### 1998 D e c i sion s O p inion s of the U nit e d

S t a t e s C our t of Appe al s for the Thir d C ir c uit

3-31-1998 

# W heelin g L ak

e E r ie v . Pub U t i l C omm P

A

P r e c e de n t i al or N on-P r e c e de n t i al :

D ock e t 96-3703,96-3704

F o l lo w thi s a nd a dd it ion al w ork s a t : h tt p://d i g it alc ommon s .l a w

. v i l l a no v a

. e du/thir dc ir c uit_1998

Thi s de c i sion i s br ou gh t t o y ou for f r e e a nd ope n a c c e s s b y the O p inion s of the U nit e d S t a t e s C our t of Appe al s for the Thir d C ir c uit a t V i l l a no v a

U niv e r sit y S choo l of L a

w Di g it al R e posit or y

. I t h as be e n a c c e pt e d for inclusion in 1998 D e c i sion s b y a n a uthor i z e d a dmini s tr a t or of V i l l a no v a

U niv e r sit y S choo l of L a

w Di g it al R e posit or y

. F or mor e infor m a t ion, p le as e c on t a ct Be n j a min

. C a rl s on@l a

w

. v i l l a no v a

. e du

. 

### R e c omme nde d C it a t ion

" W he e l in g L ak e E r ie v

. P ub U t i l C omm P

A" (1998). 1998 D e cisio n s

. P a pe r 62.

h tt p://d i g it alc ommon s .l a

w

. v i l l a no v a

. e du/thir dc ir c uit_1998/62Filed March 31, 1998

UNITED STATES COURT OF APPEALS

FOR THE THIRD CIRCUIT

Nos. 96-3703, 96-3704

WHEELING & LAKE ERIE RAILWAY COMPANY

v.

PUBLIC UTILITY COMMISSION OF THE COMMONWEALTH OF PENNSYLVANIA; DAVID W. ROLKA, Chairman of the Pennsylvania Public Utility Commission; JOSEPH RHODES, JR.; JOHN M. QUAIN; LISA CRUTCHFIELD; JOHN HANGER, In their Official Capacities as Members of the Pennsylvania Public Ut ility Commission; SCOTT TOWNSHIP, PENNSYLVANIA; JAMES P. MULLIGAN, Chairman of the Board of Commissioners of Scott Township, Pennsylvania

SCOTT TOWNSHIP,

PENNSYLVANIA and JAMES P. MULLIGAN, Chairman of the

Board of Commissioners of Scott Township, Pennsylvania, Appellants in 96-3703

PUBLIC UTILITY COMMISSION

OF THE COMMONWEALTH OF PENNSYLVANIA; DAVID W. ROLKA, JOSEPH RHODES, JR.; JOHN M. QUAIN, LISA

CRUTCHFIELD and
JOHN HANGER, Appellants in 96-3704

ON APPEAL FROM THE

UNITED STATES DISTRICT COURT

FOR THE WESTERN DISTRICT OF PENNSYLVANIA

D.C. Civ. No. 94-01776Argued Thursday, September 11, 1997

Before: MANSMANN, NYGAARD and GARTH, Circuit Judges

(Opinion Filed: March 31, 1998)

David A. Salapa (Argued)

Assistant Counsel

John F. Povilaitis

Chief Counsel Pennsylvania Public Utility

Commission

P.O. Box 3265 Harrisburg, PA 17105-3265

Counsel for Appellants, Pennsylvania Public Utility Commission; David W. Rolka; Joseph Rhodes, Jr.; John M. Quain; Lisa Crutchfield; and John
Hanger

David L. Haber, Esquire (Argued) Weinheimer, Schadel & Haber 602 Law & Finance Building

429 Fourth Avenue Pittsburgh, PA 15219

Counsel for Appellants, Scott Township, Pennsylvania; and James Mulligan

Gregory G. Fletcher (Argued) Baker, Donelson, Bearman &

Caldwell 165 Madison Avenue, Suite 2000 Memphis, TN 38103

Richard R. Wilson Vuono, Lavelle & Gray 2310 Grant Building Pittsburgh, PA 15219

Counsel for Appellee

2Charles D. Gray

National Association of Regulatory Utility Commissioners 1102 ICC Building

P.O. Box 684 Washington, D.C. 20044

Counsel for Amicus, National Association of Regulatory Utility

Commissioners

Andrew S. Gordon

Chief Counsel

Gina M. D'Alfonso Assistant Counsel in Charge Commonwealth of Pennsylvania Department of Transportation Forum Place, 555 Walnut Street Office of Chief Counsel, 9th Floor Harrisburg, PA 17101-1900

Counsel for Amicus, Commonwealth of Pennsylvania Department of Transportation

OPINION OF THE COURT

NYGAARD, Circuit Judge.

In this appeal we must decide whether assessing a railroad for a portion of the construction and main tenance costs of a bridge intersecting its right-of-way con stitutes a discriminatory tax under the Railroad Revitalizatio n and Regulatory Reform (4-R) Act of 1976, 49 U.S.C. S 11 501.1

The district court held that the assessment was a discriminatory tax. We will reverse.

___________________________________________________ ______________

1. The original complaint alleges a violation of 49 U.S.C. S 11503. That section was recodified pursuant to Pub. L. No. 104- 88, S 102(a) (1996). We will refer to provisions of the 4-R Act at issue here by section number as currently codified in title 49, U.S. Code.

3I. Background

The Wheeling & Lake Erie Railway Company subleases a railroad right-of-way passing under "Old Washington Pike" in Scott Township, Allegheny County, Pennsylvania. The bridge supporting that highway became so deteriorat ed that it was closed in 1982. The Township procured the necessary approvals from the Pennsylvania Public Ut ility Commission and constructed a new bridge at the Township's initial expense. The Commission then ord ered Wheeling to pay 3% of the total construction costs of the bridge replacement project and 15% of the maintenan ce costs of the new bridge (excluding costs of snow an d ice removal).2 The Commission also assessed another rai lroad, whose tracks pass under the same span, 3% and 15% respectively. That railroad is not a party. The Pen nsylvania Department of Transportation was to pay 7% of the construction costs. The Township was to pay the rem aining

87% of the construction costs and 70% of the mainte nance costs, with an 80% reimbursement for construction c osts coming from Pennsylvania's Billion Dollar Bridge Pr oject

Fund.

Wheeling filed this action requesting declaratory a nd injunctive relief from the construction and mainten ance costs. It argued that the assessment was a discrimi natory tax in violation of the 4-R Act. All parties filed motions for summary judgment. In its order granting Wheeling's motion, the district court declared that the assess ment was an unlawfully discriminatory tax under the 4-R Act. The court also enjoined the defendants from assessing o r collecting the construction and maintenance costs f rom Wheeling. The Commission and the Township appealed separately. We consolidated the appeals.

___________________________________________________ ______________

2. The Commission delegated this case to a Public U tility Commission Administrative Law Judge who issued a Recommended D ecision. (J.A. at 226.) That decision included a proposed allocation of the construction

and maintenance costs and also decided that Wheelin g was not discriminated against on the basis of its railroad status. (J.A. at 245- 50.) The Commission adopted the Recommended Decision in its September 23, 1994 Order. (J.A. at 266.)

4II. Eleventh Amendment Immunity

The Commission did not raise its Eleventh Amendment 3 argument before the district court. Nonetheless, El eventh Amendment immunity can properly be raised for thefi rst time on appeal. See Edelman v. Jordan, 415 U.S. 651 , 658, 94 S. Ct. 1347, 1363 (1974) ("the Eleventh Amendmen t sufficiently partakes of the nature of a jurisdicti onal bar so that it need not be raised in the trial court"); Bo lden v. Southeastern Pa. Trans. Auth., 953 F.2d 807, 812 (3 d Cir. 1991).

The Eleventh Amendment bars suits against unconsenting states in federal courts. See Seminole Tribe of Fla. v. Florida, ___ U.S. ___, 116 S. Ct. 1114, 112 2 (1996). There are two exceptions: Congress may abrogate a s tate's immunity, id., and parties may sue state officers f or prospective injunctive and declaratory relief. See Idaho v. Coeur d'Alene Tribe of Idaho, ___ U.S. ___, 117 S. Ct. 2028, 2034 (1997); Seminole, ___ U.S. at ___, 116 S. Ct. at 1132; Ex parte Young, 209 U.S. 123, 28 S. Ct. 441 (1908); Balgowan v. New Jersey, 115 F.3d 214, 217 (3d Cir. 1997). Here, the parties do not dispute that the Pennsylva nia Public Utility Commission is an arm of the Commonwe alth of Pennsylvania protected by Eleventh Amendment principles of sovereign immunity.4 Also, Pennsylvan ia has

___________________________________________________ ______________

3. "The Judicial Power of the United States shall n ot be construed to extend to any suit in law or equity, commenced or p rosecuted against one of the Unites States by Citizens of another Sta te, or by Citizens or Subjects of any Foreign State." U.S. Const. amend. XI. "[T]he Eleventh Amendment [stands] for the constitutional principle that state sovereign immunity limited the federal courts' jurisdiction u nder Article III." Seminole Tribe of Fla. v. Florida, ___ U.S. ___, 11 6 S. Ct. 1114, 1127 (1996). "[A] State can waive its Eleventh Amendment protection and

allow a federal court to hear and decide a case com mence or prosecuted against it. The Amendment, in other words, enacts a sovereign immunity from suit, rather than a nonwaivable limit on the f ederal judiciary's subject-matter jurisdiction." Idaho v. Coeur d'Alen e Tribe of Idaho, ___ U.S. ___, 117 S. Ct. 2028, 2033 (1997).

4. In its reply brief, the Commission analyzed whet her it is an arm of the

state under the criteria this Court set forth in Ch risty v. Pennsylvania Turnpike Commission, 54 F.3d 1140, 1144 (3d Cir. 19 95). The Commission concluded that they are indeed an arm of the state, and Wheeling does not take issue with that determinatio n.

5not given its consent to be sued in federal court. 5 The

question remaining is whether any exceptions to imm unity apply.

A. Congressional Abrogation of Immunity

A valid abrogation of Eleventh Amendment immunity requires Congress to "unequivocally express[ ] its intent to abrogate the immunity" and to act "pursuant to a va lid exercise of power." Seminole, ___ U.S. at ___, 116 S. Ct. at 1123 (quoting Green v. Mansour, 474 U.S. 64, 68, 10 6 S. Ct. 423, 426 (1985)). Here, the parties agree that section 11501(c)6 is an unmistakably clear expression of Co ngress's intent to abrogate states' immunity regarding viola tions of section 11501(b). However, the parties disagree on whether the statute is a valid exercise of congressional po wer.

The dispute centers largely around Seminole, which overruled Pennsylvania v. Union Gas Co., 491 U.S. 1 , 23, 109 S. Ct. 2273, 2286 (1989) (holding that Congress could validly abrogate a state's sovereign immunity pursu ant to its Commerce Clause powers). In Seminole, the Court noted that it had previously recognized only one other so urce of congressional power to abrogate states' sovereign i mmunity --the Fourteenth Amendment. Seminole, ___ U.S. at _

__, 116 S. Ct. at 1125 (citing Fitzpatrick v. Bitzer, 4 27 U.S. 445, 96 S. Ct. 2666 (1976)). Thus, after Seminole, the only remaining source of congressional power to abrogate states' Eleventh Amendment immunity is the Fourteenth

Amendment.

___________________________________________________ ______________

5. The Commonwealth of Pennsylvania has codified it s position on immunity as follows: "Nothing contained in this sub chapter shall be construed to waive the immunity of the Commonwealth from suit in Federal courts guaranteed by the Eleventh Amendment to the

Constitution of the United States." 42 Pa. Cons. St at. S 8521.

6. Subsection (c) states in pertinent part as follo ws:

"Notwithstanding section 1341 of title 28 an d without regard to the amount in controversy or citizenship of the parties, a district

court of the United States has jurisdiction, concu rrent with other jurisdiction of courts of the United States and the States, to prevent a violation of subsection (b) of this sectio n."

49 U.S.C. S 11501(c).

6Congress promulgated the 4-R Act pursuant to its

Commerce Clause powers because of the interstate na ture of the railroad industry. Section 11501 announces Congress's concern that discriminatory taxation "unreasonably burden[s] and discriminate[s] against interstate commerce." 49 U.S.C. S 11501(b); see als o 49 U.S.C. S 10101 (listing the purposes and policies o f railroad regulation). However, when determining the sources of Congress's authority to legislate, we may look beyo nd the expressed constitutional basis in a statute's pream ble or legislative history. See Fullilove v. Klutznick, 44 8 U.S. 448, 478, 100 S. Ct. 2758, 2774-75 (1980). The Supreme C ourt
directs us to:

"proceed to the consideration whether [S 115 01] is "appropriate legislation" to enforce the Equ al Protection Clause, that is . . . whether [S 11501] may be regarded as an enactment to enforce the Equal Protect ion Clause, whether it is "plainly adapted to th at end" and whether it is not prohibited by but is consi stent with "the letter and spirit of the constitution." "

Katzenbach v. Morgan, 384 U.S. 641, 651, 86 S. Ct. 1717, 1724 (1966). In a later examination of Morgan, the Court established that to answer this inquiry:

"[i]t was enough that the Court could percei ve a basis upon which Congress could reasonably predica te a judgment that application of literacy qualif ications within the compass of S 4(e) would discrimin ate in terms of access to the ballot and consequent ly in terms of access to the provision of administration of government programs."

Fullilove, 448 U.S. at 477, 100 S. Ct. at 2774 (cit ing Morgan, 384 U.S. at 652-53, 86 S. Ct. at 1722). 7

___________________________________________________ ______________

7. Since Seminole, the District of Wyoming is the o nly other court to address this issue, specifically regarding the 4-R Act. See Union Pac.

R.R. Co. v. Burton, 949 F. Supp. 1546 (D. Wyo. 1996). We disagree with that court's analysis because it was restricted to the e xpressed purposes of

the 4-R Act set forth in section 10101. See id. at 1554. We look beyond the general purposes of the 4-R Act as a whole, to what we perceive as the purpose underlying section 11501, the portion o f the act implicated

here.

7The legislative history of the statute before us sh ows

"Congress was aware that the railroads" `are easy p rey for State and local tax assessors" in that they are "no nvoting, often nonresident, targets for local taxation," who cannot easily remove themselves from the locality.' " Depa rtment of Rev. of Or. v. ACF Indus., 510 U.S. 332, 336, 114 S . Ct. 843, 847 (1994) (quoting Western Air Lines, Inc. v. Board of Equalization, 480 U.S. 123, 131, 107 S. Ct. 1038, 1 043 (1987) (quoting S. Rep. No. 91-630, at 3 (1969))). Moreover, another court of appeals has held that the very pur pose of section 11501 was to remedy discrimination against

railroads:

"Until this law was passed, as pointed out b y the appellants, states could constitutionally cl assify railroads differently from all other taxpaye rs for the imposition of state taxes without violating the equal protection clause of the Fourteenth Amendmen t. It was the obvious purpose of Congress to put an en d to this practice, where such treatment of the railro ads as a class was discriminatory in effect."

Alabama Great S. R.R. Co. v. Eagerton, 663 F.2d 103 6, 1040 (11th Cir. 1981) (emphasis added). The Supreme Court has also said that "[c]orrectly viewed, S 5 [ of the Fourteenth Amendment] is a positive grant of legisl ative power authorizing Congress to exercise its discreti on in determining whether and what legislation is needed to secure the guarantees of the Fourteenth Amendment." Morgan, 384 U.S. at 651, 86 S. Ct. at 1723-24.

It is evident to us that Congress recognized the po tential for state and local taxing authorities to discrimin ate against railroads in violation of their Equal Protection ri ghts under the Fourteenth Amendment. We conclude that Congress had the power, pursuant to Section Five of the Four teenth Amendment, to promulgate section 11501, and did so to protect the railroads. Therefore, Congress validly abrogated Eleventh Amendment immunity, and the district court properly exercised jurisdiction over this lawsuit.

Neither our analysis nor our conclusion is affected by the recent decisions cited by the Commission. It cites WilsonJones v. Caviness, 99 F.3d 203 (6th Cir. 1996), as

8employing the correct post-Seminole analysis for

determining whether an act of Congress, generally r egarded to be within its Commerce Clause powers, can also b e justified by the Fourteenth Amendment. The Commissi on reads Wilson-Jones to hold that, barring an explici t congressional recitation of authority under the Fou rteenth Amendment, only statutes that remedy discrimination against a class of persons that Fourteenth Amendmen t jurisprudence has already identified as deserving s pecial protection can be regarded as enactments to enforce the provisions of the Fourteenth Amendment.

We disagree with this narrow reading of Wilson-Jone s. There, the Court found no evidence that the core pr ovisions of the Fair Labor Standards Act, before being amend ed by the Equal Pay Act, were enacted pursuant to Section Five of the Fourteenth Amendment. Although the Court fea red the implications of an expansive rule "that an act is valid [merely] if it is rationally related to achieving e qual protection of the laws," it expressly admitted that its "opinion might be different if Congress madefinding s that a particular group needed legal protection to remed y some sort of invidious discrimination not directly addre ssed by federal precedent." Wilson-Jones, 99 F.3d at 209, 2 10 n.4. Here, however, the remedial nature of section 11501 's constitutional protection is evident, despite the l ack of an explicit congressional statement. We believe that C ongress was within its discretion when it found that railro ads need special protection from local tax assessors. Theref ore, we reach a different conclusion than the Court in Wils on-Jones.8

Nor is our result affected by City of Boerne v. Flo res, ___ U.S. ___, 117 S. Ct. 2157 (1997), in which the Supr eme Court declared the Religious Freedom Restoration Ac t
unconstitutional. The Court found that the Act was "so out of proportion to a supposed remedial or preventive object that it cannot be understood as responsive to, or d esigned to prevent, unconstitutional behavior. It appears, instead, to attempt a substantive change in constitutional protections." Id. at ___, 117 S. Ct. at 2170. In so holding,

___________________________________________________ ______________

8. The reasoning in Wilson-Jones was also rejected in another Fair Labor Standards Act case. See Mills v. Maine, 118 F.3d 37 , 45 (1st Cir. 1997).

9the Court reasoned that "[i]f Congress could define its own

powers by altering the Fourteenth Amendment's meani ng," it would be "difficult to conceive of a principle t hat would limit congressional power." Id. at ___, 117 S. Ct. at 2168. Here, section 11501 is not out of proportion to its objective, nor does it substantively change any constitutional protections.

We recently decided College Savings Bank v. Florida Prepaid Postsecondary Education Expense Board, Nos. 97- 5055, 97-5086, 1997 WL 749514 (3d Cir. Dec. 5, 1997 ), in which we held that the right to be free of false ad vertising is not a constitutionally protected intangible prop erty right. Therefore, the Due Process Clause of the Fourteenth Amendment was not implicated, and we concluded that the Trademark Remedy Clarification Act of 1992 did not abrogate Florida's immunity because it did not furt her the purposes of the Fourteenth Amendment. College Savin gs Bank, however, was expressly limited to its facts, id. at *9, and did not concern the Equal Protection Clause. It does not contradict our decision. Similarly, there is no

dissonance between our decision in In re Sacred Hea rt Hospital of Norristown, No. 97-1126, 1998 WL 3627 ( 3d Cir. Jan. 8, 1998), and our decision here. In Sacred Hea rt, we did not distinguish between the Bankruptcy Clause a nd the Commerce Clause (both Article I powers) as being inappropriate sources of congressional power to abr ogate states' Eleventh Amendment immunity. Id. at *5. Fur ther, we found "no evidence suggesting that S 106(a) [of the Bankruptcy Code] was enacted pursuant to any constitutional provision other than Congress' Bankr uptcy Clause power." Id. at *6. Here, however, we have fo und such evidence in section 11501's legislative histor y and judicially-recognized anti-discrimination purpose.

In sum, section 11501 is a valid exercise of congre ssional power under Section Five of the Fourteenth Amendmen t, thus effectively abrogating the Commission's Eleven th Amendment immunity.9 We now turn to the merits of t he appeal.

___________________________________________________ ______________

9. The individual Commissioners also claim that the y are immune from suit in federal court pursuant to the Eleventh Amen dment. Wheeling

10III. The 4-R Act

Wheeling argues that the assessment of construction and

maintenance costs violates section 11501 because it is an illegal tax that discriminates against railroads. 1 0 The district court agreed, concluding that the assessments were" taxes" within the meaning of section 11501. Because this i ssue involves the interpretation of federal statutory la w, our review is plenary. See In re TMI, 89 F.3d 1106, 111 2 (3d Cir. 1996). Unfortunately, the 4-R Act does not def ine "tax." We must, therefore, begin by determining the approp riate

rule of construction.

In Department of Revenue of Oregon v. ACF Industrie s, 510 U.S. 332, 114 S. Ct. 843 (1994), the Court held that nonrailroad property tax exemptions were not prohib ited by subsection (b)(4).

"When determining the breadth of a federal s tatute that impinges upon or pre-empts the States' tradi tional powers, we are hesitant to extend the statut e beyond its evident scope. We will interpret a statu te to pre- empt the traditional state powers only if th at result is "the clear and manifest purpose of Congress. " "

Id. at 345, 114 S. Ct. at 850-51 (citations omitted ).

We have decided two cases dealing with the statutor y interpretation of "taxes" in a similar context. In National

___________________________________________________ ______________

contends that the Commissioners are within the seco nd exception noted above: state officials can be sued for prospective injunctive and declaratory relief from constitutional violations. See Ex parte Young, 209 U.S. 123, 28 S. Ct. 441 (1908); Balgowan v. New Jer sey, 115 F.3d 214, 217 (3d Cir. 1997); Laskaris v. Thornburgh, 661 F.2 d 23, 26 (3d Cir. 1981); see also Idaho v. Coeur d'Alene Tribe of Ida ho, ___ U.S. ___, 117 S. Ct. 2028, 2034 (1997); Seminole, ___ U.S. ___, 1 16 S. Ct. 1114, 1132 (1996). The parties dispute whether the declaratory or injunctive relief that Wheeling seeks is truly prospective. Because w e have decided that the Commission is not immune, we need not reach thi s issue.

10. "The following acts unreasonably burden and dis criminate against interstate commerce, and a State, subdivision of a State, or authority acting for a State or subdivision of a state may no t do any of them: . . . Impose another tax that discriminates against a rai l carrier . . . ." 49 U.S.C. S 11501(b)(4).

11Railroad Passenger Corp. v. Pennsylvania Public Uti lity

Commission, 848 F.2d 436 (3d Cir. 1988) (hereinafte r Amtrak), the issue was whether "any taxes or other fees" covered levies against Amtrak for building and main taining the Cassatt Avenue bridge. Id. at 438 (interpreting 45 U.S.C. S 546b (recodified at 49 U.S.C. S 24301(l))) . That decision outlined the declining history of intercit y rail passenger service in America and Congress's efforts to revitalize it. Id. at 438. Congress rationalized Am trak's exemption by theorizing that cities would gladly pa y a user contribution to maintain rail passenger service. Id . In Amtrak, we reasoned, "[w]hether such`special assess ments' will be construed as `taxes' depends on the context in which the terms are raised." Id. Additionally, we instruc ted that "the meaning of the word `tax' is a matter of feder al law deduced from congressional policy underlying the st atute, rather than from state tax labels developed in an e ntirely unrelated legal context." Id. at 439. After noting that exemptions from taxation usually do not apply to su ch assessments, we adopted some general rules:

"When a tax exemption is granted to certain private entities, the statutory language is construe d closely because it affords a special privilege not a vailable to others. Likewise, when a statute waives the federal government's freedom from local taxation, th at language is also narrowly construed because it defeats the immunity shielding the federal governmen t. In interpreting an exemption statute, the inten tion of the legislative body is pivotal."

Id. Amtrak, we concluded, was not an ordinary priva te firm; Congress intended it to be exempt from state and lo cal

taxes and fees to the same extent as the federal government. Thus, under a liberal reading of that s tatute, the bridge assessment was within the meaning of the statutory phrase "taxes or other fees." Id. at 439- 40.

Likewise, in Southeastern Pennsylvania Transportati on Authority v. Pennsylvania Public Utility Commission , 826 F. Supp. 1506 (E.D. Pa. 1993) (hereinafter SEPTA ), af f'd 27 F.3d 558 (3d Cir. 1994) (unpublished table decision ), the same issue arose under a different statute, which c onfers Amtrak's tax immunity upon certain commuter authori ties.

12See 49 U.S.C. S 24501(g). The district court found that

Congress intended the phrase "taxes or other fees" in section 24501(g) to have the same broad meaning as our Amtrak decision found Congress to have given to ide ntical language in section 24301(l). Id. at 1525-26.

Amtrak and SEPTA involved the interpretation of sta tutes with different purposes and histories from the stat ute at issue here. Nonetheless, we believe the reasoning underlying those cases is instructive regarding the principles of statutory construction applicable her e. The statutes in Amtrak and SEPTA were construed broadly because those entities had tax immunity comparable to that of the federal government. In contrast, we mus t interpret section 11501 strictly here, because Whee ling is a private entity benefitting from a special provision exempting it from discriminatory taxation. Thus, we must cons ider the

context in which the term "tax" is raised and the congressional policy underlying section 11501 to de termine if it was the clear and manifest purpose of Congres s to include such assessments within that provision.

As the Commission, Scott Township, and the Departme nt of Transportation all point out, there is nothing i n the legislative history that sheds light on what Congre ss meant by the word "tax" in section 11501(b)(4). See gener ally Alabama Great S. R.R. Co. v. Eagerton, 663 F.2d 103 6, 1041 (11th Cir. 1981). Moreover, they maintain that because assessing railroads for such improvements w as commonplace when the 4-R Act was enacted and Congre ss did not address that practice in either the Act or the legislative history, then Congress did not intend " tax" to include bridge assessments. This argument parallels the Supreme Court's reasoning in ACF regarding ad valor em tax exemptions:

"It was common at the time [S 11501] was dra fted, as it is now, for States with generally applica ble ad valorem property taxes to exempt various cla sses of commercial property. . . . Given the prevale nce of property tax exemptions when Congress enacte d the 4-R Act, [S 11501's] silence on the subject- -in light of the explicit prohibition of tax rate and [ta x] assessment

13ratio discrimination--reflects a determinati on to permit

the States to leave their exemptions in plac e."

ACF, 510 U.S. at 344, 114 S. Ct. at 850.

Another court followed this reasoning in Chicago & North Western Transportation Co. v. Webster County, 71 F. 3d 265 (8th Cir. 1995). There, the County Board of Supervi sors was expanding a drainage ditch running under a rail road's right-of-way. The County ordered the railroad to in stall a larger culvert under its tracks. When the railroad refused, the County installed the culvert anyway, and assess ed the cost against the railroad. The Court found that the culvert solely benefitted the railroad because it kept the railroad's right-of-way intact: the Supervisors could have leg ally bulldozed a wider ditch through the right-of-way, r esulting in the same benefit to the public. The Court also n oted that before the passage of the 4-R Act:

"many states had statutes requiring railroad s to construct improvements, including culverts, when drainage ditches crossed their rights-of-way

. . . .

These statutes represent the juridical back ground against which Congress passed the 4-R Act, a nd nothing in either its language or its legisl ative history indicates that Congress wanted to upset or u ndermine state drainage laws. Congress did not expres s an intent to preempt the states' longstanding and comm on practice of charging railroads for certain d rainage improvements, and we refuse to impute that i ntent into S [11501(b)(4)], given the historical enviro nment in

which it was enacted."

71 F.3d at 267-68. Here, the statutes giving the Commission the powers to order the construction and assess the costs of railroad crossing improvements date back to 1913. See 66 Pa. Cons. Stat. Ann. SS 2702, 2704 (historical notes). Like the ad valorem tax exempti ons in ACF and the culvert assessment in Chicago & North Western, assessing bridge improvement costs in Pennsylvania was a longstanding practice when Congr ess enacted the 4-R Act. Thus, we are convinced that th e congressional policy underlying section 11501 was n ot to treat bridge assessments as taxes. We conclude that it was

14not the clear and manifest purpose of Congress to i nclude

bridge assessments within the meaning of the word " tax" in section 11501(b)(4).

This conclusion is consistent with our comments in Amtrak that such assessments are usually not consid ered within exemptions from taxation. 848 F.2d at 439. T here, we found support in an early Supreme Court case rea ching

a similar conclusion:

"The charges here [costs of grading and pavi ng a street] are not taxes proper, are not contributions to the state or to the city for the purpose of enabling e ither to carry on its general administration of affairs, bu t are charges only, and specially, for the cost for a loca l improvement supposed to have resulted in an enhancement of the value of the railroad company's property."

Illinois Cent. R. Co. v. Decatur, 147 U.S. 190, 208 -209, 13 S. Ct. 293, 298 (1893) (cited by Amtrak, 848 F.2d a t 439). Importantly, the amount assessed here does not rais e revenue for the general fund of either the Township or the Commonwealth. (J.A. at 266-68)

Our conclusion is also consistent with the progeny of the Head Money Cases (Edye v. Robertson), 112 U.S. 580, 5 S. Ct. 247 (1884) (finding that a fifty-cent levy on s hip owners for every immigrant passenger entering a U.S. port was not a tax because the money was used to regulate immigr ation, not for the general support of the government). Fol lowing that precedent, the Courts of Appeals for the Eight h and Ninth Circuits have decided that assessing the cost s of a new drainage culvert and the costs of railroad regu lation, respectively, are not taxes within the meaning of section 11501. See Chicago & North Western, 71 F.3d at 265; Union Pac. R.R. Co. v. Public Util. Comm'n of Or., 899 F.2d 854 (9th Cir. 1990). Those Courts reasoned tha t since the government levies at issue did not raise money for the general welfare, they were not taxes within the mea ning of the respective statutes.

Wheeling's counter argument is that the assessment must be a tax because it partially relieves the sta te or township fisc of the cost of a bridge benefitting t he public. This argument is not convincing. The bridge assessm ent

15does not contribute to the general fund of either t he

Township or the Commonwealth and is specific to a particular bridge at a particular crossing. Moreove r, none of the levies in Chicago & North Western, Union Pacifi c, Head Money Cases, and Decatur were held to be taxes, eve n though they all arguably relieved burdens on the pu blic

fisc.

According to Wheeling, Chicago & North Western held that assessments are not taxes because the improvem ent benefitted that railroad alone. We disagree, and be lieve that the more logical reading is that to the extent a po rtion of the project benefitted that railroad, the cost of t hat portion should be assessed to that railroad. Here, the Comm ission determined that a new bridge would benefit both the railroad and the public and assessed the costs of construction and maintenance accordingly. The Commission's assessment order adopting the Recommended Decision of the Administrative Law Judg e stated: "Only after the Commission determines a par ticular party has a direct interest in or bears some respon sibility for or obtains a discernible benefit from a specifi c crossing, does the Commission exercise its authority under st ate law to assess construction and maintenance responsibili ties." (J.A. at 249, emphasis added.) Here, Wheeling direc tly benefits from the above-grade crossing of the Towns hip's right-of-way because its trains are not impeded by any cross-traffic. This directly benefits Wheeling's sa fety and efficiency. Although the bridge benefits the genera l public, the peculiar benefit Wheeling receives from the con struction and maintenance of the bridge reinforces our conclu sion

that the assessment is not a "tax" within the meani ng of

section 11501.

There is no need to overrule either Amtrak or SEPTA , as the Commission urges. Bridge assessments were inten ded to be included in the phrase "taxes or other fees" regarding the statutes applicable to those two cases, constru ed broadly, but not intended to be included in the wor d "tax" in section 11501, construed strictly. We find that the weight of authority supports our conclusion that Congress did not

manifest a clear intent to include the assessment o f bridge construction and maintenance costs, like those at i ssue

16here, within the meaning of "taxes" in section 1150 1.

Without taxes, there was no discriminatory taxation

. Therefore, the Commission and the Township did not

violate 49 U.S.C. S 11501.

IV.

In sum, we hold that the district court erred by concluding that the assessments were discriminatory taxes, and for the reasons set forth above, we will revers e.

17GARTH, J., dissenting:

I cannot agree with the majority of the panel which has reversed the district court's order of October 11, 1996, and has held: (1) that we have subject matter jurisdict ion to decide Wheeling's claim against the Commonwealth; ( 2) that accordingly, we need not reach the issue of th e Eleventh Amendment immunity of the individual Commissioners; and (3) that the assessment of construction and maintenance costs made against Whe eling is not a tax and does not discriminate against Whee ling in violation of 49 U.S.C.A. S 11501 et seq. (West 1997 ) ("the 4-R Act").

Because I believe that the majority has erred in it s constitutional analysis as well as in the result wh ich it reaches, I would affirm the district court's order. 1 In doing so, I would hold that under the doctrine of Ex Part e Young, 209 U.S. 123 (1908), all future maintenance costs c an be enjoined. I leave to the court for future decision, however, the question as to whether relief is available for assessed, but unpaid, construction costs.

I have come to this conclusion because I find no Congressional power under the Fourteenth Amendment to abrogate the sovereign immunity of the Commonwealth of Pennsylvania. Hence, as to the Commonwealth, we hav e no jurisdiction to entertain Wheeling's challenge. How ever, as pertains to the individual Commissioners, their act ion in assessing Wheeling constitutes -- under my analysis and the precedents I cite -- a discriminatory tax.

Thus, I conclude that maintenance costs accruing in the future can be enjoined. I leave open for another da y the question as to whether an unpaid assessment can be enjoined without violating the Eleventh Amendment.

I.

As the majority has explained, the Eleventh Amendme nt

___________________________________________________ ______________

1. The issue of whether Eleventh Amendment sovereig n immunity strips subject matter jurisdiction from the federal forum was not before the

district court.

18to the United States Constitution confers sovereign

immunity upon the States. Without its explicit cons ent, a State cannot be sued in federal court unless Congre ss has abrogated its immunity. To abrogate the States' sov ereign immunity, Congress must (1) unequivocally express i ts intent to abrogate that immunity, and (2) act pursu ant to a valid exercise of power. Seminole Tribe v. Florid a, ___ U.S. ___, 116 S. Ct. 1114, 1123 (1996). At this point, I depart from the majority's analysis which upholds jurisdic tion over the 4-R Act as enforcing the Equal Protection Claus e because I cannot conclude that Congress could abrog ate Pennsylvania's sovereign immunity by recourse to th e Fourteenth Amendment.

I agree with the majority that the 4-R Act was enac ted pursuant to Congress' commerce powers, and thus, af ter Seminole Tribe, abrogation of the States' sovereign immunity can no longer be upheld on that basis. See Majority Op. at 6. I further agree that we may vent ure beyond the expressed intent of Congress to determin e whether the 4-R Act could have been enacted pursuan t to some other valid exercise of Congressional power su ch that we may still retain jurisdiction over claims agains t the States. See id. at 8. However, I conclude that ther e is no such power granted under the Constitution and hence I cannot agree that Congress could have validly enact ed the 4-R Act pursuant to section five, the enforcement p rovision of the Equal Protection Clause of the Fourteenth

Amendment.

The 4-R Act explicitly prohibits conduct by State a nd local authorities which "unreasonably burden[s] and discriminate[s] against interstate commerce . . . . " 49 U.S.C.A. S 11501. The purpose of the 4-R Act was to "provide the means to rehabilitate and maintain the physical facilities, improve the operations and str ucture, and restore the financial stability of the railway system of the United States." Burlington Northern R.R. Co. v. Oklahoma Tax Comm'n, 481 U.S. 454, 457 (1987). The policy behind the 4-R Act, memorialized at 49 U.S.C .A. S 10101 (West 1997), describes the commercial and economic objectives aimed at unburdening interstate commerce by strengthening the rail transport infras tructure

19of this country through competition and the free ma rket. It

is only with respect to the realization of these ec onomic aims which proscribe predatory pricing, that any me ntion is made of prohibiting discrimination.2

Unlike the majority, I cannot conclude that Congres s can validly invoke its enforcement powers under section five of the Fourteenth Amendment merely because the word "discrimination" appears within the statutory text. The Congressional enforcement power under section five is not unlimited. See City of Boerne v. Flores, ___ U.S. _ __, 117 S. Ct. 2157, 2163 (1997).3 Enactments legislated pursu ant to Congress' section five enforcement power must be re medial in nature, designed to prevent constitutional infra ction. See

id.

In Wilson-Jones v. Caviness, 99 F.3d 203 (6th Cir. 1996), a pre-Flores case, the Sixth Circuit addressed whet her acts legislated pursuant to Congress' commerce powers ca n be upheld as legitimately enforcing the Equal Protecti on Clause under section five of the Fourteenth Amendme nt after Seminole Tribe. The court concluded that legi slation enforcing the Equal Protection Clause only extends to that "class of persons that Fourteenth Amendment jurisprudence has already identified as deserving s pecial protection." Id. at 210. In light of Flores, the Si xth Circuit's holding in Wilson-Jones properly recognized that

___________________________________________________ ______________

2. Section 10101 states, in pertinent part:

In regulating the railroad industry, it is t he policy of the United

States Government--

(12) to prohibit predatory pricing and pract ices, to avoid undue concentrations of market power, and to prohi bit unlawful

discrimination.

49 U.S.C.A. S 10101(12) (emphasis added).

3. In Flores, the Supreme Court held that the Relig ious Freedom Restoration Act ("RFRA") was unconstitutional becau se its enactment exceeded Congress' enforcement power under sectionf ive of the Fourteenth Amendment. Instead of remedying or preve nting constitutional infringements, the Court concluded t hat RFRA altered the meaning the Free Exercise Clause, thereby exceeding Congress' legitimate exercise of its section five power.

20enactments construed as enforcing the Equal Protect ion

clause must remedy or prevent constitutional infrin gements.

Similarly, in CSX Transportation v. Board of Public Works, ___ F.3d ___, No. 97-1296, 1998 WL 100394 (4th Cir. Mar. 10, 1998), a post-Flores opinion, the Fourth Circui t
indicated that the district court held -- as I woul d -- that

the 4-R Act could not be enacted under the sectionf ive power of the Fourteenth Amendment, as "the major purpose of the 4-R Act in general [is] to protect i nterstate commerce." Id. at 2.4 Accordingly, the district cou rt dismissed a challenge by two railroads for the asse ssment of illegally assessed taxes under the 4-R Act for l ack of subject matter jurisdiction in light of Seminole Tr ibe.5

By enacting the 4-R Act, Congress was not legislati ng to prevent unconstitutional behavior. There is no evid ence that the discriminatory taxation which Congress int ended to prohibit under the 4-R Act ever rose to the leve l of a

constitutional violation such that the railroads we re deprived of their right to equal protection. See, e .g., Nashville Chattanooga & St. Louis Ry. v. Browning, 310 U.S. 362 (1940) (holding that higher tax burden pla ced upon railroad property did not violate the Equal Pr otection Clause). Without such evidence, we have no basis to conclude that Congress had the power to enact the 4 -R Act pursuant to its enforcement power under the Fourtee nth Amendment. See Flores, 117 S. Ct. at 2169.

Thus, although the court in Wilson-Jones opined in a footnote that its conclusion might differ had "Cong ress made findings that a particular group needed legal protection to remedy some sort of invidious discrim ination not addressed by federal precedent," 99 F.3d at 210 n.4, Congress has not made such findings in this case. H ence, the majority's rejection of Wilson-Jones despite it s reliance upon this footnote is ill-founded as a justificatio n to uphold

___________________________________________________ ______________

4. I have been unable to directly access the distri ct court opinion, as it

is unavailable on either Westlaw or Lexis.

5. The Fourth Circuit reversed, however, on the bas is that the district court had jurisdiction over State officials under t he doctrine of Ex Parte Young. I discuss the Fourth Circuit's opinion in CS X Transportation infra at 10 n.9, 18.

21jurisdiction over the 4-R Act. See Majority Op. at 9.

Nowhere in the 4-R Act can a Congressional expressi on be found that the 4-R Act was passed "to secure the ri ghts under the Fourteenth Amendment." Katzenbach v. Morg an, 384 U.S. 641, 652 (1966).

In fact, the majority implicitly concedes this poin t by reference to the following passage from Alabama Gre at Southern Railroad Company v. Eagerton, 663 F.2d 103 6 (11th Cir. 1981):

Until this law was passed . . . states could constitutionally classify railroads differen tly from all other taxpayers for the impositions of state taxes without violating the equal protection claus e[sic] of the Fourteenth Amendment. It was the obvious pur pose of Congress to put an end to this practice, whe re such

treatment of the railroads as a class was discriminatory in effect.

Id. at 1040 (emphasis added); see Majority Op. at 8 . Thus, the majority acknowledges that prior to the passage of the 4-R Act disparate classifications concerning railro ads for taxation purposes were constitutional and did not v iolate the Equal Protection Clause. Indeed, this was well-sett led law. See Browning, 310 U.S. at 369 ("so far as the Feder al Constitution is concerned, a state can put railroad property into one pigeonhole and other property into another . . ."). Nevertheless, the majority now apparently character izes such classifications as unconstitutional, sufficien t to warrant congressional enactment of the 4-R Act unde r the Fourteenth Amendment Equal Protection Clause. From Flores, we learn that "Congress does not enforce a constitutional right by changing what the right is. " 117 S. Ct. at 2164. Congress cannot make constitutional classifications unconstitutional, even though it ca n make such classifications unlawful. That is precisely wh at the 4-R Act did: it prohibited long-standing constituti onally permissible discriminatory taxation practices. It d id not -- indeed, could not -- make such discrimination

unconstitutional.

Furthermore, the majority's analysis regarding the "findings" that Congress made that could support th e

22enactment of the instant legislation under the sect ion five

power is both flawed and untenable. The legislative history and judicial recognition referencing discrimination cannot transform what was admittedly a constitutionally permissible classification into an impermissible on e. That railroads were "easy prey" which were subjected to higher

rates of taxation than other taxable entities does not lead to the inescapable conclusion that the discrimination that the railroads suffered -- the disparate classification for taxation purposes -- rose to unconstitutional proportions. T he majority has not pointed to any evidence that could support the conclusion that the disparate taxation to which railroads were subjected constituted a violation un der the Equal Protection Clause, and as I have mentioned ab ove, Congress made no explicit findings, as Flores instr ucts must be done. See Flores, 117 S. Ct. at 2169. The m ere fact that the railroads were permissibly discriminated a gainst for taxation purposes is insufficient. Disparate ta x classifications concerning railroads were long-stan ding:

That the states may classify property for ta xation; may set up different modes of assessment, valuat ion and collection; may tax some kinds of property a t higher rates than others; and in making all these differentiations may treat railroads and oth er utilities with that separateness which their distincti ve characteristics and functions in society mak e appropriate -- these are among the commonpla ces of

taxation and of constitutional law.

Browning, 310 U.S. at 368.

As no constitutional infraction has been shown, the re is no issue to address concerning whether the sectionf ive enforcement power can be employed to abrogate the S tates' sovereign immunity. More importantly, as there is n o constitutional violation to remedy, interpreting S 11501 as the majority has is out of proportion to its remedi al objective. "There must be a congruence and proporti onality between the injury to be prevented or remedied and the means adopted to that end. Lacking such a connectio n, legislation may become substantive in operation and effect." Flores, 117 S. Ct. at 2164. Quite simply, there can be no congruence between the injury sought to be prevente d in

23this case and the sustaining of S 11501 under the

Fourteenth Amendment section five enforcement power

, because the injury involved in this case is simply not a constitutional injury.

Accordingly, after Seminole Tribe, and in the absen ce of any other legitimate constitutional grant of power, the Congressional intent to abrogate the States' sovere ign immunity under the 4-R Act cannot be upheld as enac ted pursuant to a valid exercise of power.6 See also M ills v. State of Maine, 118 F.3d 37 (1st Cir. 1997) (reject ing

section five of the Fourteenth Amendment as a means to retain federal jurisdiction over FLSA claim against the State in post-Seminole Tribe context).

In addition to Flores, other recent holdings from o ur court also support my position that the 4-R Act can not be upheld as a valid enactment pursuant to the section five enforcement power. See In re: Sacred Heart Hosp., 1 33 F.3d 237 (3d Cir. 1998);7 College Sav. Bank v. Florida P repaid Postsecondary Educ. Expense Bd., 131 F.3d 353 (3d C ir. 1997).8 While I acknowledge that these cases do not

___________________________________________________ ______________

6. This, of course, does not mean that the statute, itself, is unconstitutional. Rather, it simply means that fede ral courts are without jurisdiction to adjudicate such claims against the States because the Eleventh Amendment proscribes them.

7. In Sacred Heart, we addressed the constitutional ity of S 106(a) of the Bankruptcy Code, 11 U.S.C. S 106(a), which purports to abrogate state sovereign immunity in bankruptcy proceedings, in a post-Seminole Tribe context. As the Bankruptcy Clause is an Article I p ower, see U.S. Const. art. I, S 8, cl. 4, we held that it could not susta in an enactment abrogating a state's sovereign immunity after Semin ole Tribe. In considering whether S 106(a) could have been proper ly enacted pursuant to section five of the Fourteenth Amendment, we hel d that there was no evidence to support such a construction. Accordingl y, we concluded that S 106(a) was unconstitutional as it was not enacted pursuant to a legitimate exercise of Congressional power.

8. In College Savings Bank, we considered whether t he district court properly dismissed a claim against the State of Flo rida brought under the Trademark Remedy Clarification Act of 1992 ("TR CA") for want of subject matter jurisdiction after Seminole Tribe. I n affirming, we held that on the facts of that case jurisdiction could n ot be upheld pursuant to the section five power as a means to enforce the Due Process Clause of the Fourteenth Amendment as no protected propert y right was at

issue.

24concern railroads or the 4-R Act, they form the cru x of the

analysis which must obtain where an act legislated pursuant to some other congressional power, such as the commerce clause, is examined for whether it can be upheld as a valid enactment under the section five power.

The majority finds no incompatibility between its h olding and the holdings of the aforementioned cases largel y because of the different subject matters involved a nd "section 11501's legislative history and judicially recognized anti-discrimination purpose." Majority Op. at 10. I n each of those cases, however, and contrary to the conclusio n which the majority reaches, the respective courts held th at such legislation could not be validly enacted pursuant t o the section five power. Furthermore, as I have indicate d above, the discrimination referenced in S 11501's legislat ive history and by various courts does not, by itself, render t he discrimination the 4-R Act intends to prevent unconstitutional discrimination subject to enforcem ent under the section five power of the Fourteenth Amen dment. The majority's view of the test for validity under section five of the Fourteenth Amendment is so permissive, "it i s difficult to conceive of a principle that would lim it congressional power." Flores, 117 S. Ct. at 2168.

Thus, I cannot join the majority of this panel in h olding that this court retains subject matter jurisdiction over Wheeling's 4-R Act claims against the Commission. Notwithstanding that conclusion, Wheeling's claim f or prospective declaratory and injunctive relief still survives against the individual Commissioners under the doct rine of Ex Parte Young -- a subject not addressed by the ma jority. See CSX Transp., Inc. v. Board of Public Works, ___ F.3d ___, No. 97-1296, 1998 WL 100394 (4th Cir. Mar. 10, 1998);9 Majority Op. at 7 n.7.

___________________________________________________ ______________

9. Like the case before us, CSX Transportation v. B oard of Public Works, ___ F.3d ___, No. 97-1296, 1998 WL 100394 (4th Cir. Mar. 10, 1998), involved a challenge by two railroads to a tax levi ed in violation of the

4-R Act. The district court dismissed the case for want of subject matter jurisdiction in light of Seminole Tribe, see supra at 4-5, but found no basis for jurisdiction over state officials under E x Parte Young. While

not addressing whether the 4-R Act could be properly en acted pursuant to

25II.

A.

The district court held that the assessment levied against Wheeling for three (3) percent of the construction costs and for fifteen (15) percent of the future maintenance costs of the bridge constituted not only a tax under 49 S 11 501(b)(4),10 but a discriminatory tax. I discuss the discriminat ory character of the tax in Section II(B), infra.

A tax "raises money, contribute[s] to a general fun d, and [is] spent for the benefit of the entire community. " San Juan Cellular Tel. Co. v. Public Serv. Comm'n, 967 F.2d 683, 685 (1st Cir. 1992). By contrast, a fee is imposed for regulatory purposes generally by an entity upon those who are subject to its regulation. When it is unclear whether an as sessment is a tax or a fee, courts

emphasize the revenue's ultimate use, asking whether it provides a general benefit to the public, of a sort often financed by a general tax, or whether it provides

___________________________________________________ ______________

the section five power of the Fourteenth Amendment, the Fourth Circuit reversed, holding that the members of the Board of Public Works could be enjoined from the collection of such illegal tax es under the doctrine of Ex Parte Young. Indeed, the Fourth Circuit resol ved the issue of improperly assessed taxes not yet paid -- an issue which I have pointed out but have left open for this court to decide at a later time. See infra at 18. Hence, the analysis of the Fourth Circuit ad opted in CSX Transportation coincides with my own in this case.

10. Section 11501(b)(4) states:

(b) The following acts unreasonably burden a nd discriminate against interstate commerce, and a State, su bdivision of a State,

or authority acting for a State or subdivision of a State may not do

any of them:

. . .

(4) Impose another tax that discriminates a gainst a rail carrier providing transportation subject to the juri sdiction of the Board

under this part.

49 U.S.C.A. S 11501(b)(4) (West 1997).

26more narrow benefits to regulated companies or defrays

the agency's costs of regulation.

Id. (emphasis added). Support for this distinction between taxes and regulatory fees is found in the Head Mone y Cases, 112 U.S. 580 (1984), and Union Pacific Railr oad Company v. Public Utilities Commission, 899 F.2d 85 4 (9th Cir. 1990), another case brought under the 4-R Act.

In those cases, the courts reasoned that the assess ments in question were used to finance the cost of the re gulatory programs regulating the immigration and railroad industries, respectively. Therefore, the benefits f rom these regulatory programs did not inure to the public-at- large but only to the regulated industries. Accordingly, they did not

constitute taxes.

Thus, the majority's reliance upon these cases as authority which would authorize the assessments mad e in the instant case is misplaced. Those cases do no mo re than hold that monies used for the benefit of the partic ular industry do not necessarily benefit the public in g eneral,

and thus cannot be deemed "taxes."

Here, considering the ultimate use of the monies assessed by the Commission, I can only conclude-- a s did the district court -- that the assessments in quest ion are a tax which benefits the general public which uses th e bridge. Unlike a regulatory fee which would provide specific benefits to Wheeling, the revenue from the instant assessments was earmarked for a highway bridge that

, once repaired, would provide a general benefit to t he public at large.

It must be kept in mind that Wheeling's tracks are not laid upon the bridge in question. Rather, Wheeling' s tracks run under the very bridge for which Wheeling has be en assessed and for which it is required to pay future maintenance charges. Wheeling has been running its trains under the bridge throughout the duration of the per iod that the bridge has been closed.

In its amendment to the complaint before the Commission, Scott Township conceded that the construction and repair of the highway bridge was f or the

27benefit of the general public, not the railroads. S cott

Township alleged:

(4)(d) That the present design of the "Crook ed Bridge" is dangerous and not conducive to meeting th e needs of the Township and travelling [sic] public in the area.

. . .

(5)(e) That the bridge above [Wheeling] be r eplaced with one designed to meet the needs of the T ownship and travelling [sic] public.

Amend. to Compl. at 2-3 (emphasis added). These averments -- made by Scott Township -- are revealin g. They disclose that the Township intended to repair the bridge (which as the record establishes, provides n o benefit for Wheeling) not for the benefit of Wheeling but o nly for that of the general public.

The testimony of Patricia Wodnicki, the former mana ger/ secretary of Scott Township, supports this fact as well. At her deposition, Wodnicki testified that the bridge for which the assessment was imposed upon Wheeling had been closed by 1982. See Dep. Patricia Wodnicki at 7 (De c. 11, 1995).11 Notwithstanding that the bridge had been c losed by 1982, there is no contention that interference had been had with Wheeling's railroad operations or that Wheelin g's operations had been interrupted or impacted upon as a result of the bridge's condition. In fact, the Comm ission's Administrative Law Judge found that:

If the highway is permanently closed and the bridge demolished, [Wheeling's] operations will not be affected. The proposed improvement will not result in any changes to [Wheeling's] operations nor will it provide [Wheeling] with any additional revenues.

Findings of Fact and Conclusions of Law (May 27, 19 94). Furthermore, the repair of the bridge does not impl icate any regulatory program regulating Wheeling's activi ties. Accordingly, because the assessment and maintenance

___________________________________________________ ______________

11. The Amendment to Complaint and excerpts from th e deposition of Patricia Wodnicki were submitted to the court by a letter dated September 12, 1997, after oral argument, upon the r equest of the court.

28charges benefit only the general public and not spe cifically

Wheeling, I conclude that the assessment levied upo n Wheeling constituted a tax.

I believe the majority's reasoning which relies upo n National Railroad Passenger Corporation v. Pennsylv ania Public Utility Commission, 848 F.2d 436 (3d Cir. 1988)("Amtrak"), and Septa v. Pennsylvania Public U tility Commission, 826 F. Supp. 1506 (E.D. Pa. 1993) ("Sep ta"), aff 'd 27 F.3d 558 (3d Cir. 1994) (unpublished tabl e decision), to identify when an assessment is a tax, is flawed.12

Those cases arise in a context different from the c ontext of this appeal. Both cases involve a Congressional sta tute which exempted the railroad from any "taxes or othe r fees" imposed by any state. No definition of "taxes" or " fees" was furnished in either court's holding that a special assessment to pay for the construction and maintena nce of identified bridges could not be charged against the railroads. Thus, their analyses cannot assist us in distinguishing between a tax which should be borne by the general public and a regulatory fee properly impose d upon a carrier, because the statutory framework of those two cases exempted the railroad from both taxes and fee s. I
therefore read these cases and their discussions an d holdings to be inapposite.

B.

Because the majority has held that Scott Township's assessment does not constitute a tax, it has not ad dressed the issue of whether the tax is discriminatory. To determine whether this tax discriminates against Wheeling und er S 11501, we must compare the effect of the tax upon a certain "comparison class" of other taxpayers.

Our sister courts in Atchison, Topeka & Santa Fe Ra ilway

___________________________________________________ ______________

12. Significantly, two cases on which the majority relies and which I find inapposite held that under a Congressional exemptio n statute, railroads

could not be assessed construction and maintenance costs. See National R.R. Passenger Corp. v. Pennsylvania Pub. Util. Com m'n, 848 F.2d 436 (3d Cir. 1988); Septa v. Pennsylvania Pub. Util. Co mm'n, 826 F. Supp. 1506 (E.D. Pa. 1993).

29Company v. Arizona, 78 F.3d 438 (9th Cir 1996), and

Kansas City Railway Company v. McNamara, 817 F.2d 3 68 (8th Cir. 1987), have held that the comparison clas s to which a railroad such as Wheeling should be compare d is that of "other commercial and industrial taxpayers. " 78 F.3d at 441; 817 F.2d at 375. The Commission argues that because it has only limited jurisdiction to assess costs to a small group of entities that it would be inappropri ate to compare its assessment on Wheeling to a class of al l commercial and industrial taxpayers. Although we ha ve yet to decide this issue, and as I have pointed out, th e majority has not addressed it, I believe that the approach a dopted by our sister courts in Atchison and Kansas City provi des a logical and sensible rule of law.

If the comparison class were only those entities wh ich were also taxed by the Commission, there would seld om, if ever, be any finding of discriminatory taxation. In Kansas City the court explained that

[t]he only simple way to prevent tax discrim ination against the railroads is to tie their tax fa te to the fate of a large and local group of taxpayers. A l arge group of local taxpayers will have the political a nd economic power to protect itself against an unfair di stribution of

the tax burden.

817 F.2d at 375.

Given that I would adopt as the comparison class th e group of commercial and industrial taxpayers, I mus t conclude that the tax at issue against Wheeling is a discriminatory tax. None of the parties disputes th at industrial and commercial taxpayers were not subjec ted to the tax assessment for the repair and reconstructio n of the highway bridge. As a result, I would affirm the dis trict court's ruling of discrimination as well.

III.

Wheeling seeks both declaratory and injunctive reli ef. As I would hold that after the Supreme Court decided S eminole Tribe, this court no longer has subject matter juri sdiction over the 4-R Act to hear cases involving the Commis sion, I

30am obliged to address the issue of whether the indi vidual

Commissioners may be sued under the doctrine of Ex Parte Young, 209 U.S. 123 (1908). As I have noted, the ma jority has not dealt with this issue. See supra at 8-9.

The doctrine of Ex Parte Young permits suits agains t state officials acting in their official capacity - - notwithstanding the States' immunity under the Elev enth Amendment -- if the suit seeks prospective declarat ory and/or injunctive relief. It does not allow suits f or retrospective relief. See Edelman v. Jordan, 415 U. S. 651 (1974).

Wheeling has not yet paid the discriminatory taxes it was assessed regarding the construction of the bridge. Wheeling thus contends that it is seeking prospective relief because the assessment would have to be paid in the future. In addition, Wheeling asserts that because the future maintenance costs have not yet been assessed, the r elief it requests is prospective in nature. By contrast, the

Commissioners claim that the Commission's order assessing costs to Wheeling became final when Wheel ing appealed the Commission's order. The Commissioners argue that if this court were to grant Wheeling rel ief, we would have to hold the Commission's order -- a past act -- invalid, and that such would be contrary to Elevent h

Amendment doctrine.

The issue of prospectivity is a difficult one. I ha ve no problem holding that Wheeling is entitled to the pr ospective declaratory and injunctive relief concerning the fu ture maintenance costs. Although the tax liability has a lready been determined, the Commissioners have not yet ass essed those taxes. Accordingly, this court would merely b e enjoining the state actors from assessing future ta xes, and that would fall comfortably within the Ex Parte You ng doctrine.

With respect to the taxes assessed against Wheeling for the construction of the bridge, however, the prospe ctivity issue is less clear, and I am troubled by the Commi ssion's claim that there is no remedy or relief available t o Wheeling for the construction assessment made against it, de spite Wheeling's consistent and continual challenge to th at assessment as a discriminatory tax.

31Since we have heard oral argument, the Fourth Circu it

has directly addressed this issue in CSX Transporta tion, Inc. v. Board of Public Works, ___ F.3d ___, No. 97-1296 , 1998 WL 100394 (4th Cir. Mar. 10, 1998). Upholding juris diction over state officials under the Ex Parte Young doctr ine, the Fourth Circuit held that "[a]n injunction against t he future collection of the illegal taxes, even those that al ready have been assessed, is prospective, and therefore availa ble under the Ex parte Young [sic] doctrine." Id. at 3 (empha sis added). "The point is that the future collection[of the taxes] is illegal." Id. at 6. Thus, under CSX Transportati on, it is within the power of the court to enjoin as prospect ive relief improperly assessed -- though not yet paid -- taxes

.

As I am in dissent and my opinion on the issue of prospectivity is without precedential authority, I leave the resolution of this issue for another day. Neverthel ess, I
would be inclined to hold that Eleventh Amendment doctrine would permit relief where a mere assessmen t without payment of the charge has occurred -- as it has here -- and the Fourth Circuit has led the way by h olding so in CSX Transportation.

IV.

In sum, I disagree with the majority's opinion in i ts entirety.

I would hold that this court is without subject mat ter jurisdiction to hear suits against the Commission a fter Seminole Tribe. Nonetheless, Wheeling would be enti tled to prospective declaratory and injunctive relief under the doctrine of Ex Parte Young.

I would also hold that the assessment against Wheel ing is a tax because it is for the general benefit of t he public,

and not for the narrow benefit of the railroad or t o achieve some regulatory purpose.

I would further hold that the tax is discriminatory because the comparison class of commercial and indu strial taxpayers was not assessed the tax for construction or future maintenance costs.

32Finally, I would hold that Wheeling is entitled to

prospective declaratory and injunctive relief from any assessment relating to the future maintenance costs of the bridge, although as I have indicated above, I do no t decide

at this time whether relief from the Commission's o rder levying the cost of construction of the bridge to W heeling constitutes prospective or retrospective relief.

I therefore respectfully dissent from the majority' s holdings.

A True Copy:

Teste:

Clerk of the United States Court of Appeals

for the Third Circuit

33