2009 Decisions

Opinions of the United

States Court of Appeals

for the Third Circuit

12-22-2009

Richard Deweese v. Natl RR Passenger

Precedential or Non-Precedential: Precedential

Docket No. 09-1569

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PRECEDENTIAL

UNITED STATES COURT OF APPEALS

FOR THE THIRD CIRCUIT

_____________

No. 09-1569

_____________

RICHARD DEWEESE

v.

NATIONAL RAILROAD PASSENGER CORPORATION

(AMTRAK);

SOUTHEASTERN PENNSYLVANIA TRANSPORTATION

AUTHORITY; 

COMMONWEALTH OF PENNSYLVANIA

DEPARTMENT OF TRANSPORTATION

Southeastern Pennsylvania Transportation Authority,

 Appellant

_______________

On Appeal from the United States District Court

for the Eastern District of Pennsylvania

(D.C. No. 06-cv-4455)

District Judge: Honorable Thomas J. Rueter

_______________

Argued November 2, 2009
2

Before: SCIRICA, Chief Judge, JORDAN and

GREENBERG, Circuit Judges.

(Filed: December 22, 2009 )

_______________

Thomas S. Biemer [ARGUED]

Matthew A. Foley

Dilworth Paxson

1500 Market Street , Suite #3500E

Philadelphia, PA 19102

Counsel for Appellant Southeastern Pennsylvania

Transportation Authority (“SEPTA”)

William G. Ballaine [ARGUED]

Landman, Corsi, Ballaine & Ford

120 Broadway - 27 Fl. th

New York, NY 10271-0079

Paul F.X. Gallagher

Gallagher & Rowan

1800 John F. Kennedy Blvd., Suite #1000

Philadelphia, PA 19103

Counsel for Appellee National Railroad Passenger

Corporation

_______________

OPINION OF THE COURT

_______________
3

JORDAN, Circuit Judge.

The Southeastern Pennsylvania Transportation Authority

(“SEPTA”) appeals from an order of the United States District

Court for the Eastern District of Pennsylvania granting summary

judgment to the National Railroad Passenger Corporation

(“Amtrak”) on its cross-claim against SEPTA. The District

Court determined that SEPTA’s state-law sovereign immunity

defense is preempted by Amtrak’s federal enabling statute and

that an indemnity contract between SEPTA and Amtrak is

therefore enforceable. For the following reasons, we will

affirm.

I. Background

A. The Accident

This dispute arises out of an accident on October 28,

2004, in which plaintiff Richard Deweese was struck by an

Amtrak train. The day of the accident, Deweese was waiting

for a Philadelphia-bound SEPTA train at the Crum Lynne,

Pennsylvania train station, which is adjacent to tracks used by

both Amtrak and SEPTA. Someone at the station told Deweese

that the platform from which to board the Philadelphia-bound

trains was located on the opposite side of the tracks. Rather

than using the stairs available to him to safely cross to the other

side, Deweese took it upon himself to descend from the platform

and walk directly across the tracks. While doing so, he was

struck by an oncoming Amtrak train. Deweese filed suit in state

court against Amtrak, SEPTA, and the Commonwealth of

Pennsylvania to recover damages resulting from injuries he
Not knowing the full details of the accident and the 1

railroads’ decision to settle with Deweese, a reader may be left

bewildered by this brief synopsis, but the underlying lawsuit is

irrelevant to the dispute presently before us.

4

sustained as a result of the accident. Amtrak removed the action

to federal court, and the Commonwealth was subsequently

dismissed as a defendant. Prior to trial, Deweese settled his

claims with SEPTA and Amtrak for $200,000, with each

defendant paying Deweese $100,000. The settlement left 1

unresolved Amtrak’s cross-claim against SEPTA for contractual

indemnity, which was based on two separate indemnity

agreements between Amtrak and SEPTA.

B. The Indemnity Agreements

Amtrak owns the Crum Lynne train station as well as the

adjacent tracks. SEPTA leases the station from Amtrak

pursuant to a 1987 agreement entitled “Lease Agreement

between National Railroad Passenger Corporation and

Southeastern Pennsylvania Transportation Authority Covering

47 Commuter Stations in southeastern Pennsylvania” (the

“Lease Agreement”). The Crum Lynne station is serviced

exclusively by SEPTA, although SEPTA shares use of the

railroad tracks with Amtrak pursuant to a 1982 agreement called

the “Agreement between National Railroad Passenger

Corporation and Southeastern Pennsylvania Transportation

Authority for Northeast Corridor Access and Services” (the

“NEC Agreement”). 
 Paragraph 25 of the Lease Agreement states the 2

following: 

Lessee shall indemnify, save and hold harmless

and defend Lessor ... against and from any and all

claims and suits for, and any and all liability, loss

or expense arising from or incidental to or in

connection with, damage to or loss of property of

Lessor, Lessee, or of agents, servants, licensees,

contractors, invitees or employees of either, or of

any other person, and against and from any and all

claims and suits for, and any and all liability, loss,

or expense arising from or incidental to or in

connection with, injury to or death of persons,

including agents, servants, contractors, licensees,

5

Both the Lease Agreement and the NEC Agreement

contain indemnity provisions. Section 5 of the NEC Agreement

includes a “Risk of Liability” clause stating that,

SEPTA agrees to indemnify and save harmless

Amtrak, its officers, agents, employees, and

subsidiaries, irrespective of any fault of Amtrak

or such persons, for all damage or for liability for

personal injury or property damage which would

not have been incurred but for the existence of the

commuter service provided for SEPTA ... .

(App. at A155.) The Lease Agreement contains similar

language. 

2
invitees or employees of Lessor or of Lessee, or

any other person, which such damage, loss, injury

or death shall arise in any manner, directly or

indirectly, out of or incidental to or in connection

with this lease ... .” (App. at A133-A134, ¶ 25.)

The docket entries and the District Court opinion refer

3

to Amtrak’s cross-claim as an amended cross-claim. The

record, however, does not indicate how Amtrak’s cross-claim

has been amended. Thus, for ease of reference, we refer to

Amtrak’s amended cross-claim as simply a cross-claim.

6

Relying on both the Lease Agreement and the NEC

Agreement, Amtrak, as already noted, filed a cross-claim3

against SEPTA in the lawsuit that Deweese brought. Amtrak’s

claim, consistent throughout this litigation, is that SEPTA is

obligated to indemnify Amtrak for its settlement payment to

Deweese. SEPTA responded by asserting sovereign immunity,

stating in its reply to the cross-claim that “[a]ny obligations on

SEPTA’s part under the applicable [L]ease [A]greement and

[NEC Agreement] to indemnify, save and hold harmless

AMTRAK from plaintiff’s claims are limited, restricted, and

conditioned by, and subject to, SEPTA’s immunity as a

Commonwealth party ... .” (App. at A29.) 

Amtrak and SEPTA both moved for summary judgment.

SEPTA argued in its summary judgment motion that, despite its

clear contractual indemnity obligation to Amtrak under the NEC
SEPTA acknowledges that the NEC agreement is 4

applicable to the present action but does not concede the

applicability of the Lease Agreement. Argument and analysis in

the case have thus naturally centered on the NEC Agreement.

We too focus on that particular agreement, though our

conclusions are equally applicable to the Lease Agreement. 

SEPTA has not invoked sovereign immunity under the 5

Eleventh Amendment of the United States Constitution; it only

invokes sovereign immunity under Pennsylvania state law. Cf.

Cooper v. SEPTA , 548 F.3d 296, 311 (3d Cir. 2008) (holding

that “SEPTA is not entitled to Eleventh Amendment

immunity”). 

7

Agreement, it is barred from indemnifying Amtrak because of 4

the sovereign immunity conferred upon it by Pennsylvania state

statute, 1 Pa. Cons. Stat. Ann. § 2310 and 42 Pa. Cons. Stat.

Ann. § 8521-25. SEPTA conceded that, were it not for its 5

state-law sovereign immunity defense, it would be required

under the NEC Agreement to “hold [Amtrak] harmless against

plaintiff’s claims.” (App. at A168.) 

In its own motion for summary judgment, Amtrak

contended that any state-law sovereign immunity defense

proffered by SEPTA is preempted by Amtrak’s enabling statute,

49 U.S.C. § 28103, enacted as part of the Amtrak Reform and

Accountability Act of 1997 (the “Reform Act”). The Reform

Act states, among other things, that “a provider of rail passenger

transportation may enter into contracts that allocate financial

responsibility for claims.” 49 U.S.C. § 28103(b). To support its
SEPTA further argued that it lacks the power to contract 6

away its sovereign immunity and that Amtrak’s claims do not

fall within any of the statutorily enumerated exceptions to that

immunity. Amtrak conceded that SEPTA does not have the

power to waive its sovereign immunity through contract and,

thus, despite the NEC Agreement, did not waive the opportunity

to claim immunity. Amtrak instead argued that SEPTA’s

sovereign immunity confers protection only against claims

sounding in tort and that the instant matter, which implicates the

NEC Agreement, presents a contract dispute to which sovereign

immunity is inapplicable. SEPTA responded that Amtrak was

collaterally estopped from litigating the applicability of

SEPTA’s sovereign immunity to contractual obligations because

that issue had been previously adjudicated in SEPTA’s favor in

a lawsuit called Apfelbaum v. National R.R. Pass. Corp., 2002

WL 32342481 (E.D. Pa. Oct. 17, 2002). 

Because we hold that § 28103(b) preempts SEPTA’s

sovereign immunity defense, and that holding wholly disposes

of the case, we need not address the parties’ arguments as to

whether state-law sovereign immunity actually applies to the

present action, nor need we address whether Amtrak is

8

position, Amtrak relied on a recent decision from the United

States Court of Appealsfor the Second Circuit, O&G Industries,

Inc. v. National R.R. Passenger Corp., 537 F.3d 153 (2d Cir.

2008), which held that the Reform Act preempted a Connecticut

state statute governing indemnity contracts, to the extent that the

two laws conflicted. SEPTA argued in response that Congress,

in enacting 49 U.S.C. § 28103, did not intend “to preclude the

application of state law on indemnity clauses.” (App. at A185.) 6
collaterally estopped from litigating that issue. See United

States v. Sanchez, 562 F.3d 275, 279 n.5 (3d Cir. 2009) (court

need not decide an issue when there is an alternative and

dispositive basis for decision).

Ordinarily, deciding the scope of a statute would be

preferable to addressing a conflict between federal and state law.

However, we decide this case on preemption grounds because,

first, preemption is the basis of decision chosen by the District

Court and it is what the parties have emphasized in their briefs;

second, the scope of Pennsylvania’s statute is an important statelaw issue, better addressed by Pennsylvania’s courts in the first

instance; and, finally, and most importantly, the issues presented

in this appeal are not confined to Pennsylvania. As indicated by

both the Second Circuit’s O&G Industries case and the Reform

Act’s legislative history, there is an inclination for regional rail

carriers to seek shelter from liability, despite the contractual

obligations they have undertaken. See infra, pages 20-21. Thus,

because the conflict between federal and state law implicated

here is farther reaching than Pennsylvania’s sovereign immunity

statute, it is appropriate for us to resolve the case on a broader

basis.

9

 C. The District Court Opinion

The District Court granted Amtrak’s motion for summary

judgment and denied SEPTA’s, finding that SEPTA’s state-law

sovereign immunity defense was preempted by the Reform Act

under the doctrine of implied conflict preemption. The Court

began by noting that Supreme Court precedent dictates a finding

of preemption when “the challenged state law stands as an
 Because the Court found that SEPTA’s sovereign 7

immunity defense was preempted by the Reform Act, it did not

address whether SEPTA’s state-law sovereign immunity defense

was valid under Pennsylvania state law, nor did not it discuss

whether Amtrak was collaterally estopped from litigating that

issue. See supra, note 6.

Amtrak removed the present action from state court to 8

federal court under 28 U.S.C. § 1441. The District Court

exercised jurisdiction pursuant to 28 U.S.C. § 1331. Our

jurisdiction arises under 28 U.S.C. § 1291. A district court’s

grant of summary judgment is subject to plenary review. Horn

v. Thoratec Corp., 376 F.3d 163, 165 (3d Cir. 2004); see also

Levy v. Sterling Holding Co., 544 F.3d 493, 501 (3d Cir. 2008)

(“We review de novo the grant or denial of summary judgment

by a district court.”) (citation omitted). More particularly, we

10

obstacle to the accomplishment and execution of the full

purposes ... of Congress.” (App. at A16-A17.) The Court then

explained that, because the Reform Act was enacted in part to

ensure the enforceability of indemnification agreements between

Amtrak and other parties, a state-law sovereign immunity

defense stood as an impermissible obstacle to that objective.

The Court supported its holding by analogizing to the Second

Circuit’s reasoning in O&G Industries, 537 F.3d at 153, and

concluded that, “[t]o the extent that the Pennsylvania sovereign

immunity statute conflicts with the Reform Act, it is

preempted.” (App. at A17.) 7

II. Discussion8
also exercise plenary review over a preemption determination,

as it is a question of law. Horn, 376 F.3d at 166. 

11

SEPTA presents a two-fold argument, focused on the

breadth of the preemption effected by the District Court’s

decision and what it contends is an improperly retroactive

consequence of such preemption in this case. In advancing its

argument, SEPTA, recognizing the importance of the Second

Circuit’s O&G Industries opinion in the District Court’s

analysis, frames its discussion around issues addressed in that

opinion and asserts that the District Court failed to account for

two critical distinctions between that case and this one. First,

SEPTA argues, the Pennsylvania sovereign immunity statute is

a law of general applicability, whereas the Connecticut statute

preempted in O&G Industries was a law specifically enacted to

govern the enforceability of indemnification contracts, voiding

indemnification agreements to the extent they would cover gross

negligence by the party seeking to be indemnified. Thus,

SEPTA says, preempting the application of Pennsylvania’s

statute would result in a dramatically broader application of

preemption than occurred in O&G Industries. 

Second, SEPTA argues that, even if such a broad

application of preemption were warranted in general, it cannot

be justified in this particular case because allowing preemption

here would give retroactive effect to the Reform Act. While the

indemnity agreement in O&G Industries was implemented after

the passage of the Reform Act, the NEC Agreement was

executed a decade prior to the passage of the Reform Act. By

SEPTA’s reasoning, applying the Reform Act to indemnity
12

agreements entered into prior to the enactment of that statute

would give the statute an impermissible retroactive effect

because Congress did not expressly provide for retroactive

application. 

Amtrak responds that the District Court properly found

preemption because “Congressional history makes abundantly

clear that [the Reform Act] ... applies broadly to assure that

Amtrak’s indemnity agreements with any other party are fully

enforceable without regard to any state law or public policy.”

(Appellee’s Ans. Br. at 12.) Amtrak further argues that finding

preemption will not, in fact, result in an impermissible

retroactive application of the Reform Act because the important

event for purposes of a retroactivity analysis is not the parties’

execution of the NEC Agreement in 1992 but rather the accrual

of Amtrak’s right to indemnification for the Deweese claim in

2004, which occurred several years after the Reform Act was

passed in 1997. 

A. Preemption

The primary focus of the parties’ attention, as it was of

the District Court opinion, is whether Pennsylvania’s sovereign

immunity statute, 1 Pa. Cons. Stat. Ann. § 2310 and 42 Pa.

Cons. Stat. Ann. §§ 8521-25, is preempted by Amtrak’s federal

enabling statute, 49 U.S.C. § 28103. 

The Supremacy Clause, found in Article VI of the United

States Constitution, provides that the laws of the United States

“shall be the supreme Law of the Land; ... any Thing in the

Constitution or Laws of any State to the Contrary
13

notwithstanding.” U.S. Const. art. VI, cl. 2. Under that clause,

Congress has the power “to preempt state legislation if it so

intends.” Hi Tech Transp., LLC v. N.J. Dep’t of Envtl. Prot.,

382 F.3d 295, 302 (3d Cir. 2004) (internal quotation omitted);

see also Gade v. Nat’l Solid Waste Mgmt. Ass’n, 505 U.S. 88,

108 (1992) (“[U]nder the Supremacy Clause, from which our

pre-emption doctrine is derived, any state law, however clearly

within a State’s acknowledged power, which interferes with or

is contrary to federal law, must yield.”); Gibbons v. Ogden, 22

U.S. 1, 82 (1824) (stating that “acts of the State Legislatures ...

[that] interfere with, or are contrary to, the laws of Congress”

must be invalidated, and that “the law of the State, though

enacted in the exercise of powers not controverted, must yield

to [the federal law]”). While the Supremacy Clause plainly

provides Congress with the constitutional power to preempt

state law, the challenge for courts has been deciding when a

conflict between state and federal law requires application of

that power. See Hines v. Davidowitz, 312 U.S. 52, 67 (1941)

(acknowledging that there is not “an infallible constitutional test

or an exclusive constitutional yardstick” for the application of

preemption). 

The Supreme Court has identified three types of

preemption: express preemption, field preemption, and implied

conflict preemption. Hillsborough County, Fla. v. Automated

Med. Labs., Inc., 471 U.S. 707, 713 (1985); Bruesewitz v.

Wyeth, Inc., 561 F.3d 233, 238-39 (3d Cir. 2009). The first,

express preemption, exists when Congress includes in a statute

explicit language stating an intent to preempt conflicting state

law. Lorillard Tobacco Co. v. Reilly, 533 U.S. 525, 541 (2001)

(“State action may be foreclosed by express language in a
 We sometimes call this “implied obstacle preemption.” 9

Holk v. Snapple Beverage Corp., 575 F.3d 329, 334 (3d Cir.

2009). 

14

constitutional enactment.”). The second, field preemption,

occurs when a state law impinges upon a “field reserved for

federal regulation.” United States v. Locke, 529 U.S. 89, 111

(2000). This form of preemption exists “either ... [where] the

nature of the regulated subject matter permits no other

conclusion, or [where] the Congress has unmistakingly so

ordained.” Fl. Lime & Avocado Growers, Inc. v. Paul, 373 U.S.

132, 142 (1963). Lastly, and most significantly for the present

case, implied conflict preemption exists when, “under the

circumstances of [a] particular case, [the state law] stands as an

obstacle to the accomplishment and execution of the full

purposes and objectives of Congress.” Hines, 312 U.S. at 67. 9

In analyzing a potential conflict between federal and state

law, we must be “guided ... ‘by the rule that the purpose of

Congress is the ultimate touchstone in every preemption case.’”

Id. at 575 F.3d at 334 (citing Altria Group, Inc. v. Good, 129

S.Ct. 538, 543 (2008)). We are required to consider “the entire

scheme of the [federal] statute” and identify “its purpose and

intended effect.” Crosby v. Nat’l Foreign Trade Council, 530

U.S. 363, 373 (2000). Only then can we determine whether the

opposing state law presents a “sufficient obstacle” such that it

requires preemption. Id. at 374 n.8. While there is a recognized

presumption against preemption, Cipollone v. Ligget Group,

Inc., 505 U.S. 504, 516 (1992), and we seek to avoid it when

possible, Bates v. Dow Agrosciences LLC, 544 U.S. 431, 432,
15

449 (2005), conflicts that are implied by operation of state law

are “of no less force than that which is expressed.” Crosby, 530

U.S. at 373 (“If the purpose of the act cannot otherwise be

accomplished ... the state law must yield to the regulation of

Congress within the sphere of its delegated power.”) (citations

omitted). Thus, in deciding whether the Reform Act preempts

the sovereign immunity that SEPTA claims, we must scrutinize

the effect of the state law interpretation pressed by SEPTA and

“ascertain Congress’s intent in enacting the federal statute at

issue.” Shaw v. Delta Air Lines, Inc., 463 U.S. 85, 95 (1993). 

The specific statutory provision at issue here is §

28103(b) of the Reform Act, which reads as follows:

(b) Contractual obligations—A provider of rail

passenger transportation may enter into contracts

that allocate financial responsibility for claims.

49 U.S.C. § 28103(b). The language is neither complex nor

ambiguous. A plain reading of that single sentence reveals that

the Act grants Amtrak power to enter into binding contracts that

allocate financial responsibility for claims against it. Such a

reading is confirmed by looking to other language in the statute,

particularly the description of congressional findings, which

include that “(1) intercity rail passenger service is an essential

component of a national intermodal passenger transportation

system; (2) Amtrak is facing a financial crisis, with growing and

substantial debt obligations severely limiting its ability to cover

operating costs and jeopardizing its long-term viability; and (3)

immediate action is required to improve Amtrak’s financial

condition if Amtrak is to survive.” 49 U.S.C. § 24101; see also
This approaches express preemption but does not 10

qualify as such because the language of § 28103(b), while clear

in its implication, is not explicit about preemption. “Express

preemption occurs when Congress ‘explicitly state[s]’ that it

intends a statute to have that effect. Jones v. Rath Packing Co.,

430 U.S. 519, 525 (1977). Such preemption is thus generally

found only when Congress has used language that expressly

precludes state regulation in a given area. See St. Thomas-St.

John Hotel & Tourism Ass’n, Inc. v. Gov’t of the United States

Virgin Islands, 218 F.3d 232, 238 (3d Cir. 2000) (holding that

express preemption only “arises when there is an explicit

16

Amtrak Reform Act, Pub. L. 105-134, 105th Congress, 1st

Session, 111 Stat. 2570, 2571, § 2. 

The broad wording of § 28103(b), combined with those

findings, shows that subsection (b) was enacted to facilitate

Amtrak’s entering into contracts to transfer liability risk to

entities like SEPTA. Pennsylvania’s sovereign immunity

statute, if applied as SEPTA urges, would be a complete

obstacle to Amtrak’s ability to enter into such contracts because

it would directly prevent Amtrak from being able to allocate

financial responsibility to SEPTA. Permitting the invocation of

sovereign immunity would thus have the impermissible impact

of preventing Amtrak from doing exactly what the Reform Act

says Amtrak can do, thereby moving Amtrak towards the

financial instability that the Reform Act sought to avoid.

Therefore, based on the plain language of the statute, we

conclude that the Reform Act preempts the application of

Pennsylvania’s sovereign immunity statute.10
statutory command that state law be displaced”); see also Rush

Prudential HMO, Inc. v. Moran, 536 U.S. 355, 364 (describing

the “express preemption” language in ERISA); Sprietsma v.

Mercury Marine, 537 U.S. 51, 62-63 (“Because the [Federal

Boat Safety Act] contains an express pre-emption clause, our

task of statutory construction must in the first instance focus on

the plain wording of the clause ... .”).

17

If the plain language of the statute were not clear enough

to demonstrate congressional intent, the legislative history of the

Reform Act is. See United States v. Gregg, 226 F.3d 253, 257

(3d Cir. 2000) (“To determine a law’s plain meaning, we begin

with the language of the statute. If the language of the statute

expresses Congress’s intent with sufficient precision, the inquiry

ends there ... . Where the statutory language does not express

Congress’s intent unequivocally, a court traditionally refers to

the legislative history... .”). That history only serves to

strengthen the conclusion of implied conflict preemption.

A Senate Report explains that the Reform Act was

designed to “enable Amtrak to increase efficiencies, reduce

costs, and [to] permit changes to its liability.” S. Rep. No. 105-

85 at 1, Committee on Commerce, Science, and Transportation,

105th Congress, 1st Session (Sept. 24, 1997) (“Senate Report”).

The Report highlights the importance of the railroads in this

region of the country and cautions that, if the Reform Act failed

to become law, bankruptcy could occur, because “Amtrak is

staking the future of the national system on the projected

financial success of highspeed rail service in the Northeast

Corridor.” Id. at 2-3; see also id. at 12 (explaining the “urgent
18

need for immediate action to improve Amtrak’s financial

condition and eliminate its dependency ... .”). With regard to §

28103(b) in particular, the Senate Report explains that the

purpose behind that subsection is to “clarif[y] that

indemnification agreements related to the provision of rail

passenger service entered into by Amtrak and other parties

would be enforceable.” Id. at 5; see also id. at 14 (“Subsection

(b) ... clarifies that rail passenger indemnification agreements

entered into by Amtrak and other parties are enforceable.”). In

fact, the Report outlines a scenario closely analogous to what is

at issue here:

As long as there is the possibility that state laws

governing indemnification contracts may make

those contracts unenforceable, Amtrak and a

freight railroad may find themselves litigating

with each other. Amtrak believes that such

litigation inevitably would not only adversely

impact business relationships between Amtrak

and the host freight railroads, but it would also

lead to significantly higher outlays in settlements

and judgments to plaintiffs.

Id. at 5. 

A report from the House of Representatives similarly

emphasizes that “indemnity contracts ... are fully enforceable

without regard to any other law or public policy.” H.R. Rep.

No. 105-251 at 15, Committee on Transportation and

Infrastructure, 105th Congress, 1st Session (Sept. 17, 1997)

(“House Report”). The House Report is explicit that “a crucial
19

feature of the liability reform provision is the affirmation of the

right of owners of ... passenger operators to indemnify by

contract.” Id. at 17. 

In short, legislative history reveals that giving Amtrak the

freedom to negotiate agreements with other carriers to allocate

the financial consequences of liability was a key component of

the Reform Act, and § 28103(b) was specifically needed to

eliminate “the possibility that state laws can nullify [Amtrak’s]

indemnification contracts.” Senate Report, at 14. The

Pennsylvania sovereign immunity statute, to the extent it could

nullify the NEC Agreement, stands as a direct obstacle to that

goal, and, as such, is preempted. 

SEPTA offers several arguments for not giving

preemptive effect to the Reform Act. Each is unpersuasive.

First, SEPTA notes that § 28103(b) states that Amtrak “may”

enter into indemnity contracts.” SEPTA then says that the

statutory language is “merely permissive” and so is insufficient

to “justify such a broad preemption of state law.” (Appellant’s

Op. Br. at 13.) However, it cites no precedent to support its

contention that a statute has less preemptive force because it

authorizes rather than compels certain acts. Moreover, it does

not explain how the Reform Act can be reasonably read to give

Amtrak the option to enter into indemnity contracts while

simultaneously giving entities like SEPTA the prerogative to

ignore those same contracts. 

Second, relying on the principle that preemption analysis

should attempt to “reconcile the operation of both statutory

schemes with one another,” Hi Tech Transp., 382 F.3d at 302,
As summarized by the District Court, 42 Pa. Cons. Stat. 11

Ann.§ 8522(b) states that 

[T]he defense of sovereign immunity shall not be

raised to claims caused by: (1) the operation of

any motor vehicle in the possession or control of

a Commonwealth party; (2) acts of health care

employees of Commonwealth agency medical

facilities or institutions or by a Commonwealth

party who is a doctor, dentist, nurse or related

health care personnel; (3) the care, custody or

control of personal property in the possession or

control of Commonwealth parties; (4) a

dangerous condition of Commonwealth agency

real estate and sidewalks; (5) a dangerous

condition of highways under the jurisdiction of a

Commonwealth agency created by potholes or

sinkholes or other similar conditions created by

natural elements; (6) the care, custody or control

of animals in the possession or control of a

Commonwealth party; (7) the sale of liquor at

Pennsylvania liquor stores; (8) acts of a member

of the Pennsylvania military forces; or (9) the

administration, manufacture and use of a toxoid

20

SEPTA suggests that its state-law sovereign immunity and the

Reform Act can be reconciled because there are enumerated

exceptions to the immunity. While there are, as SEPTA says,

nine enumerated exceptions to its sovereign immunity, they are

narrow and have no impact on SEPTA’s indemnity obligation 11
or vaccine. 

(App. at A8 (citing 42 Pa. Cons. Stat. Ann. § 8522(b)).)

Subsection (a) preempts state law with respect to 12

punitive damages and aggregate liability. 49 U.S.C. § 28103(a).

See supra, n.10. 13

21

to Amtrak. Indeed, it is surely only because they have no impact

here that SEPTA cites them, for, if they did accommodate the

purpose of the Reform Act, they would run counter to SEPTA’s

effort to escape liability. Contrary to what SEPTA suggests, it

is not possible to reconcile the claim of state-law sovereign

immunity with the express purpose of the Reform Act.

Third, SEPTA argues that Congress could not have

intended § 28103(b) to have preemptive effect because Congress

chose to include an explicit statement of preemption in another

subsection of the statute, § 28103(a). Congress knew how to 12

broadly preempt state law if it so intended, SEPTA argues, and

Congress did not intend to do so by subsection (b). We

acknowledge that § 28103(b) does not contain an express

preemption clause. However, even though subsection (b) is 13

not expressly preemptive, it is still quite clear. The preemptive

consequences of its language are sufficiently plain for us to say

that Congress intended to obviate all obstacles to the

enforceability of contracts to indemnify Amtrak. Further, the

expression of preemption in one subsection does not mean that

preemption was not intended by the language of another
22

subsection on another topic. See Bruesewitz, 561 F.3d at 239 (“

[I]mplied preemption may exist even in the face of an express

preemption clause.”); see also Freightliner Corp. v. Myrick, 514

U.S. 280, 288 (1995) (noting that an express preemption clause

in a statute does not “foreclose [the] possibility of implied preemption”). Again, “the purpose of Congress is the ultimate

touchstone in every preemption case,” Holk 575 F.3d at 334,

and, as discussed above, the purpose here is not in doubt: §

28103(b) was passed to “clarif[y] that rail passenger service

indemnification agreements entered into by Amtrak and other

parties are enforceable.” Senate Report at 14. 

Fourth, SEPTA contends that its sovereign immunity

defense should not be preempted because “Congress was

certainly aware of SEPTA’s status with respect to liability yet it

chose not to expressly preempt that status.” (Appellant’s Op.

Br. at 16.) This argument, put forward with no support, rests

on the peculiar proposition that Congress knew that SEPTA

would enter into indemnity contracts with no intent or capacity

to honor them. It is true that Congress was aware that state laws

existed “to protect the taxpayers who ultimately bear the costs

of tort liability incurred in providing the public transportation.”

House Report, at 21. In fact, recognizing the threat those laws

posed to the viability of indemnity agreements, the House

warned that “[w]ithout the confirmation that indemnity

agreements will be upheld in court, [Amtrak] will be placed in

jeopardy as [it] resists taking on what is increasingly viewed as

an unacceptable and uncompensated liability exposure.” Id.

But that does not mean that Congress was “certainly aware” of

the sovereign immunity position that SEPTA would take when

reneging on its indemnity obligations. Even if Congress had
23

been aware of SEPTA’s bait-and-switch position, however, the

intent of the Reform Act remains clear in its commitment to the

enforcement of those obligations.

Finally, SEPTA argues that Congress, in enacting §

28103(b), only intended to preempt state laws expressly

governing the enforceability of indemnity contracts, and, more

specifically, state laws that prohibit indemnification when there

is a finding of gross negligence. Accordingly, SEPTA reasons,

the Reform Act should preempt only that specific kind of state

law, and not a law of general applicability like Pennsylvania’s

sovereign immunity statute. A finding of preemption in the

present case, says SEPTA, would be far too “vast,” and would

“wipe away all principles of state contract law that may be

utilized as a defense to contractual liability and/or contract

formation.” (Appellant’s Op. Br. at 13.) 

The Reform Act was indeed intended to preempt state

laws of the sort described by SEPTA. In fact, subsection (b)

was passed in part to supersede National R.R. Passenger Corp.

v. Consolidated Rail Corp., 698 F. Supp. 951 (D.D.C. 1988)

(overruled on other grounds), which held that an indemnification

agreement between Amtrak and ConRail violated District of

Columbia public policy because it allowed indemnification in

the context of gross negligence. See House Report, at 33-44;

see also O&G Indus., 537 F.3d at 166-67 (“[I]t was precisely the

doubts cast by the [Consolidated Rail] decision over the validity

of indemnity agreements by railroad parties that prompted

Congress to enact § 28103(b).”). It does not follow, however,

that that was the limit of congressional intent. To the contrary,

it would be odd to suppose that Congress meant to eliminate a
The Second Circuit finds preemption in three scenarios: 14

“(1) where Congress expressly states its intent to preempt; (2)

where Congress’s scheme of federal regulation is sufficiently

comprehensive to give rise to a reasonable inference that it

leaves no room for the state to act; and (3) where state law

actually conflicts with federal law.” O&G Industries, 537 F.3d

at 161. In O&G Industries, the Second Circuit found

24

specific obstacle to its purpose of protecting Amtrak’s ability to

spread risk but had no concern with a broader obstacle having

the same effect. The Reform Act’s legislative history

demonstrates that Congress intended to override any and all

state laws that might interfere with the enforceability of

Amtrak’s contracts, not only those state laws specifically

enacted to govern indemnity agreements. See House Report, at

13 (“[I]ndemnity contracts ... are fully enforceable without

regard to any other law or public policy.”) (emphasis added); cf.

O&G Indus., 537 F.3d at 160-63 (rejecting the argument that §

28103(b) only applies to indemnity contracts with freight

railroads, and holding that the Reform Act was meant “to ensure

the enforceability of indemnity agreements Amtrak concludes

with any other party.”) 

The Second Circuit’s opinion in O&G Industries supports

that conclusion. In O&G Industries, the Second Circuit held

that § 28103(b) preempted a Connecticut statute which, on

public policy grounds, voided any indemnity provision

contained in construction-related contracts, if the provision

purported to indemnify a party against its own negligence. 537

F.3d at 158; see also Conn. Gen. Stat. § 52-572k(a). The 14
preemption under its third category, conflict preemption, id.,

which is analogous to our finding of implied conflict

preemption.

25

Court rejected O&G Industries’ argument that there was a

limitation on the kinds of conflicting state laws preempted by

the Reform Act, stating that

[t]he goal of the Reform Act was to shield all of

Amtrak’s indemnity arrangements from legal

attacks on their validity. [In enacting § 28103(b)],

Congress ... encouraged all providers of rail

passenger transportation to enter into contracts

that allocate financial responsibility for claims ... .

Congress also affirmed the enforceablity of

contracts that include indemnification obligations.

O&G Indus., 537 F.3d at 162 (citation omitted) (original

emphasis).

Thus, as our sister circuit decided, Congress intended

with the passage of the Reform Act, and, more specifically, with

the passage of § 28103(b), that all of Amtrak’s indemnity

agreements should be enforceable, regardless of the kind of

conflicting state law that might be erected. SEPTA’s state-law

sovereign immunity assertion directly conflicts with the

enforcement of its indemnity contract with Amtrak and thus

presents an irreconcilable obstacle to the objectives of
Lest there be any misunderstanding, we emphasize that 15

this does not constitute a general preemption or invalidation of

Pennsylvania’s sovereign immunity statute. We hold only that

SEPTA’s effort to invoke that statute to escape the

consequences of its indemnity obligations to Amtrak cannot be

permitted, for the reasons stated.

26

§ 28103(b). Accordingly, that invocation of sovereign immunity

is preempted under principles of implied conflict preemption.15

B. Preemption and Retroactivity

SEPTA also argues that, even if some claims of

sovereign immunity are preempted by § 28103(b), there can be

no preemption here without giving the Reform Act an

impermissible retroactive effect. The NEC Agreement was

executed a decade prior to the passage of the Reform Act. By

SEPTA’s reasoning, applying the Reform Act to an indemnity

agreement entered into prior to the enactment of that statute is

untenable because Congress did not expressly provide for

retroactive application. 

Before asking whether Congress intended the Reform

Act to have any retroactive effect, we must first ask whether the

statute even has such an effect. A statute “has retroactive effect

when it ‘takes away or impairs vested rights acquired under

existing laws, or creates a new obligation, imposes a new duty,

or attaches a new disability, in respect to transactions or

considerations already past.’” Id. at 227 (citing Landgraf v. USI

Film Prods., 511 U.S. 244, 269 (1994)). Analyzing whether a
27

statute operates retroactively “is not always a simple or

mechanical task.” Id. at 268. The analysis requires a

“commonsense, functional judgment as to whether a statute

attaches new legal consequences.” Atkinson v. Att’y Gen., 479

F.3d 222, 231 (3d Cir. 2007). In seeking that commonsense

answer, we can “be guided by considerations of fair notice,

reasonable reliance, and settled expectations.” Id. (emphasis

omitted). Moreover, “[a] statute does not operate retrospectively

merely because it is applied in a case arising from conduct

antedating the statute’s enactment.” Landgraf, 511 U.S. at 269

(citation omitted). “Rather, the statute’s temporal reach

becomes unacceptable only when its retroactive application

would significantly impair existing rights and thereby disappoint

legitimate expectations.” Dinnall v. Gonzales, 421 F.3d 247,

252 (3d Cir. 2005) (citation omitted). 

In deciding whether a statute has a retroactive effect, a

court must determine the “important event” to which the statute

allegedly attaches new legal consequences. See Atkinson, 479

F.3d at 230 (stating that the defendant’s conviction was the

“important event” to which the federal statute attached a new

legal consequence). In the present case, the important event is

not the execution of the NEC Agreement in 1982, as SEPTA

asserts, but is rather the Deweese accident in 2004, after which

Amtrak had the right to indemnity from SEPTA for that

accident. SEPTA did not owe Amtrak any indemnity obligation

for the Deweese accident until it occurred on October 28, 2004,

and, thus, SEPTA’s alleged sovereign immunity defense did not

arise until Amtrak filed its cross-claim for indemnity.

Therefore, the Reform Act, passed in 1997, did not attach any

new “legal duties” to events at issue here, which took place long
28

after it was enacted. Because Amtrak’s right to indemnity for

the 2004 accident did not accrue until 2004, and the Reform Act

was passed seven years before, SEPTA’s argument that there is

impermissible retroactivity lacks merit.

Moreover, SEPTA had “fair notice” of the Reform Act’s

effects well before Amtrak first invoked its contractual

indemnity right in 2004 and so has no basis for claiming

“reasonable reliance” on its sovereign immunity defense. See

Atkinson, 479 F.3d at 231 (stating that in retroactivity analysis,

“a court can certainly be guided by considerations of fair notice,

reasonable reliance, and settled expectations”) (emphasis

omitted). Between 1997, when the Reform Act was passed

specifying that all of Amtrak’s indemnity contracts would be

upheld, and 2004, when the accident occurred, SEPTA had

ample time to seek termination of the NEC Agreement or to

renegotiate its indemnity obligations, if it wished to limit them.

III. Conclusion

Section 28103(b) of the Reform Act reflects Congress’s

unequivocal support for indemnity agreements such as the ones

between Amtrak and SEPTA. The plain meaning of the statute

is confirmed by legislative history, which specifically notes

Congress’s intent to eliminate “the possibility thatstate laws can

nullify [Amtrak’s] indemnification contracts.” Senate Report at

14. Because SEPTA cannot be allowed to use Pennsylvania’s

sovereign immunity statute to frustrate the goals of the Reform

Act, we will affirm the judgment of the District Court.