defendants' arguments for summary judgment in their favor and/or to resist summary judgment in favor of SEPTA fall into three categories: (1) deference to state policies and proceedings; (2) the unconstitutionality of § 581(c)(5); and (3) the inapplicability of § 581(c)(5) to the cases at bar (or, at least, factual uncertainty surrounding that statute's applicability). I will address each of these arguments in turn.

The standards for granting or denying summary judgment do not change by virtue of cross-motions being presented. United States v. Hall, 730 F.Supp. 646, 648 (M.D.Pa.1990). Therefore, the question now — as always at the summary judgment stage — is whether, provided there is no genuine issue as to any material fact, the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(c).

II. Deference to State Policy and Proceedings

The PUC and Lower Merion recommend that this court decline to exercise its jurisdiction pursuant to either Burford v. Sun Oil Co., 319 U.S. 315, 63 S.Ct. 1098, 87 L.Ed. 1424 (1943), or Colorado River Water Conservation Dist. v. United States, 424 U.S. 800, 96 S.Ct. 1236, 47 L.Ed.2d 483 (1976). In considering the possibility of abstention, it is important to keep in mind that

abstention from the exercise of federal jurisdiction is the exception, not the rule. "The doctrine of abstention, under which a District Court may decline to exercise or postpone the exercise of its jurisdiction, is an extraordinary and narrow exception to the duty of a District Court to adjudicate a controversy properly before it."

Colorado River, 424 U.S. at 813, 96 S.Ct. at 1244 (quoting County of Allegheny v. Frank Mashuda Co., 360 U.S. 185, 188, 79 S.Ct. 1060, 1062, 3 L.Ed.2d 1163 (1959)). These cases do not present one of those limited circumstances where a district court should decline to exercise its jurisdiction in deference to state policies (pursuant to Burford) or to pending state proceedings (pursuant to Colorado River).

A. Burford Abstention

Under the Burford doctrine, "if the exercise of federal review would be disruptive of state efforts to establish a coherent policy, and the policy concerns complicated local matters, abstention may be justified." United Servs. Auto. Ass'n v. Muir, 792 F.2d 356, 364 (3d Cir.1986), cert. denied sub nom. Grode v. United Servs. Auto. Ass'n, 479 U.S. 1031, 107 S.Ct. 875...