OCTOBER TERM, 1994
Syllabus
HESS ET AL.
v. PORT AUTHORITY TRANS-HUDSON
CORPORATION
CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE THIRD
CIRCUIT
No. 93-1197. Argued October 3, 1994-Decided November 14,
1994
Petitioners, two railroad workers, were injured in unrelated
incidents while employed by respondent bistate railway, the Port
Authority Trans-Hudson Corporation (PATH). PATH is a wholly owned
subsidiary of the Port Authority of New York and New Jersey (Port
Authority or Authority), an entity created when Congress, pursuant
to the Constitution's Interstate Compact Clause, consented to a
compact between the Authority's parent States. Petitioners filed
separate personal injury actions under the Federal Employers'
Liability Act (FE LA). The District Court dismissed the suits under
Third Circuit precedent,
Port Authority Police Benevolent Assn.,
Inc. v.
Port Authority of New York and New Jersey,
819 F.2d
413 (CA3) (Port Authority PBA), which declared
PATH a state agency entitled to Eleventh Amendment immunity from
suit in federal court. The Third Circuit consolidated the cases and
summarily affirmed. That court's assessment of PATH's immunity
conflicts with the Second Circuit's decision in
Feeney v.
Port Authority Trans-Hudson Corporation, 873 F.2d
628.
Held: PATH is not entitled to Eleventh Amendment immunity
from suit in federal court. Pp. 39-53.
(a) The Court presumes that an entity created pursuant to the
Compact Clause does not qualify for Eleventh Amendment immunity
unless there is good reason to believe that the States structured
the entity to arm it with the States' own immunity, and that
Congress concurred in that purpose.
Lake Country Estates,
Inc. v.
Tahoe Regional Planning Agency, 440 U. S. 391, 401. The
Port Authority emphasizes that certain indicators of immunity are
present in this case, particularly provisions in the interstate
compact and its implementing legislation establishing state control
over Authority commissioners, acts, powers, and responsibilities,
and state-court decisions typing the Authority as an agency of its
parent States. Other indicators, however, point away from immunity,
particularly the States' lack of financial responsibility for the
Authority. Pp. 39-46.
(b) When indicators of immunity point in different directions,
the Court is guided primarily by the Eleventh Amendment's twin
reasons
31
for being: the States' dignity and their financial solvency.
Neither is implicated here. First, there is no genuine threat to
the dignity of New York or New Jersey in allowing petitioners to
pursue FELA claims against PATH in federal court. The Port
Authority is a discrete entity created by compact among three
sovereigns, the two States and the Federal Government. Federal
courts are not alien to such an entity, for they are ordained by
one of its founders. Nor is it disrespectful to one State to call
upon the entity to answer complaints in federal court, for the
States agreed to the power sharing, coordination, and unified
action that typify Compact Clause creations. Second, most Federal
Courts of Appeals have identified the "state treasury"
criterion-whether a judgment against the entity must be satisfied
out of a State's treasury-as the most important consideration in
determining whether a state-created entity qualifies for Eleventh
Amendment immunity. The Port Authority, however, is financially
self-sufficient: it generates its own revenues and pays its own
debts. Where, as here, the States are neither legally nor
practically obligated to pay the entity's debts, the Eleventh
Amendment's core concern is not implicated. pp.47-51.
(c) The conflict between the Second and Third Circuits no longer
concerns the correct legal theory, for the Third Circuit, as shown
in two
post-Port Authority PEA decisions, now accepts the
prevailing "state treasury" view. A narrow intercircuit split
persists only because the Circuits differ on whether the Port
Authority's debts are those of its parent States. In resolving that
issue, the
Port Authority PEA court relied primarily on a
compact provision calling for modest state contributions, capped at
$100,000 annually from each State, unless Port Authority revenues
were "adequate to meet all expenditures," but the court drew from
that provision far more than its text warrants. pp.51-52.
8 F.3d
811, reversed and remanded.
GINSBURG, J., delivered the opinion of the Court, in which
STEVENS, KENNEDY, SOUTER, and BREYER, JJ., joined. STEVENS, J.,
filed a concurring opinion,
post, p. 53. O'CONNOR, J., filed
a dissenting opinion, in which REHNQUIST, C. J., and SCALIA and
THOMAS, JJ., joined,
post, p. 55.
Lawrence A. Katz argued the cause for petitioners. With
him on the briefs were
Joseph A. Coffey, Jr., and
David J. Bederman.
32
Hugh H. Welsh argued the cause for respondent. With him on the
brief were Arthur P. Berg, Donald F. Burke, and Anne M. Tannenbaum.
*
JUSTICE GINSBURG delivered the opinion of the Court. These
paired cases arise out of work-related accidents in which a
locomotive engineer and a train conductor, employees of a bistate
railway authorized by interstate compact, sustained personal
injuries. The courts below-the United States District Court for the
District of New Jersey, and the United States Court of Appeals for
the Third Circuitrejected both complaints on the ground that the
Eleventh Amendment sheltered respondent railway from suit in
federal court. We granted certiorari to resolve an intercircuit
conflict on this issue. 510 U. S. 1190 (1994). Concluding that
respondent bistate railway, the Port Authority TransHudson
Corporation (PATH), is not cloaked with the Elev-
*William G.
Mahoney and
L. Pat Wynns filed
a brief for the Railway Labor Executives' Association as
amicus
curiae urging reversal.
Briefs of
amici curiae urging affirmance were filed for
the State of New Jersey et al. by
Deborah T. Poritz,
Attorney General of New Jersey,
Andrea M. Silkowitz, Robert H.
Stoloff, and
Mary Jacobson, Assistant Attorneys General,
and
Eldad Philip Isaac, Deputy Attorney General, joined by
the Attorneys General for their respective jurisdictions as
follows: G.
Oliver Koppell of New York,
James H.
Evans of Alabama,
Winston Bryant of Arkansas,
Gale A.
Norton of Colorado,
Richard Blumenthal of Connecticut,
Michael J. Bowers of Georgia,
Robert A.
Marks of Hawaii,
Larry EchoHawk of Idaho,
Roland W
Burris of Illinois,
Pamela Carter of Indiana,
Robert
T. Stephen of Kansas,
Chris Gorman of Kentucky,
Richard p. Ieyoub, Jr., of Louisiana,
J. Joseph
Curran, Jr., of Maryland,
Scott Harshbarger of
Massachusetts,
Hubert H. Humphrey III of Minnesota,
Mike
Moore of Mississippi,
Joseph P. Mazurek of Montana,
Frankie Sue Del Papa of Nevada,
Tom Udall of New
Mexico,
Michael F.
Easley of North Carolina,
Lee
Fisher of Ohio,
Susan B. Loving of Oklahoma,
Theodore
R. Kulongoski of Oregon,
Ernest D. Preate, Jr., of
Pennsylvania,
T. Travis Medlock of South Carolina,
Mark
Barnett of South Dakota,
Jeffrey L. Amestoy of Vermont,
James S.
Gilmore III of Virginia, and
James E.
Doyle of Wisconsin; and for the Council of State Governments et
al. by
Richard Ruda and
Clifton S.
Elgarten.
33
enth Amendment immunity that a State enjoys, we reverse the
judgment of the Third Circuit.
I A
Petitioners Albert Hess and Charles F. Walsh, both railroad
workers, were injured in unrelated incidents in the course of their
employment by PATH. PATH, a wholly owned subsidiary of the Port
Authority of New York and New Jersey (Port Authority or Authority),
operates a commuter railroad connecting New York City to northern
New Jersey. In separate personal injury actions commenced in the
United States District Court for the District of New Jersey,
petitioners sought to recover damages for PATH's alleged
negligence; both claimed a right to compensation under the federal
law governing injuries to railroad workers, the Federal Employers'
Liability Act (FELA), 35 Stat. 65, as amended, 45 U. S. C. § 51
et seq.l Hess and Walsh filed their complaints within the
3-year time limit set by the FELA, see 35 Stat. 66, as amended, 45
U. S. C. § 56, but neither petitioner met the i-year limit
specified in the States' statutory consent to sue the Port
Authority. See N. J. Stat. Ann. §§ 32:1-157, 32:1-163 (West 1990);
N. Y. Unconsol. Laws §§ 7101, 7107 (McKinney 1979).
PATH moved to dismiss each action, asserting (1) PATH's
qualification as a state agency entitled to the Eleventh Amendment
immunity from suit in federal court enjoyed by New York and New
Jersey,2 and (2) petitioners' failure to
1 Hess additionally invoked the Boiler Inspection Act, ch. 103,
36 Stat. 913, as amended, 45 U. S. C. § 22
et seq., as a
basis for his claim for damages.
2 The Eleventh Amendment provides:
"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 United States by Citizens of another State, or
by Citizens or Subjects of any Foreign State."
34
commence court proceedings within the i-year limit prescribed by
New York and New Jersey. Third Circuit precedent concerning the
Port Authority supported PATH's plea. In
Port Authority Police
Benevolent Assn., Inc. v.
Port Authority of New York and New
Jersey, 819 F.2d
413 (Port Authority PBA), cert. denied, 484 U. S. 953
(1987), the Court of Appeals for the Third Circuit held that the
Port Authority is "an agency of the state and is thus entitled to
Eleventh Amendment immunity." 819 F. 2d, at 418. In reaching this
decision, the Court of Appeals acknowledged that "[g]iven the
solvency and size of the [Port Authority's] General Reserve Fund,
it is unlikely that the Authority would have to go to the state to
get payment for any liabilities issued against it."
Id., at
416.3 But the Third Circuit considered "crystal clear" the
intentions of New York and New Jersey: "[I]f the Authority is ever
in need of financial support, the states will be there to provide
it."
Ibid.
In line with
Port Authority PBA, the District Court held
in the
Hess and
Walsh actions that PATH enjoys
Eleventh Amendment immunity, and could be sued in federal court
only within the i-year time frame New York and New Jersey allowed.
See
Walsh, 813 F. Supp. 1095, 1096-1097 (NJ
1993);
Hess, 809 F. Supp.1172, 1178-1182 (NJ 1992). Accordingly,
both actions were dismissed.
The District Court in
Hess noted an anomaly: Had Hess
sued in a New Jersey or New York
state court the FELA's
3-year limitation period, not the States' i-year prescription,
would have applied. See
id., at 1183-1185, and n. 16. This
followed from our reaffirmation in
Hilton v.
South
Carolina Public Railways Comm'n, 502 U. S. 197 (1991),
that the
entire federal scheme of railroad
regulation-including all FELA terms-applies to all railroads, even
those wholly
3 The court referred to the Port Authority of New York and New
Jersey Comprehensive Annual Financial Report 42-44 (1985), which
shows that the Authority's General Reserve Fund had a balance of
over $271 million at the end of 1985.
35
owned by one State. Time-bar rejection by a federal court of a
federal statutory claim that federal prescription would have
rendered timely, had the case been brought in state court, becomes
comprehensible, the District Court explained, once it is recognized
that "'the Eleventh Amendment does not apply in state courts.'"
Hess, 809 F. Supp., at 1183-1184 (quoting
Hilton, 502
U. S., at 205); see 809 F. Supp., at 1185, n.16.
Consolidating
Hess and
Walsh on appeal, the Third
Circuit summarily affirmed the District Court's judgments.
8 F.3d
811 (1993) (table).
B
The Port Authority, whose Eleventh Amendment immunity is at
issue in these cases, was created in 1921, when Congress, pursuant
to the Constitution's Interstate Compact Clause,4 consented to a
compact between the Authority's parent States. 42 Stat. 174.
Through the bistate compact, New York and New Jersey sought to
achieve "a better coordination of the terminal, transportation and
other facilities of commerce in, about and through the port of New
York." N. J. Stat. Ann. § 32:1-1 (West 1990); N. Y. Unconsol. Law §
6401 (McKinney 1979). The compact grants the Port Authority power
to
"purchase, construct, lease and/or operate any terminal or
transportation facility within [the Port of New York D]istrict; and
to make charges for the use thereof; and for any of such purposes
to own, hold, lease and/or operate real or personal property, to
borrow money and secure the same by bonds or by mortgages upon any
property held or to be held by it." N. J. Stat. Ann. § 32:1-7
4 Article I, § 10, cl. 3, of the Constitution provides:
"No State shall, without the Consent of Congress, lay any Duty
of Tonnage, keep Troops, or Ships of War in time of Peace, enter
into any Agreement or Compact with another State, or with a foreign
Power, or engage in War, unless actually invaded, or in such
imminent Danger as will not admit of delay."
36
(West 1990); accord, N. Y. Unconsol. Law § 6407 (McKinney
1979).
The Port Authority's domain, the Port of New York District, is a
defined geographic area that embraces New York Harbor, including
parts of New York and New Jersey. See N. J. Stat. Ann. § 32:1-3
(West 1990); N. Y. Unconsol. Law § 6403 (McKinney 1979).5
"The Port Authority was conceived as a financially independent
entity, with funds primarily derived from private investors."
United States Trust Co. of N.
Y. v.
New
Jersey, 431 U. S.
1, 4 (1977). Tolls, fees, and investment income account for the
Authority's secure financial position. See App. to Pet. for Cert.
60a-61a.6
Twelve commissioners, six selected by each State, govern the
Port Authority. See N. J. Stat. Ann. §§ 32:1-5, 32:12-3 (West
1990); N. Y. Unconsol. Law § 6405 (McKinney 1979); 1930 N. Y. Laws,
ch. 422, § 6. Each State may remove, for cause, the commissioners
it appoints. See N. J. Stat. Ann. §§ 32:1-5, 32:12-5 (West 1990);
N. Y. Unconsol. Law § 6405 (McKinney 1979); 1930 N. Y. Laws, ch.
422, § 4. Consonant with the Authority's geographic domain, four of
New York's six commissioners must be resident voters of New York
City, and four of New Jersey's must be resident voters of the New
Jersey portion of the Port of New York District. See N. J. Stat.
Ann. § 32:1-5 (West 1990); N. Y. Unconsol. Law § 6405 (McKinney
1979). The Port Authority's commissioners also serve as PATH's
directors. See N. J. Stat. Ann. § 32:1-35.61 (West 1990); N. Y.
Unconsol. Law § 6612 (McKinney 1979).
5 See also N. J. Stat. Ann. § 32:2-23.28(j) (West 1990)
(defining larger area in which Port Authority has obligation to
supply commuter buses to authorized operators); N. Y. Unconsol. Law
§ 7202(10) (McKinney Supp. 1994) (same).
6 At the end of 1993, the Port Authority had over $2.8 billion
in net assets and $534 million in its General Reserve Fund. See
Port Authority of New York and New Jersey, Comprehensive Annual
Financial Report 49, 64 (1993) (hereinafter 1993 Annual Financial
Report).
37
The Governor of each State may veto actions of the Port
Authority commissioners from that State, including actions taken as
PATH directors. See N. J. Stat. Ann. §§ 32:1-17, 32:1-35.61,32:2-6
to 32:2-9 (West 1990); N. Y. Unconsol. Law §§ 6417, 6612, 7151-7154
(McKinney 1979). Acting jointly, the state legislatures may augment
the powers and responsibilities of the Port Authority, see N. J.
Stat. Ann. § 32:1-8 (West 1990); N. Y. Unconsol. Law § 6408
(McKinney 1979), and specify the purposes for which the Port
Authority's surplus revenues are used. See N. J. Stat. Ann. §
32:1-35.142 (West 1990); N. Y. Unconsol. Law § 7002 (McKinney
1979).
Debts and other obligations of the Port Authority are not
liabilities of the two founding States, and the States do not
appropriate funds to the Authority. The compact and its
implementing legislation bar the Port Authority from drawing on
state tax revenue, pledging the credit of either State, or
otherwise imposing any charge on either State. See N. J. Stat. Ann.
§§ 32:1-8, 32:1-33 (West 1990); N. Y. Unconsol. Law §§ 6408, 6459
(McKinney 1979).
The States did agree to appropriate sums to cover the
Authority's "salaries, office and other administrative expenses,"
N. J. Stat. Ann. §32:1-16 (West 1990); N. Y. Unconsol. Law § 6416
(McKinney 1979), but this undertaking is notably modest.7 By its
terms, it applies only "until the revenues from operations
conducted by the [P]ort [A]uthority are adequate to meet all
expenditures." The promise of support has a low ceiling: $100,000
annually from each State. Thus, the States in no way undertake to
cover the bulk of the Author-
7 Compact article XV, the provision for expense coverage, reads
in full:
"Unless and until the revenues from operations conducted by the
[P]ort [A]uthority are adequate to meet all expenditures, the
legislatures of the two states shall appropriate, in equal amounts,
annually, for the salaries, office and other administrative
expenses, such sum or sums as shall be recommended by the [P]ort
[A]uthority and approved by the governors of the two states, but
each state obligates itself hereunder only to the extent of one
hundred thousand dollars in anyone year." N. J. Stat. Ann. §
32:1-16 (West 1990); N. Y. Unconsol. Law § 6416 (McKinney
1979).
38
ity's operating and capital expenses. Further, even the limited
administrative expense payments for which the States provided are
contingent on the advance approval of both Governors, see
ibid., and the States' treasuries may not be tapped until
both legislatures have appropriated the necessary funds. See N. J.
Stat. Ann. § 32:1-18 (West 1990); N. Y. Unconsol. Law § 6418
(McKinney 1979). A judgment against PATH, it is thus apparent,
would not be enforceable against either New York or New Jersey.
C
The Third Circuit's assessment of PATH's qualification for
Eleventh Amendment immunity conflicts with the judgment of the
Court of Appeals for the Second Circuit on the same matter. See
Feeney v.
Port Authority Trans-Hudson Corporation,
873 F.2d
628, 631 (1989), aff'd on other grounds,
495 U. S. 299 (1990). The
Second Circuit concluded:
"No provision [of the compact or of state legislation pursuant
to the compact] commits the treasuries of the two states to satisfy
judgments against the Port Authority .... We believe that this
insulation of state treasuries from the liabilities of the Port
Authority outweighs both the methods of appointment and
gubernatorial veto so far as the Eleventh Amendment immunity is
concerned." 873 F. 2d, at 631.
We affirmed the Second Circuit's judgment in
Feeney, but
we bypassed the question whether PATH enjoyed the States' Eleventh
Amendment immunity. See
Port Authority Trans-Hudson Corp. v.
Feeney, 495 U.
S. 299 (1990). Assuming,
arguendo, that the suit in
Feeney was tantamount to a claim against the States,S we
ruled that New York and New
8 Our assumption was in accord with prior state and federal
decisions typing the Port Authority a state arm or agency. See,
e. g., Howell v.
Port of New York Authority, 34 F.
Supp. 797, 801 (NJ 1940);
Trippe v.
Port of New York
Authority, 14 N. Y. 2d 119, 123, 198 N. E. 2d 585, 586
39
Jersey had effectively consented to the litigation. See
id., at 306-309 (relying on N. J. Stat. Ann. §§32:1-157,
32:1-162 (West 1963); N. Y. Unconsol. Laws §§ 7101, 7106 (McKinney
1979)). Consent is not arguable here, because Hess and Walsh
commenced suit too late to meet the i-year prescription specified
by the States. See
supra, at 33. Accordingly, we confront
directly the sole question petitioners Hess and Walsh present, and
we hold that PATH is not entitled to Eleventh Amendment immunity
from suit in federal court.
II
The Eleventh Amendment largely shields States from suit in
federal court without their consent, leaving parties with claims
against a State to present them, if the State permits, in the
State's own tribunals. Adoption of the Amendment responded most
immediately to the States' fears that "federal courts would force
them to pay their Revolutionary War debts, leading to their
financial ruin."
Pennhurst State School and Hospital v.
Halderman, 465
U. S. 89, 151 (1984) (STEVENS, J., dissenting); see also
Petty v.
TennesseeMissouri Bridge Comm'n, 359 U. S. 275, 276, n. 1
(1959);
Missouri v.
Fiske, 290 U. S. 18, 27 (1933).9
More pervasively, current Eleventh Amendment jurisprudence
emphasizes the integrity retained by each State in our federal
system:
"The Amendment is rooted in a recognition that the States,
although a union, maintain certain attributes of sovereignty,
including sovereign immunity. See Hans
(1964); Miller v.
Port of New York Authority, 18
N. J. Misc. 601, 606, 15 A. 2d 262, 266 (Sup. Ct. 1939).
9 As Chief Justice John Marshall recounted: "[AJt the adoption
of the [CJonstitution, all the States were greatly indebted; and
the apprehension that these debts might be prosecuted in the
federal Courts" prompted swift passage of the Eleventh Amendment.
Cohens v.
Virginia, 6 Wheat. 264, 406 (1821). See
generally 1 C. Warren, The Supreme Court in United States History
96-102 (1922).
40
v. Louisiana, 134 U. S. 1, 13 (1890). It
thus accords the States the respect owed them as members of the
federation." Puerto Rico Aqueduct and Sewer Authority v.
Metcalf & Eddy, Inc., 506 U. S. 139, 146
(1993).
Bistate entities occupy a significantly different position in
our federal system than do the States themselves. The States, as
separate sovereigns, are the constituent elements of the Union.
Bistate entities, in contrast, typically are creations of three
discrete sovereigns: two States and the Federal Government.10 Their
mission is to address "'interests and problems that do not coincide
nicely either with the national boundaries or with State lines'"
-interests that" 'may be badly served or not served at all by the
ordinary channels of National or State political action.''' V.
Thursby, Interstate Cooperation: A Study of the Interstate Compact
5 (1953) (quoting National Resources Committee, Regional Factors in
National Planning and Development 34 (1935)); see Grad,
Federal-State Compact: ANew Experiment in Cooperative Federalism,
63 Colum. L. Rev. 825, 854-855 (1963) (Compact Clause entities
formed to deal with "broad, region-wide problems" should not be
regarded as "an affirmation of a narrow concept of state
sovereignty," but as "independently functioning parts of a regional
polity and of a national union.").
A compact accorded congressional consent "is more than a supple
device for dealing with interests confined within a region ... [I]t
is also a means of safeguarding the national interest ... West
Virginia ex rel. Dyer v. Sims,
341 U. S. 22, 27 (1951).
The Port Authority of New York and New Jersey exemplifies both the
need for, and the utility of, Compact Clause entities:
10 If the creation of a bistate entity does not implicate
federal concerns, however, federal consent is not required. See
Virginia v.
Tennessee, 148 U. S. 503, 517-520
(1893).
41
"From the point of view of geography, commerce, and engineering,
the Port of N ew York is an organic whole. Politically, the port is
split between the law-making of two States, independent but futile
in their respective spheres. The scarcity of land and mounting
commerce have concentrated on the New York side of the Hudson River
the bulk of the terminal facilities for foreign commerce, while it
has made the Jersey side, to a substantial extent, the terminal and
breaking-up yards for the eastand west-bound traffic. In addition,
both sides of the Hudson are dotted with municipalities, who have
sought to satisfy their interest in the general problem through a
confusion of local regulations. In addition, the United States has
been asserting its guardianship over interstate and foreign
commerce. What in fact was one, in law was many. Plainly the
situation could not be adequately dealt with except through the
coordinated efforts of New York, New Jersey, and the United States.
The facts presented a problem for the unified action of the
law-making of these three governments, and law heeded facts."
Frankfurter & Landis, The Compact Clause of the Constitution-A
Study in Interstate Adjustments, 34 Yale L. J. 685, 697 (1925)
(footnote omitted).
Suit in federal court is not an affront to the dignity of a
Compact Clause entity, for the federal court, in relation to such
an enterprise, is hardly the instrument of a distant, disconnected
sovereign; rather, the federal court is ordained by one of the
entity's founders. Nor is the integrity of the compacting States
compromised when the Compact Clause entity is sued in federal
court. As part of the federal plan prescribed by the Constitution,
the States agreed to the power sharing, coordination, and unified
action that typify
42
Compact Clause creations.ll Again, the federal tribunal cannot
be regarded as alien in this cooperative, trigovernmental
arrangement. This is all the more apparent here, where the very
claims in suit-the FELA claims of Hess and Walsh-arise under
federal law. See
supra, at 33.
Because Compact Clause entities owe their existence to state and
federal sovereigns acting cooperatively, and not to any "one of the
United States," see
supra, at 33, n. 2, their political
accountability is diffuse; they lack the tight tie to the people of
one State that an instrument of a single State has:
"An interstate compact, by its very nature, shifts a part of a
state's authority to another state or states, or to the agency the
several states jointly create to run the compact. Such an agency
under the control of special interests or gubernatorially appointed
representatives is two or more steps removed from popular control,
or even of control by a local government." M. Ridgeway, Interstate
Compacts: A Question of Federalism 300 (1971).
In sum, within any single State in our representative democracy,
voters may exercise their political will to direct state policy;
bistate entities created by compact, however, are not subject to
the unilateral control of anyone of the States that compose the
federal system.
Accordingly, there is good reason not to amalgamate Compact
Clause entities with agencies of "one of the United States" for
Eleventh Amendment purposes. This Court so recognized in
Lake
Country Estates, Inc. v.
Tahoe Regional Planning Agency,
440 U. S. 391
(1979), the only case, prior
11 See
Port Authority Trans-Hudson Corp. v.
Feeney, 495 U.
S. 299, 314316 (1990) (Brennan, J., concurring in part and
concurring in judgment) (observing that no single State has
dominion over an entity created by interstate compact and that
state/federal shared power is the essential attribute of such an
entity); M. Ridgeway, Interstate Compacts: A Question of Federalism
297-300 (1971) (emphasizing limits of individual State's authority
over interstate compact entities).
43
to this one, in which we decided whether a bistate entity
qualified for Eleventh Amendment immunity.12
Lake Country rejected a plea that the Tahoe Regional
Planning Agency (TRP A), an agency created by compact to which
California and Nevada were parties, acquired the immunity which the
Eleventh Amendment accords to each one of TRP A's parent States.
TRP A had argued that if the Amendment shields each State, then
surely it must shield an entity "so important that it could not be
created by [two] States without a special Act of Congress."
Id., at 400. That "expansive reading," we said, was not
warranted, for the Amendment specifies "the State" as the entity
protected:
"By its terms, the protection afforded by [the Eleventh]
Amendment is only available to 'one of the United States.' It is
true, of course, that some agencies exercising state power have
been permitted to invoke the Amendment in order to protect the
state treasury from liability that would have had essentially the
same practical consequences as a judgment against the State itself.
But the Court has consistently refused to construe the Amendment to
afford protection to political subdivisions such as counties and
municipalities, even though such entities exercise a 'slice of
state power.'" Id., at 400401 (footnotes omitted).
We then set out a general approach: We would presume the Compact
Clause agency does not qualify for Eleventh Amendment immunity
"[u]nless there is good reason to believe that the States
structured the new agency to enable it to enjoy the special
constitutional protection of the States
12 Petty v.
Tennessee-Missouri Bridge Comm'n,
359 U. S.
275,279,281282 (1959), and
Feeney, 495 U. S., at
308-309, also involved Eleventh Amendment pleas by bistate
agencies; we upheld the exercise of federalcourt jurisdiction in
both cases on the ground that the asserted immunity from suit had
been waived.
44
themselves, and that Congress concurred in that purpose."
Id., at 40l.
The Court in
Lake Country found "no justification for
reading additional meaning into the limited language of the
Amendment." Indeed, all relevant considerations in that case
weighed against TRP A's plea. The compact called TRPA a "political
subdivision," and required that the majority of the governing
members be county and city appointees.
Ibid. Obligations of
TRP A, the compact directed, "shall
not be binding on either
State." TRPA's prime function, we noted, was regulation of land
use, a function traditionally performed by local governments.
Further, the agency's performance of that function gave rise to the
litigation. Moreover, rules made by TRP A were "not subject to veto
at the state level."
Id., at 402.
This case is more complex. Indicators of immunity or the absence
thereof do not, as they did in
Lake Country, all point the
same way. While 8 of the Port Authority's 12 commissioners must be
resident voters of either New York City or other parts of the Port
of New York District,13 this indicator of local governance is
surely offset by the States' controls. All commissioners are state
appointees. Acting alone, each State through its Governor may block
Port Authority measures; and acting together, both States, through
their legislatures, may enlarge the Port Authority's powers and add
to its responsibilities.
The compact and its implementing legislation do not type the
Authority as a state agency; instead they use various terms: "joint
or common agency"; 14 "body corporate and poli-
13 Cf.
Farias v.
Bexar Cty. Bd. of Trustees for Mental
Health Mental Retardation Servs., 925 F.2d
866, 875
(CA5) (entity held autonomous, and thus not
shielded by Eleventh Amendment, where board members had to be
"qualified voters of the region"), cert. denied, 502 U. S. 866
(1991).
14N. J. Stat. Ann. §32:1-1 (West 1990); N. Y. Unconsol. Law
§6401 (McKinney 1979).
45
tic"; 15 "municipal corporate instrumentality of the two states
for the purpose of developing the port and effectuating the pledge
of the states in the ... compact." 16 State courts, however,
repeatedly have typed the Port Authority an agency of the States
rather than a municipal unit or local district. See,
e. g.,
Whalen v.
Wagner, 4 N. Y. 2d 575, 581583, 152 N. E. 2d
54, 56-57 (1958) (legislation authorizing specific Port Authority
projects does not pertain to the "property, affairs or government"
of a city because "the matters over which the Port Authority has
jurisdiction are of State concern").
Port Authority functions are not readily classified as typically
state or unquestionably local. States and municipalities alike own
and operate bridges, tunnels, ferries, marine terminals, airports,
bus terminals, industrial parks, also commuter railroads.17 This
consideration, therefore, does not advance our Eleventh Amendment
inquiry.
Pointing away from Eleventh Amendment immunity, the States lack
financial responsibility for the Port Authority. Conceived as a
fiscally independent entity financed predominantly by private
funds, see
United States Trust Co. of N.
Y. v.
New
Jersey, 431 U. S., at 4, the Authority generates its own
revenues, and for decades has received no money from the States.
See
Commissioner v.
Shamberg's Estate, 144 F.2d 998,
1002 (CA2 1944) ("In the compact ... the states agreed to make
annual appropriations (not in excess of $100,000 for each state)
for expenses of the Authority until
15N. J. Stat. Ann. §32:1-4 (West 1990); N. Y. Unconsol. Law
§6404 (McKinney 1979); accord, N. J. Stat. Ann. §32:1-7 (West
1990); N. Y. Unconsol. Law § 6407 (McKinney 1979).
16N. J. Stat. Ann. §32:1-33 (West 1990); N. Y. Unconsol. Law
§6459 (McKinney 1979).
17 Other Authority facilities, such as the World Trade Center,
an office complex housing numerous private tenants, see 1993 Annual
Financial Report 33-35, and the Teleport, a satellite
communications center, see
id., at 30, are not typically
operated by either States or municipalities.
46
[r]evenues from its operations were sufficient to meet its
expenses. These annual appropriations were discontinued in 1934
because the revenues from the bridges, the Holland Tunnel and
Inland Terminal had become sufficient."), cert. denied, 323 U. S.
792 (1945).
The States, as earlier observed, bear no legal liability for
Port Authority debts; they are not responsible for the payment of
judgments against the Port Authority or PATH. The Third Circuit, in
Port Authority P BA, assumed that, "if the Authority is ever
in need," the States would pay. 819 F. 2d, at 416. But nothing in
the compact or the laws of either State supports that assumption.
See
supra, at 37-38. As the Second Circuit concisely
stated:
"The Port Authority is explicitly barred from pledging the
credit of either state or from borrowing money in any name but its
own. Even the provision for the appropriation of moneys for
administrative expenses up to $100,000 per year requires prior
approval by the governor of each state and an actual appropriation
before obligations for such expenses may be incurred. Moreover, the
phrase 'salaries, office and other administrative expenses' clearly
limits this essentially optional obligation of the two states to a
very narrow category of expenses and thus also evidences an intent
to insulate the states' treasuries from the vast bulk of the Port
Authority's operating and capital expenses, including personal
injury judgments." Feeney, 873 F. 2d, at 631.18
18 Concerning the Third Circuit's decision in
Port Authority
PEA, the Second Circuit said:
"That decision ... was based on the Third Circuit's
understanding that, in the event that 'a judgment were entered
against the Authority that was serious enough to deplete its
resources, the Authority would be able to go to the state
legislatures in order to recoup the amount needed for its operating
expenses.' To the extent that this statement implies that the
states
must make such an appropriation, it appears to be in
error."
Feeney, 873 F. 2d, at 632 (quoting
Port Authority
PEA, 819 F. 2d, at 416).
47
III
When indicators of immunity point in different directions, the
Eleventh Amendment's twin reasons for being remain our prime guide.
See
supra, at 39-40. We have already pointed out that
federal courts are not alien to a bistate entity Congress
participated in creating. Nor is it disrespectful to one State to
call upon the Compact Clause entity to answer complaints in federal
court. See
supra, at 41-43. Seeing no genuine threat to the
dignity of New York or New Jersey in allowing Hess and Walsh to
pursue FELA claims against PATH in federal court, we ask, as
Lake Country instructed, whether there is here "good reason
to believe" the States and Congress designed the Port Authority to
enjoy Eleventh Amendment immunity. 440 U. S., at 401.
PATH urges that we find good reason to classify the Port
Authority as a state agency for Eleventh Amendment purposes based
on the control New York and New Jersey wield over the Authority.
The States appoint and can remove the commissioners, the Governors
can veto Port Authority actions, and the States' legislatures can
determine the projects the Port Authority undertakes. See
supra, at 36-37. But ultimate control of every state-created
entity resides with the State, for the State may destroy or reshape
any unit it creates. "[P]olitical subdivisions exist solely at the
whim and behest of their State,"
Feeney, 495 U. S., at 313
(Brennan, J., concurring in part and concurring in judgment), yet
cities and counties do not enjoy Eleventh Amendment immunity. See,
e. g., Mt. Healthy City Bd. of Ed. v.
Doyle, 429 U. S. 274, 280
(1977);
Lincoln County v.
Luning, 133 U. S. 529, 530
(1890). Moreover, no one State alone can control the course of a
Compact Clause entity. See
supra, at 42, and n. 11. Gauging
actual control, particularly when an entity has multiple
creator-controllers, can be a "perilous inquiry," "an uncertain and
unreliable exercise." See Note, 92 Colum. L. Rev. 1243, 1284
(1992); see also
id., at 1302, and n. 264 (describing
"degree to which the state controls the
48
entity" as a criterion neither "[i]ntelligible" nor "judicially
manageable").
Moreover, rendering control dispositive does not home in on the
impetus for the Eleventh Amendment: the prevention of federal-court
judgments that must be paid out of a State's treasury. See
Fletcher, A Historical Interpretation of the Eleventh Amendment, 35
Stan. L. Rev. 1033, 1129 (1983) (identifying "the award of money
judgments against the states" as "the traditional core of eleventh
amendment protection").19 Accordingly, Courts of Appeals have
recognized the vulnerability of the State's purse as the most
salient factor in Eleventh Amendment determinations. See,
e. g.,
Baxter v.
Vigo Cty. School Corp., 26
F.3d 728, 732-733 (CA7 1994) (most significant factor is
whether entity has power to raise its own funds);
Hutsell v.
Sayre, 5 F.3d
996, 999 (CA6 1993) ("The most important factor ... is whether
any monetary judgment would be paid out of the state treasury."),
cert. denied, 510 U. S. 1119 (1994);
Metcalf &
Eddy,
Inc. v.
Puerto Rico Aqueduct and Sewer Authority,
991 F.2d
935, 942-943 (CA1 1993) ("First, and most fundamentally, [the
entity's] inability to tap the Commonwealth treasury or pledge the
Commonwealth's credit leaves it unable to exercise the power of the
purse. On this basis, [the entity] is ill-deserving of Eleventh
Amendment protection.");
Bolden v.
Southeastern Pa.
Transp. Authority, 953 F.2d
807, 818 (CA3 1991) (in banc) ("[T]he 'most important' factor
is 'whether any judgment would be paid from the state treasury.''')
(quoting
Fitchik v.
New Jersey Transit Rail Operations,
Inc., 873 F.2d
655, 659 (CA3) (in banc), cert. denied, 493 U. S. 850 (1989)),
cert. denied, 504 U. S. 943 (1992);
Bar-
19 The dissent questions whether the driving concern of the
Eleventh Amendment is the protection of state treasuries,
emphasizing that the Amendment covers "any suit in law
or
equity." Post, at 60. The suggestion that suits in equity do
not drain money as frightfully as actions at law, however, is
belied by the paradigm case. See
Jarndyce and Jarndyce
(Charles Dickens, Bleak House (1853)).
49
ket, Levy &
Fine, Inc. v.
St. Louis Thermal
Energy Corp., 948 F.2d
1084, 1087 (CA8 1991) ("Because Missouri and Illinois are not
liable for judgments against Bi-State, there is no policy reason
for extending the states' sovereign immunity to Bi-State.");
Feeney v.
Port Authority Trans-Hudson Corporation,
873 F. 2d, at 631 ("In cases where doubt has existed as to the
availability of Eleventh Amendment immunity, the Supreme Court has
emphasized the exposure of the state treasury as a critical
factor."), aff'd on other grounds,
495 U. S. 299 (1990);
Jacintoport Corp. v.
Greater Baton Rouge Port Comm'n,
762 F.2d
435, 440 (CA5 1985) ("One of the most important goals of the
immunity of the Eleventh Amendment is to shield states' treasuries
.... The purpose of the immunity therefore largely disappears when
a judgment against the entity does not entail a judgment against
the state."), cert. denied, 474 U. S. 1057 (1986). In sum, as New
York and New Jersey concede, the "vast majority of Circuits ...
have concluded that the state treasury factor is the most important
factor to be considered ... and, in practice, have generally
accorded this factor dispositive weight." Brief for States of New
Jersey, New York et al. as
Amici Curiae 18-19.
The Port Authority's anticipated and actual financial
independence-its long history of paying its own way, see
supra, at 37-38, and n. 7, 45-46-contrasts with the
situation of transit facilities that place heavy fiscal tolls on
their founding States. In
Alaska Cargo Transport, Inc. v.
Alaska R. Corp., 5 F.3d
378 (CA9 1993), for example, Eleventh Amendment immunity was
accorded a thinly capitalized railroad that depends for its
existence on a state-provided "financial safety net of broad
dimension."
Id., at 381. And in
Morris v.
Washington Metropolitan Area Transit Authority, 781 F. 2d
218 (CADC 1986), Eleventh Amendment immunity was accorded an
interstate transit system whose revenue shortfall Congress and the
cooperating States anticipated from the start, an enterprise
constantly dependent on funds from
50
the participating governments to meet its sizable operating
deficits. See
id., at 225-227. As the
Morris court
concluded: "[W]here an agency is so structured that, as a practical
matter, if the agency is to survive, a judgment must expend itself
against state treasuries, common sense and the rationale of the
eleventh amendment require that sovereign immunity attach to the
agency."
Id., at 227.20 There is no such requirement where
the agency is structured, as the Port Authority is, to be
self-sustaining. Cf.
Royal Caribbean Corp. v.
Puerto Rico
Ports Authority, 973 F.2d
8,10-11 (CA1 1992) (Breyer, C. J.) (rejecting Eleventh
Amendment immunity plea, despite Commonwealth's control over
agency's executives, planning, and administration, where agency did
not depend on Commonwealth financing for its income and covered its
own expenses, including judgments against it).
PATH maintains that the Port Authority's private funding and
financial independence should be assessed differently. Operating
profitably, the Port Authority dedicates at least some of its
surplus to public projects which the States themselves might
otherwise finance. As an example, PATH notes a program under which
the Port Authority purchases buses and then leases or transfers
them without charge to public and private transportation entities
in both States. See N. J. Stat. Ann. §§ 32:2-23.27 to 32:2-23.42
(West 1990); N. Y. Unconsol. Laws §§ 7201-7217 (McKinney Supp.
1994); 1993 Annual Financial Report 66. A judgment against the Port
Authority, PATH contends, by reducing the Authority's surplus
available to fund such projects, produces an effect equivalent to
the impact of a judgment directly against the State. It follows,
PATH suggests, that distinguishing the
2°The decision in
Morris is compatible with our approach.
See
supra, at 43-44. Thus, we establish no
"per se
rule that the Eleventh Amendment never applies when States act in
concert."
Post, at 56 (O'CONNOR, J., dissenting).
51
fiscal resources of the Port Authority from the fiscal resources
of the States is unrealistic and artificial.
This reasoning misses the mark. A charitable organization may
undertake rescue or other good work which, in its absence, we would
expect the State to shoulder. But none would conclude, for example,
that in times of flood or famine the American Red Cross, to the
extent it works for the public, acquires the States' Eleventh
Amendment immunity.21 The proper focus is not on the use of profits
or surplus, but rather is on losses and debts. If the expenditures
of the enterprise exceed receipts, is the State in fact obligated
to bear and pay the resulting indebtedness of the enterprise? When
the answer is "No"-both legally and practicallythen the Eleventh
Amendment's core concern is not implicated.
IV
The conflict between the Second and Third Circuits, it bears
emphasis, is no longer over the correct legal theory. Both
Circuits, in accord with the prevailing view, see
supra, at
48-49, identify "the 'state treasury' criterion-whether any
judgment must be satisfied out of the state treasury-as the most
important consideration" in resolving an Eleventh Amendment
immunity issue. Brief for States of New Jersey, New York et al. as
Amici Curiae 2 (acknowledging, but opposing, this widely
held view). The intercircuit division thus persists only because
the Second and Third Circuits diverge in answering the question:
Are the Port Authority's debts those of its parent States? See
ibid.
Two Third Circuit decisions issued after
Port Authority
PBA, both rejecting Eleventh Amendment pleas by public
21 It would indeed heighten a "myster[y] of legal evolution"
were we to spread an Eleventh Amendment cover over an agency that
consumes no state revenues but contributes to the State's wealth.
See Borchard, Government Liability in Tort, 34 Yale L. J. 1, 4
(1924); see also
Muskopf v.
Corning Hospital Dist.,
55 Cal. 2d 211, 213-216, and n. 1, 359 P. 2d 457, 458-460, and n. 1
(1961) (Traynor, J.).
52
transit authorities, indicate the narrow compass of the current
Circuit split. In
Bolden v.
Southeastern Pa. Transp.
Authority, 953 F.2d
807 (1991) (in bane), cert. denied, 504 U. S. 943 (1992), the
Third Circuit held a regional transit authority not entitled to
Eleventh Amendment immunity from suit, under 42 U. S. C. § 1983, in
federal court. The "most important question," according to Circuit
precedent, the Court of Appeals confirmed, was "whether any
judgment would be paid from the state treasury." 953 F. 2d, at 816
(internal quotation marks omitted). Earlier, in
Fitchik v.
New Jersey Transit Rail Operations, Inc., 873 F.2d
655 (in bane), cert. denied, 493 U. S. 850 (1989), an FELA
suit, the Third Circuit concluded that the New Jersey Transit
Corporation did not share the State's Eleventh Amendment immunity.
As in
Bolden, the court in
Fitchik called "most
important" the question "whether any judgment would be paid from
the state treasury." 873 F. 2d, at 659.
Accounting for
Port Authority PBA in its later
Bolden decision, the Third Circuit acknowledged that it had
relied primarily on the interstate compact provision calling for
state contributions unless Port Authority revenues were "'adequate
to meet all expenditures.'" See
Bolden, 953 F. 2d, at 815
(quoting compact article XV, set out
supra, at 37, n. 7). As
earlier indicated, however, see
supra, at 37-38 and 46, the
Third Circuit drew from the compact expense coverage provision far
more than the text of that provision warrants.
***
A discrete entity created by constitutional compact among three
sovereigns, the Port Authority is financially selfsufficient; it
generates its own revenues, and it pays its own debts. Requiring
the Port Authority to answer in federal court to injured railroad
workers who assert a federal statutory right, under the FELA, to
recover damages does not touch the concerns-the States' solvency
and dignity-that underpin the Eleventh Amendment. The judgment of
the
53
Court of Appeals is accordingly reversed, and the
Hess
and
Walsh cases are remanded for further proceedings
consistent with this opinion.
It is so ordered.
JUSTICE STEVENS, concurring.
JUSTICE GINSBURG'S thorough opinion demonstrates why the Court's
answer to the open question this case presents is entirely faithful
to precedent. I join her opinion without reservation, but believe
it appropriate to identify an additional consideration that has
motivated my vote.
Most of this Court's Eleventh Amendment jurisprudence is the
product of judge-made law unsupported by the text of the
Constitution. The Amendment provides as follows:
"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 United States by Citizens of another State, or
by Citizens or Subjects of any Foreign State."
As Justice Brennan explained in his dissent in
Atascadero
State Hospital v.
Scanlon, 473 U. S. 234, 259-302
(1985), this language, when read in light of the historical
evidence, is properly understood to mean that the grant of
diversity jurisdiction found in Article III, § 2, does not extend
to actions brought by individuals against States. See also
Welch v.
Texas Dept. of Highways and Public Transp.,
483 U. S. 468,
509-516 (1987) (Brennan, J., dissenting). Yet since
Hans v.
Louisiana, 134
U. S. 1 (1890), the Court has interpreted the Eleventh
Amendment as injecting broad notions of sovereign immunity into the
whole corpus of federal jurisdiction. The Court's decisions have
given us "two Eleventh Amendments," one narrow and textual and the
other-not truly a constitutional doctrine at all-based on
prudential considerations of comity and federalism. See
Pennsylvania v.
Union Gas Co.,
491 U. S. 1, 23-29 (1989)
(STEVENS, J., concurring).
54
STEVENS, J., concurring
This Court's expansive Eleventh Amendment jurisprudence is not
merely misguided as a matter of constitutional law; it is also an
engine of injustice. The doctrine of sovereign immunity has long
been the subject of scholarly criticism.1 And rightly so, for
throughout the doctrine's history, it has clashed with the just
principle that there should be a remedy for every wrong. See,
e.
g., Marbury v.
Madison, 1 Cranch 137, 163 (1803).
Sovereign immunity inevitably places a lesser value on
administering justice to the individual than on giving government a
license to act arbitrarily.
Arising as it did from the peculiarities of political life in
feudal England, 1 F. Pollock & F. Maitland, History of English
Law 515-518 (2d ed. 1909), sovereign immunity is a doctrine better
suited to a divinely ordained monarchy than to our democracy.2
Chief Justice John Jay recognized as much over two centuries ago.
See
Chisholm v.
Georgia, 2 Dall. 419, 471-472 (1793).
Despite the doctrine's genesis in judicial decisions, ironically it
has usually been the Legislature that has seen fit to curtail its
reach. See Scalia, Sovereign Immunity and Nonstatutory Review of
Federal Administrative Action: Some Conclusions from the
Public-Lands Cases, 68 Mich. L. Rev. 867, 867-868 (1970).
In my view, when confronted with the question whether a
judge-made doctrine of this character should be extended or
contained, it is entirely appropriate for a court to give
1 See,
e. g., Borchard, Government Liability in
Tort, 34 Yale L. J. 1 (1924); Davis, Sovereign Immunity Must Go, 22
Admin. L. Rev. 383 (1970). The criticism has not abated in recent
years, but rather has focused on this Court's adherence to an
unjustifiably broad interpretation of the Eleventh Amendment. See,
e. g., Marshall, Fighting the Words of the Eleventh
Amendment, 102 Harv. L. Rev. 1342 (1989); Jackson, The Supreme
Court, the Eleventh Amendment, and State Sovereign Immunity, 98
Yale L. J. 1 (1988); Amar, Of Sovereignty and Federalism, 96 Yale
L. J. 1425 (1987).
2 Stevens, Is Justice Irrelevant?, 87 Nw. U. L. Rev. 1121,
1124-1125 (1993).
55
controlling weight to the Founders' purpose to "establish
Justice." 3 Today's decision is faithful to that purpose.
JUSTICE O'CONNOR, with whom THE CHIEF JUSTICE, JUSTICE SCALIA,
and JUSTICE THOMAS join, dissenting.
The Court's opinion, as I read it, makes two different points.
First, an interstate compact entity is presumptively not entitled
to immunity under the Eleventh Amendment, because the States
surrendered any such entitlement "[a]s part of the federal plan
prescribed by the Constitution."
Ante, at 41. When States
act in concert under the Interstate Compact Clause, they cede power
to each other and to the Federal Government, which, by consenting
to the state compact, becomes one of the compact entity's creators.
As such, each individual State lacks meaningful control over the
entity, and suits against the entity in federal court pose no
affront to a State's "dignity."
Ibid. Second, in place of
the various factors recognized in
Lake Country Estates, Inc.
v.
Tahoe Regional Planning Agency, 440 U. S. 391 (1979), for
determining arm-of-the-state status, we may now substitute a single
overriding criterion, vulnerability of the state treasury. If a
State does not fund judgments against an entity, that entity is not
within the ambit of the Eleventh Amendment, and suits in federal
court may proceed unimpeded. By the Court's reckoning, the state
treasury is not implicated on these facts. Neither, it follows, is
the Eleventh Amendment.
I disagree with both of these propositions and with the ultimate
conclusion the Court draws from them. The Eleventh Amendment, in my
view, clothes this interstate entity with immunity from suit in
federal courts.
3 "We the People of the United States, in Order to form a more
perfect Union, establish Justice ... do ordain and establish this
Constitution for the United States of America." U. S. Const.
Preamble.
56
I
Despite several invitations, this Court has not as yet had
occasion to find an interstate entity shielded by the Eleventh
Amendment from suit in federal court. See
Port Authority
Trans-Hudson Corp. v.
Feeney, 495 U. S. 299 (1990)
(assuming Eleventh Amendment applies, but finding waiver);
Lake
Country, supra (finding no reason to believe entity was arm of
the State);
Petty v.
Tennessee-Missouri Bridge
Comm'n, 359 U. S.
275 (1959) (same as
Feeney). As I read its opinion, the
Court now builds upon language in
Lake Country to create
what looks very much like a
per se rule that the Eleventh
Amendment never applies when States act in concert. To be sure, the
Court leaves open the possibility that in certain undefined
situations, we might find "'good reason' " to confer immunity where
States structure an entity to enjoy immunity and we see evidence
that "'Congress concurred in that purpose.'"
Ante, at 43-44,
quoting
Lake Country, supra, at 401. But the crux of the
Court's analysis rests on its apparent belief that the States ceded
their sovereignty in the interstate compact context in the plan of
the convention. See
ante, at 41-42 ("As part of the federal
plan prescribed by the Constitution, the States agreed to the power
sharing, coordination, and unified action that typify Compact
Clause creations"). Such broad reasoning brooks few, if any,
exceptions.
In reaching its conclusion, the Court attaches undue
significance to the requirement that Congress consent to interstate
compacts. Admittedly, the consent requirement performs an important
function in our federal scheme. In
Cuyler v.
Adams,
449 U. S. 433
(1981), we observed that "'the requirement that Congress approve a
compact is to obtain its political judgment: Is the agreement
likely to interfere with federal activity in the area, is it likely
to disadvantage other States to an important extent, is it a matter
that would better be left untouched by state and federal
regulation?'"
Id., at 440, n. 8, quoting
United States
Steel
57
Corp. v.
Multistate Tax Comm'n, 434 U. S. 452, 485 (1978)
(White, J., dissenting). But the consent clause neither transforms
the nature of state power nor makes Congress a full-fledged
participant in the underlying agreement; it requires
only
that Congress "check any infringement of the rights of the national
government." J. Story, Commentaries on the Constitution of the
United States § 1403, p. 264 (T. Cooley ed. 1873). In consenting,
Congress certifies that the States are acting within their
boundaries in our federal scheme and that the national interest is
not offended. Once Congress consents to cooperative state activity,
there is no reason to presume that immunity does not attach.
Sovereign immunity, after all, inheres in the permissible exercise
of state power. "If congress consent[s], then the states [are] in
this respect restored to their original inherent sovereignty; such
consent being the sole limitation imposed by the constitution, when
given, [leaves] the states as they were before .... "
Rhode
Island v.
Massachusetts, 12 Pet. 657, 725 (1838); see
also L. Tribe, American Constitutional Law § 6-33, p. 523 (2d ed.
1988).
Even if the Court were correct that the States ceded a portion
of their power to Congress in ratifying the consent provision, it
would not logically or inevitably follow that any particular entity
receives no immunity under the Eleventh Amendment. In
Fitzpatrick v.
Bitzer, 427 U. S. 445, 455456
(1976), we held that the States surrendered a portion of their
sovereign authority to Congress in ratifying § 5 of the Fourteenth
Amendment. Despite this, we have consistently required "'an
unequivocal expression of congressional intent to overturn the
constitutionally guaranteed immunity of the several States'" before
allowing suits against States to proceed in federal court.
Atascadero State Hospital v.
Scanlon, 473 U. S. 234, 240
(1985), quoting
Pennhurst State School and Hospital v.
Halderman, 465
U. S. 89, 99 (1984). Assuming,
arguendo, that States
ceded power to Congress to abrogate States' Eleventh Amendment
immunity in the
58
interstate compact realm, our precedents caution that we should
be reluctant to infer abrogation in the absence of clear signals
from Congress that such a result was, in fact, intended. At the
least, I would presume the applicability of the Eleventh Amendment
to interstate entities unless Congress clearly and expressly
indicates otherwise.
The Court ignores these abrogation cases, however, in favor of
exactly the opposite presumption. By the Court's reckoning, the
Eleventh Amendment is inapplicable unless we have "good reason" to
believe that Congress affirmatively
concurs in a finding of
immunity. In other words, the baseline is no immunity, even if the
State has structured the entity in the expectation that immunity
will inhere. If, however, Congress manifests a contrary intent, the
Eleventh Amendment shields an interstate entity from suit in
federal court. Congress, therefore, effectively may dictate the
applicability of the Eleventh Amendment in this context. The notion
that Congress possesses this power, an extension of dictum in
Lake Country, 440 U. S., at 401, has little basis in our
precedents. Congress may indeed be able to confer on the States
what in fact
looks a lot like Eleventh Amendment immunity;
but we have never held that Eleventh Amendment immunity itself
attaches at the whim of Congress.
The Court shores up its analysis by observing that each State
lacks meaningful power to control an interstate entity. As an
initial matter, one wonders how important this insight actually is
to the Court's conclusion, given that the opinion elsewhere
disclaims reliance on a control inquiry.
Ante, at 47-48. In
any event, that we may sometimes, or even often, in the application
of arm-of-the-state analysis, find too attenuated a basis for
immunity does not mean we should presume such immunity
altogether lacking in this context. Two sovereign States
acting together may, in most situations, be as deserving of
immunity as either State acting apart. I see no reason to vary the
analysis for interstate and intrastate entities.
59
II
The Court wisely recognizes that the six-factor test set forth
in
Lake Country, supra, ostensibly a balancing scheme,
provides meager guidance for lower courts when the factors point in
different directions. Without any indication from this Court as to
the weight to ascribe particular criteria, the Courts of Appeals
have struggled, variously adding factors, see
Puerto Rico Ports
Authority v.
M/V Manhattan Prince, 897
F.2d 1, 9 (CA1 1990) (considering seven factors), distilling
factors, see
Benning v.
Board of Regents of Regency
Universities, 928 F.2d
775, 777 (CA7 1991) (considering four factors), and deeming
certain factors dispositive, compare
Brown v.
East
Central Health Dist., 752 F.2d
615, 617-618 (CAll 1985) (finding state treasury factor
determinative), with
Tuveson v.
Florida Governor's
Council on Indian Affairs, Inc., 734 F.2d
730, 732 (CAll 1984) (suggesting that state courts'
characterization of entity is most important criterion). See
generally Note, Clothing State Governmental Entities with Sovereign
Immunity: Disarray in the Eleventh Amendment Arm-of-the-State
Doctrine, 92 Colum. L. Rev. 1243 (1992) (summarizing diffuse
responses).
In light of this confusion, the Court's effort to focus the
Lake Country analysis on a single overarching principle is
admirable. But its conclusion that the vulnerability of the state
treasury is determinative has support neither in our precedents nor
in the literal terms of the Eleventh Amendment. The Court takes a
sufficient condition for Eleventh Amendment immunity, and
erroneously transforms it into a
necessary condition. In so
doing, the Court seriously reduces the scope of the Eleventh
Amendment, thus underprotecting the state sovereignty at which the
Eleventh Amendment is principally directed. See
Puerto Rico
Aqueduct and Sewer Authority v.
Metcalf &
Eddy,
Inc., 506 U. S.
139, 146 (1993) ("The Amendment is rooted in a recognition that
the States, although a union, maintain certain attributes of
sovereignty, including sovereign immunity");
Atascadero
60
O'CONNOR, J., dissenting
State Hospital v.
Scanlon, supra, at 238 ("[T]he
significance of this Amendment 'lies in its affirmation that the
fundamental principle of sovereign immunity limits the grant of
judicial authority in Art. III' of the Constitution") (citation
omitted).
The Court's assertion that the driving concern of the Eleventh
Amendment is protection of state treasuries, see
ante, at
48-49, is belied by the text of the Amendment itself. The Eleventh
Amendment bars federal jurisdiction over "any suit in law
or
equity" against the States. As we recognized in
Cory v.
White, 457 U.
S. 85, 91 (1982), the Eleventh Amendment "by its terms" clearly
extends beyond actions seeking money damages. "It would be a novel
proposition indeed that the Eleventh Amendment does not bar a suit
to enjoin the State itself simply because no money judgment is
sought."
Id., at 90. While it may be clear that
Chisholm v.
Georgia, 2 Dall. 419 (1793), a money
damages action, gave initial impetus to the effort to amend the
Constitution, it is equally clear that the product of that effort,
the Eleventh Amendment itself, extends far beyond the
Chisholm facts. Recognizing this, we have long held that the
Eleventh Amendment bars suits against States and state entities
regardless of the nature of relief requested. See
Puerto
Rico Aqueduct and Sewer Authority v.
Metcalf &
Eddy, Inc., supra, at 145-146;
Cory, supra, at 90-91;
Alabama v.
Pugh, 438 U. S. 781, 782
(1978).
The Court
is entirely right, however, to suggest that the
Eleventh Amendment confers immunity over entities whose liabilities
are funded by state taxpayer dollars. If a State were vulnerable at
any time to retroactive damages awards in federal court, its
ability to set its own agenda, to control its own internal
machinery, and to plan for the future-all essential perquisites of
sovereignty-would be grievously impaired. I have no quarrel at all
with the many cases cited by the Court for the proposition that
if an entity's bills will be footed by the State, the
Eleventh Amendment clearly pre-
61
cludes the exercise of federal jurisdiction. See,
e. g.,
Hutsell v.
Sayre, 5 F.3d
996, 999 (CA6 1993) (liability of university tantamount to
claim against state treasury);
In re San Juan Dupont Plaza Hotel
Fire Litigation, 888 F.2d
940, 943-944 (CA1 1989) (70-75% of funds provided by taxpayer
dollars).
But the converse cannot also be true. The Eleventh Amendment
does not turn a blind eye simply because the state treasury is
not directly implicated. In my view, the proper question is
whether the State possesses sufficient
control over an
entity performing governmental functions that the entity may
properly be called an extension of the State itself. Such control
can exist even where the State assumes no liability for the
entity's debts. We have always respected state flexibility in
setting up and maintaining agencies charged with furthering state
objectives. See,
e. g., Highland Farms Dairy, Inc. v.
Agnew, 300 U.
S. 608, 612 (1937) ("How power shall be distributed by a state
among its governmental organs is commonly, if not always, a
question for the state itself"). An emphasis on control, rather
than impact on the state treasury, adequately protects state
managerial prerogatives while retaining a crucial check against
abuse. So long as a State's citizens may, if sufficiently
aggravated, vote out an errant government, Eleventh Amendment
immunity remains a highly beneficial provision of breathing space
and vindication of state sovereignty.
An arm of the State, to my mind, is an entity that undertakes
state functions and is politically accountable to the State, and by
extension, to the electorate. The critical inquiry, then, should be
whether and to what extent the elected state government exercises
oversight over the entity. If the lines of oversight are clear and
substantial-for example, if the State appoints and removes an
entity's governing personnel and retains veto or approval power
over an entity's undertakings-then the entity should be deemed an
arm of the State for Eleventh Amendment purposes. This test is
sufficiently elastic to encompass the Court's treasury fac-
62
tor. It will be a rare case indeed where the state treasury
foots the bill for an entity's wrongs but fails to exercise a
healthy degree of oversight over that entity. But the control test
goes further than the Court's single factor in assuring state
governments the critical flexibility in internal governance that is
essential to sovereign authority. See Note, 92 Colum. L. Rev., at
1246-1252 (describing structural innovations among state
governments).
The Court dismisses consideration of control altogether,
ante, at 47-48, noting that States wield ultimate power over
cities and counties, units that have never been accorded Eleventh
Amendment immunity. See
Lincoln County v.
Luning,
133 U. S. 529,
530 (1890). This criticism, based on a supposed line-drawing
problem, is off the mark. That "political subdivisions exist solely
at the whim and behest of their State,"
Port Authority
Trans-Hudson Corp. v.
Feeney, 495 U. S., at 313
(Brennan, J., concurring), does not mean that state governments
actually exercise sufficient oversight to trigger Eleventh
Amendment immunity under a controlcentered formulation. The inquiry
should turn on real, immediate control and oversight, rather than
on the potentiality of a State taking action to seize the reins.
Virtually every enterprise, municipal or private, flourishes in
some sense at the behest of the State. But we have never found the
Eleventh Amendment's protections to hinge on this sort of
abstraction. The control-centered formulation necessarily looks to
the structure and function of state law. If the State delegates
control and oversight of an entity to municipalities under state
law, the requisite state-level control is lacking, and the Eleventh
Amendment does not shield the entity from suit in federal
court.
III
Turning to the instant case, I believe that sufficient indicia
of control exist to support a finding of immunity for the Port
Authority, and hence, for the PATH. New Jersey and New
63
York each select and may remove 6 of the Port Authority's 12
commissioners. See N. J. Stat. Ann. § 32:1-5 (West 1990); N. Y.
Unconsol. Law § 6405 (McKinney 1979). The Governors of each State
may veto the actions of that State's commissioners. See N. J. Stat.
Ann. §32:1-17 (West 1990); N. Y. Unconsol. Law § 6417 (McKinney
1979). The quorum requirements specify that "no action of the port
authority shall be binding unless taken at a meeting at which at
least three of the members from each state are present, and unless
a majority of the members from each state present at such meeting
but in any event at least three of the members from each state
shall vote in favor thereof." N. J. Stat. Ann. §32:1-17 (West
1990); N. Y. Unconsol. Law §6417 (McKinney 1979). Accordingly, each
Governor's veto power is tantamount to a full veto power over the
actions of the Commission. The Port Authority must make annual
reports to the state legislatures, which in turn must approve
changes in the Port Authority's rules and any new projects. See N.
J. Stat. Ann. § 32:1-8 (West 1990); N. Y. Unconsol. Law § 6408
(McKinney 1979). Each State, and by extension, each State's
electorate, exercises ample authority over the Port Authority.
Without setting forth a shopping list of considerations that govern
the control inquiry, suffice it to say that in this case, the whole
is exactly the sum of its parts. I would hold that the Eleventh
Amendment shields the PATH and Port Authority from suits in federal
court. I respectfully dissent.
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