1998 Decisions

Opinions of the United

States Court of Appeals

for the Third Circuit

3-31-1998

Wheeling Lake Erie v. Pub Util Comm PA

Precedential or Non-Precedential:

Docket 96-3703,96-3704

Follow this and additional works at: http://digitalcommons.law.villanova.edu/thirdcircuit_1998

This decision is brought to you for free and open access by the Opinions of the United States Court of Appeals for the Third Circuit at Villanova

University School of Law Digital Repository. It has been accepted for inclusion in 1998 Decisions by an authorized administrator of Villanova

University School of Law Digital Repository. For more information, please contact Benjamin.Carlson@law.villanova.edu.

Recommended Citation

"Wheeling Lake Erie v. Pub Util Comm PA" (1998). 1998 Decisions. Paper 62.

http://digitalcommons.law.villanova.edu/thirdcircuit_1998/62
Filed 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 Utility 

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. 94-01776 
Argued 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 

 2 
 Charles 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 maintenance 

costs of a bridge intersecting its right-of-way constitutes a 

discriminatory tax under the Railroad Revitalization and 

Regulatory Reform (4-R) Act of 1976, 49 U.S.C. S 11501.1 

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. 

 3 
I. 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 deteriorated that 

it was closed in 1982. The Township procured the 

necessary approvals from the Pennsylvania Public Utility 

Commission and constructed a new bridge at the 

Township's initial expense. The Commission then ordered 

Wheeling to pay 3% of the total construction costs of the 

bridge replacement project and 15% of the maintenance 

costs of the new bridge (excluding costs of snow and ice 

removal).2 The Commission also assessed another railroad, 

whose tracks pass under the same span, 3% and 15% 

respectively. That railroad is not a party. The Pennsylvania 

Department of Transportation was to pay 7% of the 

construction costs. The Township was to pay the remaining 

87% of the construction costs and 70% of the maintenance 

costs, with an 80% reimbursement for construction costs 

coming from Pennsylvania's Billion Dollar Bridge Project 

Fund. 

Wheeling filed this action requesting declaratory and 

injunctive relief from the construction and maintenance 

costs. It argued that the assessment was a discriminatory 

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 assessment was 

an unlawfully discriminatory tax under the 4-R Act. The 

court also enjoined the defendants from assessing or 

collecting the construction and maintenance costs from 

Wheeling. The Commission and the Township appealed 

separately. We consolidated the appeals. 

_________________________________________________________________ 

2. The Commission delegated this case to a Public Utility Commission 

Administrative Law Judge who issued a Recommended Decision. (J.A. at 

226.) That decision included a proposed allocation of the construction 

and maintenance costs and also decided that Wheeling 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.) 

 4 
II. Eleventh Amendment Immunity 

The Commission did not raise its Eleventh Amendment 3 

argument before the district court. Nonetheless, Eleventh 

Amendment immunity can properly be raised for thefirst 

time on appeal. See Edelman v. Jordan, 415 U.S. 651, 658, 

94 S. Ct. 1347, 1363 (1974) ("the Eleventh Amendment 

sufficiently partakes of the nature of a jurisdictional bar so 

that it need not be raised in the trial court"); Bolden v. 

Southeastern Pa. Trans. Auth., 953 F.2d 807, 812 (3d 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, 1122 (1996). 

There are two exceptions: Congress may abrogate a state's 

immunity, id., and parties may sue state officers for 

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 Pennsylvania 

Public Utility Commission is an arm of the Commonwealth 

of Pennsylvania protected by Eleventh Amendment 

principles of sovereign immunity.4 Also, Pennsylvania has 

_________________________________________________________________ 

3. "The Judicial Power of the United States shall not be construed to 

extend to any suit in law or equity, commenced or prosecuted against 

one of the Unites States by Citizens of another State, 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 under Article III." 

Seminole Tribe of Fla. v. Florida, ___ U.S. ___, 116 S. Ct. 1114, 1127 

(1996). "[A] State can waive its Eleventh Amendment protection and 

allow a federal court to hear and decide a case commence or prosecuted 

against it. The Amendment, in other words, enacts a sovereign immunity 

from suit, rather than a nonwaivable limit on the federal judiciary's 

subject-matter jurisdiction." Idaho v. Coeur d'Alene Tribe of Idaho, ___ 

U.S. ___, 117 S. Ct. 2028, 2033 (1997). 

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

state under the criteria this Court set forth in Christy v. Pennsylvania 

Turnpike Commission, 54 F.3d 1140, 1144 (3d Cir. 1995). The 

Commission concluded that they are indeed an arm of the state, and 

Wheeling does not take issue with that determination. 

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

question remaining is whether any exceptions to immunity 

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 valid 

exercise of power." Seminole, ___ U.S. at ___, 116 S. Ct. at 

1123 (quoting Green v. Mansour, 474 U.S. 64, 68, 106 S. 

Ct. 423, 426 (1985)). Here, the parties agree that section 

11501(c)6 is an unmistakably clear expression of Congress's 

intent to abrogate states' immunity regarding violations of 

section 11501(b). However, the parties disagree on whether 

the statute is a valid exercise of congressional power. 

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 pursuant to 

its Commerce Clause powers). In Seminole, the Court noted 

that it had previously recognized only one other source of 

congressional power to abrogate states' sovereign immunity 

--the Fourteenth Amendment. Seminole, ___ U.S. at ___, 

116 S. Ct. at 1125 (citing Fitzpatrick v. Bitzer, 427 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 its position on 

immunity as follows: "Nothing contained in this subchapter 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. Stat. S 8521. 

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

 "Notwithstanding section 1341 of title 28 and without regard to the 

 amount in controversy or citizenship of the parties, a district 

court 

 of the United States has jurisdiction, concurrent with other 

 jurisdiction of courts of the United States and the States, to 

prevent 

 a violation of subsection (b) of this section." 

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

 6 
Congress promulgated the 4-R Act pursuant to its 

Commerce Clause powers because of the interstate nature 

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 also 49 

U.S.C. S 10101 (listing the purposes and policies of railroad 

regulation). However, when determining the sources of 

Congress's authority to legislate, we may look beyond the 

expressed constitutional basis in a statute's preamble or 

legislative history. See Fullilove v. Klutznick, 448 U.S. 448, 

478, 100 S. Ct. 2758, 2774-75 (1980). The Supreme Court 

directs us to: 

 "proceed to the consideration whether [S 11501] is 

 "appropriate legislation" to enforce the Equal Protection 

 Clause, that is . . . whether [S 11501] may be regarded 

 as an enactment to enforce the Equal Protection 

 Clause, whether it is "plainly adapted to that end" and 

 whether it is not prohibited by but is consistent 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 perceive a basis 

 upon which Congress could reasonably predicate a 

 judgment that application of literacy qualifications 

 within the compass of S 4(e) would discriminate in 

 terms of access to the ballot and consequently in terms 

 of access to the provision of administration of 

 government programs." 

Fullilove, 448 U.S. at 477, 100 S. Ct. at 2774 (citing 

Morgan, 384 U.S. at 652-53, 86 S. Ct. at 1722). 7 

_________________________________________________________________ 

7. Since Seminole, the District of Wyoming is the only 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 expressed 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 of the act implicated 

here. 

 7 
The legislative history of the statute before us shows 

"Congress was aware that the railroads" `are easy prey for 

State and local tax assessors" in that they are "nonvoting, 

often nonresident, targets for local taxation," who cannot 

easily remove themselves from the locality.' " Department 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, 1043 

(1987) (quoting S. Rep. No. 91-630, at 3 (1969))). Moreover, 

another court of appeals has held that the very purpose of 

section 11501 was to remedy discrimination against 

railroads: 

 "Until this law was passed, as pointed out by the 

 appellants, states could constitutionally classify 

 railroads differently from all other taxpayers for the 

 imposition of state taxes without violating the equal 

 protection clause of the Fourteenth Amendment. It was 

 the obvious purpose of Congress to put an end to this 

 practice, where such treatment of the railroads as a 

 class was discriminatory in effect." 

Alabama Great S. R.R. Co. v. Eagerton, 663 F.2d 1036, 

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 legislative 

power authorizing Congress to exercise its discretion 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 potential 

for state and local taxing authorities to discriminate against 

railroads in violation of their Equal Protection rights under 

the Fourteenth Amendment. We conclude that Congress

had the power, pursuant to Section Five of the Fourteenth 

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 

 8 
employing the correct post-Seminole analysis for 

determining whether an act of Congress, generally regarded 

to be within its Commerce Clause powers, can also be 

justified by the Fourteenth Amendment. The Commission 

reads Wilson-Jones to hold that, barring an explicit 

congressional recitation of authority under the Fourteenth 

Amendment, only statutes that remedy discrimination

against a class of persons that Fourteenth Amendment 

jurisprudence has already identified as deserving special 

protection can be regarded as enactments to enforce the 

provisions of the Fourteenth Amendment. 

We disagree with this narrow reading of Wilson-Jones. 

There, the Court found no evidence that the core provisions 

of the Fair Labor Standards Act, before being amended by 

the Equal Pay Act, were enacted pursuant to Section Five 

of the Fourteenth Amendment. Although the Court feared 

the implications of an expansive rule "that an act is valid 

[merely] if it is rationally related to achieving equal 

protection of the laws," it expressly admitted that its 

"opinion might be different if Congress madefindings that 

a particular group needed legal protection to remedy some 

sort of invidious discrimination not directly addressed by 

federal precedent." Wilson-Jones, 99 F.3d at 209, 210 n.4. 

Here, however, the remedial nature of section 11501's 

constitutional protection is evident, despite the lack of an 

explicit congressional statement. We believe that Congress 

was within its discretion when it found that railroads need 

special protection from local tax assessors. Therefore, we 

reach a different conclusion than the Court in Wilson-Jones.8 

Nor is our result affected by City of Boerne v. Flores, ___ 

U.S. ___, 117 S. Ct. 2157 (1997), in which the Supreme 

Court declared the Religious Freedom Restoration Act 

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 designed 

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). 

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

powers by altering the Fourteenth Amendment's meaning," 

it would be "difficult to conceive of a principle that 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 advertising 

is not a constitutionally protected intangible property 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 further the 

purposes of the Fourteenth Amendment. College Savings 

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 Heart 

Hospital of Norristown, No. 97-1126, 1998 WL 3627 (3d Cir. 

Jan. 8, 1998), and our decision here. In Sacred Heart, we 

did not distinguish between the Bankruptcy Clause and the 

Commerce Clause (both Article I powers) as being 

inappropriate sources of congressional power to abrogate 

states' Eleventh Amendment immunity. Id. at *5. Further, 

we found "no evidence suggesting that S 106(a) [of the 

Bankruptcy Code] was enacted pursuant to any 

constitutional provision other than Congress' Bankruptcy 

Clause power." Id. at *6. Here, however, we have found 

such evidence in section 11501's legislative history and 

judicially-recognized anti-discrimination purpose. 

In sum, section 11501 is a valid exercise of congressional 

power under Section Five of the Fourteenth Amendment, 

thus effectively abrogating the Commission's Eleventh 

Amendment immunity.9 We now turn to the merits of the 

appeal. 

_________________________________________________________________ 

9. The individual Commissioners also claim that they are immune from 

suit in federal court pursuant to the Eleventh Amendment. Wheeling 

 10 
III. 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. 10 The district 

court agreed, concluding that the assessments were"taxes" 

within the meaning of section 11501. Because this issue 

involves the interpretation of federal statutory law, our 

review is plenary. See In re TMI, 89 F.3d 1106, 1112 (3d 

Cir. 1996). Unfortunately, the 4-R Act does not define "tax." 

We must, therefore, begin by determining the appropriate 

rule of construction. 

In Department of Revenue of Oregon v. ACF Industries, 

510 U.S. 332, 114 S. Ct. 843 (1994), the Court held that 

nonrailroad property tax exemptions were not prohibited by 

subsection (b)(4). 

 "When determining the breadth of a federal statute that 

 impinges upon or pre-empts the States' traditional 

 powers, we are hesitant to extend the statute beyond 

 its evident scope. We will interpret a statute to pre- 

 empt the traditional state powers only if that 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 statutory 

interpretation of "taxes" in a similar context. In National 

_________________________________________________________________ 

contends that the Commissioners are within the second 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 Jersey, 115 F.3d 214, 

217 (3d Cir. 1997); Laskaris v. Thornburgh, 661 F.2d 23, 26 (3d Cir. 

1981); see also Idaho v. Coeur d'Alene Tribe of Idaho, ___ U.S. ___, 117 

S. Ct. 2028, 2034 (1997); Seminole, ___ U.S. ___, 116 S. Ct. 1114, 1132 

(1996). The parties dispute whether the declaratory or injunctive relief 

that Wheeling seeks is truly prospective. Because we have decided that 

the Commission is not immune, we need not reach this issue. 

10. "The following acts unreasonably burden and discriminate against 

interstate commerce, and a State, subdivision of a State, or authority 

acting for a State or subdivision of a state may not do any of them: . . . 

Impose another tax that discriminates against a rail carrier . . . ." 49 

U.S.C. S 11501(b)(4). 

 11 
Railroad Passenger Corp. v. Pennsylvania Public Utility 

Commission, 848 F.2d 436 (3d Cir. 1988) (hereinafter 

Amtrak), the issue was whether "any taxes or other fees" 

covered levies against Amtrak for building and maintaining 

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 intercity rail 

passenger service in America and Congress's efforts to 

revitalize it. Id. at 438. Congress rationalized Amtrak's 

exemption by theorizing that cities would gladly pay a user 

contribution to maintain rail passenger service. Id. In 

Amtrak, we reasoned, "[w]hether such`special assessments' 

will be construed as `taxes' depends on the context in which 

the terms are raised." Id. Additionally, we instructed that 

"the meaning of the word `tax' is a matter of federal law 

deduced from congressional policy underlying the statute, 

rather than from state tax labels developed in an entirely 

unrelated legal context." Id. at 439. After noting that 

exemptions from taxation usually do not apply to such 

assessments, we adopted some general rules: 

 "When a tax exemption is granted to certain private 

 entities, the statutory language is construed closely 

 because it affords a special privilege not available to 

 others. Likewise, when a statute waives the federal 

 government's freedom from local taxation, that 

 language is also narrowly construed because it defeats 

 the immunity shielding the federal government. In 

 interpreting an exemption statute, the intention of the 

 legislative body is pivotal." 

Id. Amtrak, we concluded, was not an ordinary private firm; 

Congress intended it to be exempt from state and local 

taxes and fees to the same extent as the federal 

government. Thus, under a liberal reading of that statute, 

the bridge assessment was within the meaning of the

statutory phrase "taxes or other fees." Id. at 439-40. 

Likewise, in Southeastern Pennsylvania Transportation 

Authority v. Pennsylvania Public Utility Commission , 826 F. 

Supp. 1506 (E.D. Pa. 1993) (hereinafter SEPTA ), aff'd 27 

F.3d 558 (3d Cir. 1994) (unpublished table decision), the 

same issue arose under a different statute, which confers 

Amtrak's tax immunity upon certain commuter authorities. 

 12 
See 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 identical 

language in section 24301(l). Id. at 1525-26. 

Amtrak and SEPTA involved the interpretation of statutes 

with different purposes and histories from the statute at 

issue here. Nonetheless, we believe the reasoning 

underlying those cases is instructive regarding the

principles of statutory construction applicable here. 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 must 

interpret section 11501 strictly here, because Wheeling is a 

private entity benefitting from a special provision exempting 

it from discriminatory taxation. Thus, we must consider the 

context in which the term "tax" is raised and the 

congressional policy underlying section 11501 to determine 

if it was the clear and manifest purpose of Congress to 

include such assessments within that provision. 

As the Commission, Scott Township, and the Department 

of Transportation all point out, there is nothing in the 

legislative history that sheds light on what Congress meant 

by the word "tax" in section 11501(b)(4). See generally 

Alabama Great S. R.R. Co. v. Eagerton, 663 F.2d 1036, 

1041 (11th Cir. 1981). Moreover, they maintain that

because assessing railroads for such improvements was 

commonplace when the 4-R Act was enacted and Congress 

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 valorem 

tax exemptions: 

 "It was common at the time [S 11501] was drafted, as 

 it is now, for States with generally applicable ad 

 valorem property taxes to exempt various classes of 

 commercial property. . . . Given the prevalence of 

 property tax exemptions when Congress enacted the 

 4-R Act, [S 11501's] silence on the subject--in light of 

 the explicit prohibition of tax rate and [tax] assessment 

 13 
 ratio discrimination--reflects a determination to permit 

 the States to leave their exemptions in place." 

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 Supervisors 

was expanding a drainage ditch running under a railroad's 

right-of-way. The County ordered the railroad to install a 

larger culvert under its tracks. When the railroad refused, 

the County installed the culvert anyway, and assessed 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 legally 

bulldozed a wider ditch through the right-of-way, resulting 

in the same benefit to the public. The Court also noted that 

before the passage of the 4-R Act: 

 "many states had statutes requiring railroads to 

 construct improvements, including culverts, when 

 drainage ditches crossed their rights-of-way . . . . 

 These statutes represent the juridical background 

 against which Congress passed the 4-R Act, and 

 nothing in either its language or its legislative history 

 indicates that Congress wanted to upset or undermine 

 state drainage laws. Congress did not express an intent 

 to preempt the states' longstanding and common 

 practice of charging railroads for certain drainage 

 improvements, and we refuse to impute that intent into 

 S [11501(b)(4)], given the historical environment 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 exemptions in 

ACF and the culvert assessment in Chicago & North 

Western, assessing bridge improvement costs in 

Pennsylvania was a longstanding practice when Congress 

enacted the 4-R Act. Thus, we are convinced that the 

congressional policy underlying section 11501 was not to 

treat bridge assessments as taxes. We conclude that it was 

 14 
not the clear and manifest purpose of Congress to include 

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 considered 

within exemptions from taxation. 848 F.2d at 439. There, 

we found support in an early Supreme Court case reaching 

a similar conclusion: 

 "The charges here [costs of grading and paving a street] 

 are not taxes proper, are not contributions to the state 

 or to the city for the purpose of enabling either to carry 

 on its general administration of affairs, but are charges 

 only, and specially, for the cost for a local 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 at 439). 

Importantly, the amount assessed here does not raise 

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 ship owners 

for every immigrant passenger entering a U.S. port was not 

a tax because the money was used to regulate immigration, 

not for the general support of the government). Following 

that precedent, the Courts of Appeals for the Eighth and 

Ninth Circuits have decided that assessing the costs of a 

new drainage culvert and the costs of railroad regulation, 

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 that since 

the government levies at issue did not raise money for the 

general welfare, they were not taxes within the meaning of 

the respective statutes. 

Wheeling's counter argument is that the assessment 

must be a tax because it partially relieves the state or 

township fisc of the cost of a bridge benefitting the public. 

This argument is not convincing. The bridge assessment 

 15 
does not contribute to the general fund of either the 

Township or the Commonwealth and is specific to a 

particular bridge at a particular crossing. Moreover, none of 

the levies in Chicago & North Western, Union Pacific, Head 

Money Cases, and Decatur were held to be taxes, even 

though they all arguably relieved burdens on the public 

fisc. 

According to Wheeling, Chicago & North Western held

that assessments are not taxes because the improvement 

benefitted that railroad alone. We disagree, and believe that 

the more logical reading is that to the extent a portion of 

the project benefitted that railroad, the cost of that portion 

should be assessed to that railroad. Here, the Commission 

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 Judge 

stated: "Only after the Commission determines a particular 

party has a direct interest in or bears some responsibility 

for or obtains a discernible benefit from a specific crossing, 

does the Commission exercise its authority under state law 

to assess construction and maintenance responsibilities." 

(J.A. at 249, emphasis added.) Here, Wheeling directly 

benefits from the above-grade crossing of the Township's 

right-of-way because its trains are not impeded by any 

cross-traffic. This directly benefits Wheeling's safety and 

efficiency. Although the bridge benefits the general public, 

the peculiar benefit Wheeling receives from the construction 

and maintenance of the bridge reinforces our conclusion 

that the assessment is not a "tax" within the meaning of 

section 11501. 

There is no need to overrule either Amtrak or SEPTA, as 

the Commission urges. Bridge assessments were intended 

to be included in the phrase "taxes or other fees" regarding 

the statutes applicable to those two cases, construed 

broadly, but not intended to be included in the word "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 of bridge 

construction and maintenance costs, like those at issue 

 16 
here, within the meaning of "taxes" in section 11501. 

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 reverse. 

 17 
GARTH, 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 jurisdiction to 

decide Wheeling's claim against the Commonwealth; (2) 

that accordingly, we need not reach the issue of the 

Eleventh Amendment immunity of the individual 

Commissioners; and (3) that the assessment of 

construction and maintenance costs made against Wheeling 

is not a tax and does not discriminate against Wheeling 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 its 

constitutional analysis as well as in the result which it 

reaches, I would affirm the district court's order.1 In doing 

so, I would hold that under the doctrine of Ex Parte Young, 

209 U.S. 123 (1908), all future maintenance costs can 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 have no 

jurisdiction to entertain Wheeling's challenge. However, as 

pertains to the individual Commissioners, their action 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 day the 

question as to whether an unpaid assessment can be 

enjoined without violating the Eleventh Amendment. 

I. 

As the majority has explained, the Eleventh Amendment 

_________________________________________________________________ 

1. The issue of whether Eleventh Amendment sovereign immunity strips 

subject matter jurisdiction from the federal forum was not before the 

district court. 

 18 
to the United States Constitution confers sovereign

immunity upon the States. Without its explicit consent, a 

State cannot be sued in federal court unless Congress has 

abrogated its immunity. To abrogate the States' sovereign 

immunity, Congress must (1) unequivocally express its 

intent to abrogate that immunity, and (2) act pursuant to 

a valid exercise of power. Seminole Tribe v. Florida, ___ U.S. 

___, 116 S. Ct. 1114, 1123 (1996). At this point, I depart 

from the majority's analysis which upholds jurisdiction over 

the 4-R Act as enforcing the Equal Protection Clause 

because I cannot conclude that Congress could abrogate 

Pennsylvania's sovereign immunity by recourse to the 

Fourteenth Amendment. 

I agree with the majority that the 4-R Act was enacted 

pursuant to Congress' commerce powers, and thus, after 

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 venture 

beyond the expressed intent of Congress to determine 

whether the 4-R Act could have been enacted pursuant to 

some other valid exercise of Congressional power such that 

we may still retain jurisdiction over claims against the 

States. See id. at 8. However, I conclude that there is no 

such power granted under the Constitution and hence I 

cannot agree that Congress could have validly enacted the 

4-R Act pursuant to section five, the enforcement provision 

of the Equal Protection Clause of the Fourteenth 

Amendment. 

The 4-R Act explicitly prohibits conduct by State and 

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 structure, 

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 infrastructure 

 19 
of this country through competition and the free market. It 

is only with respect to the realization of these economic 

aims which proscribe predatory pricing, that any mention is 

made of prohibiting discrimination.2 

Unlike the majority, I cannot conclude that Congress can 

validly invoke its enforcement powers under sectionfive 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 pursuant to 

Congress' section five enforcement power must be remedial 

in nature, designed to prevent constitutional infraction. See 

id. 

In Wilson-Jones v. Caviness, 99 F.3d 203 (6th Cir. 1996), 

a pre-Flores case, the Sixth Circuit addressed whether acts 

legislated pursuant to Congress' commerce powers can be 

upheld as legitimately enforcing the Equal Protection 

Clause under section five of the Fourteenth Amendment 

after Seminole Tribe. The court concluded that legislation 

enforcing the Equal Protection Clause only extends to that 

"class of persons that Fourteenth Amendment 

jurisprudence has already identified as deserving special 

protection." Id. at 210. In light of Flores, the Sixth Circuit's 

holding in Wilson-Jones properly recognized that 

_________________________________________________________________ 

2. Section 10101 states, in pertinent part: 

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

 States Government-- 

 (12) to prohibit predatory pricing and practices, to avoid undue 

 concentrations of market power, and to prohibit unlawful 

 discrimination. 

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

3. In Flores, the Supreme Court held that the Religious Freedom 

Restoration Act ("RFRA") was unconstitutional because its enactment 

exceeded Congress' enforcement power under sectionfive of the 

Fourteenth Amendment. Instead of remedying or preventing 

constitutional infringements, the Court concluded that RFRA altered the 

meaning the Free Exercise Clause, thereby exceeding Congress' 

legitimate exercise of its section five power. 

 20 
enactments construed as enforcing the Equal Protection 

clause must remedy or prevent constitutional infringements. 

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 Circuit 

indicated that the district court held -- as I would -- that 

the 4-R Act could not be enacted under the sectionfive 

power of the Fourteenth Amendment, as "the major 

purpose of the 4-R Act in general [is] to protect interstate 

commerce." Id. at 2.4 Accordingly, the district court 

dismissed a challenge by two railroads for the assessment 

of illegally assessed taxes under the 4-R Act for lack of 

subject matter jurisdiction in light of Seminole Tribe.5 

By enacting the 4-R Act, Congress was not legislating to 

prevent unconstitutional behavior. There is no evidence 

that the discriminatory taxation which Congress intended 

to prohibit under the 4-R Act ever rose to the level of a 

constitutional violation such that the railroads were 

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 placed 

upon railroad property did not violate the Equal Protection 

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 Fourteenth 

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 "Congress 

made findings that a particular group needed legal 

protection to remedy some sort of invidious discrimination 

not addressed by federal precedent," 99 F.3d at 210 n.4, 

Congress has not made such findings in this case. Hence, 

the majority's rejection of Wilson-Jones despite its reliance 

upon this footnote is ill-founded as a justification to uphold 

_________________________________________________________________ 

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

is unavailable on either Westlaw or Lexis. 

5. The Fourth Circuit reversed, however, on the basis that the district 

court had jurisdiction over State officials under the doctrine of Ex Parte 

Young. I discuss the Fourth Circuit's opinion in CSX Transportation infra 

at 10 n.9, 18. 

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

Nowhere in the 4-R Act can a Congressional expression be 

found that the 4-R Act was passed "to secure the rights 

under the Fourteenth Amendment." Katzenbach v. Morgan, 

384 U.S. 641, 652 (1966). 

In fact, the majority implicitly concedes this point by 

reference to the following passage from Alabama Great 

Southern Railroad Company v. Eagerton, 663 F.2d 1036 

(11th Cir. 1981): 

 Until this law was passed . . . states could

 constitutionally classify railroads differently from all 

 other taxpayers for the impositions of state taxes 

 without violating the equal protection clause[sic] of the 

 Fourteenth Amendment. It was the obvious purpose of 

 Congress to put an end to this practice, where 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 railroads for 

taxation purposes were constitutional and did not violate the 

Equal Protection Clause. Indeed, this was well-settled law. 

See Browning, 310 U.S. at 369 ("so far as the Federal 

Constitution is concerned, a state can put railroad property 

into one pigeonhole and other property into another . . ."). 

Nevertheless, the majority now apparently characterizes 

such classifications as unconstitutional, sufficient to 

warrant congressional enactment of the 4-R Act under 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 can make 

such classifications unlawful. That is precisely what the 

4-R Act did: it prohibited long-standing constitutionally 

permissible discriminatory taxation practices. It did not -- 

indeed, could not -- make such discrimination 

unconstitutional. 

Furthermore, the majority's analysis regarding the 

"findings" that Congress made that could support the 

 22 
enactment of the instant legislation under the section 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 one. 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. The 

majority has not pointed to any evidence that could support 

the conclusion that the disparate taxation to which

railroads were subjected constituted a violation under the 

Equal Protection Clause, and as I have mentioned above, 

Congress made no explicit findings, as Flores instructs 

must be done. See Flores, 117 S. Ct. at 2169. The mere fact 

that the railroads were permissibly discriminated against 

for taxation purposes is insufficient. Disparate tax 

classifications concerning railroads were long-standing: 

 That the states may classify property for taxation; may 

 set up different modes of assessment, valuation and 

 collection; may tax some kinds of property at higher 

 rates than others; and in making all these 

 differentiations may treat railroads and other utilities 

 with that separateness which their distinctive 

 characteristics and functions in society make 

 appropriate -- these are among the commonplaces of 

 taxation and of constitutional law. 

Browning, 310 U.S. at 368. 

As no constitutional infraction has been shown, there is 

no issue to address concerning whether the sectionfive 

enforcement power can be employed to abrogate the States' 

sovereign immunity. More importantly, as there is no 

constitutional violation to remedy, interpreting S 11501 as 

the majority has is out of proportion to its remedial 

objective. "There must be a congruence and proportionality 

between the injury to be prevented or remedied and the 

means adopted to that end. Lacking such a connection, 

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 prevented in 

 23 
this 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 absence of 

any other legitimate constitutional grant of power, the 

Congressional intent to abrogate the States' sovereign 

immunity under the 4-R Act cannot be upheld as enacted 

pursuant to a valid exercise of power.6 See also Mills v. 

State of Maine, 118 F.3d 37 (1st Cir. 1997) (rejecting 

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 our 

court also support my position that the 4-R Act cannot be 

upheld as a valid enactment pursuant to the section five 

enforcement power. See In re: Sacred Heart Hosp., 133 F.3d 

237 (3d Cir. 1998);7 College Sav. Bank v. Florida Prepaid 

Postsecondary Educ. Expense Bd., 131 F.3d 353 (3d Cir. 

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 federal courts are without 

jurisdiction to adjudicate such claims against the States because the 

Eleventh Amendment proscribes them. 

7. In Sacred Heart, we addressed the constitutionality 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 power, see U.S. Const. 

art. I, S 8, cl. 4, we held that it could not sustain an enactment 

abrogating a state's sovereign immunity after Seminole Tribe. In 

considering whether S 106(a) could have been properly enacted pursuant 

to section five of the Fourteenth Amendment, we held that there was no 

evidence to support such a construction. Accordingly, 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 the district court 

properly dismissed a claim against the State of Florida brought under 

the Trademark Remedy Clarification Act of 1992 ("TRCA") for want of 

subject matter jurisdiction after Seminole Tribe. In affirming, we held 

that on the facts of that case jurisdiction could not be upheld pursuant 

to the section five power as a means to enforce the Due Process Clause 

of the Fourteenth Amendment as no protected property right was at 

issue. 

 24 
concern railroads or the 4-R Act, they form the crux 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 holding 

and the holdings of the aforementioned cases largely 

because of the different subject matters involved and 

"section 11501's legislative history and judicially recognized 

anti-discrimination purpose." Majority Op. at 10. In each of 

those cases, however, and contrary to the conclusion which 

the majority reaches, the respective courts held that such 

legislation could not be validly enacted pursuant to the 

section five power. Furthermore, as I have indicated above, 

the discrimination referenced in S 11501's legislative history 

and by various courts does not, by itself, render the 

discrimination the 4-R Act intends to prevent 

unconstitutional discrimination subject to enforcement 

under the section five power of the Fourteenth Amendment. 

The majority's view of the test for validity under section five 

of the Fourteenth Amendment is so permissive, "it is 

difficult to conceive of a principle that would limit 

congressional power." Flores, 117 S. Ct. at 2168. 

Thus, I cannot join the majority of this panel in holding 

that this court retains subject matter jurisdiction over 

Wheeling's 4-R Act claims against the Commission. 

Notwithstanding that conclusion, Wheeling's claim for 

prospective declaratory and injunctive relief still survives 

against the individual Commissioners under the doctrine of 

Ex Parte Young -- a subject not addressed by the majority. 

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. Board 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 levied 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 Ex Parte Young. While 

not 

addressing whether the 4-R Act could be properly enacted pursuant to 

 25 
II. 

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 11501(b)(4),10 

but a discriminatory tax. I discuss the discriminatory 

character of the tax in Section II(B), infra. 

A tax "raises money, contribute[s] to a general fund, 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 assessment 

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 taxes under the doctrine 

of Ex Parte Young. Indeed, the Fourth Circuit resolved 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 adopted in CSX 

Transportation coincides with my own in this case. 

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

 (b) The following acts unreasonably burden and discriminate 

 against interstate commerce, and a State, subdivision 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 against a rail carrier 

 providing transportation subject to the jurisdiction of the Board 

under 

 this part. 

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

 26 
 more 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 Money 

Cases, 112 U.S. 580 (1984), and Union Pacific Railroad 

Company v. Public Utilities Commission, 899 F.2d 854 (9th 

Cir. 1990), another case brought under the 4-R Act.

In those cases, the courts reasoned that the assessments 

in question were used to finance the cost of the regulatory 

programs regulating the immigration and railroad 

industries, respectively. Therefore, the benefits from 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 made in 

the instant case is misplaced. Those cases do no more than 

hold that monies used for the benefit of the particular 

industry do not necessarily benefit the public in general, 

and thus cannot be deemed "taxes." 

Here, considering the ultimate use of the monies 

assessed by the Commission, I can only conclude-- as did 

the district court -- that the assessments in question are a 

tax which benefits the general public which uses the 

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 the 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 been 

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 period 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 for the 

 27 
benefit of the general public, not the railroads. Scott 

Township alleged: 

 (4)(d) That the present design of the "Crooked Bridge" 

 is dangerous and not conducive to meeting the needs 

 of the Township and travelling [sic] public in the area. 

 . . . 

 (5)(e) That the bridge above [Wheeling] be replaced 

 with one designed to meet the needs of the Township 

 and travelling [sic] public. 

Amend. to Compl. at 2-3 (emphasis added). These 

averments -- made by Scott Township -- are revealing. 

They disclose that the Township intended to repair the 

bridge (which as the record establishes, provides no benefit 

for Wheeling) not for the benefit of Wheeling but only for 

that of the general public. 

The testimony of Patricia Wodnicki, the former manager/ 

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 (Dec. 11, 

1995).11 Notwithstanding that the bridge had been closed by 

1982, there is no contention that interference had been had 

with Wheeling's railroad operations or that Wheeling's 

operations had been interrupted or impacted upon as a 

result of the bridge's condition. In fact, the Commission'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, 1994). 

Furthermore, the repair of the bridge does not implicate 

any regulatory program regulating Wheeling's activities. 

Accordingly, because the assessment and maintenance

_________________________________________________________________ 

11. The Amendment to Complaint and excerpts from the deposition of 

Patricia Wodnicki were submitted to the court by a letter dated 

September 12, 1997, after oral argument, upon the request of the court. 

 28 
charges benefit only the general public and not specifically 

Wheeling, I conclude that the assessment levied upon 

Wheeling constituted a tax. 

I believe the majority's reasoning which relies upon 

National Railroad Passenger Corporation v. Pennsylvania 

Public Utility Commission, 848 F.2d 436 (3d Cir. 

1988)("Amtrak"), and Septa v. Pennsylvania Public Utility 

Commission, 826 F. Supp. 1506 (E.D. Pa. 1993) ("Septa"), 

aff 'd 27 F.3d 558 (3d Cir. 1994) (unpublished table 

decision), to identify when an assessment is a tax, is flawed.12 

Those cases arise in a context different from the context of 

this appeal. Both cases involve a Congressional statute 

which exempted the railroad from any "taxes or other 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 maintenance 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 imposed upon 

a carrier, because the statutory framework of those two 

cases exempted the railroad from both taxes and fees. I 

therefore read these cases and their discussions and 

holdings to be inapposite. 

B. 

Because the majority has held that Scott Township's

assessment does not constitute a tax, it has not addressed 

the issue of whether the tax is discriminatory. To determine 

whether this tax discriminates against Wheeling under 

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 Railway 

_________________________________________________________________ 

12. Significantly, two cases on which the majority relies and which I find 

inapposite held that under a Congressional exemption statute, railroads 

could not be assessed construction and maintenance costs. See National 

R.R. Passenger Corp. v. Pennsylvania Pub. Util. Comm'n, 848 F.2d 436 

(3d Cir. 1988); Septa v. Pennsylvania Pub. Util. Comm'n, 826 F. Supp. 

1506 (E.D. Pa. 1993). 

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

Kansas City Railway Company v. McNamara, 817 F.2d 368 

(8th Cir. 1987), have held that the comparison class to 

which a railroad such as Wheeling should be compared 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 inappropriate to 

compare its assessment on Wheeling to a class of all 

commercial and industrial taxpayers. Although we have yet 

to decide this issue, and as I have pointed out, the majority 

has not addressed it, I believe that the approach adopted by 

our sister courts in Atchison and Kansas City provides a 

logical and sensible rule of law. 

If the comparison class were only those entities which 

were also taxed by the Commission, there would seldom, if 

ever, be any finding of discriminatory taxation. In Kansas 

City the court explained that 

 [t]he only simple way to prevent tax discrimination 

 against the railroads is to tie their tax fate to the fate 

 of a large and local group of taxpayers. A large group 

 of local taxpayers will have the political and economic 

 power to protect itself against an unfair distribution of 

 the tax burden. 

817 F.2d at 375. 

Given that I would adopt as the comparison class the 

group of commercial and industrial taxpayers, I must 

conclude that the tax at issue against Wheeling is a 

discriminatory tax. None of the parties disputes that 

industrial and commercial taxpayers were not subjected to 

the tax assessment for the repair and reconstruction of the 

highway bridge. As a result, I would affirm the district 

court's ruling of discrimination as well. 

III. 

Wheeling seeks both declaratory and injunctive relief. As 

I would hold that after the Supreme Court decided Seminole 

Tribe, this court no longer has subject matter jurisdiction 

over the 4-R Act to hear cases involving the Commission, I 

 30 
am obliged to address the issue of whether the individual 

Commissioners may be sued under the doctrine of Ex Parte 

Young, 209 U.S. 123 (1908). As I have noted, the majority 

has not dealt with this issue. See supra at 8-9. 

The doctrine of Ex Parte Young permits suits against 

state officials acting in their official capacity -- 

notwithstanding the States' immunity under the Eleventh 

Amendment -- if the suit seeks prospective declaratory 

and/or injunctive relief. It does not allow suits for 

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 relief it 

requests is prospective in nature. By contrast, the

Commissioners claim that the Commission's order 

assessing costs to Wheeling became final when Wheeling 

appealed the Commission's order. The Commissioners 

argue that if this court were to grant Wheeling relief, we 

would have to hold the Commission's order -- a past act -- 

invalid, and that such would be contrary to Eleventh 

Amendment doctrine. 

The issue of prospectivity is a difficult one. I have no 

problem holding that Wheeling is entitled to the prospective 

declaratory and injunctive relief concerning the future 

maintenance costs. Although the tax liability has already 

been determined, the Commissioners have not yet assessed 

those taxes. Accordingly, this court would merely be 

enjoining the state actors from assessing future taxes, and 

that would fall comfortably within the Ex Parte Young 

doctrine. 

With respect to the taxes assessed against Wheeling for 

the construction of the bridge, however, the prospectivity 

issue is less clear, and I am troubled by the Commission's 

claim that there is no remedy or relief available to Wheeling 

for the construction assessment made against it, despite 

Wheeling's consistent and continual challenge to that 

assessment as a discriminatory tax. 

 31 
Since we have heard oral argument, the Fourth Circuit 

has directly addressed this issue in CSX Transportation, Inc. 

v. Board of Public Works, ___ F.3d ___, No. 97-1296, 1998 

WL 100394 (4th Cir. Mar. 10, 1998). Upholding jurisdiction 

over state officials under the Ex Parte Young doctrine, the 

Fourth Circuit held that "[a]n injunction against the future 

collection of the illegal taxes, even those that already have 

been assessed, is prospective, and therefore available under 

the Ex parte Young [sic] doctrine." Id. at 3 (emphasis 

added). "The point is that the future collection[of the taxes] 

is illegal." Id. at 6. Thus, under CSX Transportation, it is 

within the power of the court to enjoin as prospective 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. Nevertheless, I 

would be inclined to hold that Eleventh Amendment 

doctrine would permit relief where a mere assessment 

without payment of the charge has occurred -- as it has 

here -- and the Fourth Circuit has led the way by holding 

so in CSX Transportation. 

IV. 

In sum, I disagree with the majority's opinion in its 

entirety. 

I would hold that this court is without subject matter 

jurisdiction to hear suits against the Commission after 

Seminole Tribe. Nonetheless, Wheeling would be entitled to 

prospective declaratory and injunctive relief under the 

doctrine of Ex Parte Young. 

I would also hold that the assessment against Wheeling 

is a tax because it is for the general benefit of the public, 

and not for the narrow benefit of the railroad or to achieve 

some regulatory purpose. 

I would further hold that the tax is discriminatory

because the comparison class of commercial and industrial 

taxpayers was not assessed the tax for construction or 

future maintenance costs. 

 32 
Finally, 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 not decide 

at this time whether relief from the Commission's order 

levying the cost of construction of the bridge to Wheeling 

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