985 F.3d 189
3rd Cir.2021Background:
- Pennsylvania and New Jersey created the Delaware River Joint Toll Bridge Commission by interstate compact approved by Congress (1935); the Compact authorized the Commission to acquire, improve, operate, and maintain real property and to exercise “all other powers” reasonably necessary (except taxing).
- In 2017–18 the Commission built the Scudder Falls Administration Building on Pennsylvania land without applying for Pennsylvania building permits; PA Department of Labor & Industry inspectors threatened stop-work and later threatened an elevator subcontractor.
- The Commission sued the Pennsylvania Secretary of Labor and Industry in federal court seeking declaratory and injunctive relief that Pennsylvania may not enforce its building-safety and flammable-liquids regulations against the Commission absent express Compact language.
- The district court granted a preliminary injunction and later declaratory relief holding the Secretary may not unilaterally inspect, approve, or regulate the building’s elevators or fuel-dispensing equipment under Pennsylvania law.
- The Secretary appealed, arguing (inter alia) that the suit is barred by the Eleventh Amendment because Pennsylvania retained its police powers and is the real party in interest; the Third Circuit affirmed.
Issues:
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Eleventh Amendment / jurisdiction | Commission: Ex parte Young allows suit against the Secretary for prospective relief enforcing Compact. | Secretary: Commonwealth is real party in interest so Eleventh Amendment bars the suit. | Ex parte Young applies; suit seeks prospective relief against an official, not barred by Eleventh Amendment. |
| Whether relief is improper specific performance or drains treasury | Commission: relief is prospective and won’t order state to perform or require payment. | Secretary: declaratory relief would force state to abide by Compact and could affect treasury. | Relief is prospective and not impermissible specific performance; incidental fiscal effects are permissible. |
| Whether Pennsylvania reserved police power over building safety | Commission: Compact’s grant (acquire/improve/operate structures; all necessary powers) ceded regulatory authority. | Secretary: States retained fundamental police powers to protect health and safety absent express surrender. | Compact language unambiguously ceded Pennsylvania’s authority to enforce building-safety regs at the Commission’s facility. |
| Interpretation of Compact silence and scope of surrendered sovereignty | Commission: creation of bi-state entity under Compact is an unambiguous surrender of unilateral state control unless Compact reserves it. | Secretary: silence does not imply surrender; state laws should apply unless expressly waived. | Following Operating Engineers and HIP, creation of the bi-state entity and the Compact’s broad powers show an unambiguous surrender of control; state regulation cannot be imposed absent express reservation. |
Key Cases Cited
- Ex parte Young, 209 U.S. 123 (establishes exception to Eleventh Amendment for prospective relief against state officials)
- Hess v. Port Authority Trans-Hudson Corp., 513 U.S. 30 (Compact Clause entities are not subject to unilateral control of a constituent state)
- Tarrant Regional Water Dist. v. Herrmann, 569 U.S. 614 (interstate compacts construed as contracts; text controls parties’ intent)
- Int’l Union of Operating Eng’rs, Local 542 v. Del. River Joint Toll Bridge Comm’n, 311 F.3d 273 (compact silence cannot be read to impose unilateral state controls on a bi-state entity)
- HIP Heightened Independence & Progress, Inc. v. Port Authority, 693 F.3d 345 (creation of bi-state entity is an unambiguous surrender of state control absent express reservation)
- Waterfront Comm’n of N.Y. Harbor v. Governor of N.J., 961 F.3d 234 (limits on remedial orders that would amount to specific performance of a state’s obligations under a compact)