National Railroad Passenger Corporation v. the Pennsylvania Public Utility Commission

PRECEDENTIAL
Filed May 1, 2002
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
No. 01-2419
NATIONAL RAILROAD PASSENGER CORPORATION
v.
THE PENNSYLVANIA PUBLIC UTILITY COMMISSION;
JOHN M. QUAIN, CHAIRMAN; ROBERT K. BLOOM, VICE
CHAIRMAN; NORA MEAD BROWNELL, COMMISSIONER;
AARON WILSON, JR., COMMISSIONER; TERRENCE J.
FITZPATRICK, COMMISSIONER; NORFOLK SOUTHERN
RAILWAY COMPANY; CSX TRANSPORTATION, INC.; THE
SOUTHEASTERN PENNSYLVANIA TRANSPORTATION
AUTHORITY; JOHN K. LEARY, GENERAL MANAGER
The Pennsylvania Public Utility Commission;
John M. Quain, Chairman; Robert K. Bloom,
Vice Chairman; Nora Mead Brownell,
Commissioner; Aaron Wilson, Jr.,
Commissioner; Terrence J. Fitzpatrick,
Commissioner
Appellants
On Appeal From the United States District Court
For the Eastern District of Pennsylvania
(D.C. Civil Action No. 01-cv-00302)
District Judge: Honorable Clarence C. Newcomer
Argued January 22, 2002
BEFORE: NYGAARD and STAPLETON, Circuit Judges ,
and CAPUTO,* District Judge
_________________________________________________________________
* Honorable A. Richard Caputo, United States District Judge for the
Middle District of Pennsylvania, sitting by designation.
(Opinion Filed: May 1, 2002)
Susan D. Colwell
Elizabeth L. Januzzi (Argued)
Pennsylvania Public Utility
Commission
P.O. Box 3265
Harrisburg, PA 17105
Attorneys for Appellants
John L. Moore, Jr. (Argued)
Piper, Marbury, Rudnick & Wolfe
1200 19th Street, N.W.

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Suite 700
Washington, DC 20036
and
Joseph Kernen
Elizabeth J. Feeney
Piper, Marbury, Rudnick & Wolfe
18th & Arch Streets
3400 Two Logan Square
Philadelphia, PA 19103
Attorneys for Appellee
OPINION OF THE COURT
STAPLETON, Circuit Judge:
In this appeal we consider whether the District Court
properly applied the doctrine of collateral estoppel to
preclude the Pennsylvania Public Utility Commission (the
"PUC") from relitigating its claim to Eleventh Amendment
immunity. Because we find that all requirements for
application of collateral estoppel are met and no equitable
considerations counsel against its application, we will
affirm.
I.
This case arises out of proceedings initiated by the
Southeastern Pennsylvania Transportation Authority
("SEPTA") before the PUC. SEPTA petitioned the PUC for the
2
right to construct certain "partial high-level passenger
platforms" at five passenger stations owned by National
Railroad Passenger Corporation ("Amtrak"), along Amtrak’s
northeast corridor. Although Amtrak was not a party to the
administrative adjudication, Amtrak advised the PUC that
in its view the PUC had no jurisdiction over the issues
raised by SEPTA because those issues were either
preempted by federal law or subject to arbitration. Despite
Amtrak’s objection, the PUC administrative law judge
adjudicated the matter and issued a recommended
decision. On appeal to the full PUC, the Commissioners
ordered the ALJ to reopen the proceeding and issued an
order joining Amtrak as an indispensable party to the
proceeding.
Prior to a scheduled pre-hearing conference on remand to
the ALJ, Amtrak filed this action against the PUC and the
PUC’s five commissioners asserting its federal preemption
claims and seeking to compel arbitration. In response, the
PUC1 filed a motion to dismiss this case asserting, among
other things, that the PUC was an arm of the government
of the Commonwealth of Pennsylvania and immune from
suit in federal court under the Eleventh Amendment.
Amtrak opposed the motion arguing that the PUC was
precluded from relitigating its status under the Eleventh
Amendment because Amtrak had already won a prior
decision against the PUC on that issue in 1997 in National

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Railroad Passenger Corp. v. Commonwealth of Pennsylvania
Public Utility Commission, CIV. A. No. 86-5357, 1997 WL
597963, (E.D. Pa. Sep. 15, 1997).
In 1987, in the earlier suit, Amtrak secured a permanent
injunction, based on the authority of 45 U.S.C.S 546b,2
_________________________________________________________________
1. Except where it is relevant to distinguish between them, we will refer
to the PUC and the individual commissioners collectively as the "PUC."
2. 45 U.S.C. S 546b was passed on September 10, 1982, Pub. L. 97-257,
S 107. At the time of the earlier suit the statute provided:
S 546b. Exemption from taxes or other fees imposed by any State,
political subdivision, or local taxing authority levied on the
Corporation or any railroad subsidiary; covered period; jurisdiction
to enforce exemption
3
barring the PUC from assessing against Amtrak the cost of
maintaining the Cassatt Avenue highway bridge in the
_________________________________________________________________
Notwithstanding any other provision of law, the National Railroad
Passenger Corporation (the "Corporation") shall be exempt from any
taxes or other fees imposed by any State, political subdivision of a
State, or local taxing authority which are levied on the Corporation,
or any railroad subsidiary thereof, from and after October 1, 1981,
including such taxes and fees levied after September 30, 1982:
Provided, however, That notwithstanding any provision of law, the
Corporation shall not be exempt from any taxes or other fees which
it is authorized to pay as of September 10, 1982. Taxes and fees
levied on the Corporation or any railroad subsidiary thereof by
States, political subdivisions of States, or local taxing authorities
with respect to periods beginning prior to October 1, 1981, shall be
payable in proportion to the part of the relevant tax period which
elapsed prior to such date. Notwithstanding the provision of section
1341 of title 28, the United States district courts shall have original
jurisdiction over any civil actions brought by the Corporation to
enforce the exemption conferred hereunder and may grant equitable
or declaratory relief as requested by the Corporation.
45 U.S.C. S 546b (1988). This section was repealed by S 7(b) of the Act
of July 5, 1994, Pub. L. No. 103-272, 108 Stat. 1379, and reenacted
with linguistic, but not substantive changes and recodified by S 1(e) of
the same act, 108 Stat. 904. See H.R. Rep. No. 103-180 at 1, 3, 4
(1993), reprinted in 1994 U.S.C.C.A.N. 818, 820, 822. The relevant
section of the 1994 statute stated:
Exemption from taxes levied after September 30, 1981.
(1) Amtrak or a rail carrier subsidiary of Amtrak is exempt from a
tax or fee imposed by a State, a political subdivision of a State, or
a local taxing authority and levied on it after September 30, 1981.
However, Amtrak is not exempt under this subsection from a tax or
fee that it was required to pay as of September 10, 1982.

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(2) The district courts of the United States have original
jurisdiction over a civil action Amtrak brings to enforce this
subsection and may grant equitable or declaratory relief required by
Amtrak.
49 U.S.C. S 24301(l) (1994). That section has since been amended by the
Act of December 2, 1997. See Pub. L. 105-134, S 208, 111 Stat. 2584.
Throughout the remainder of this opinion we will cite to the statute as
S 24301.
4
Townships of Tredyffrin and Easttown, Pennsylvania. See
National R.R. Passenger Corp. v. Pennsylvania Pub. Util.
Comm’n, 665 F. Supp. 402 (E.D. Pa. 1987). This Court
affirmed. See 848 F.2d 436 (3d Cir. 1988). Several years
later, Amtrak moved to broaden the injunction to bar
assessment of Amtrak for the repair, maintenance or
replacement of any highway bridges in the Commonwealth.
In response, the PUC asked the court to dissolve the
injunction on the ground that it was entered in violation of
its Eleventh Amendment immunity. Specifically, the PUC
argued that the District Court could not base its injunction
on 49 U.S.C. S 24301(1) because that provision was enacted
under Congress’s Article I powers and thus could not
abrogate the PUC’s immunity. Amtrak made three
arguments in opposition to the PUC’s motion. First, Amtrak
contended that Eleventh Amendment immunity should not
apply because it is a federal entity. Second, Amtrak argued
that the PUC could not raise the shield of immunity
because it is not an arm or alter ego of the state. Finally,
Amtrak argued that it should be allowed to amend its
complaint to include the individual commissioners because
it sought only prospective injunctive relief, and these
individuals were amenable to suit under Ex parte Young,
209 U.S. 123 (1908).
On September 15, 1997, the District Court issued a
comprehensive memorandum opinion denying the PUC’s
motion to dissolve the injunction. After finding that Amtrak
is not a federal entity for the purposes of the doctrine of
Eleventh Amendment immunity, the District Court
considered the question of whether the PUC is an arm of
the Commonwealth of Pennsylvania entitled to Eleventh
Amendment immunity. See National R.R. Passenger Corp.,
1997 WL 597963, at *6. The court properly analyzed this
issue under the three prong test of Christy v. Pennsylvania
Turnpike Commission, 54 F.3d 1140 (3d Cir. 1995), which
requires a court to determine:
(1) whether, in the event the plaintiff prevails, the
payment of the judgment would come from the state
(this includes three considerations: whether the
payment will come from the state’s treasury, whether
the agency has sufficient funds to satisfy the judgment,
5

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and whether the sovereign has immunized itself from
responsibility for the agency’s debts); (2) the status of
the agency under state law (this includes four
considerations: how state law treats the agency
generally, whether the agency is separately
incorporated, whether the agency can sue and be sued
in its own right, and whether it is immune from state
taxation); and (3) what degree of autonomy the agency
enjoys.
Id. at 1144-45.
The District Court found that the first factor, the source
of the funds to satisfy any judgment, "weigh[ed] heavily in
support of the finding that the [PUC] is not an arm or alter
ego of the Commonwealth." National R.R. Passenger Corp.,
1997 WL 597963, at *8. However, it found that the second
factor, the "status under the law," weighed in favor of the
PUC, and the third factor, autonomy, weighed "ever so
slightly in favor of the [PUC]." Id. at *10. In balancing the
relative merit and weight of all three factors, the District
Court concluded that because the funding factor was the
most important factor and it weighed so heavily against the
PUC, "the second and third factors, although weighing in
favor of the [PUC], simply do not tip the scales in favor of
a finding" that the PUC is an arm or alter ego of the
Commonwealth. Id. Thus, the court concluded that the PUC
is not protected by Pennsylvania’s cloak of Eleventh
Amendment immunity and declined to dissolve the
injunction. The PUC did not appeal from this decision or
the District Court’s February 1998 denial of the PUC’s
renewed motion to dissolve the injunction filed under Rule
60(b).
In this case, the District Court held that the PUC was
collaterally estopped to relitigate the issue of whether it was
entitled to Eleventh Amendment immunity. Accordingly, it
denied the PUC’s motion to dismiss. The PUC timely
appealed invoking this Court’s jurisdiction under the
collateral order doctrine. See Puerto Rico Aqueduct and
Sewer Auth. v. Metcalf & Eddy, Inc., 506 U.S. 139 (1993).
II.
In Witkowski v. Welch, 173 F.3d 192, 198 n.7 (3d Cir.
1999), we noted that different panels of our Court have
6
applied different standards of review where collateral
estoppel is in issue. As in Witkowski, it is unnecessary for
us to resolve this apparent conflict. Applying the more
exacting, plenary standard, we conclude that the District
Court must be affirmed.
III.
The Restatement (Second) of Judgments articulates the
general rule of collateral estoppel, or in its terminology

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"issue preclusion," as follows: "When an issue of fact or law
is actually litigated and determined by a valid and final
judgment, and the determination is essential to the
judgment, the determination is conclusive in a subsequent
action between the parties, whether on the same or a
different claim." Restatement (Second) of Judgments S 27
(1980). We have consistently applied this general rule in
determining the collateral effect of federal court judgments.
In Burlington Northern Railroad Co. v. Hyundai Merchant
Marine, 63 F.3d 1227 (3d Cir. 1995), for example, we held
that the "prerequisites for the application of issue
preclusion are satisfied when: ‘(1) the issue sought to be
precluded [is] the same as that involved in the prior action,
(2) that issue [was] actually litigated; (3) it [was] determined
by a final and valid judgment; and (4) the determination
[was] essential to the prior judgment.’ " Id. at 1231-2
(quoting from In re Graham, 973 F.2d 1089, 1097 (3d Cir.
1992)); see also Hawksbill Sea Turtle v. FEMA , 126 F.3d
461, 474-75 (3d Cir. 1997); Raytech Corp. v. White, 54 F.3d
187, 190 (3d Cir. 1995).
This general rule is subject to a number of equitable
exceptions designed to assure that the doctrine is applied
in a manner that will serve the twin goals of fairness and
efficient use of private and public litigation resources. The
equitable factors to be considered in a particular case
depend in part on (1) whether both parties to the
subsequent suit were also parties to the first so that there
is "mutuality of estoppel," see Blonder-Tongue Labs., Inc. v.
University of Ill. Found., 402 U.S. 313, 328-29 (1971) and
(2) whether the estoppel is being asserted (a) "offensively"
by a plaintiff seeking to estop a defendant from relitigating
issues which the defendant has previously litigated and
7
lost, or (b) "defensively" by a defendant seeking to estop a
plaintiff from relitigating an issue which the plaintiff has
previously litigated and lost, see Parklane Hosiery Co. v.
Shore, 439 U.S. 322, 328 (1979). This is a case of offensive
mutual estoppel. The relevant equitable factors to be
considered in a case of mutual collateral estoppel are
summarized in Section 28 of the Restatement Second. 3
_________________________________________________________________
3. Section 28 provides:
S 28. Exceptions to the General Rule of Issue Preclusion
Although an issue is actually litigated and determined by a valid
and final judgment, and the determination is essential to the
judgment, relitigation of the issue in a subsequent action between
the parties is not precluded in the following circumstances:
(1) The party against whom preclusion is sought could not, as a
matter of law, have obtained review of the judgment in the initial
action; or
(2) The issue is one of law and (a) the two actions involve claims

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that are substantially unrelated, or (b) a new determination is
warranted in order to take account of an intervening change in
the applicable legal context or otherwise to avoid inequitable
administration of the laws; or
(3) A new determination of the issue is warranted by differences
in the quality or extensiveness of the procedures followed in the
two courts or by factors relating to the allocation of jurisdiction
between them; or
(4) The party against whom preclusion is sought had a
significantly heavier burden of persuasion with respect to the
issue in the initial action than in the subsequent action; the
burden has shifted to his adversary; or the adversary has a
significantly heavier burden than he had in the first action; or
(5) There is a clear and convincing need for a new determination
of the issue (a) because of the potential adverse impact of the
determination on the public interest or the interests of persons
not themselves parties in the initial action, (b) because it was not
sufficiently foreseeable at the time of the initial action that the
issue would arise in the context of a subsequent action, or (c)
because the party sought to be precluded, as a result of the
conduct of his adversary or other special circumstances, did not
have an adequate opportunity or incentive to obtain a full and fair
adjudication in the initial action.
8
The PUC contends that (1) the issue in the 1997
proceeding was not the same as the issue asserted here; (2)
the Eleventh Amendment issue was not actually determined
in the first proceeding; (3) the determination in the first
proceeding was not necessary to the judgment of the court;
(4) all of the parties sought to be estopped here were not
parties to the first proceeding; and (5) equitable
considerations preclude application of collateral estoppel in
this case. We examine each of these contentions in turn.
1. The Identity of the Issues
The PUC claims that the Eleventh Amendment immunity
issue presented to the District Court in 1997 is not
identical to the issue in the case at bar because"in the
prior proceeding Amtrak[ ] claim[ed] that the PA PUC was
barred from charging any fees to Amtrak pursuant to 49
U.S.C. S 24301(l) . . ., and in the present proceeding
Amtrak[ ] claim[s] that 49 U.S.C.S 29402(j) . . . bars the PA
PUC from ruling on safety issues involving Amtrak’s
property."4 This argument misses the point. As noted in the
Restatement, if the issues presented and determined in the
two proceedings are the same, it does not matter whether
they arise in the context of "the same or a different claim."
Although it is true that the 1997 proceeding and the
present proceeding involve claims predicated on different
sections of the code, one issue considered by the court in
both proceedings was whether the PUC was entitled to
assert Eleventh Amendment immunity when sued by
Amtrak. The District Court fully considered and determined

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that issue in the 1997 proceeding.
2. Actual Determination of the Relevant Issue
An argument heading in the PUC’s brief asserts that the
"District Court’s decision in [the] previous matter was not
_________________________________________________________________
4. Both S 24301(l) and S 29402(j) grant Amtrak immunity from the
application of certain state and local laws. Section 24301(l) exempts
Amtrak from taxes and fees imposed by a State after September 30,
1981. Section 29402(j) exempts Amtrak from state or local building,
zoning, subdivision, or other related laws.
9
‘final, valid and on the merits.’ " It does not contend,
however, that the 1977 decisions denying the PUC’s
application to dissolve the injunction were not final ones or
that the District Court lacked subject matter or personal
jurisdiction to determine the matter of its own jurisdiction
to enter the injunction. It does, however, contend that the
District Court did not resolve the Eleventh Amendment
issue in 1997 "on the merits" -- its way of saying that this
issue was not, in Restatement terminology, "actually
determined."
The sole case cited in support of this argument by the
PUC is Frazier v. Southeastern Pennsylvania Transportation
Authority, 868 F. Supp. 757 (E.D. Pa. 1994). In that case,
SEPTA filed a preliminary objection in a state court
proceeding seeking a dismissal on the theory that it was
entitled to sovereign immunity. The plaintiff responded by
arguing that under Pennsylvania pleading practices,
sovereign immunity can only be raised as a defense in an
answer and new matter, not by preliminary objection.
Alternatively, the plaintiff argued that SEPTA was not
entitled to sovereign immunity. The state court issued an
order overruling SEPTA’s preliminary objection without
explanation. In a subsequent federal proceeding, the
District Court refused to give the state court’s order
collateral effect because the order "contained neither a
statement of the reasons for the decision nor a supplement
providing an opinion explaining the rationale." Id. at 761.
Thus, the District Court was unable to determine whether
the state court reached the sovereign immunity issue or
decided the motion before it on the procedural grounds
asserted by the plaintiff.
The decision in Frazier is inapposite. Here there is no
question that the District Court reached and determined
the Eleventh Amendment issue in the 1997 proceeding. The
District Court carefully considered and weighed each of the
Christy factors in order to determine whether the PUC was
entitled to Eleventh Amendment immunity and
unambiguously determined that it was not.
3. Essential to the Judgment

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The Restatement (Second) of Judgments explains in the
following terms the rationale behind the requirement that
10
the initial resolution of the relevant issue be essential to the
judgment:
[I]f issues are determined but the judgment is not
dependent upon the determinations, relitigation of
those issues in a subsequent action between the
parties is not precluded. Such determinations have the
characteristics of dicta, and may not ordinarily be the
subject of an appeal by the party against whom they
were made. In these circumstances, the interest in
providing an opportunity for a considered
determination, which if adverse may be the subject of
an appeal, outweighs the interest in avoiding the
burden of relitigation.
Restatement (Second) of Judgments S 27, cmt. h; see also
O’Leary v. Liberty Mut. Ins. Co., 923 F.2d 1062 (3d Cir.
1991).
Thus, in determining whether the issue was essential to
the judgment, we must look to whether the issue"was
critical to the judgment or merely dicta." O’Leary, 923 F.2d
at 1067. In the 1997 decision, the District Court held that
the PUC was not entitled to Eleventh Amendment immunity
and this holding was necessary to the outcome of the
proceeding. If the District Court had ruled differently on
that issue, it would have dissolved the outstanding
injunction. Its holding on the immunity issue was thus
essential to its judgment denying the PUC’s application and
leaving the injunction in place.5
4. Same Parties
Only the PUC as an entity and not the commissioners
were parties to the 1997 proceeding. The PUC, therefore,
contends that collateral estoppel was improperly applied to
the commissioners in this proceeding. This contention
ignores the fact that the commissioners in their official
capacity comprise the PUC and did participate in the 1997
_________________________________________________________________
5. Contrary to the PUC’s insistence, the issue of whether Amtrak was
entitled to modification of the injunction is simply unrelated to the issue
of whether the District Court’s ruling on immunity was essential to the
judgment denying relief to the PUC.
11
decision. Accordingly, it was entirely appropriate for the
District Court to apply collateral estoppel against them to
the extent they rely upon their official status to support a
claim of Eleventh Amendment immunity.6 See Tait v.
Western Md. Ry. Co., 289 U.S. 620, 626-27 (1933).

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5. Equitable Concerns
Even when the requirements of the general rule of
collateral estoppel are satisfied, the Court must consider
whether there are special circumstances present which
make it inequitable or inappropriate to foreclose relitigation
of a previously determined issue. PUC contends that such
special circumstances are present here. Specifically, it
contends that relitigation is warranted (1) because the
Eleventh Amendment immunity issue is an "unmixed
question of law" and this suit involves a matter"unrelated"
to that involved in the prior proceeding and (2) because
relitigation is required "in order to take into account
intervening change in the applicable legal context or
otherwise to avoid inequitable administration of the laws."
Appellants’ Brief pp. 32, 35 (quoting from Restatement
(Second) of Judgments S 28(2)).7
A. Unmixed Question of Law
In United States v. Moser, 266 U.S. 236 (1924), Moser, a
retired Navy captain, had previously litigated before the
Court of Claims his right to an enhanced pension under a
statute providing for an enhancement for "serv[ice] during
the Civil War." The Court, in applying the statute to his
particular case, had given him credit for time spent as a
Naval Academy cadet during the Civil War. Subsequently,
the Court of Claims changed its interpretation of the
statute and Moser was forced to bring a new suit to secure
continuing payment of an enhanced pension. The Court of
Claims held that collateral estoppel barred the government
_________________________________________________________________
6. To the extent Amtrak is entitled to proceed against the commissioners
in their individual capacities under Ex parte Young, 209 U.S. 123, 159-
60 (1908), the issue of Eleventh Amendment immunity does not arise.
7. See supra, p.8 n.3.
12
from relitigating Moser’s right. The Supreme Court affirmed,
observing in part:
The contention of the Government seems to be that the
doctrine of res judicata does not apply to questions of
law; and, in a sense, that is true. It does not apply to
unmixed questions of law. Where, for example, a court
in deciding a case has enunciated a rule of law, the
parties in a subsequent action upon a different
demand are not estopped from insisting that the law is
otherwise, merely because the parties are the same in
both cases. But a fact, question or right distinctly
adjudged in the original action cannot be disputed in a
subsequent action, even though the determination was
reached upon an erroneous view or by an erroneous
application of the law.

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Id. at 242 (emphasis in original).
The Supreme Court last considered the Moser"unmixed
question of law" exception to the general rule of issue
preclusion in United States v. Stauffer Chemical Co., 464
U.S. 165 (1984). Stauffer litigated with the EPA in two suits
involving different attempted inspections at two different
plants the issue of whether a private contractor could be an
"authorized representative" of the EPA within the meaning
of the statute conferring the right to inspect. The EPA lost
on this issue in the first proceeding and relied upon the
"unmixed question of law" exception in support of its
contention that it should not be precluded from relitigating
the statutory interpretation issue in the second proceeding.
The Supreme Court acknowledged that "the exception is
generally recognized" but was "frank to admit uncertainty
as to its application." It described the exception in the
following terms:
The exception seems to require a determination as to
whether an "issue of fact" or an "issue of law" is sought
to be relitigated and then a determination as to
whether the "issue of law" arises in a successive case
that is so unrelated to the prior case that relitigation of
the issue is warranted. Yet we agree that, for the
purpose of determining when to apply an estoppel,
13
"[w]hen the claims in two separate actions between
the same parties are the same or are closely related
. . . it is not ordinarily necessary to characterize an
issue as one of fact or of law for purposes of issue
preclusion. . . . In such a case, it is unfair to the
winning party and an unnecessary burden on the
courts to allow repeated litigation of the same issue
in what is essentially the same controversy, even if
the issue is regarded as one of ‘law’."
Id. at 171 (quoting Restatement (Second) of Judgments
S 78, cmt. b). The Court refused to apply the exception,
holding that "the doctrine of mutual collateral estoppel is
applicable against the government to preclude relitigation of
the same issue already litigated against the same party in
another case involving virtually identical facts." Id. at 169.
More recently, we, too, recognized the continuing vitality
of the "unmixed question of law" exception while
acknowledging that its scope remains uncertain. Burlington
N. R.R. Co., 63 F.3d at 1236. We there declined to apply the
exception and held that the general rule of preclusion
governed in a situation involving two suits for indemnity
brought against Burlington by different downstream
carriers arising from two different shipments in which
goods were damaged while allegedly in the possession of
Burlington. In the first suit, Burlington asserted that the
indemnity claim was barred by a provision in the carriage
contract requiring that any suit be brought no later than
one year after the date of delivery of the goods. The Court

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in the first suit held that despite this provision, the
timeliness of suit was to be determined by the general rule
of indemnity accrual -- i.e., that an indemnity claim does
not accrue until the indemnitee’s liability is determined by
judgment or payment. In the second carrier’s suit for
indemnity arising from a different damaged shipment,
Burlington attempted to assert that the suit was untimely
based upon a similar, "nine month from delivery" limitation
in the carriage contract. We explained our refusal to apply
the "unmixed question of law" exception as follows:
While, as Burlington points out, the contractual
limitations provisions in this case provides for a
shorter period of time (nine months as opposed to one
14
year), and applies to the presentation of "claims" as
compared to the filing of "suits," these distinctions are
of no legal significance to the issue decided in Atlantic
Mutual and presented here. In both cases Burlington
denied the indemnity claims on the grounds that they
were untimely because the contract term limited
liability to a period of time (commencing at the date of
delivery) that had already run. Similarly, in both
actions, the indemnity claimant sought recovery
notwithstanding such provision on the grounds that
any time limit for indemnity claims must commence
when liability is determined or a cognizable loss is
incurred. In sum, given these relevant similarities, we
cannot conclude that the issue of law arising in this
action is so unrelated to the Atlantic Mutual case that
relitigation of the issue is warranted.
Id. at 1237-38.
As our review of Moser, Stauffer and Burlington indicates,
the "unmixed question of law" exception is not easily
summarized. It is an equitable doctrine which, while
recognizing that the court and the adverse party should
ordinarily be spared the burden of relitigating an issue
previously determined, nevertheless sounds a note of
caution where the issue involved is the choice or
formulation of the governing rule of law. Where the same
legal issue is presented in two suits but the second suit
calls for application of the previously selected rule of law in
a significantly different context, it may be inappropriate to
preclude a party from contending that the governing rule of
law applied in the first was erroneously chosen or
formulated. It is not necessary, however, that the"two
cases . . . must arise from the very same facts or
transaction before an estoppel can be applied." Stauffer
Chem. Co., 464 U.S. at 172 n.5. Indeed, estoppel should be
applied unless "the ‘issue of law’ arises in a successive case
that is so unrelated to the prior case that relitigation is
warranted." Burlington N. R.R. Co., 63 F.3d at 1237 (quoting
from Stauffer Chem. Co., 464 U.S. at 172 n.5).
Whether the context in which the legal issue is presented

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in the second suit is sufficiently unrelated to that in the
first to counsel against preclusion is a decision that should
15
be made with reference to the consequences of preclusions
for the precluded party and the administration of justice. A
significantly different context, for example, may make it
more likely that the second suit and the stake there at
issue were not foreseen at the time of the first suit.
Moreover, insistence on estoppel in a new context may in
some situations unduly impede the development of the law.
Such insistence may also impose an unfair competitive
disadvantage on the party who is precluded from rearguing
questions of law that would be open to challenge by other
litigants. Finally, when the party to be precluded is a public
agency responsible for administration of a governmental
program, preclusion may impair its ability to regulate in a
coherent manner. See 18 Charles Alan Wright, et al.,
Federal Practice and Procedure S 4425, at 244 (1981).
The District Court did not foreclose the PUC from
challenging a legal precept. The PUC never sought to argue
that Christy v. Pennsylvania Turnpike Authority did not
provide the appropriate legal standard. Rather, it sought to
argue that the District Court had erroneously applied that
standard to the particular circumstances of the PUC at the
time of the first suit at least in part because it did not
have sufficient information about those particular
circumstances. In support of its request for relitigation, the
PUC submitted evidence of its particular circumstances
which supplemented its submission in 1997. It did not,
however, submit any evidence that its circumstances had
changed since that time. The fact that the PUC may not
have submitted all of the relevant evidence available to it in
1997, hardly justifies placing on Amtrak the burden of
relitigating the application of the Christy legal principles to
the unchanged circumstances of the PUC.
Moreover, while it is true that the two relevant
proceedings here present distinct preemption issues, the
issue as to which estoppel is sought does not arise in such
a different context that the current situation implicates any
of the concerns underlying the "unmixed question of law"
doctrine. Amtrak and the PUC undoubtedly foresaw in
1997 that there would be repeated issues of importance
that could bring them before a federal court. Moreover,
foreclosing the PUC from relitigating its Eleventh
16
Amendment immunity issue with Amtrak will not impede
the development of the law because the PUC will remain
free to relitigate that issue with anyone else who hauls it
into federal court. See United States v. Mendoza , 464 U.S.
154, 164 (1984) ("The application of an estoppel when the
government is litigating the same issue with the same party
avoids the problem of freezing the development of the law

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because the government is still free to litigate that issue in
the future with some other party.") Nor is this a case in
which insistence on estoppel will place the PUC at a
competitive disadvantage or impair its ability to effectively
regulate. The PUC is not being foreclosed from enforcing
any regulatory rule against Amtrak that is enforceable
against others. The sole effect of estoppel in this context
will be to afford Amtrak access to the federal courts (that
other utilities may conceivably be denied) unless and until
the circumstances of the PUC materially change.
For these reasons, we decline to apply the "unmixed
question of law" exception to the general rule of issue
preclusion.
B. Intervening Change in the Legal Context and
Avoidance of Inequitable Administration of the Law.
Under this argument heading, the PUC contends that the
estoppel applied by the District Court is inequitable
because (1) the PUC’s Eleventh Amendment immunity has
been previously recognized in other suits, (2) the PUC here
tenders evidence not considered in the first proceeding, (3)
the PUC had "no expectation that [the] determination [in
the first proceeding] would forever bar its claim of sovereign
immunity," and (4) estoppel here might "expose[it] to
application of offensive non-mutual collateral estoppel."
None of the authorities cited by the PUC hold that it is
entitled to Eleventh Amendment immunity.8 Moreover, our
_________________________________________________________________
8. The PUC argues that other courts in the Third Circuit have recognized
its Eleventh Amendment immunity and thus the application of collateral
estoppel is inappropriate. In making this argument, the PUC relies on
three cases from this Court: Bell Atlantic-Pennsylvania, Inc. v.
Pennsylvania Public Utility Commission, 2001 WL 1382537, Nos. 00-
17
conclusion here would be no different even if a court had
previously so held in a suit to which Amtrak was not a
party.
We believe that we have earlier explicitly or implicitly
rejected each of the remaining contentions. The ability of
the PUC to litigate its Eleventh Amendment immunity with
parties other than Amtrak presents a materially different
issue. See United States v. Mendoza, supra.9
_________________________________________________________________
2619, 00-2620 (3d Cir. Nov. 2, 2001); MCI Telecommunication Corp. v.
Bell Atlantic-Pennsylvania, 271 F.3d 491 (3d Cir. 2001); and Wheeling &
Lake Erie Railway Co. v. Public Utility Commission of the Commonwealth
of Pennsylvania, 141 F.3d 88 (3d Cir. 1998). These cases, however, do
not support the PUC’s argument.
In both Bell-Atlantic and MCI, which were consolidated for oral
argument on the issue of Eleventh Amendment immunity, we assumed,

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without deciding, that the PUC was an arm of the Commonwealth.
However, we held that under the statutory scheme in question the PUC
"knowingly waived its Eleventh Amendment immunity by voluntarily
accepting the congressional gift or gratuity of the power to regulate local
telecommunications competition under the Act." MCI Telecommunication
Corp., 271 F.3d at 513. Likewise in Wheeling , the court explicitly stated
that the parties did not "dispute that the [PUC] is an arm of the
Commonwealth of Pennsylvania protected by Eleventh Amendment
principles of sovereign immunity." 141 F.3d at 91. Thus, this Court did
not reach the question at issue here--whether or not the PUC is entitled
to Eleventh Amendment immunity as an alter-ego or arm of
Pennsylvania--in any of these cases.
9. The PUC does not explicitly argue, nor could it persuasively maintain,
that there has been an intervening change in the applicable legal
context. Undoubtedly the Supreme Court has taken up the issue of
Eleventh Amendment immunity with vigor since 1997. See, e.g., Board of
Tr. of Univ. of Al. v. Garrett, 531 U.S. 356 (2001); Alden v. Maine, 527
U.S. 706 (1999); College Sav. Bank v. Florida Prepaid Postsecondary
Educ. Expense Bd., 527 U.S. 666 (1999); Florida Prepaid Postsecondary
Educ. Expense Bd. v. College Sav. Bank, 527 U.S. 627 (1999); Idaho v.
Couer d’Alene Tribe of Idaho, 521 U.S. 261 (1997); Seminole Tribe of Fla.
v. Fla., 517 U.S. 44 (1996). However, none of these cases addressed the
issue in this case: the standard for determining whether a party is an
arm of the state and thus entitled to the cloak of immunity. Rather these
cases considered when Congress can abrogate Eleventh Amendment
immunity and when a State can waive its immunity.
18
We perceive no inequity in the application of collateral
estoppel in the context of this case.
IV. Conclusion
The judgment of the District Court will be affirmed.
A True Copy:
Teste:
Clerk of the United States Court of Appeals
for the Third Circuit
19

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